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 | $ | - | |||||
