U.S. Revenue Increases 67% as Distribution Expansion Continues to New Markets
BOCA RATON, FL / ACCESSWIRE / August 11, 2016 / Celsius Holdings Inc. (OTCQX: CELH), the creator and marketer of Celsius®, the
world's first negative calorie drink backed by clinical science, today reported financial results for the three and six month
periods ended June 30, 2016.
Second Quarter 2016 Highlights:
- Revenue of $6.2 million, up 33% compared to $4.7 million in the year ago quarter - Domestic
revenue increased 67% to $4.0 million, up from $2.4 million in the year ago quarter - Celsius placed on shelves at approximately
50% of 7-Eleven's nationwide - The Celsius product line has gained 81% placement in Sunoco nationwide - International revenue
decreased 3% to $2.2 million, down from $2.3 million in the year ago quarter - Sweden Business stabilized during Q2 - Celsius
successfully launched product sales in Finland in May - Gross profit margin increased to 44.8% compared to 43.6% in the year ago
quarter - Net loss of $(1.5) million compared to $(595,000) in the year ago quarter - Non-GAAP Adjusted EBITDA* Loss of ($596,000)
compared to $433,000 in the year ago quarter - President and CEO Gerry David named Gold Winner in CEO World Awards®
Subsequent to Quarter End:
- Partnered with YHS Singapore (Yeo's) for major international expansion beginning with Singapore
in the third quarter
"Robust sales growth in the second quarter, particularly in the U.S., was the direct result of our ongoing efforts to expand our
distribution channels and the investments we are making in senior field sales management and marketing programs to elevate brand
awareness," said Gerry David, Chief Executive Officer. "We are gaining significant traction in increasing product availability to
meet increasing consumer demand stemming from our media, celebrity marketing campaigns and non-compensated celebrity endorsements.
Identifying and selecting the right partners and distributors has been key to our recent performance and lays a solid foundation
for future growth both domestically and abroad. Our expansion plans include Singapore, followed by Malaysia and Indonesia later
this year, through a new partnership with YHS Singapore (Yeo's), a globally-renowned, multi-national corporation and drink
manufacturer headquartered in Singapore. Through Yeo's we will be introducing Celsius products to an entirely new base of
consumers. Celsius launched in Finland during the month of May with the introduction into several retail chains. We continue to
make investments in regulatory initiatives in several countries."
Three Months Ended June 30, 2016 Compared to Three Months Ended June 30, 2015
Revenue
For the three months ended June 30, 2016, revenue was approximately $6.17 million, an increase of $1.51 million or 33% from
$4.66 million for the same period in the prior year. This revenue increase of 33% was attributable in large part to 67% growth in
domestic revenues associated with a blended growth rate of 81% in retail accounts arising mainly from expansion of convenience
store distribution initiatives, 37% growth in health and fitness accounts and 44% growth in internet retailer accounts from the
same period in 2015. This increase was offset by a 3% decrease in international revenue from our Swedish distribution partner.
Gross profit
For the three months ended June 30, 2016, gross profit increased by approximately $736,000 or 36% to $2.76 million from $2.03
million for the same period in 2015. Gross profit margins improved 1.2% to 44.8% for the three months ended June 30, 2016, from the
same period in 2015.
Sales and marketing expenses
Sales and marketing expenses for the three months ended June 30, 2016 were approximately $3.19 million, an increase of $2.05
million or 179% from $1.14 million in the same period in 2015. The increase is due primarily to increases in investments in
marketing programs of $1.36 million and increases in human resource investments of $684,000.
General and administrative expenses
General and administrative expenses for the three months ended June 30, 2016 were approximately $980,000, a decrease of
$349,000, or 26%, from $1.33 million for the three months ended June 30, 2015. The decrease was primarily due to savings in option
expense of $629,000 and savings in depreciation and amortization of $5,000, offset by increases in professional fees of $202,000,
travel of $41,000, office related costs of $25,000, research and development costs of $9,000 and investments in human resources of
$8,000.
Other expense
Total other expense decreased to approximately $57,000 for three months ended June 30, 2016 from $75,000 for the same period in
2015, as a result of $18,000 in savings in interest expense.
Six months ended June 30, 2016 compared to six months ended June 30, 2015
Revenue
For the six months ended June 30, 2016, revenue was approximately $9.85 million, an increase of $545,000 or 6% from $9.30
million for same period in the prior year. The revenue increase of 6% was attributable in large part to 71% growth in domestic
revenues associated from blended growth rates of 90% in retail accounts arising mainly from expansion of convenience store
distribution initiatives, 33% in health and fitness accounts and 44% growth in internet retailer accounts from the same period in
2015. This growth was offset by a 40% decrease in international revenue from our Swedish distribution partner, who was adversely
affected by a rebalancing of inventory during the first quarter of 2016.
Gross profit
For the six months ended June 30, 2016, gross profit increased by approximately $417,000 or 10.8% to $4.28 million from $3.87
million for the same period in 2015. Gross Profit margins improved 1.9% to 43.5% for the six months ended June 30, 2016 from the
same period in 2015.
Sales and marketing expenses
Sales and marketing expenses for the six months ended June 30, 2016 were approximately $4.97 million, an increase of $2.93
million or 143% from $2.04 million in the same period in 2015. The increase is due primarily to increases in investments in
marketing programs of $1.84 million and increases in human resource investments of $1.09 million.
General and administrative expenses
General and administrative expenses for the six months ended June 30, 2016 were approximately $1.86 million, a decrease of
$36,000, or 2%, from $1.89 million for the six months ended June 30, 2015. The decrease was primarily due to savings in option
expense of $547,000 and depreciation and amortization of $11,000, offset by increases in professional fees of $265,000, increases
in travel of $96,000, investments in human resources of $76,000, office related costs of $60,000 and research and development costs
of $21,000.
Other expense
Total other expense decreased to approximately $114,000 for six months ended June 30, 2016 from $207,000 for the same period in
2015, as a result of $93,000 in savings in interest expense.
Liquidity and Capital Resources
As of June 30, 2016, we had cash of approximately $7.3 million and working capital of $11.4 million. Cash used in operations
during the six months ended June 30, 2016 totaled $2.8 million. We incurred a net loss available to common stockholders of $2.8
million during six months ended June 30, 2016, and our accumulated deficit increased to $52.8 million as of June 30, 2016.
Conference Call
Management will host a conference call today, Thursday, August 11, 2016 at 4:30 pm ET to discuss the results with the investment
community.
To participate in the conference call, please call one of the following telephone numbers at least 10 minutes before the start
of the call:
US: 877-709-8150 International: 201-689-8354 An audio replay of the call will be available on the Company's website at
http://celsius.com/press-releases/.
Disclosures can be found on the Company's online disclosure portal at: http://www.otcmarkets.com/stock/CELH/filings
About Celsius Holdings, Inc.
Celsius Holdings, Inc. (OTCQX: CELH) is a global nutritional science based company, founded in April 2004. Celsius Holdings,
Inc. has a corporate mission to become the global leader with a portfolio of functional brands offering proprietary or patented
brands offering significant health benefits steeped in nutritional science.
Celsius comes in seven delicious flavors, carbonated and non-carbonated, and in powder stick formulas that can be mixed with
water. Celsius has no preservatives, no aspartame, no high fructose corn syrup, no artificial flavors or colors and is very low in
sodium. The Celsius line of products is kosher and vegan certified, Gluten Free, and sugar free. The first university study was
conducted in 2005, and additional studies from the University of Oklahoma were conducted over the next five years. All studies were
published in peer-reviewed journals and validated the unique benefits Celsius provides to the consumer.
For more information, please visit www.celsius.com.
Forward-Looking Statements
This press release may contain statements that are not historical facts and are considered forward-looking within the meaning of
the Private Securities Litigation Reform Act of 1995. These forward-looking statements contain projections of Celsius Holdings'
future results of operations and/or financial position, or state other forward-looking information. In some cases you can identify
these statements by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may,"
"should," "will," "would," or similar words. You should not rely on forward-looking statements since Celsius Holdings' actual
results may differ materially from those indicated by forward-looking statements as a result of a number of important factors.
These factors include, but are not limited to: general economic and business conditions; our business strategy for expanding our
presence in our industry; anticipated trends in our financial condition and results of operation; the impact of competition and
technology change; existing and future regulations affecting our business; and other risks and uncertainties discussed in the
reports Celsius Holdings has filed previously with the Securities and Exchange Commission. Celsius Holdings does not intend to and
undertakes no duty to update the information contained in this press release.
Celsius Holdings, Inc. and
SubsidiariesConsolidated Balance SheetsCelsius Holdings, Inc. and Subsidiaries Consolidated Statements of Operations
(Unaudited)Celsius Holdings, Inc. Reconciliation of Non-GAAP Financial Measure
*We report financial results in accordance with accounting principles generally accepted in the United States ("GAAP"), but
believe that disclosure of adjusted EBITDA, a non-GAAP financial measure, may provide users with additional insights into operating
performance.
Investor Relations:
Hayden IR Brett Maas (646) 536-7331 brett@haydenir.com or Cameron Donahue (651) 653-1854 cameron@haydenir.com
SOURCE: Celsius Holdings Inc.
