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

By: Bricks 4 Kidz |  0 Shares     154 Reads

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)

 

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

Contacts:

David Waldman
Crescendo Communications, LLC
(212) 671-1020 x 304
clcn@crescendo-ir.com

Natalya Rudman
Crescendo Communications, LLC
(212) 671-1020 x 304
clcn@crescendo-ir.com

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