SOURCE: Celsius Holdings, Inc.

Celsius Holdings, Inc.

February 27, 2012 07:00 ET

Celsius Holdings Reports Fourth Quarter and 2011 Year End Results and Additions to Senior Management Team

BOCA RATON, FL--(Marketwire - Feb 27, 2012) - Celsius Holdings, Inc. (PINKSHEETS: CELH), the creator and marketer of Celsius®, Your Ultimate Fitness Partner®, today reported their results of operations for the fourth quarter and year ended December 31, 2011.

Revenue for the three months ended December 31, 2011 totaled $1.8 million versus $103,000 in the same period last year. A significant portion of this increase related to a reduction of discounts, promotions, and returns this year compared to last year's fourth quarter.

Revenue increased 3% for the year 2011 to $8.5 million as compared to $8.3 million in 2010. The increase was mainly due to increased sales to existing customers, offset by reduction in revenues associated with eliminating unprofitable accounts.

Operating expenses decreased to $1.4 million for the fourth quarter (or 65%) from$3.9 million in the prior year. For the year ended December 31, 2011, operating expenses decreased to $5.0 million (or 75%) from $19.9 million a year ago. In addition, sales, marketing, and G&A expenses were reduced significantly during 2011, while organic revenue growth continued.

The Company recorded a net loss of $716,000 for the fourth quarter compared to a net loss of $5.6 million in the same quarter a year ago (a decrease of 87%); or $(0.04) and $(0.30) per share respectively. For the year ended December 31, 2011, the Company recorded a net loss of $1.9 million compared to a net loss of $19.5 million a year ago (a decrease of 90%); or $(0.10) and $(1.11) per share respectively.

The Company announced today a strategy to expand the Celsius brand through Direct to Consumer initiatives and to restructure and support its retail sales efforts. The campaigns will include DRTV, Affiliate Networks, Banner Advertising, Social and Digital Media, Direct Mail, Viral Marketing and Health Club Sampling. The Company has produced a new package with 30 servings of an Outrageous Orange flavored powder, incorporating its MetaPlus ™ technology. This new powder package will allow for improved margins and cost effective shipping in support of the Direct to Consumer programs. "We believe that by employing these cost effective initiatives, the Celsius brand will achieve a greater market awareness, driving pull through in the retail stores while producing direct sales revenue to the company," said Gerry David, our CEO.

The Company also announced the addition of several senior managers to its executive team:

  • Ms. Michelle Pease, Director of Operations, to lead supply chain requirements including manufacturing oversight, quality control, fulfillment and regulatory compliance.
  • Mr. Michael Hopf Sr., Vice President, International, to expand our current international market share where Celsius has gained a distribution foothold. Efforts have begun on the assessment and registration process in several international markets.
  • Mr. John Fieldly, Chief Financial Officer, to oversee financial reporting, infrastructure initiatives including new management reporting software systems, fulfillment operations, call center operations, and enhanced website capabilities. Mr. Fieldly replaces Mr. Geary Cotton, the interim CFO for the company over the past two years.

Additional information on the new management team can we found at the Company's website,
http://www.celsius.com

"We saw significant progress in several areas of our business in the fourth quarter," stated Mr. David. David continued, "The implementation of several key initiatives to solidify our infrastructure, improve our retail presence, explore international opportunities, execute the Direct to Consumer marketing plans, and the recruitment of critical management has positioned Celsius for an exciting 2012."

About Celsius Holdings, Inc.
Celsius Holdings, Inc. (PINKSHEETS: CELH) markets Celsius®, Your Ultimate Fitness Partner®, which is backed by science. Celsius is dedicated to providing healthier, everyday refreshment through science and innovation. Information about Celsius Holdings, Inc. and Celsius, Your Ultimate Fitness Partner®, is available at http://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 this press release and other information which we make publicly available. Celsius Holdings does not intend to and undertakes no duty to update the information contained in this press release.


Celsius Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
Unaudited Audited
December 31 December 31
ASSETS 2011 2010
Current assets:
Cash and cash equivalents $ 130,536 $ 1,320,665
*Accounts receivable, net 537,867 1,192,139
Inventories, net 871,779 1,563,753
Other current assets 69,340 138,310
Total current assets 1,609,522 4,214,867
Property, fixtures and equipment, net 67,000 101,895
Total Assets $ 1,676,522 $ 4,316,762
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
*Accounts payable and accrued expenses $ 979,914 $ 2,771,166
Due to related parties, short-term portion 1,989 63,882
Total current liabilities 981,903 2,835,048
Convertible note payable, related party 1,500,000 2,000,000
Note due to related parties 3,000,000 2,000,000
Total Liabilities 5,481,903 6,835,085
Stockholders' Equity (Deficit):
Common stock 20,181 18,515
Additional paid-in capital 36,722,894 36,101,998
Accumulated deficit (40,548,456 ) (38,638,799 )
Total Stockholders' Equity (Deficit) (3,805,381 ) (2,518,286 )
Total Liabilities and Stockholders' Equity (Deficit) $ 1,676,522 $ 4,316,762
*Note: Customer discounts and promotion payables were previously classified as a liability in 2010. These amounts have been restated and netted against accounts receivable for all periods presented.

Celsius Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
For the Three Months
Ended December 31,
For the Years
Ended December 31,
Unaudited Unaudited Unaudited Audited
2011 2010 2011 2010
Net revenue $ 1,762,020 $ 103,328 $ 8,535,603 $ 8,312,960
Cost of revenue 995,567 1,733,827 5,207,088 7,217,601
Gross profit 766,453 (1,630,499 ) 3,328,515 1,095,359
Selling and marketing expenses 1,299,970 2,256,102 3,536,717 15,187,499
General and administrative expenses 123,907 1,642,577 1,454,216 4,705,393
Total operating expenses 1,423,877 3,898,679 4,990,933 19,892,892
Loss from operations (657,424 ) (5,529,178 ) (1,662,418 ) (18,797,533 )
Loss on extinguishment of debt, related party - - - (322,356 )
Interest expense, net (58,710 ) (52,571 ) (247,239 ) (377,513 )
Net loss $ (716,134 ) $ (5,581,749 ) $ (1,909,657 ) $ (19,497,402 )
Basic and diluted:
Weighted average shares outstanding 20,181,408 18,498,969 18,934,832 17,525,352
Loss per share $ (0.04 ) $ (0.30 ) $ (0.10 ) $ (1.11 )

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