BZI Xelr8 Holdings

- Net Sales Show Increase of 47% Compared to Year Ago Third Quarter - DENVER, Nov. 5 /PRNewswire-FirstCall/ -- XELR8 Holdings, Inc. (AMEX:BZI), a provider of functional foods, beverages and nutritional supplements, announced today its financial results for the three and nine months ended September 30, 2008. Financial and operational highlights for third quarter and nine months: -- Year over year revenues increased 47% in the quarter and 62% in the nine months period -- Gross profit was $1.6 million in the quarter and $4.6 million during the nine months period, improvements of 49% and 72% respectively compared to same periods one year ago -- Growth in participants was 11,649 as of September 30, 2008, a 10% sequential increase from Q2 -- Cash and cash equivalents were $1.8 million as of September 30, 2008 Total revenue for the third quarter ended September 30, 2008 was $2.1 million, a 47% increase compared to total revenue of $1.4 million for the third quarter ended September 30, 2007. Gross profit grew to $1.6 million for the three months ended September 30, 2008, up 49% from $1.1 million in the prior year period. Gross margin in the quarter was 77%, an improvement from 76% in the same quarter one year ago, due to increased sales of Bazi(TM), which carries a higher gross margin compared to the legacy products. Net loss for the three months ended September 30, 2008, increased slightly to $0.41 million, or $(0.03) per share, compared to a loss of $0.36 million, or $(0.02) per share, in the prior year. Total revenue for the nine months ended September 30, 2008 was approximately $6.0 million, an increase of 62% compared to total revenue of $3.7 million for the nine months period ended September 30, 2007. Gross profit improved to $4.6 million for the nine months ended September 30, 2008, up 72% from $2.7 million in the prior year period. Gross margin in the nine months period was 77%, an improvement from 72% in the same period one year ago, due to increased sales of Bazi, which carries a higher gross margin compared to the legacy products. Net loss for the nine months ended September 30, 2008, decreased 32% to $1.8 million, or $(0.11) per share, compared to a loss of $2.6 million, or $(0.19) per share, in the prior year period. The Company continues to remain well capitalized. As of September 30, 2008, cash and cash equivalents were approximately $1.8 million and the Company continues to be debt free. Net cash used by operating activities was $0.44 million used during the third quarter and $0.86 million used during the nine months period. "Bazi, XELR8's powerful, concentrated, antioxidant nutritional drink continues to show major success in the marketplace, maintaining its sales momentum through the third quarter," said Mr. John Pougnet, Chief Executive Officer of XELR8. "Bazi accounts for over 92% of sales and its success vindicates management's decision to focus on establishing Bazi as the core product for the Company. During the third quarter the Company continued the sales promotional programs that have been instrumental in maintaining our distributors' high degree of enthusiasm for the product and the programs supporting it. Our 'XELR8 to a Million' promotion attained good acceptance and reached a level of success that warranted rewarding the leading distributors with recognition both internally and with cash rewards; a current expense that we expect will pay significant future benefits." "In the current economic climate," Mr. Pougnet noted, "we anticipate a growing number of consumers will recognize the opportunity to supplement their income by becoming a member of the XELR8 team. Bazi's documented nutritional profile is designed to satisfy the needs of the consumer who is looking for a product that is easy to use and has recognized health benefits. Our compensation program has attracted many participants and our growing network now exceeds 11,600." Mr. Pougnet concluded, "The strength of the Company is in its people and its key product -- Bazi. We will continue to focus on increasing the distributor network by offering the best combination of incentive programs and marketing assistance and will invest the necessary funds to do so. With our dedicated distributors leading the way, we believe that our goal of positive cash flow and profitability are realizable in the near future." There will be a conference call today at 10:30 a.m. ET with the investment community, featuring John Pougnet, Chief Executive Officer of XELR8 Holdings, Inc. Interested parties may participate in the call by dialing (877) 869-3847; international callers dial (201) 689-8261. In addition, the replay of the conference call will be available approximately three hours after the call has ended. The replay can be accessed at: http://www.xelr8tools.com/Media/ConfCall102908.mp3 and will be archived for 30 days. About XELR8 Holdings, Inc. XELR8 Holdings, Inc. is a provider of nutritional foods and beverages designed to help enhance physical health and overall performance. XELR8 has developed a comprehensive line of nutritional supplements and functional foods designed in systems that are easy to take, simple to understand, and conveniently fit within a lifestyle. These include the Company's Eat/Drink/Snack System; Peak Performance System; and its newest market entry, Bazi(TM), a powerful, concentrated, antioxidant (Vitamins A, C & E) nutritional drink packed with eight different super fruits and berries, including the Chinese jujube plus 12 vitamins and 68 minerals, providing all the daily vitamins and minerals you need in a single, convenient, one-ounce shot. XELR8's commitment to quality, science and research has earned the Company a loyal following of over 350 world-class athletes and an elite list of endorsers, such as 3-time World Series Champion Curt Schilling, five-time Cy Young Award Winner Randy Johnson; Super Bowl Champions Mike Alstott, Lawyer Milloy and Head Coach Mike Shanahan; professional football superstar Cadillac Williams; Olympians Briana Scurry and Caroline Lalive; Stanley Cup Winner Blake Sloan; and PGA Tour Professional Tom Pernice, Jr. XELR8 products are only available through independent distributors located throughout the nation. For more information about XELR8, please visit http://www.xelr8.com/ or http://www.drinkbazi.com/ . Forward-looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including prospects for XELR8's distribution network. Actual results may differ from those discussed in such forward-looking statements. These forward-looking statements include risks and uncertainties that include the Company's ability to attract and retain distributors; changes in demand for the Company's products; changes in the level of operating expenses; changes in general economic conditions that impact consumer behavior and spending; product supply; the availability, amount, and cost of capital for the Company; and the Company's use of such capital. More information about factors that potentially could affect the Company's financial results is included in the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-KSB for the year ended December 31, 2007 and all subsequent filings. Certain statements in this release regarding the Company's agreements are in accordance with the guidelines established by the Federal Trade Commission for endorsements in advertising. Contacts: Stephen D. Axelrod, CFA John Pougnet, CEO Alisa Steinberg (Media) XELR8 Holdings, Inc. Wolfe Axelrod Weinberger Assoc. LLC (303) 316-8577 (212) 370-4500 - Financial Tables to Follow - XELR8 HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS September 30, December 31, 2008 2007 ---- ---- ASSETS Current assets: Cash and cash equivalents $1,827,842 $2,245,858 Accounts receivable, net of allowance for doubtful accounts of $2,376 and $12,231, respectively 5,016 7,460 Inventory, net of allowance for obsolescence of $187,619 and $189,403, respectively 394,556 370,843 Prepaid expenses and other current assets 417,220 329,015 ------- ------- Total current assets 2,644,634 2,953,176 Intangible assets, net 17,038 17,959 Property and equipment, net 46,038 81,405 Deferred offering and loan costs - - ------- ------- Total assets $2,707,710 $3,052,540 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable and accrued expenses $1,111,826 $832,697 ----------- --------- Total Liabilities 1,111,826 832,697 --------- ------- Commitments and Contingencies SHAREHOLDERS' EQUITY (DEFICIT) (Note 2): Preferred stock, authorized 5,000,000 shares, $.001 par value, none issued or outstanding - - Common stock, authorized 50,000,000 shares, $.001 par value, 15,697,170 and 15,197,170 shares issued and outstanding respectively 15,697 15,197 Additional paid in capital 23,843,449 22,696,657 Accumulated (deficit) (22,263,262) (20,492,011) ------------ ------------ Total shareholders' equity (deficit) 1,595,884 2,219,843 --------- --------- Total liabilities and shareholders' equity $2,707,710 $3,052,540 =========== =========== XELR8 HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three and Nine Months Ended September 30, 2008 and 2007 For the Three Months Ended For the Nine Months Ended September September September September 30, 2008 30, 2007 30, 2008 30, 2007 --------- --------- ----------- ----------- Net sales $2,109,995 $1,432,220 $5,964,194 $3,687,690 Cost of goods sold 486,068 342,233 1,369,128 1,014,765 --------- --------- ----------- ----------- Gross profit 1,623,927 1,089,987 4,595,066 2,672,925 --------- --------- ----------- ----------- Operating expenses: Selling and marketing expenses 1,355,045 820,080 4,059,998 2,417,200 General and Administrative expenses 674,712 642,930 2,295,770 2,429,738 Research and development expenses 3,230 3,214 5,742 8,342 Depreciation and amortization 11,470 11,716 35,158 45,992 --------- --------- ----------- ----------- Total operating expenses 2,044,457 1,477,940 6,396,668 4,901,272 --------- --------- ----------- ----------- Net (loss) from operations (420,530) (387,953) (1,801,602) (2,228,347) --------- --------- ----------- ----------- Other income (expense) Interest income 11,615 32,674 45,251 67,716 Other expenses - - (13,770) (Loss) on disposal of asset - - (1,130) - Interest (expense) - - - (439,537) --------- --------- ----------- ----------- Total other income (expense) 11,615 32,674 30,351 (371,821) --------- --------- ----------- ----------- Net (loss) $(408,915) $(355,279) $(1,771,251) $(2,600,168) ========== ========== ============ ============ Net (loss) Per common share Basic and Diluted net (loss) per share $(0.03) $(0.02) $(0.11) $(0.19) ======== ======== ======== ======== Weighted average common shares outstanding, basic and diluted 15,697,170 15,197,170 15,576,732 13,544,596 XELR8 HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended September 30, 2008 and 2007 September 30, September 30, 2008 2007 ------------- ------------- Cash flows from operating activities: Net income (loss) $(1,771,251) $(2,600,168) Adjustments to reconcile Depreciation and amortization 35,158 45,993 Loss on disposal of asset 1,130 - Stock and stock options issued for services 694,319 1,188,848 Expense related to anti-dilution of warrants 13,770 - Interest expense and amortization related to bridge loan financing - 428,889 Change in allowance for doubtful accounts (9,855) 9,121 Change in allowance for inventory obsolescence (1,784) 53,760 Change in allowance for product returns 42,063 30,866 Changes in assets and liabilities: Accounts receivable 12,299 (11,998) Inventory (21,930) (255,530) Other current assets (88,204) (62,137) Accounts payable and accrued expenses 237,066 214,235 --------- --------- Net cash (used) by operating activities (857,219) (958,121) --------- --------- Cash flows from investing activities: Proceeds from maturity of investments - - Capital expenditures - (14,242) --------- --------- Net cash (used) by investing activities - (14,242) --------- --------- Cash flows from financing activities: Proceeds from bridge loan financing - 250,000 Repayments of bridge financing - (500,000) Offering costs (60,797) (380,551) Issuance of common stock 500,000 4,000,000 --------- --------- Net cash provided from financing activities 439,203 3,369,449 ------- --------- NET INCREASE (DECREASE) IN CASH (418,016) 2,397,086 CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD 2,245,858 76,147 --------- ------ CASH AND CASH EQUIVALENTS, END OF THE PERIOD $1,827,842 $2,473,233 =========== =========== SUPPLEMENTAL CASH FLOW DISCLOSURES Cash paid for interest $- $13,425 === ======= Stock issued for satisfaction of accrued compensation expense $- $540,000 === ========= Deferred offering costs applied against proceeds from offering $- $25,000 === ======== DATASOURCE: XELR8 Holdings, Inc. CONTACT: John Pougnet, CEO of XELR8 Holdings, Inc., +1-303-316-8577, ; or Stephen D. Axelrod, CFA, , or Alisa Steinberg (Media), , both of Wolfe Axelrod Weinberger Assoc. LLC, for XELR8 Holdings, Inc., +1-212-370-4500 Web Site: http://www.xelr8.com/

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