Benzinga·2025-11-06 15:17Core Viewpoint - Celsius Holdings, Inc. experienced a significant decline in share price due to a $246.7 million distributor termination, overshadowing a strong performance in the third quarter with better-than-expected earnings and sales growth [1][10]. Financial Performance - The company reported adjusted earnings per share of 42 cents, exceeding the analyst consensus estimate of 28 cents [3]. - Quarterly sales reached $725.1 million, reflecting a 173% year-over-year increase, surpassing the expected $712.156 million [3]. - Adjusted EBITDA surged by 4573% to $205.6 million, with an adjusted EBITDA margin expanding to 28.4% from 1.7% in the previous year [8]. Sales and Market Share - Retail sales for Celsius Holdings rose by 31% year over year, driven by a 114% sales surge from Alani Nu and double-digit growth for the CELSIUS brand [4]. - North American sales increased by 184% to $702 million, capturing a 20.8% market share in the U.S. energy drink sector [7]. Distributor Transition and Costs - The company incurred $246.7 million in distributor termination costs related to the transition of Alani Nu's distribution to PepsiCo in the U.S. and Canada [4]. - PepsiCo has agreed to fund the termination fees, resulting in a net neutral cash position for Celsius Holdings [6]. Debt and Cash Position - The company ended the quarter with cash and equivalents totaling $805.955 million, while long-term debt rose to $861 million, a significant increase from $0 a year earlier [9]. Inventory and Revenue Recognition - The transition of Alani Nu's business to PepsiCo is expected to affect reported results due to inventory movements, as revenue is primarily recognized upon delivery to distributor partners and retailers [5].