Celsius(US:CELH)2024-05-06 23:28Financial Performance - Net income for the three months ended March 31, 2024, was $77.8 million, compared to $41.2 million for the same period in 2023, representing an increase of 88.5%[74]. - Revenue for the three months ended March 31, 2024, was $259.9 million, with North America contributing $248.6 million, a significant increase from $259.9 million in 2023[77]. - Basic earnings per share for Q1 2024 was $0.28, compared to $0.14 for Q1 2023, reflecting a 100% increase[74]. - Revenue from Pepsi amounted to $210.5 million for the three months ended March 31, 2024, compared to $156.5 million for the same period in 2023, representing a year-over-year increase of approximately 34.5%[120]. - For Q1 2024, revenue was approximately $355.7 million, a 37% increase from $259.9 million in Q1 2023, driven primarily by North American sales[212]. - North American revenue for Q1 2024 was $339.5 million, up 37% from $248.6 million in Q1 2023, attributed to increased distribution points and SKUs per location[212]. - Gross profit for Q1 2024 increased by $68.4 million, or 60%, to $182.2 million, with gross profit margins rising to 51% from 44% in Q1 2023[216]. - Net income attributable to common stockholders for Q1 2024 was $64.8 million, with basic earnings per share of $0.28, compared to $31.5 million and $0.14 in Q1 2023[221]. Expenses and Allowances - Promotional allowances recorded as a reduction to revenue were $95.0 million for Q1 2024, up from $65.5 million in Q1 2023, indicating a 45% increase[83]. - Accrued promotional allowances increased to $129.2 million as of March 31, 2024, compared to $99.8 million as of December 31, 2023[84]. - Selling, general and administrative expenses for Q1 2024 totaled $99.0 million, a 44% increase from $68.9 million in Q1 2023[217]. - Depreciation expense for the three months ended March 31, 2024, was approximately $1.1 million, compared to $0.4 million for the same period in 2023, representing a significant increase of 175%[110]. - The Company recognized stock-based compensation expense of approximately $3.6 million for the three months ended March 31, 2024, down from $5.5 million in the same period of 2023[167]. Assets and Liabilities - Finished goods inventory decreased to $169.1 million as of March 31, 2024, from $184.4 million as of December 31, 2023[93]. - As of March 31, 2024, accounts receivable from Pepsi accounted for 67.9% of total accounts receivable, slightly down from 69.0% as of December 31, 2023[102]. - As of March 31, 2024, accounts payable was approximately $40.2 million, down from $42.8 million as of December 31, 2023, indicating a decrease of about 6.1%[117]. - The total long-lived assets-net increased to $41.6 million as of March 31, 2024, from $38.7 million as of December 31, 2023, reflecting a growth of approximately 7.4%[109]. - The carrying amount of goodwill decreased to approximately $13.9 million as of March 31, 2024, from $14.2 million as of December 31, 2023, a decline of about 2.1%[111]. - The Company had deferred revenues of approximately $174.3 million as of March 31, 2024, down from $176.7 million as of December 31, 2023, a decrease of about 1.4%[122]. - The total accrued expenses increased to $63.9 million as of March 31, 2024, from $62.1 million as of December 31, 2023, reflecting a rise of about 2.9%[118]. Stock and Equity - The Company issued Series A Preferred Stock with a fair value of $832.5 million for an issuance price of $550 million on August 1, 2022[122]. - The Series A Preferred Stock has a cumulative dividend rate of 5.00% per annum, with $6.8 million paid in Regular Dividends for the three months ended March 31, 2024[148]. - As of March 31, 2024, the conversion ratio for Series A Preferred Stock into common stock is one to fifteen, with approximately 22.0 million shares of common stock issuable upon conversion[157]. - The Company has 20.8 million shares available for issuance under the 2015 Stock Incentive Plan, which is set to expire in 2025[165]. - The total fair value of shares vested during the three months ended March 31, 2024 and 2023 was approximately $27.8 million and $16.2 million, respectively[175]. - Unrecognized compensation expense related to outstanding restricted stock units as of March 31, 2024 was $31.0 million, expected to be expensed over the next 2.3 years[175]. - Unrecognized compensation expense related to outstanding PSUs as of March 31, 2024 was approximately $5.5 million, expected to be expensed over the next 2.7 years[186]. - The Company issued an aggregate of 1.3 million shares of common stock under the 2015 Plan during the three months ended March 31, 2024, receiving proceeds of approximately $1.0 million[187]. Cash Flow and Commitments - The company had cash and cash equivalents of approximately $879.5 million as of March 31, 2024, up from $756.0 million at the end of 2023[225]. - Cash flows provided by operating activities totaled $134.6 million for Q1 2024, a significant increase from cash used in operating activities of $13.8 million in Q1 2023[227]. - As of March 31, 2024, the Company had purchase commitments to third parties of $73.0 million, up from $55.3 million as of December 31, 2023[199]. - Long-term contractual obligations as of March 31, 2024, totaled approximately $42.5 million, an increase from $34.4 million as of December 31, 2023[200]. Market Risks - The company is exposed to market risks from fluctuations in commodity prices, particularly for raw materials like aluminum cans and sweeteners[233]. - The company does not utilize hedging agreements or alternative instruments to manage risks associated with securing raw materials[233]. - The ability to recover increased costs through higher pricing is limited by the competitive environment[233]. - There have been no material changes to the market risk information since the 2023 Annual Report[234]. - The company does not use derivative financial instruments to protect against interest rate fluctuations[234]. Legal and Regulatory Matters - The Company has accrued a liability related to a jury verdict against it, estimating a range of possible outcomes between $2.1 million and $82.6 million plus interest[197]. - The Company believes various derivative actions against it are without merit and is actively negotiating settlements[193]. Strategic Initiatives - The company entered into a definitive manufacturing, sales, and distribution agreement with Suntory Oceania to expand into Australia and New Zealand, with sales expected to begin in Q4 2024[209]. - An incentive program with Pepsi was established to align business goals and expand the product portfolio across the U.S.[210].