5 YEAR CHART
Expands New Trainer-Grade “CELSIUS HEAT™” AND Launches Global Expansion to Increase Distribution in Robust Asia Market
BOCA RATON, Fla., Nov. 8, 2017 /PRNewswire/ — Celsius Holdings Inc. (CELH), maker of the leading global fitness drink, CELSIUS®, today reported financial results for the three and nine-month periods ended September 30, 2017.
- Revenue of $10.8 million, up 62% from $6.7 million in the year ago quarter
- Gross profit of $4.7 million increased 62% from $2.9 million in the year ago quarter
- Net loss to common stockholders of $1.7 million compared to a net loss to common stockholders of $93,000 in the year ago quarter
- Non-GAAP Adjusted EBITDA* of $(980,000), inclusive of $2.1 million of expenses related to the company’s product launch in China and distribution expansion in Hong Kong, compared to $379,000 in the year ago quarter
- Entered China market with regional distribution through partnership with Qifeng Food Technology (Beijing) Co. Ltd., a national wholesale distributor of foods and beverages
- Expanded to Hong Kong through a distribution agreement with A.S. Watson Group, the largest international health and beauty retailer in Asia and Europe
Subsequent to Quarter End:
- Debuted CELSIUS HEAT™, the new trainer-grade line of fitness drinks to the consumers at Olympia in Las Vegas, and to the convenience store channel buyers at the National Association of Convenience Stores (NACS) Trade Show in Chicago, IL.
“We took our global expansion to the next level in the third quarter with the initial launch of product distribution in China and further expansion in Hong Kong,” said John Fieldly, Interim President and Chief Executive Officer and Chief Financial Officer. “The investments we made in Asia during the quarter were critical to ensuring product availability ahead of promotions and targeted marketing campaigns that are elevating recognition of our brand across a variety of venues and mediums and accelerating consumer enthusiasm. The near- and long-term growth opportunities in Asia are extremely attractive, given both the size of the consumer beverage market and the increasing demand for healthy beverage alternatives. We are positioning our operations and products to capture a meaningful share of the market.”
“We maintained healthy gross margins on exponentially higher revenue during the third quarter as our robust financial results are the direct result of the tremendous traction our products are gaining with consumers while making significant investments in our operations to support our international expansion,” continued Fieldly. “Investments of nearly $2.1 million in sales support, marketing and promotion programs and inventory in Asia during the quarter was essential for the successful launch and longevity of our presence in Asia. Absent these investments, Adjusted EBITDA would have exceeded $1.0 million, a nearly three-fold increase over the year ago quarter.”
Three months ended September 30, 2017 compared to three months ended September 30, 2016
Revenue
Revenue for the three months ended September 30, 2017 and September 30, 2016 was $10.8 million and $6.7 million, respectively, an increase of 62%. This increase was driven primarily by a 73% increase in international revenue, mainly from the Company’s Swedish and Asian distribution partners, and a 54% increase in domestic revenue associated with blended growth rates of 47% in retail accounts (mainly from growth in existing accounts), 67% in health and fitness accounts and 59% in internet retailer accounts. The increase in total revenue from the 2016 period to the 2017 period was primarily attributable to increases in sales volume, as opposed to increases in product pricing.
Gross profit
Gross profit was $4.7 million of revenue in the three months ended September 30, 2017compared to $2.9 million for the same period in 2016. Gross profit margins remained consistent at 43.3% for both periods.
Operating expenses
Sales and marketing expenses for the three months ended September 30, 2017 and September 30, 2016 were $4.7 million and $1.7 million, respectively, an increase of 171%. The increase is due primarily to increases in marketing programs, including trade development and consumer events, investments in human resources and increases in warehousing costs, particularly with respect to the launch of our products in China and Hong Kong, where we expended approximately $2.1 million during the 2017 quarter. General and administrative expenses for the three months ended September 30, 2017 and September 30, 2016 were $1.6 million and $1.1 million, respectively, an increase of 44%. The increase was primarily due to increases in option expense of $294,000, investments in human resources of $83,000, office-related costs of $21,000 and research and development costs of $79,000.
