FitLife Brands Announces Fiscal Second Quarter 2016 Results

OMAHA, Neb.--()--FitLife Brands, Inc. (“FitLife”) (OTCBB:FTLF), an international provider of innovative and proprietary nutritional supplements for health conscious consumers marketed under the brand names NDS Nutrition Products™ ("NDS") (www.ndsnutrition.com), PMD® (www.pmdsports.com), SirenLabs® (www.sirenlabs.com), CoreActive® (www.coreactivenutrition.com), Metis Nutrition™ (www.metisnutrition.com), iSatori™ (www.isatori.com), Energize (www.tryenergize.com), and BioGenetic Laboratories, (www.biogeneticlabs.com), today announced results for its fiscal second quarter ended June 30, 2016.

“We are delighted with the financial results we achieved during the second quarter”

Highlights for the quarter and six months ended June 30, 2016 include:

  • Total revenue increased 72% to $8.7 million for the quarter.
  • Net income for the quarter was $1.1 million or $0.09 per fully diluted share, versus $240,000 or $0.03 per share in 2Q15.
  • iSatori contributed $352,000 to net income during the quarter, a sequential increase of $192,000 or 120% compared to the first quarter.
  • Total revenue for the 6-months was $16.3 million, an increase of 84%.
  • Net income for the 6-months was $1.9 million or $0.17 compared to $0.2 million or $0.02 per share last year.
  • EBITDA for the six months was $2.4 million vs. $0.4 million in 2015.

For the second quarter ended June 30, 2016, total revenue was $8.7 million, a 72% increase over revenue of $5.0 million for the second quarter of 2015. Core FitLife revenue for the quarter was $6.0 million, an increase of 19%. iSatori revenue was $2.7 million for the second quarter of 2016.

Gross margin was 44.0% for the quarter compared to 38.5% in the same period a year ago. Operating expenses declined to 29.9% of revenue in the second quarter from 32.8%. Operating expenses in the second quarter of 2015 included approximately $225,000 related to the merger with iSatori.

Second quarter net income was $1.1 million or $0.09 per fully diluted share versus $0.2 million or $0.03 per share last year. iSatori was profitable during the quarter and contributed $352,000 to net income. The core FitLife business generated net income of $727,000 or $0.06 per diluted share.

For the six months ended June 30, total revenue was $16.3 million versus $8.9 million for the first six months of 2015, an increase of 84%. Core FitLife revenue for the six months was $11.3 million, an increase of 27% on an as reported basis. iSatori contributed $5.0 million in revenue for the six-month period.

Net income for the six months ended June 30 was $1.9 million or $0.17 per share compared to $0.2 million or $0.02 per share last year. The core FitLife business generated $1.4 million and iSatori contributed $0.5 million.

The Company ended the second quarter with $1.9 million in cash, down from $4.3 million in the same period a year ago, but up from $0.7 million at the end of the first quarter and $1.5 million at December 31, 2015. At quarter end, total debt decreased to $3.2 million from $3.4 million at the end of the first quarter.

“We are delighted with the financial results we achieved during the second quarter,” said John S. Wilson, Chief Executive Officer of FitLife Brands. “Our revenue growth and profitability continue to be more reflective of the fundamentals of our business as we move past the disruptions we experienced in 2015. We continue to execute at the store level as our product sell-through at retail remains strong, particularly within our sports nutrition segment, which represents over 70% of our revenue. In addition, we are excited about iSatori’s second straight quarter of growing profitability as it remains on track to be accretive to earnings for the year.”

Mr. Wilson continued, “As we look forward, we are very excited about several key growth drivers for our business, including: The continued expansion and development of our new Metis line into both GNC corporate and franchise locations; continuing to execute on the plan for iSatori to grow through new products and channels while maximizing profitability through our disciplined approach; and capitalizing on the opportunity that the new GNC re-franchising strategy presents us by expanding our relationships with new and existing franchisees and continuing to roll out our products into refranchised stores as they are completed. With this in mind, we expect significant revenue and earnings growth for FitLife in the coming quarters.”

About FitLife Brands

FitLife Brands is a marketer and manufacturer 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. FitLife is headquartered in Omaha, Nebraska. For more information please visit our new website at www.fitlifebrands.com.

Forward-Looking Statement
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.

Non-GAAP Financial Measures
This press release includes the following financial measures defined as “non-GAAP financial measures” by the Securities and Exchange Commission: non-GAAP net income, non-GAAP earnings per share. These measures may be different from non-GAAP financial measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles. Reconciliations of these non-GAAP financial measures to the nearest comparable GAAP measures will be provided upon the completion of the Company’s annual audit.

Non-GAAP net income excludes items such as impairment charges, allowance for doubtful accounts, charges to consolidate and integrate recently acquired businesses, costs of closing corporate facilities, non-cash stock based compensation and other one-time cash and non-cash charges. Non-GAAP EPS excludes items such as non-cash stock based compensation, charges to consolidate and integrate recently acquired businesses, costs for closing corporate facilities, amortization of acquired intangible assets and other one-time cash and non-cash charges. The Company believes the non-GAAP measures provide useful information to both management and investors by excluding certain expenses, gains and losses or net purchases of property and equipment, as the case may be, which may not be indicative of its core operation results and business outlook.

 
FITLIFE BRANDS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
    (Unaudited)    
ASSETS: June 30, December 31,
2016 2015
 
CURRENT ASSETS
Cash $ 1,940,117 $ 1,532,550
Accounts receivable, net 6,382,159 2,684,567
Security deposits 24,992 26,077
Inventory 3,649,240 4,790,301
Note receivable, current portion 11,032 16,517
Prepaid income tax 1,000 152,000
Prepaid expenses and other current assets   197,402     334,483  
Total current assets 12,205,942 9,536,494
 
PROPERTY AND EQUIPMENT, net 207,730 226,804
 
Note receivable, net of current portion 52,695 52,695
Deferred Taxes 689,000 812,879
Intangibles assets, net   6,718,505     6,929,505  
TOTAL ASSETS $ 19,873,872   $ 17,558,378  
 
LIABILITIES AND STOCKHOLDERS' EQUITY:
 
CURRENT LIABILITIES:
Accounts payable $ 3,700,266 $ 3,363,906
Accrued expenses and other liabilities 818,135 1,003,832
Litigation Reserve - 95,775
Income tax payable

38,000

-
Line of credit 2,010,305 1,490,305
Term loan agreement, current portion 535,121 525,589
Notes payable   45,019     54,036  
Total current liabilities 7,146,846 6,533,443
 
LONG-TERM DEBT, net of current portion 644,172 914,138
   
TOTAL LIABILITIES 7,791,017 7,447,581
 
CONTINGENCIES AND COMMITMENTS - -
 
STOCKHOLDERS' EQUITY:

Common stock, $.01 par value, 150,000,000 shares authorized; 10,408,264 and 10,444,357 issued and outstanding as of June 30, 2016 and December 31, 2015, respectively

104,083 104,443
Subscribed common stock 54 97
Treasury stock - (142,228 )
Additional paid-in capital 30,900,166 30,963,122
Accumulated deficit   (18,921,447 )   (20,814,637 )
Total stockholders' equity $ 12,082,855   $ 10,110,797  
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 19,873,872   $ 17,558,378  
 
The accompanying notes are an integral part of these consolidated financial statements
 
 
FITLIFE BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2016 AND 2015
               
(Unaudited) (Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
2016 2015 2016 2015
 
Revenue $ 8,662,760   $ 5,027,003 $ 16,274,989   $ 8,869,425
Total 8,662,760 5,027,003 16,274,989 8,869,425
 
Cost of Goods Sold   4,851,166     3,090,595   9,115,857     5,357,305
Gross Profit 3,811,594 1,936,408 7,159,132 3,512,120
 
OPERATING EXPENSES:
General and administrative 1,356,464 682,891 2,745,671 1,615,137
Selling and marketing 1,111,129 910,953 2,026,687 1,514,757
Depreciation and amortization   125,995     55,388   250,751     110,665
Total operating expenses   2,593,589     1,649,232   5,023,109     3,240,559
OPERATING INCOME (LOSS)   1,218,006     287,176   2,136,023     271,561
 
OTHER (INCOME) AND EXPENSES
Interest expense 27,172 19,880 56,601 40,528
Other expense (income)   (2,203 )   -   (2,767 )   -
Total other (income) expense 24,969 19,880 53,833 40,528
 
INCOME TAXES (BENEFIT) 114,000 23,758 189,000 29,758
       
NET INCOME (LOSS) $ 1,079,036   $ 243,539 $ 1,893,190   $ 201,276
 
NET INCOME (LOSS) PER SHARE:
Basic $ 0.10   $ 0.03 $ 0.18   $ 0.02
 
Diluted $ 0.09   $ 0.03 $ 0.17   $ 0.02
 
Basic   10,408,264     8,092,281   10,397,077     8,138,204
 
Diluted   11,520,541     8,790,132   11,459,628     8,732,810
 
The accompanying notes are an integral part of these consolidated financial statements
 
 
FITLIFE BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2016 AND 2015
       
(Unaudited)
2016 2015
 
Net income $ 1,893,190 $ 243,537

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and amortization 250,751 55,388
Capitalization of select merger costs - -
Common stock issued (cancelled) for services 51,331 402,411
Warrants and options issued (cancelled) for services 27,537 -
Gain on write-up of investment - -
Intercompany transfer - -
Changes in operating assets and liabilities:
Accounts receivable (3,697,593 ) (699,734 )
Inventory 1,141,061 630,806
Deferred tax asset 123,879 -
Prepaid income tax 151,000 -
Prepaid expenses 137,081 (8,719 )
Note receivable 5,485 -
Deposits - -
Accounts payable 336,360 43,845
Accrued liabilities (185,697 ) 19,768
Litigation reserve (95,775 ) -
Income tax payable   38,000     6,000  
Net cash provided by (used in) operating activities   176,610     693,302  
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (21,619 ) (2,214 )
Long-term investment 2,027 -
Repurchases of common stock   -     (255,981 )
Net cash provided by (used in) investing activities   (19,592 )   (258,196 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from draw down on credit line 520,000 -
Payments for redemption of preferred stock - -
Repayments of note payable   (269,452 )   (125,247 )
Net cash provided by (used in) financing activities   250,548     (125,247 )
 
INCREASE (DECREASE) IN CASH 407,566 309,859
CASH, BEGINNING OF PERIOD   1,532,550     4,353,699  
CASH, END OF PERIOD $ 1,940,117   $ 4,663,557  
 
Supplemental disclosure operating activities
 
Cash paid for interest $ 56,601   $ 19,880  
 
The accompanying notes are an integral part of these consolidated financial statements
 

Contacts

Three Part Advisors, LLC
Jeff Elliott, 972-423-7070
or
David Burtzlaff, CFA, 817-527-8837

Recent Stories

RSS feed for FitLife Brands, Inc.

FitLife Brands, Inc.