celh-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-34611

CELSIUS HOLDINGS, INC.

(Exact name of registrant as specified in its charter)


Nevada						20-2745790
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


2424 N Federal Highway, Suite 208, Boca Raton, Florida						33431
(Address of principal executive offices)						(Zip Code)

(561) 276-2239

(Registrant’s telephone number, including area code)

__________________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common Stock, $0.001 par value

CELH

Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:


Large accelerated filer	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The number of shares outstanding of the registrant’s common stock, $0.001 par value, as of July 31, 2023 was 76,891,227 shares.

TABLE OF CONTENTS


		Page

PART I – FINANCIAL INFORMATION		1

Item 1.	Financial Statements	1
	Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022 (unaudited)	1
	Consolidated Statements of Operations and Comprehensive Income for the three and six months ended June 30, 2023 and 2022 (unaudited)	2
	Consolidated Statements of Changes in Stockholders’ Equity and Mezzanine Equity for the three and six months ended June 30, 2023 (unaudited)	3
	Consolidated Statements of Changes in Stockholders’ Equity and Mezzanine Equity for the three and six months ended June 30, 2022 (unaudited)	4
	Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022 (unaudite d )	5
	Notes to Consolidated Financial Statements (unaudited)	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34

Item 4.	Controls and Procedures	34

PART II – OTHER INFORMATION		35

Item 1.	Legal Proceedings	35

Item 1A.	Risk Factors	35

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35

Item 3.	Defaults Upon Senior Securities	35

Item 4.	Mine Safety Disclosures	35

Item 5.	Other Information	36

Item 6.	Exhibits	36

SIGNATURES		37

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

Celsius Holdings, Inc.

Consolidated Balance Sheets

(In thousands, except par value) (Unaudited)


	June 30, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	681,054	$	614,159
Restricted cash	—		38,768
Accounts receivable-net	197,811		63,311
Note receivable-current, net	3,323		2,979
Inventories-net	152,545		173,289
Prepaid expenses and other current assets	23,398		11,341
Deferred other costs-current	14,124		14,124
Total current assets	1,072,255		917,971

Note receivable-non-current	—		3,574
Property and equipment-net	15,892		10,185
Deferred tax asset	28,373		501
Right of use assets-operating leases	756		972
Right of use assets-finance leases	171		208
Other long-term assets	254		263
Deferred other costs-non-current	255,400		262,462
Intangibles-net	12,211		12,254
Goodwill	13,937		13,679
Total Assets	$	1,399,249	$	1,222,069

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	94,313	$	106,147
Income taxes payable	58,798		1,193
Accrued distributor termination fees	—		3,986
Accrued promotional allowance	98,933		35,977
Lease liability obligation-operating leases	505		661
Lease liability obligation-finance leases	67		70
Deferred revenue-current	9,500		9,675
Other current liabilities	7,109		3,586
Total current liabilities	269,225		161,295

Long-term liabilities:
Lease liability obligation-operating leases	249		326
Lease liability obligation-finance leases	147		162
Deferred tax liability	2,333		15,919
Deferred revenue-non-current	171,745		179,788
Total Liabilities	443,699		357,490

Commitments and contingencies (Note 19)

Mezzanine Equity:
Series A convertible preferred shares, $0.001 par value, 5% cumulative dividends; 1,467 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively, aggregate liquidation preference of $550,000 as of June 30, 2023 and December 31, 2022, respectively	824,488		824,488

Stockholders’ Equity:
Common stock, $0.001 par value; 100,000 shares authorized, 76,884 and 76,382 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	77		76
Additional paid-in capital	278,980		280,668
Accumulated other comprehensive loss	(1,877)		(1,881)
Accumulated deficit	(146,118)		(238,772)
Total Stockholders’ Equity	131,062		40,091
Total Liabilities, Mezzanine Equity and Stockholders’ Equity	$	1,399,249	$	1,222,069

The accompanying notes are an integral part of these unaudited consolidated financial statements

Celsius Holdings, Inc.

Consolidated Statements of Operations and Comprehensive Income

(In thousands, except per share amounts)

(Unaudited)


	For The Three Months Ended June 30,				For The Six Months Ended June 30,
	2023		2022		2023		2022
Revenue	$	325,883	$	154,020	$	585,822	$	287,408
Cost of revenue	166,889		94,701		313,010		174,195
Gross profit	158,994		59,319		272,812		113,213
Selling, general and administrative expenses	94,181		46,889		163,086		90,667

Income from operations	64,813		12,430		109,726		22,546

Other Income (Expense):

Interest income on note receivable	28		55		73		133
Interest income (expense), net	5,545		(3)		10,469		(4)
Foreign exchange loss	(931)		(514)		(1,049)		(676)
Total other income (expense)	4,642		(462)		9,493		(547)

Net income before income taxes	69,455		11,968		119,219		21,999

Income tax expense	(17,946)		(2,810)		(26,483)		(6,161)

Net income	$	51,509	$	9,158	$	92,736	$	15,838

Dividends on Series A convertible preferred shares	(6,856)		—		(13,637)		—
Income allocated to participating preferred shares	(3,796)		—		(6,727)		—
Net income attributable to common stockholders	$	40,857	$	9,158	$	72,372	$	15,838

Other comprehensive income:
Foreign currency translation (loss) gain, net of income tax	(590)		(2,296)		4		(2,787)
Comprehensive income	$	40,267	$	6,862	$	72,376	$	13,051

Earnings per share:
Basic	$	0.53	$	0.12	$	0.94	$	0.21
Dilutive	$	0.52	$	0.12	$	0.92	$	0.20
Weighted average shares outstanding:
Basic	76,845		75,451		76,759		75,472
Dilutive	78,944		78,372		78,859		78,397

The accompanying notes are an integral part of these unaudited consolidated financial statements

Celsius Holdings, Inc.

Consolidated Statements of Changes in Stockholders’ Equity and Mezzanine Equity

(In thousands)

(Unaudited)


	Stockholders' Equity
	Common Stock											Mezzanine Equity
	Shares	Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders' Equity		Preferred Shares	Amount
Balance at December 31, 2022	76,382	$	76	$	280,668	$	(1,881)	$	(238,772)	$	40,091	1,467	$	824,488
Adoption of accounting standard	—	—		—		—		(82)		(82)		—	—
Stock-based compensation expense	—	—		5,507		—		—		5,507		—	—
Issuance of common stock pursuant to exercise of stock options and vested restricted stock units - Cashless	251	1		—		—		—		1		—	—
Issuance of common stock pursuant to exercise of stock options - Cash	149	—		478		—		—		478		—	—
Dividends paid to Series A convertible preferred shares	—	—		(6,781)				—		(6,781)		—
Foreign currency translation	—	—		—		594		—		594		—	—
Net income	—	—		—		—		41,227		41,227		—	—
Balance at March 31, 2023	76,782	$	77	$	279,872	$	(1,287)	$	(197,627)	$	81,035	1,467	$	824,488
Stock-based compensation expense	—	—		5,735		—		—		5,735		—	—
Issuance of common stock pursuant to exercise of stock options and vested restricted stock units - Cashless	63	—		—		—		—		—		—	—
Issuance of common stock pursuant to exercise of stock options - Cash	39	—		229		—		—		229		—	—
Dividends paid to Series A convertible preferred shares	—	—		(6,856)		—		—		(6,856)		—	—
Foreign currency translation	—	—		—		(590)		—		(590)		—	—
Net income	—	—		—		—		51,509		51,509		—	—
Balance at June 30, 2023	76,884	$	77	$	278,980	$	(1,877)	$	(146,118)	$

SEC Form 10-Q filed by Celsius Holdings Inc.