Boo Koo Holdings, Inc. Announces 2008 First Quarter Financial Results

ADDISON, Texas, May 8 /PRNewswire-FirstCall/ -- Boo Koo Holdings, Inc. OTCBulletinBoard: BOKO (Boo Koo), an energy drink company, announced today financial results for the first quarter ended March 31, 2008.

Net sales for the first quarter of fiscal 2008 were $501,557 compared to $2.4 million for the first quarter of fiscal 2007, a decrease of 78.8 percent. The Company continues to be negatively impacted by the loss of key distributors. Many of the lost distributors are independent Coca-Cola distributors who have dropped Boo Koo over the last six months due to absorbing additional Coca-Cola North America products.

Gross margin for the first quarter of fiscal 2008 of 1.3%, as a percent of gross sales, versus the fiscal 2007 first quarter gross margin of 41.4%, was lower due to a much higher percentage of sales at close out prices in fiscal 2008, as well as the addition of Gazzu(TM), our private label brand for Circle K which has a lower margin than our Boo Koo energy drink.

Net loss for the three months ended March 31, 2008 was $(2.5) million or $(0.07) per share, compared to a net loss of $(1.2) million or $(0.06) per share for the three months ended March 31, 2007. The increased net loss is primarily the result of lower gross sales at lower margins, as well as higher operating expenses due to increased legal and marketing costs.

Currently, the Company is in the process of finalizing its launch of its next generation energy drink Boo Koo Burner(TM), which we expect to launch in early June. Additionally, we are negotiating an agreement with Circle K to add additional products to the Gazzu(TM) line. Gazzu(TM) is now available in over 2,000 Circle K stores across the US as well as expanding its product offerings under the brand name Gazzu(TM). Going forward part of management's restructuring plans is to focus on developing and launching new products that improve the company's performance, as well as reducing costs in areas that are not commercially viable.

About Boo Koo

Boo Koo develops, produces, markets and distributes alternative beverage category energy drinks under the Boo Koo(R) and Gazzu(TM) brand names. Boo Koo currently sells and distributes its products in parts of the United States and Canada through its network of regional bottlers and other direct store delivery distributors, including independent Coca-Cola, Cadbury Schweppes and other wholesale distributors. Gazzu(TM) is sold exclusively to Circle K. Boo Koo's products are sold primarily to mainstream convenience and grocery store chains, drug stores, gas stations and other retail outlets.

Forward-looking Statements

This news release contains "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements related to future products and relationships. Forward-looking statements include statements with respect to the Company's beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond the Company's control, and which may cause the Company's actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements, including its ability to raise additional capital, its reliance on distributors of its products, its ability to manage inventory, its ability to maintain relationships with customers, its reliance on third parties to produce and package its products, its limited operating history, the availability and cost of raw materials, effects of competition and the other factors listed under "Risk Factors" in its filings with the SEC. All statements other than statements of historical fact are statements that could be forward-looking statements. The Company assumes no obligation to update the information contained in this news release.

    Boo Koo Holdings, Inc.
    Consolidated Statements of Operations (Unaudited)
    For the Three Months Ended March 31, 2008 and 2007

                                                Three Months Ended March 31,
                                                    2008           2007

    Net sales                                     $501,557      $2,364,671
    Cost of sales                                  494,206       1,288,676

          Gross profit                               7,351       1,075,995

    Operating expenses:
      Salaries, wages and other compensation       957,088         850,389
      Advertising, marketing and promotions        550,533         322,107
      Travel and entertainment                     135,845          82,677
      General and administrative                   850,335         510,661
      Depreciation and amortization                 36,621          97,792

          Total operating expenses               2,530,422       1,863,626

          Loss from operations                  (2,523,071)       (787,631)

    Other (income) and expense:
      Interest (income) expense, net               (23,405)        137,782
      Amortization of debt discount                      -         276,108

          Loss before income taxes              (2,499,666)     (1,201,521)

    Income tax expense                                   -               -

          Net loss                             $(2,499,666)    $(1,201,521)

    Basic and diluted net loss per share            $(0.07)         $(0.06)

    Weighted average number of shares           34,572,380      18,776,039



    Boo Koo Holdings, Inc.
    Consolidated Balance Sheets (Unaudited)
    As of March 31, 2008 and March 31, 2007

                                                 March 31,      December 31,
                                                   2008            2007
    ASSETS

    Current assets:
      Cash and cash equivalents                 $1,755,565      $4,022,641
      Accounts receivable, net                     152,799         219,640
      Inventories, net                           1,016,524       1,308,384
      Prepaid expenses and other                   239,375         309,347
          Total current assets                   3,164,263       5,860,012

    Property and equipment, net                    400,913         448,477
    Other assets, net                                  750             750

          Total assets                          $3,565,926      $6,309,239

    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:
      Accounts payable                            $403,731        $473,088
      Accrued expenses                           1,038,377       1,286,188
      Current portion of accrued
       litigation settlement                     1,012,077       1,012,077
      Current portion of long-term debt             47,076          64,866
      Current portion of capital lease
       obligations                                  13,880          14,011
          Total current liabilities              2,515,141       2,850,230

    Long-term debt, less current portion            11,095          26,532
    Accrued litigation settlement, less
     current portion                               772,119         772,119
    Capital lease obligations, less
     current portion                                 3,025           6,228
          Total liabilities                      3,301,380       3,655,109

    Stockholders' equity:
      Common stock                                   3,457           3,457
      Additional paid-in capital                25,533,938      25,423,856
      Accumulated deficit                      (25,272,849)    (22,773,183)
          Total stockholders' equity               264,546       2,654,130

          Total liabilities and
           stockholders' equity                 $3,565,926      $6,309,239



    Boo Koo Holdings, Inc.
    Consolidated Statements of Cash Flows (Unaudited)
    For the Three Months Ended March 31, 2008 and 2007

                                                Three Months Ended March 31,
                                                   2008            2007
    Cash flow from operating activities:
      Net loss                                 $(2,499,666)    $(1,201,521)
      Adjustments to reconcile net loss
       to net cash used in operating
       activities:
        Depreciation and amortization               36,621          97,792
        Gain on disposal of property
         and equipment                              (3,728)              -
        Amortization of debt discount                    -         276,108
        Related party note interest
         added to principal                              -          74,416
        Stock-based compensation                   154,840          82,232
        Other                                      (44,758)              -
        Changes in operating assets
         and liabilities:
          Accounts receivable                       66,842         369,839
          Inventories                              291,860         223,613
          Prepaid expenses and other                69,972           8,090
          Other assets                                   -         (58,594)
          Accounts payable                         (69,357)        133,340
          Accrued expenses                        (247,811)       (321,007)

             Net cash used in operating
              activities                        (2,245,185)       (315,692)

    Cash flow from investing activities:
      Purchase of property and equipment            (4,329)              0
      Net proceeds from sales of
       property and equipment                       19,000               -

             Net cash provided by investing
              activities                            14,671               0

    Cash flow from financing activities:
      Principal payments on long-term
       borrowings                                  (33,227)        (92,555)
      Net borrowings (payments) on
       revolving line of credit                          -      (1,448,068)
      Net proceeds from borrowings from
       related parties                                   -       2,000,000
      Net borrowings (payments) on
       capital lease obligations                    (3,335)        (23,898)
      Proceeds from exercise of stock
       warrants                                          -           5,439

             Net cash (used in) provided by
              financing activities                 (36,562)        440,918

    Net (decrease) increase in cash and
     cash equivalents                           (2,267,076)        125,226
    Cash and cash equivalents, beginning
     of year                                     4,022,641          79,523
    Cash and cash equivalents, end of the
     period                                     $1,755,565        $204,749