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.

  • 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)


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  
  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  


Condensed Consolidated Balance Sheets
    June 30,        September 30,
    (Unaudited)     (Audited)
    2014     2013
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


David Waldman
Crescendo Communications, LLC
(212) 671-1020 x 304

Natalya Rudman
Crescendo Communications, LLC
(212) 671-1020 x 304


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