SOURCE: Creative Learning Corporation

Creative Learning Corporation

August 18, 2014 16:55 ET

Creative Learning Corporation Reports 33.3% Increase in Revenue for the Third Quarter of Fiscal 2014

ST. AUGUSTINE, FL--(Marketwired - August 18, 2014) - Creative Learning Corporation (OTCQB: CLCN), owner and developer of Bricks 4 Kidz®, and Challenge Island®, the highly-popular children's education and enrichment programs, today announced financial results for the three and nine months ended June 30, 2014.

Q3 Fiscal 2014 Financial Highlights (Year-Over-Year):

  • Revenue increased 33.3% to $2.1 million
  • Royalty fees increased 80.6% to $504,623
  • Achieved net income of $318,073 or $0.03 per share
  • Cash of $3.4 million as of June 30, 2014
  • Shareholders' equity of $3.4 million as of June 30, 2014

Brian Pappas, CEO of Creative Learning, commented, "We are pleased with our continued strong top line revenue growth, which reflects the rapid pace at which we are adding new franchises. I am especially pleased to report we recently surpassed 600 franchises worldwide and our recurring royalty fees increased over 80% compared to the same period last year. We attribute this success to our highly differentiated business model focusing on the underserved market of educational and enrichment programs. Specifically, there is growing interest in after-school and other programs that emphasize creativity and problem solving over standardized testing."

"Bricks 4 Kids has been extremely well received by the market, and Challenge Island is well positioned for similar growth worldwide. We recently announced our third franchise concept, Sew Fun Studios, and plan to launch additional franchise brands following this successful model."

Mr. Pappas concluded, "We have developed a scalable business model with minimal capex requirements and high margin, recurring revenue. Moreover, we have consistently generated very high ROI from our advertising and lead generation initiatives. We recently stepped up our advertising initiatives targeting new franchisees, which we believe will help drive our global expansion. We also increased our personnel and certain overhead, which will allow us to support our continued growth including the launch of Sew Fun Studios. We have also invested considerable resources on the international front. As a result, we expect to add several large international franchisees before year-end. Despite these investments in the business, we achieved profitability and continue to generate solid cash flow. At the same time, we maintained a strong balance sheet with over $3 million cash."

Revenue for the three months ended June 30, 2014 was $2.1 million, an increase of 33.3% compared to $1.6 million for the same period last year. Operating income for the third quarter of fiscal 2014 was $510,444 compared to $565,523 for the same period in fiscal 2013. Operating income for the third quarter of fiscal 2014 included increased personnel and international expenses, as well higher marketing expense as the company launched new advertising initiatives. Net income for the third quarter of fiscal 2014 was $318,073, or $0.03 per share, compared to net income of $565,063, or $0.05 per share, for the same period last year. Net income for the third quarter of fiscal 2014 included a $199,167 income tax expense, which was not incurred for the same period last year.

Revenue for the nine months ended June 30, 2014 was $6.0 million, an increase of 72.3% compared to $3.5 million for the same period last year. Operating income for the nine months ended June 30, 2014 was $1.5 million compared to $674,036 for the same period in fiscal 2013. Net income for the nine months ended June 30, 2014 was $962,574 million, or $0.08 per share, compared to net income of $650,969, or $0.06 per share, for the same period last year. Net income for the nine months ended June 30, 2014 included a $588,016 income tax expense, which was not incurred for the same period last year.

About Creative Learning Corporation

Creative Learning Corporation, operating under the trade names of Bricks 4 Kidz® and Challenge Island®, offers educational and enrichment programs to children ages 3-12+. Through a unique franchise business model that includes a proprietary curriculum and marketing strategies, plus a proprietary Franchise Marketing Tool (FMT), the Company provides a wide variety of programs designed to enhance students' problem solving and critical thinking skills. Creative Learning Corp is now operating in 30 countries.

SAFE HARBOR STATEMENT: This press release may contain "forward-looking statements" that are made pursuant to the "safe harbor" provisions as defined within the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words including "anticipates," "believes," "intends," "estimates," and similar expressions. These statements are based upon management's current expectations as of the date of this press release. Such forward-looking statements may include statements regarding the Company's future financial performance or results of operations, including expected revenue growth, cash flow growth, future expenses and other future or expected performances. The Company cautions readers there may be events in the future that the Company is not able to accurately predict or control and the information contained in the forward-looking statements is inherently uncertain and subject to a number of risks that could cause actual results to differ materially from those indicated in the forward-looking statements. Further information on these and other potential factors that could affect the Company's financial results is included in the Company's filings with the SEC under the "Risk Factors" sections and elsewhere in those filings.

(tables follow)

  
  
CREATIVE LEARNING CORPORATION 
  
Condensed Consolidated Statements of Operations 
                  
   (Unaudited)   (Unaudited)  
   For The Three   For The Nine  
   Months Ended   Months Ended  
   June 30,   June 30,   June 30,   June 30,  
   2014   2013   2014   2013  
Revenues:                     
 Initial franchise fees  $1,605,899   $1,280,871   $4,674,372   $2,731,471  
 Royalty fees   504,265    279,176    1,245,688    658,453  
 Corporate Creativity Center sales   3,618    26,006    70,818    86,559  
    2,113,782    1,586,053    5,990,878    3,476,483  
                      
Operating expenses:                     
 Franchise consulting and commissions:                     
  Related parties   205,187    144,689    636,639    389,961  
  Other   442,874    370,971    1,188,404    902,463  
 Franchise training and expenses   122,700    82,963    348,355    202,768  
 Salaries and payroll taxes   264,774    136,610    700,200    405,081  
 Advertising   263,860    132,356    627,467    326,981  
 Professional fees   97,135    20,707    226,752    86,020  
 Office expense   49,504    27,649    232,245    115,341  
 Depreciation   10,061    8,749    29,539    22,008  
 Stock based compensation   (0 )  -    21,537    -  
 Other general and administrative expenses   147,243    95,836    479,415    351,824  
   Total operating expenses   1,603,338    1,020,530    4,490,553    2,802,447  
                         
   Income from operations   510,444    565,523    1,500,325    674,036  
                      
Other income (expense):                     
 Interest (expense)   (0 )  -    (2 )  (1,995 )
 Other income (expense)   6,796    (460 )  50,267    (21,072 )
   Total other income (expense)   6,796    (460 )  50,265    (23,067 )
                         
   Income before provision for income taxes   517,240    565,063    1,550,590    650,969  
                      
                      
Provision for income taxes (Note 1)   199,167    -    588,016    -  
                      
Net Income  $318,073   $565,063   $962,574   $650,969  
                      
Net Income per share                     
 Basic  $0.03   $0.05   $0.08   $0.06  
 Basic Weighted average number of common shares outstanding   11,809,409    11,611,770    11,809,409    11,611,770  
 Diluted  $0.03   $0.05   $0.08   $0.06  
 Diluted Weighted average number of common shares outstanding   11,854,528    11,611,770    11,854,528    11,611,770  
                 
                 
 
 
CREATIVE LEARNING CORPORATION
 
Condensed Consolidated Balance Sheets
 
   June 30,   September 30,
   (Unaudited)   (Audited)
   2014   2013
Assets        
Current Assets:        
 Cash  $3,418,549  $2,004,947
 Accounts receivable, less allowance for doubtful accounts of $9,402 and $10,000, respectively   383,022   310,150
 Prepaid expenses   37,895   826
 Other receivables - current portion   125,093   94,301
 Deferred tax asset   1,058   1,058
   Total Current Assets   3,965,617   2,411,282
         
Note receivable from related party   70,000   70,000
Other receivables - net of current portion   50,867   37,491
Property and equipment, net of accumulated depreciation of $87,863 and $60,073, respectively   330,961   294,863
Intangible assets   125,754   95,270
Deposits   6,425   15,000
         
   Total Assets  $4,549,624  $2,923,906
         
         
Liabilities and Stockholders' Equity        
Current Liabilities:        
 Accounts payable:        
  Related parties  $14,405  $5,690
  Third party   309,617   171,889
 Payroll accruals   27,902   13,105
 Unearned revenue   95,900   35,900
 Accrued liabilities   147,600   -
 Accrued marketing fund   161,259   100,754
 Customer deposits   59,975   120,001
 Income tax payable   221,221   13,131
 Notes payable:        
  Related parties   20,000   20,000
  Other   68,055   3,560
   Total Current Liabilities   1,125,934   484,030
         
Notes payables - net of current portion   5,000   5,297
         
   Total Liabilities   1,130,934   489,327
         
Stockholders' Equity:        
         
  Preferred stock, $.0001 par value; 10,000,000 shares authorized; -0- and -0- shares issued and outstanding, respectively   -   -
  Common stock, $.0001 par value; 50,000,000 shares authorized; 11,809,409 and 11,809,409 shares issued and outstanding, respectively   1,181   1,181
  Additional paid-in capital   2,179,210   2,157,673
  Retained earnings   1,238,299   275,725
         
   Total Stockholders' Equity   3,418,690   2,434,579
            
   Total Liabilities and Stockholders' Equity  $4,549,624  $2,923,906
         
         

Contact Information

  • Contact:
    David Waldman or Natalya Rudman
    Crescendo Communications, LLC
    (212) 671-1020 x 304
    clcn@crescendo-ir.com