Pulse Beverage Reports 63 Percent Sales Growth For Second Quarter 2013

Aug. 9, 2013

The Pulse Beverage Corp. (Pulse), makers of PULSE® brand of functional beverages and Natural Cabana® Lemonade, announces its second quarter financial results for 2013 (Q2-2013) and issued a corporate update.

Gross revenues for Q2-2013 increased 63 percent compared with Q1-2013 and 48 percent when compared to Q2-2012.

Gross profits for Q2-2013 were 38 percent compared to 32 percent for Q1-2013 and 35 percent for Q2-2012. This improvement in cost of sales and gross profit is due to higher production volumes and better efficiencies at our co-packers.

For Q2-2013 Pulse's net loss after adjustments to bring generally accepted accounting principles (GAAP) to adjusted net loss before corporation income taxes, depreciation and amortization and stock based compensation was $437,000 (Q2-2012 - $327,000). This loss was, for the most part, an investment in the establishment of our extensive distribution system. This loss is minimal considering that Pulse has only been in commercial operations, since the launch of Natural Cabana® Lemonade, for some twenty-one months. Most emerging growth beverage companies incur significantly larger losses in the first few years of operations after commencing product launches and do not reach the one million annual case sale level until the fourth or fifth year after product launch; Pulse expects its Natural Cabana® brand to reach the annualized one million cases threshold by the end of 2013.

During Q2-2013 grocery and convenience chain store listings for Natural Cabana® Lemonade increased by 3,000 listings to more than 14,000.

Pulse has in excess of $4.6 million in working capital as at June 30, 2013 and an excellent working capital ratio of ten to one. The Company will likely not need additional capital to finance the growth of its operations for its existing two brands. Pulse is presently looking at a few strategic acquisitions and could possibly need a small financing for that purpose. Pulse has received several offers for additional financing so that it has the ability to finance any future acquisitions that it's considering.