Stephen Haley - CEO & Chairman Geary W. Cotton - Chief Financial Officer

Good morning and welcome to Celsius Holdings’ Third Quarter 2010 investor conference call. Joining me on the call today is Steve Haley, the company’s Chief Executive Officer and Geary Cotton, the Chief Financial Officer. During the course of this conference call we will make forward-looking statements regarding future events and the future performance of the Company. We caution you that such statements reflect our best judgment based on factors currently known to us, and that you should not rely on such forward-looking statements since our actual events or results could differ materially as a result of a number of important factors. These factors include general economic and business conditions, trends, the impact of competition, technology and regulations and other risks and uncertainties discussed in the reports we file from time to time with the Securities and Exchange Commission. We assume no obligation to update any forward-looking statements or other information provided during this conference call. In adherence to Regulation Fair Disclosure, the Company has provided information in its third quarter 2010 results press release and this publicly announced conference call. We will not provide any further guidance or updates on our performance during the quarter unless we do so in a public forum.

Thanks Christine and thank you for joining us for our Third Quarter 2010 investor conference call. Financial results for our third quarter 2010 were released to the public yesterday in our press release. You can view a copy of the press release on our web-site at www.celsius.com in the investor section. The quarter can best be summed up as an aggressive effort to raise the top line through heavy promotions and consumer advertising with mixed results. Scan data from the cash registers showed that consumer sales continued to increase but not at a corresponding rate of the increased marketing spend. This led to a lower net revenue number and higher loss than our plans called for. Before getting into more of the details, let me first provide a summary of our results and offer some brief insight into the numbers. Geary will provide more details in a few minutes. Our top line Net Revenue was $1.8 million. This is down from the $4.1 million in the second quarter. You may ask if consumer sales at the register are increasing, why would the top line decrease from the last quarter. One of the first reasons is we shipped a large pipeline order in Q2 to Wal-Mart. These large initial orders that mainly fill the supply pipeline and store shelves, lead to a high degree of lumpiness in revenue as we are adding these larger retailers. If you remember, we had the initial pipeline order for Costco in the 4th quarter of 2009. A second reason for the lower than expected top line is a pipeline order to another large retailer was delayed by the retailer until the latter part of the quarter and we were requested to only ship about half of the planned amount in September. In addition to the…

Thank you Steve. Net Revenue for the three months ended September 30, 2010 increased 32% to $1.8 million from $1.3 million for the comparable quarter in 2009. The quarter this year included a charge to revenue of $1.8 million dollars compared to $232,000 last year related to discounts, coupons, slotting allowances and promotions. This is an increase of over one and a half million dollars. As Steve mentioned, the company strategically determined to be very aggressive with the promotions in the third quarter. The details of the $1.8 million dollars of promotions include: $450,000 in temporary price reductions $870,000 in consumer coupons $380,000 in slotting fees and $100,000 for other discounts and allowances If you compare invoiced revenue this year versus last year the amount is $3.5 million against $1.5 million or an increase of 133%. Total case equivalents for the three months ended September 30, 2010 increased to 155,000 vs. 64,000 for the same period last year, an increase of 142%. Sequentially, from the second quarter, net revenue was down from the $4.1 million of which $1.4 million was a pipeline fill. Pipeline fill in the third quarter was approximately $560,000. Gross profit was 2% in the third quarter of 2010 as compared to 43% for the same period in 2009. Because of the large promotions this year, a more accurate view of the actual cost of goods should be compared to invoiced sales. The third quarter 2010 cost of goods was 50% of invoiced sales compared to 49% for the third quarter of 2009. Sales and Marketing expenses increased substantially to $4.2 million in the third quarter versus $2.6 million in the same quarter a year ago. Expense increases as compared to the same quarter last year were: Consumer Advertising = $1.0 million Product Sampling = 500,000 General…

Thanks Geary. Let me once again say that we remain excited about the potential for the company, the Celsius brand and the MetaPlus technology. It is taking more time and capital than we planned but so many of the elements of the original vision continue to get better and stronger. The official review of our studies is a big plus for us and the new products built on the MetaPlus formula look like winners. The fitness wave is huge and growing and the pre-exercise segment looks to offer substantial growth. We are very well positioned here and excited about exploiting our head start in the emerging category. If you haven’t been to our website recently please do so. There are many more customer success stories and more insight into the pre-exercise category and positioning. We see that it will take additional capital to continue to grow the brand and we are committed to finding a strategic partner for not only the required growth capital but hopefully extra value-add in the marketplace. The team and I are committed to working together to grow the Celsius brand and company as well as this exciting new category. With that, we’ll open it up for questions. Operator do we have any questions in the queue? [Q&A]: