FitLife Brands Announces Second Quarter 2021 Results

Omaha, Aug. 16, 2021 (Globalrelease Wire) — FitLife Brands Announces Second Quarter 2021 Results

OMAHA, NE – August 16, 2021 — FitLife Brands, Inc. (“FitLife” or the “Company”) (OTCQX: FTLF), an international provider of innovative and proprietary nutritional supplements for health-conscious consumers marketed under the brand names NDS Nutrition, PMD, SirenLabs, Nutrology, CoreActive, Metis Nutrition, iSatori, Energize, and BioGenetic Laboratories, today announced results for the three and six months ended June 30, 2021.

Highlights for the second quarter ended June 30, 2021 include:

  • Total revenue increased 197% to $8.1 million.
  • Direct-to-consumer online sales increased 52% and accounted for 21% of total revenue.
  • Gross profit increased 170% to $3.6 million.
  • The Company generated net income of $1.5 million compared to a net loss of ($0.1) million during the same quarter last year.
  • Adjusted EBITDA increased to $2.0 million compared to an adjusted EBITDA loss of ($0.1) million during the second quarter of 2020.
  • Adjusted EBITDA for the trailing twelve months increased to $6.8 million.
  • The Company ended the quarter with no debt and $8.4 million of cash.

For the second quarter ended June 30, 2021, total revenue was $8.1 million compared to $2.7 million in the same quarter last year, an increase of 197%.   The increase was attributable to the closure of some of our retail partners’ store locations and the stay-at-home orders during the second quarter of 2020 caused by the COVID-19 pandemic, continued organic growth in our online and wholesale businesses, and the acquisition of Nutrology. During the quarter, online sales increased 52% and accounted for approximately 21% of the Company’s revenue.

Gross profit increased 170% to $3.6 million, driven primarily by higher revenue. Gross margin declined to 43.7% due primarily to a reduction in higher-margin online sales as a percent of total revenue during the quarter.

Net income for the second quarter of 2021 was $1.5 million compared to a net loss ($0.1) million during the same quarter in 2020.   Basic earnings per share was $1.37 and diluted earnings per share was $1.26, compared to a loss of ($0.09) per basic and diluted share during the same quarter last year.

Subsequent to releasing a substantial portion of the reserve against its deferred tax assets at the end of 2020, the Company now reports a provision for income taxes, which is largely non-cash. In an effort to provide a more cash-based earnings metric, and to allow better comparability to prior periods, the Company has begun reporting adjusted EBITDA, a non-GAAP measure that is not subject to procedures by our Independent Registered Public Accounting Firm. Please see the non-GAAP financial measures table below for a reconciliation of net income to adjusted EBITDA. For the quarter ended June 30, 2021, adjusted EBITDA was $2.0 million compared to an adjusted EBITDA loss of ($0.1) million in the same period last year. As of June 30, 2021, adjusted EBITDA for the trailing twelve months was $6.8 million.

Dayton Judd, the Company’s Chairman and CEO, commented, “The second quarter of 2021 was one of the strongest quarters in the Company’s history. We continue to experience robust organic growth in both our wholesale and our online businesses. We have successfully integrated Nutrology into our operations, and we continue to look for opportunities to deploy our strong and growing cash balance into additional accretive acquisitions.”

About FitLife Brands
FitLife Brands is a developer and marketer of innovative and proprietary nutritional supplements for health-conscious consumers. FitLife markets over 130 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 17,000 additional domestic retail locations and, increasingly, online. FitLife is headquartered in Omaha, Nebraska. For more information please visit our 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.

Non-GAAP Financial Measures 
  
The financial presentation below contains certain financial measures defined as “non-GAAP financial measures” by the SEC, including non-GAAP EBITDA and adjusted non-GAAP EBITDA. 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 this Annual Report in accordance with GAAP. 
  
As presented below, non-GAAP EBITDA excludes interest, income taxes, and depreciation and amortization. Adjusted non-GAAP EBITDA excludes, in addition to interest, taxes, depreciation and amortization, equity-based compensation and non-recurring gains or losses. The Company believes the non-GAAP measures provide useful information to both management and investors by excluding certain expense and other items that may not be indicative of its core operating results and business outlook. The Company believes that the inclusion of non-GAAP measures in the financial presentation below allows investors to compare the Company’s financial results with the Company’s historical financial results and is an important measure of the Company’s comparative financial performance. 

FITLIFE BRANDS, INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS  
           
ASSETS:   June 30,   December 31,  
      2021       2020    
    (Unaudited)      
CURRENT ASSETS          
   Cash   $ 8,425,000     $ 6,336,000    
Accounts receivable, net of allowance of doubtful accounts of $59,000 and $51,000, respectively     1,757,000       2,044,000    
Inventories, net of allowance for obsolescence of $28,000 and $56,000, respectively     4,834,000       3,401,000    
   Income tax receivable     40,000       40,000    
Prepaid expenses and other current assets     228,000       52,000    
      Total current assets     15,284,000       11,873,000    
           
Property and equipment, net     85,000       98,000    
Right of use asset, net of amortization of $296,000 and $272,000, respectively     183,000       208,000    
Intangibles, net of amortization of $10,000 and $0, respectively     212,000          
Goodwill     358,000       225,000    
Deferred tax asset     3,639,000       4,370,000    
    TOTAL ASSETS   $ 19,761,000     $ 16,774,000    
           
LIABILITIES AND STOCKHOLDERS’ EQUITY:          
           
CURRENT LIABILITIES:          
   Accounts payable   $ 3,542,000     $ 3,246,000    
   Accrued expense and other liabilities     635,000       498,000    
   Product returns     326,000       335,000    
   Lease liability – current portion     53,000       50,000    
      Total current liabilities     4,556,000       4,129,000    
           
Long-term lease liability, net of current portion     131,000       158,000    
PPP loan           453,000    
      TOTAL LIABILITIES     4,687,000       4,740,000    
           
STOCKHOLDERS’ EQUITY:          
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none outstanding          
as of June 30, 2021 and December 31, 2020              
   Common stock, $0.01 par value, 15,000,000 shares authorized; 1,105,690 and 1,060,818          
issued and outstanding as of June 30, 2021 and December 31, 2020, respectively     12,000       12,000    
Treasury stock, 219,654 and 210,631 shares, respectively     (2,050,000 )     (1,790,000 )  
   Additional paid-in capital     32,312,000       32,204,000    
   Accumulated deficit     (15,200,000 )     (18,392,000 )  
      TOTAL STOCKHOLDERS’ EQUITY     15,074,000       12,034,000    
           
    TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 19,761,000     $ 16,774,000    
           
The accompanying notes are an integral part of these condensed consolidated financial statements  
           
FITLIFE BRANDS, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020  
(Unaudited)  
                   
    Three months ended   Six months Ended  
    June 30   June 30  
      2021       2020       2021       2020    
                   
                   
 Revenue   $ 8,141,000     $ 2,740,000     $ 14,299,000     $ 8,891,000    
 Cost of goods sold     4,580,000       1,421,000       7,661,000       4,835,000    
 Gross profit     3,561,000       1,319,000       6,638,000       4,056,000    
                   
OPERATING EXPENSES:                  
     General and administrative     917,000       1,001,000       1,774,000       1,734,000    
     Selling and marketing     716,000       435,000       1,385,000       1,106,000    
     Depreciation and amortization     15,000       10,000       23,000       23,000    
         Total operating expenses     1,648,000       1,446,000       3,182,000       2,863,000    
OPERATING INCOME (LOSS)     1,913,000       (127,000 )     3,456,000       1,193,000    
                   
OTHER EXPENSES (INCOME)                  
Interest expense (income)     (5,000 )     5,000       (11,000 )     8,000    
Gain on settlement                       (70,000 )  
Gain on debt forgiveness                 (453,000 )        
        Total other expenses (income)     (5,000 )     5,000       (464,000 )     (62,000 )  
                   
PRE-TAX NET INCOME (LOSS)     1,918,000       (132,000 )     3,920,000       1,255,000    
                   
PROVISION (BENEFIT) FOR INCOME TAXES     410,000       (40,000 )     728,000       (81,000 )  
                   
NET INCOME (LOSS)   $ 1,508,000     $ (92,000 )   $ 3,192,000     $ 1,336,000    
                   
NET INCOME (LOSS) PER SHARE                  
  Basic   $ 1.37     $ (0.09 )   $ 2.94     $ 1.27    
  Diluted   $ 1.26     $ (0.09 )   $ 2.68     $ 1.19    
  Basic weighted average common shares     1,098,000       1,060,033       1,087,385       1,055,893    
  Diluted weighted average common shares     1,194,880       1,060,033       1,189,069       1,126,631    
                   
                                             The accompanying notes are an integral part of these condensed consolidated financial statements          
                   
FITLIFE BRANDS, INC.    
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY    
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020    
(Unaudited)    
                           
              Additional            
  Common Stock   Treasury   Paid-in   Accumulated        
  Shares   Amount   Stock   Capital   Deficit   Total    
                           
THREE MONTHS ENDED JUNE 30, 2021                          
                           
MARCH 31, 2021 1,090,818     $ 12,000   $ (1,790,000 ) $ 32,335,000 $ (16,708,000 ) $ 13,849,000  
                           
Repurchase of common stock (9,023 )         (260,000 )                 (260,000 )    
Exercise of stock options 3,895                 54,000             54,000      
Repurchase of options                 (184,000 )           (184,000 )    
Stock-based compensation 20,000                 107,000             107,000      
Net income                       1,508,000       1,508,000      
                           
JUNE 30, 2021 1,105,690     $ 12,000   $ (2,050,000 )   $ 32,312,000     $ (15,200,000 )   $ 15,074,000      
                           
THREE MONTHS ENDED JUNE 30, 2020                          
                           
MARCH 31, 2020 1,060,033     $ 12,000   $ (1,790,000 ) $ 32,154,000 $ (25,678,000 ) $ 4,698,000      
                           
Fair value of common stock issued for services                 10,000             10,000      
Repurchase of common stock                                  
Exercise of stock options                                  
Stock-based compensation                 12,000             12,000      
Net income                       (92,000 )     (92,000 )    
                           
JUNE 30, 2020 1,060,033     $ 12,000   $ (1,790,000 )   $ 32,176,000     $ (25,770,000 )   $ 4,628,000      
                           
SIX MONTHS ENDED JUNE 30, 2021                          
                           
DECEMBER 31, 2020 1,060,818     $ 12,000   $ (1,790,000 ) $ 32,204,000 $ (18,392,000 ) $ 12,034,000  
Repurchase of common stock (9,023 )         (260,000 )                 (260,000 )    
Exercise of stock options 3,895                 54,000             54,000      
Repurchase of options                 (184,000 )           (184,000 )    
Stock-based compensation 50,000                 238,000             238,000      
Net income                       3,192,000       3,192,000      
                           
JUNE 30, 2021 1,105,690     $ 12,000   $ (2,050,000 )   $ 32,312,000     $ (15,200,000 )   $ 15,074,000      
                           
SIX MONTHS ENDED JUNE 30, 2020                          
                           
DECEMBER 31, 2019 1,054,516     $ 12,000   $ (1,619,000 ) $ 32,055,000 $ (27,106,000 ) $ 3,342,000      
Fair value of common stock issued for services 417                 26,000             26,000      
Repurchase of common stock (11,900 )         (171,000 )                 (171,000 )    
Exercise of stock options 17,000                 71,000             71,000      
Stock-based compensation                 24,000             24,000      
Net income                       1,336,000       1,336,000      
                           
JUNE 30, 2020 1,060,033     $ 12,000   $ (1,790,000 )   $ 32,176,000     $ (25,770,000 )   $ 4,628,000      
                           
The accompanying notes are an integral part of these condensed consolidated financial statements    
                           
                 
                 
    For the three months ended June 30,   For the six months ended June 30,
      2021       2020       2021       2020  
    (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
   Net income   $ 1,508,000     $ (92,000 )   $ 3,192,000     $ 1,336,000  
   Interest expense (income)     (5,000 )     5,000       (11,000 )     8,000  
   Provision (benefit) for income taxes     410,000       (40,000 )     728,000       (81,000 )
   Depreciation and amortization     15,000       10,000       23,000       23,000  
EBITDA     1,928,000       (117,000 )     3,932,000       1,286,000  
Non-cash and non-recurring adjustments                
   Stock compensation expense     107,000       26,000       238,000       54,000  
   Non-recurring losses (gains)                 (453,000 )     (70,000 )
Adjusted EBITDA   $ 2,035,000     $ (91,000 )   $ 3,717,000     $ 1,270,000  
                 

        

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