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

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.

Q3 Fiscal 2014 Financial Highlights (Year-Over-Year):

  • 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
                                                  =========== ==============
                                                                            
                                                                            

Contact:
David Waldman or Natalya Rudman
Crescendo Communications, LLC
(212) 671-1020 x 304
[email protected]

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