Second Quarter Results for Celsius Holdings: Back on Track Print E-mail
By Vinny Cassano   
Thursday, 19 August 2010 10:32

Celsius Holdings, maker of the calorie-burning beverage of the same name, last week released numbers for the second quarter, as expected. A couple of weeks ago I stated that I thought the second quarter was a pivotal one for the company, because even long term shareholders were becoming impatient after first quarter results that did not meet expectations.

Celsius came out of the "pivotal" second quarter in decent shape, in my opinion, as year-over-year sales increased an impressive 252%, while the quarter-over-quarter sales increased from $2.3 million to $4.1 million.

Celsius also reported a net loss of three million, bringing the totals for the first half of 2010 to nearly nine million in losses on revenues of $6.4 million.

Full year guidance from CEO Steve Haley has been reduced once again, this time to $15-$18 million in sales, a number that may be achievable given the trends in growth over the last quarter. That said, any sustained momentum in growth could put the numbers at the higher end of those estimates, although it would be an impressive, if not challenging feat to reach the $18 million mark.

I'm still confident that the product can and will catch on enough to make an investment in CELH pay off even more than it already has.

Given that the stock may trade back down to a few dimes under the two dollar mark, after a post-earnings dip, it might be worth picking up a few more shares. It's likely that we'll see relatively sideways trading until the next earnings report, unless other news hits the wires that could drive the price up. This should give investors ample time and opportunity to load up, add or accumulate.

On the distribution front, I've received word that Celsius has become embedded in the work out/weight loss sections of both the Army & Air Force Exchange Service (AAFES) and Navy Exchange Service (NEX) world-wide. From what I understand, Celsius has premium shelf space in many of those locations, located at eye-level and taking up multiple racks. In addition to the Green Tea and Sparkling Berry beverages, the new stick shaped on-the-go packets are also available for sale in these exchanges.

We've long heard that Celsius would move into the military exchanges, and this is an encouraging development, in my opinion.

The first quarter was a bit of a hiccup for Celsius, but these second quarter numbers are solid enough to keep investors interested moving forward. The growth in distribution continues, the sales numbers are moving in the right direction and I'm confident about the future of the company and the product to pick up some additional shares, although I'll wait and see where the share price settles over the next couple of weeks.

It's safe to say that this was a bounce-back quarter for Celsius, and things could be getting exciting again.

Also of note, it was announced that Chief Operating Officer Jeffrey Perlman is no longer employed by the company.

Vinny also authors the popular stock investing blog, VFC's Stock House.

Disclosure: Long CELH.




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