Royalty Fees Increased 68.1% to $0.7 Million
Shareholder’s Equity Increased by $0.4 Million to $3.7 Million
Profitable for the Second Quarter of Fiscal 2015
ST. AUGUSTINE, Fla. - May 21, 2015 - (BUSINESS WIRE) - Creative Learning Corporation (OTC: CLCN), owner and developer of Bricks 4 Kidz®, Challenge Island® and Sew Fun Studios™, the highly-popular children’s education and enrichment programs, today announced financial results for the second quarter of fiscal 2015 ending March 31, 2015.
Brian Pappas, CEO of Creative Learning, commented, “We are pleased to see our high margin, recurring royalties continue to grow rapidly, increasing 68.1% to $0.7 Million versus $0.4 Million for the second quarters of fiscal 2015 and 2014, respectively. We achieved profitability this quarter, while continuing to strengthen our balance sheet with shareholders’ equity increasing to $3.7 million at March 31, 2015, compared to $3.3 million at the end of fiscal 2014. Our total revenues were not as strong in the second quarter of fiscal 2015, compared to the same period last year, due to the fact that we sold an unusually high number of international franchises and master franchises in the first half of fiscal 2014. Master franchise fees are generally in the six-figure range, averaging approximately $160,000 each for the first half of fiscal year 2014, and add significant revenue over the typical franchise fees, ranging from approximately $20,000 to $26,000, depending upon the franchise concept and scope for an initial franchise territory. Nevertheless, we continue to add franchises and now have an impressive 728 franchises to date. In April, we signed two international master franchise agreements for Bricks 4 Kidz®, one in Poland and the other in the remaining available territory in Australia. These two master franchises could bring a total of 137 new individual franchises to the Company over the course of the franchise development schedule included in their master agreements. The growth of Challenge Island® continues to be promising with 48 franchises now operating, including operating franchises in two foreign countries. I am especially pleased to report that just this month we awarded our first five Sew Fun Studios™ franchises. The market has responded extremely well to Sew Fun Studios™ and we see encouraging growth opportunities ahead for Sew Fun Studios™.”
“We are experiencing demand for all three of our franchise concepts and we project continued growth through the end of the fiscal year. Furthermore, our high margin royalty revenue continues to increase each month and we expect this will continue through the end of the fiscal year and beyond. Most importantly, we remain focused on delivering value to our shareholders by continuing to grow the business, strengthen our balance sheet and achieve high returns on capital.”
Revenue for the second quarters ended March 31, 2015 and 2014 was $1.6 million and $2.0 million, respectively. The decrease in revenue was primarily the result of a high number of international franchises and master franchises sold in the first half of fiscal 2014. Operating income for the second quarter of fiscal 2015 was $0.2 Million versus operating income of $0.5 Million for the second quarter of fiscal 2014. Net income for the second quarter of fiscal 2015 was $0.1 Million or $0.01 earnings per share, versus net income of $0.3 Million or $0.03 earnings per share for the second quarter of fiscal 2014.
Creative Learning Corporation, operating under the trade names of Bricks 4 Kidz®, Challenge Island® and Sew Fun Studios® offers educational and enrichment programs to children ages 3-12+. Through a unique franchise business model that includes a proprietary curriculum and marketing strategies, 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 38 countries.
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.
SOURCE Creative Learning Corporation
David Waldman | Natalya Rudman
Crescendo Communications, LLC
212-671-1020 x304
clcn@crescendo-ir.com
BRICKS 4 KIDZ programs provide an extraordinary atmosphere for students to build unique creations, play games, and have loads of fun using LEGO(R) bricks.