- 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/
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