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

By: Bricks 4 Kidz | 0 Shares 253 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