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


August 18, 2014 - St. Augustine, FL

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
clcn@crescendo-ir.com

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