U.S. Markets closed

FitLife Brands Announces Second Quarter 2019 Results

OMAHA, Neb., Aug. 09, 2019 (GLOBE NEWSWIRE) -- FitLife Brands, Inc. (“FitLife” or the “Company”) (OTC Pink: FTLF), an international provider of innovative and proprietary nutritional supplements for health-conscious consumers marketed under the brand names NDS Nutrition™, PMD®, SirenLabs®, CoreActive®, Metis Nutrition™, iSatori™, Energize, and BioGenetic Laboratories, today announced results for the three and six months ended June 30, 2019.

Highlights for the quarter ended June 30, 2019 include:

  • Total revenue increased 5.5% to $4.6 million.
  • Direct-to-consumer online sales increased to 13.5% of total revenue, compared to 4.5% in the same quarter last year, with Energize and select iSatori products continuing to achieve the strongest unit movement.
  • Gross profit improved 2.7% to $1.9 million.
  • Operating expense declined 10.5% to $1.4 million.
  • Net income available to common shareholders improved to $0.5 million, or $0.43 per diluted share, compared to $0.2 million, or $0.16 per diluted share, in the same quarter last year.
  • As a result of the reverse/forward split that was executed during the quarter, the Company repurchased approximately 8.9% of its outstanding shares.
  • For the first time in several years, the Company achieved a net cash position, with cash of $0.9 million exceeding total debt of $0.7 million at quarter end.

For the first quarter ended June 30, 2019, total revenue was $4.6 million versus $4.4 million in the same quarter last year, an increase of 5.5%.  The increase was primarily attributable to an increase in our online direct-to-consumer sales with our brands such as Energize, offset partially by a decline in our wholesale revenue.  During the second quarter of 2019, online sales accounted for 13.5% of the Company’s revenue, compared to 4.5% during the same quarter last year.

Gross profit improved to $1.9 million, an increase of 2.7% from the second quarter of 2018.  Gross margin declined from 41.2% to 40.1% over the same time period, driven primarily by greater promotional activity during the quarter in our iSatori wholesale business. 

Total operating expense for the second quarter of 2019 declined 10.5% to $1.4 million, primarily due to cost reduction initiatives that were implemented throughout 2018.  Operating income for the second quarter increased 100% to $0.4 million.

Net income available to common shareholders for the second quarter of 2019 was $0.5 million, an increase of 211% compared to the same period last year.  The Company delivered basic earnings per share of $0.51—or $0.43 per diluted share—in the quarter, compared to $0.16 per share in the same quarter last year.  Earnings during the quarter benefitted from a non-recurring legal settlement amounting to $0.14 million.

For the six-month period ended June 30, 2019, total revenue was $10.5 million, a 16.7% increase over the prior year.  Operating income was $1.6 million and net income available to common shareholders was $1.7 million compared to $0.5 million and $0.4 million, respectively, during the prior year period.

The Company’s balance sheet has continued to improve consistent with operations.  As of June 30, 2019, the Company’s cash balance of $0.9 million exceeded its total outstanding debt of $0.7 million. 

Dayton Judd, the Company’s Chairman and CEO, commented “I am pleased that the Company’s operations continue to improve.  Our improved cost structure and financial flexibility is giving us the freedom to invest in marketing and explore other opportunities to further strengthen and grow our Company.”

About FitLife Brands
FitLife Brands is a developer and marketer of innovative and proprietary nutritional supplements for health-conscious consumers.  FitLife markets over 80 different dietary supplements to promote sports nutrition, improved performance, weight loss and general health primarily through domestic and international GNC® franchise locations as well as through more than 25,000 additional domestic retail locations and, increasingly, online.  FitLife is headquartered in Omaha, Nebraska.  For more information please visit our new website at www.fitlifebrands.com.

Forward-Looking Statements
Statements in this release that are forward looking involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to be materially different from any future performance that may be suggested in this news release.  Such factors may include, but are not limited to, the ability to of the Company to continue to grow revenue, and the Company's ability to continue to achieve positive cash flow given the Company's existing and anticipated operating and other costs.  Many of these risks and uncertainties are beyond the Company's control.  Reference is made to the discussion of risk factors detailed in the Company's filings with the Securities and Exchange Commission including its reports on Form 10-K and 10-Q.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made.

Dayton Judd
djudd@fitlifebrands.com

FITLIFE BRANDS, INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS  
    (Unaudited)      
ASSETS:   June 30,   December 31,  
     2019     2018   
           
CURRENT ASSETS          
Cash   $   917,000     $   259,000    
Accounts receivable, net of allowance of doubtful accounts, product returns, sales returns and incentive programs of $294,000 and $455,000, respectively       3,220,000         1,433,000    
Inventories, net of allowance for obsolescence of $131,000 and $107,000, respectively       2,712,000         3,523,000    
Note receivable       -          -     
Prepaid expenses and other current assets       96,000         223,000    
Total current assets       6,945,000         5,438,000    
           
Property and equipment, net       161,000         189,000    
Right of use asset, net of amortization of $187,000       293,000         -     
Goodwill       225,000         225,000    
Security Deposits       10,000         10,000    
TOTAL ASSETS   $   7,634,000     $   5,862,000    
           
LIABILITIES AND STOCKHOLDERS' EQUITY:          
           
CURRENT LIABILITIES:          
Accounts payable   $   2,625,000     $   2,628,000    
Accrued expenses and other liabilities       445,000         420,000    
Lease Liability - current portion       70,000         -     
Notes payable - Related Parties       693,000         500,000    
Total current liabilities       3,833,000         3,548,000    
           
LONG-TERM LEASE LIABILITY, net of current portion       227,000         -     
           
TOTAL LIABILITIES       4,060,000         3,548,000    
           
CONTINGENCIES AND COMMITMENTS       -          -     
           
STOCKHOLDERS' EQUITY:          
Preferred stock, $0.01 par value, 10,000,000 shares authorized; none outstanding as of June 30, 2019 and December 31, 2018:          
Preferred stock Series A Preferred, $0.01 par value 1,000 shares authorized; 600 and 600 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively     -          -     
Common stock, $.01 par value, 15,000,000 shares authorized; 10,015,120 and 1,111,943 issued and outstanding as of June 30, 2019 and December 31, 2018 respectively        11,000         11,000    
Treasury Stock, 99,238 shares       (566,000 )       -     
Additional paid-in capital       32,199,000         32,107,000    
Accumulated deficit       (28,070,000 )       (29,804,000 )  
Total stockholders' equity   $   3,574,000     $   2,314,000    
           
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $   7,634,000     $   5,862,000    
           
           

 

FITLIFE BRANDS, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2019 AND 2018  
           
    (Unaudited)   (Unaudited)  
    Three Months Ended   Six Months Ended  
    June 30   June 30  
     2019     2018    2019     2018   
                   
 Revenue   $   4,618,000     $   4,379,000   $   10,496,000     $   8,993,000    
                   
 Cost of goods sold       2,764,000         2,573,000       6,101,000         5,271,000    
 Gross profit       1,854,000         1,806,000       4,395,000         3,722,000    
                   
OPERATING EXPENSES:                  
General and administrative        796,000         856,000       1,570,000         1,709,000    
Selling and marketing       616,000         718,000       1,166,000         1,523,000    
Depreciation and amortization       13,000         18,000       28,000         38,000    
Total operating expenses       1,425,000         1,592,000       2,764,000         3,270,000    
OPERATING INCOME        429,000         214,000       1,631,000         452,000    
                   
OTHER EXPENSES (INCOME)                  
Interest expense       18,000         44,000       33,000         65,000    
Other income       -          -        -          (1,000 )  
Gain on settlement       (142,000 )       -        (142,000 )       -     
Total other expense (income)       (124,000 )       44,000       (109,000 )       64,000    
                   
NET INCOME BEFORE INCOME TAXES       553,000         170,000       1,740,000         388,000    
                   
INCOME TAXES        6,000         -        6,000         -     
                   
NET INCOME       547,000         170,000       1,734,000         388,000    
                   
PREFERRED STOCK DIVIDEND       (18,000 )       -        (18,000 )       -     
                   
NET INCOME AVAILAB LE TO COMMON SHAREHOLDERS   $   529,000     $   170,000   $   1,716,000     $   388,000    
                   
NET INCOME PER SHARE AVAILABLE TO COMMON SHAREHOLDERS:                  
Basic   $   0.51     $   0.16   $   1.59     $   0.36    
                   
Diluted   $   0.43     $   0.16   $   1.36     $   0.36    
                   
Basic weighted average common shares     1,047,447       1,095,510     1,079,517       1,084,091    
                   
Diluted weighted average common shares     1,239,875       1,095,510     1,258,520       1,084,091    
                   
     

 

FITLIFE BRANDS, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
FOR THE SIX MONTHS ENDED JUNE 30, 2019 AND 2018  
           
    (Unaudited)  
     2019     2018   
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net income   $   1,734,000     $   388,000    
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation and amortization       28,000         38,000    
Decrease in allowance for sales returns and doubtful accounts       (161,000 )       (521,000 )  
Increase (decrease) in allowance for inventory obsolescence       24,000         (25,000 )  
Common stock issued for services       39,000         98,000    
Fair value of options issued for services       71,000         19,000    
Gain on disposal of assets       -          (1,000 )  
Right of use asset - Amortization       50,000         -     
Changes in operating assets and liabilities:          
Accounts receivable - trade       (1,626,000 )       2,097,000    
Accounts receivable - factored       -          (1,466,000 )  
Inventories       787,000         142,000    
Prepaid expenses       127,000         139,000    
Customer note receivable       -          5,000    
Accounts payable       (3,000 )       43,000    
Accrued interest on notes       33,000         -     
Accrued liabilities and other liabilities       (69,000 )       (74,000 )  
Right of use asset - Lease Liability       (46,000 )       -     
Net cash provided by operating activities       988,000         882,000    
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Proceeds from the sale of assets       -          2,000    
Net cash provided by investing activities       -          2,000    
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Proceeds from issuance of Notes Payable       300,000         -     
Dividend payments on preferred stock       (18,000 )       -     
Secured payable to factor       -          1,159,000    
Repurchases of common stock       (472,000 )       -     
Repayment of line of credit       -          (1,950,000 )  
Repayments of term loan       -          (415,000 )  
Repayments of note payable       (140,000 )       -     
Net cash used in financing activities       (330,000 )       (1,206,000 )  
           
INCREASE IN CASH       658,000         (322,000 )  
CASH, BEGINNING OF PERIOD       259,000         1,262,000    
CASH, END OF PERIOD   $   917,000     $   940,000    
           
Supplemental disclosure operating activities          
Cash paid for interest   $   33,000     $   65,000    
           
Non-cash investing and financing activities          
Recording of lease asset and liability upon adoption of ASU-2016-02   $   343,000     $   -     
Accrued liability for stock buyback   $   94,000     $   -