Xelr8 Holdings (AMEX:BZI)
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- Net Sales Show Increase of 47% Compared to Year Ago Third Quarter -
DENVER, Nov. 5 /PRNewswire-FirstCall/ -- XELR8 Holdings, Inc. (AMEX:BZI), a provider of functional foods, beverages and nutritional supplements, announced today its financial results for the three and nine months ended September 30, 2008.
Financial and operational highlights for third quarter and nine months:
-- Year over year revenues increased 47% in the quarter and 62% in the
nine months period
-- Gross profit was $1.6 million in the quarter and $4.6 million during
the nine months period, improvements of 49% and 72% respectively
compared to same periods one year ago
-- Growth in participants was 11,649 as of September 30, 2008, a 10%
sequential increase from Q2
-- Cash and cash equivalents were $1.8 million as of September 30, 2008
Total revenue for the third quarter ended September 30, 2008 was $2.1 million, a 47% increase compared to total revenue of $1.4 million for the third quarter ended September 30, 2007. Gross profit grew to $1.6 million for the three months ended September 30, 2008, up 49% from $1.1 million in the prior year period. Gross margin in the quarter was 77%, an improvement from 76% in the same quarter one year ago, due to increased sales of Bazi(TM), which carries a higher gross margin compared to the legacy products. Net loss for the three months ended September 30, 2008, increased slightly to $0.41 million, or $(0.03) per share, compared to a loss of $0.36 million, or $(0.02) per share, in the prior year.
Total revenue for the nine months ended September 30, 2008 was approximately $6.0 million, an increase of 62% compared to total revenue of $3.7 million for the nine months period ended September 30, 2007. Gross profit improved to $4.6 million for the nine months ended September 30, 2008, up 72% from $2.7 million in the prior year period. Gross margin in the nine months period was 77%, an improvement from 72% in the same period one year ago, due to increased sales of Bazi, which carries a higher gross margin compared to the legacy products. Net loss for the nine months ended September 30, 2008, decreased 32% to $1.8 million, or $(0.11) per share, compared to a loss of $2.6 million, or $(0.19) per share, in the prior year period.
The Company continues to remain well capitalized. As of September 30, 2008, cash and cash equivalents were approximately $1.8 million and the Company continues to be debt free. Net cash used by operating activities was $0.44 million used during the third quarter and $0.86 million used during the nine months period.
"Bazi, XELR8's powerful, concentrated, antioxidant nutritional drink continues to show major success in the marketplace, maintaining its sales momentum through the third quarter," said Mr. John Pougnet, Chief Executive Officer of XELR8. "Bazi accounts for over 92% of sales and its success vindicates management's decision to focus on establishing Bazi as the core product for the Company. During the third quarter the Company continued the sales promotional programs that have been instrumental in maintaining our distributors' high degree of enthusiasm for the product and the programs supporting it. Our 'XELR8 to a Million' promotion attained good acceptance and reached a level of success that warranted rewarding the leading distributors with recognition both internally and with cash rewards; a current expense that we expect will pay significant future benefits."
"In the current economic climate," Mr. Pougnet noted, "we anticipate a growing number of consumers will recognize the opportunity to supplement their income by becoming a member of the XELR8 team. Bazi's documented nutritional profile is designed to satisfy the needs of the consumer who is looking for a product that is easy to use and has recognized health benefits. Our compensation program has attracted many participants and our growing network now exceeds 11,600."
Mr. Pougnet concluded, "The strength of the Company is in its people and its key product -- Bazi. We will continue to focus on increasing the distributor network by offering the best combination of incentive programs and marketing assistance and will invest the necessary funds to do so. With our dedicated distributors leading the way, we believe that our goal of positive cash flow and profitability are realizable in the near future."
There will be a conference call today at 10:30 a.m. ET with the investment community, featuring John Pougnet, Chief Executive Officer of XELR8 Holdings, Inc. Interested parties may participate in the call by dialing (877) 869-3847; international callers dial (201) 689-8261. In addition, the replay of the conference call will be available approximately three hours after the call has ended. The replay can be accessed at: http://www.xelr8tools.com/Media/ConfCall102908.mp3 and will be archived for 30 days.
About XELR8 Holdings, Inc.
XELR8 Holdings, Inc. is a provider of nutritional foods and beverages designed to help enhance physical health and overall performance. XELR8 has developed a comprehensive line of nutritional supplements and functional foods designed in systems that are easy to take, simple to understand, and conveniently fit within a lifestyle. These include the Company's Eat/Drink/Snack System; Peak Performance System; and its newest market entry, Bazi(TM), a powerful, concentrated, antioxidant (Vitamins A, C & E) nutritional drink packed with eight different super fruits and berries, including the Chinese jujube plus 12 vitamins and 68 minerals, providing all the daily vitamins and minerals you need in a single, convenient, one-ounce shot.
XELR8's commitment to quality, science and research has earned the Company a loyal following of over 350 world-class athletes and an elite list of endorsers, such as 3-time World Series Champion Curt Schilling, five-time Cy Young Award Winner Randy Johnson; Super Bowl Champions Mike Alstott, Lawyer Milloy and Head Coach Mike Shanahan; professional football superstar Cadillac Williams; Olympians Briana Scurry and Caroline Lalive; Stanley Cup Winner Blake Sloan; and PGA Tour Professional Tom Pernice, Jr. XELR8 products are only available through independent distributors located throughout the nation. For more information about XELR8, please visit http://www.xelr8.com/ or http://www.drinkbazi.com/ .
Forward-looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including prospects for XELR8's distribution network. Actual results may differ from those discussed in such forward-looking statements. These forward-looking statements include risks and uncertainties that include the Company's ability to attract and retain distributors; changes in demand for the Company's products; changes in the level of operating expenses; changes in general economic conditions that impact consumer behavior and spending; product supply; the availability, amount, and cost of capital for the Company; and the Company's use of such capital. More information about factors that potentially could affect the Company's financial results is included in the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-KSB for the year ended December 31, 2007 and all subsequent filings. Certain statements in this release regarding the Company's agreements are in accordance with the guidelines established by the Federal Trade Commission for endorsements in advertising.
Contacts: Stephen D. Axelrod, CFA
John Pougnet, CEO Alisa Steinberg (Media)
XELR8 Holdings, Inc. Wolfe Axelrod Weinberger Assoc. LLC
(303) 316-8577 (212) 370-4500
- Financial Tables to Follow -
XELR8 HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2008 2007
---- ----
ASSETS
Current assets:
Cash and cash
equivalents $1,827,842 $2,245,858
Accounts receivable, net of
allowance for doubtful
accounts of $2,376 and
$12,231, respectively 5,016 7,460
Inventory, net of
allowance for
obsolescence of
$187,619 and $189,403,
respectively 394,556 370,843
Prepaid expenses
and other
current assets 417,220 329,015
------- -------
Total current assets 2,644,634 2,953,176
Intangible assets, net 17,038 17,959
Property and
equipment, net 46,038 81,405
Deferred offering
and loan costs - -
------- -------
Total assets $2,707,710 $3,052,540
========== ==========
LIABILITIES AND SHAREHOLDERS'
EQUITY (DEFICIT)
Current
liabilities:
Accounts payable
and accrued
expenses $1,111,826 $832,697
----------- ---------
Total Liabilities 1,111,826 832,697
--------- -------
Commitments and
Contingencies
SHAREHOLDERS'
EQUITY (DEFICIT)
(Note 2):
Preferred stock,
authorized
5,000,000 shares,
$.001 par value,
none issued or
outstanding - -
Common stock,
authorized
50,000,000 shares,
$.001 par value,
15,697,170 and
15,197,170 shares
issued and
outstanding
respectively 15,697 15,197
Additional paid in
capital 23,843,449 22,696,657
Accumulated (deficit) (22,263,262) (20,492,011)
------------ ------------
Total shareholders'
equity (deficit) 1,595,884 2,219,843
--------- ---------
Total liabilities
and shareholders'
equity $2,707,710 $3,052,540
=========== ===========
XELR8 HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three and Nine Months Ended September 30, 2008 and 2007
For the Three Months Ended For the Nine Months Ended
September September September September
30, 2008 30, 2007 30, 2008 30, 2007
--------- --------- ----------- -----------
Net sales $2,109,995 $1,432,220 $5,964,194 $3,687,690
Cost of
goods sold 486,068 342,233 1,369,128 1,014,765
--------- --------- ----------- -----------
Gross profit 1,623,927 1,089,987 4,595,066 2,672,925
--------- --------- ----------- -----------
Operating
expenses:
Selling and
marketing
expenses 1,355,045 820,080 4,059,998 2,417,200
General and
Administrative
expenses 674,712 642,930 2,295,770 2,429,738
Research and
development
expenses 3,230 3,214 5,742 8,342
Depreciation
and
amortization 11,470 11,716 35,158 45,992
--------- --------- ----------- -----------
Total
operating
expenses 2,044,457 1,477,940 6,396,668 4,901,272
--------- --------- ----------- -----------
Net (loss) from
operations (420,530) (387,953) (1,801,602) (2,228,347)
--------- --------- ----------- -----------
Other income
(expense)
Interest
income 11,615 32,674 45,251 67,716
Other
expenses - - (13,770)
(Loss) on
disposal of
asset - - (1,130) -
Interest
(expense) - - - (439,537)
--------- --------- ----------- -----------
Total other
income
(expense) 11,615 32,674 30,351 (371,821)
--------- --------- ----------- -----------
Net (loss) $(408,915) $(355,279) $(1,771,251) $(2,600,168)
========== ========== ============ ============
Net (loss) Per
common share
Basic and Diluted
net (loss) per share $(0.03) $(0.02) $(0.11) $(0.19)
======== ======== ======== ========
Weighted average
common shares
outstanding,
basic and diluted 15,697,170 15,197,170 15,576,732 13,544,596
XELR8 HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended September 30, 2008 and 2007
September 30, September 30,
2008 2007
------------- -------------
Cash flows from operating
activities:
Net income (loss) $(1,771,251) $(2,600,168)
Adjustments to reconcile
Depreciation and
amortization 35,158 45,993
Loss on disposal of
asset 1,130 -
Stock and stock options
issued for services 694,319 1,188,848
Expense related to
anti-dilution of
warrants 13,770 -
Interest expense and
amortization related
to bridge loan
financing - 428,889
Change in allowance for
doubtful accounts (9,855) 9,121
Change in allowance for
inventory obsolescence (1,784) 53,760
Change in allowance for
product returns 42,063 30,866
Changes in assets and
liabilities:
Accounts receivable 12,299 (11,998)
Inventory (21,930) (255,530)
Other current assets (88,204) (62,137)
Accounts payable and
accrued expenses 237,066 214,235
--------- ---------
Net cash (used) by
operating activities (857,219) (958,121)
--------- ---------
Cash flows from investing
activities:
Proceeds from maturity of
investments - -
Capital expenditures - (14,242)
--------- ---------
Net cash (used) by
investing activities - (14,242)
--------- ---------
Cash flows from financing
activities:
Proceeds from bridge loan
financing - 250,000
Repayments of bridge
financing - (500,000)
Offering costs (60,797) (380,551)
Issuance of common stock 500,000 4,000,000
--------- ---------
Net cash provided from
financing activities 439,203 3,369,449
------- ---------
NET INCREASE (DECREASE)
IN CASH (418,016) 2,397,086
CASH AND CASH
EQUIVALENTS, BEGINNING
OF THE PERIOD 2,245,858 76,147
--------- ------
CASH AND CASH
EQUIVALENTS, END OF THE
PERIOD $1,827,842 $2,473,233
=========== ===========
SUPPLEMENTAL CASH FLOW
DISCLOSURES
Cash paid for interest $- $13,425
=== =======
Stock issued for
satisfaction of accrued
compensation expense $- $540,000
=== =========
Deferred offering costs
applied against proceeds
from offering $- $25,000
=== ========
DATASOURCE: XELR8 Holdings, Inc.
CONTACT: John Pougnet, CEO of XELR8 Holdings, Inc., +1-303-316-8577,
; or Stephen D. Axelrod, CFA, , or Alisa
Steinberg (Media), , both of Wolfe Axelrod Weinberger
Assoc. LLC, for XELR8 Holdings, Inc., +1-212-370-4500
Web Site: http://www.xelr8.com/