FitLife Brands Announces First Quarter 2021 Results

Omaha, Nebraska, UNITED STATES


Omaha, NE, May 14, 2021 (GLOBE NEWSWIRE) -- FitLife Brands, Inc. (“FitLife” or the “Company”) (OTCQX: FTLF), a 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 months ended March 31, 2021.

Highlights for the quarter ended March 31, 2021 include:

  • Total revenue was roughly flat at $6.2 million.
  • Online sales increased 89.2% to $1.6 million, representing 26% of total revenue compared to 14% in the same quarter last year.
  • Gross profit improved 12.4% to $3.1 million compared to $2.7 million last year.
  • Gross margin increased to 50.0% compared to 44.5% in the same quarter last year.
  • Net income increased 17.9% to $1.7 million compared to $1.4 million last year.
  • Net income per basic share increased 14.7% to $1.56, and net income per diluted share increased 12.6% to $1.43.
  • Adjusted EBITDA increased 23.6% to $1.7 million compared to $1.4 million last year.
  • The Company ended the quarter with $6.6 million of cash and no borrowings on its line of credit.

For the first quarter ended March 31, 2021, total revenue was approximately flat at $6.2 million. As previously mentioned, the Company believes that a portion of the wholesale revenue that historically would have been received during the first quarter shifted into the fourth quarter of 2020. For the first quarter of 2021, online sales increased 89.2% to $1.6 million and accounted for approximately 26% of the Company’s total revenue compared to 14% during the first quarter of 2020.

Gross profit improved to $3.1 million, an increase of 12.4% from the first quarter of 2020. Gross margin improved from 44.5% to 50.0% over the same time period. The improvement in gross margin was driven primarily by higher online sales volumes.  

The Company generated net income of $1.7 million compared to $1.4 million during the first quarter of 2020. Basic earnings per share was $1.56 and diluted earnings per share was $1.43, compared to $1.36 and $1.27, respectively, 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. Please see the non-GAAP financial measures table below for a reconciliation of net income to adjusted EBITDA. For the quarter ended March 31, 2021, adjusted EBITDA was $1.7 million, an increase of 23.6% compared to $1.4 million in the same period last year.

Dayton Judd, the Company’s Chairman and CEO, commented, “I am pleased that we continue to experience organic growth in both our wholesale and our online businesses.   And as our online revenue becomes a larger portion of our business, we benefit from higher margins, as evidenced by the 50% gross margins we achieved during the first quarter.”  

Mr. Judd continued, “Over the past several months, the global supply chain for nutritional supplement ingredients and packaging has become increasingly challenging. Production lead times for many of our products have increased from two months to as much as six months in some cases. In an effort to ensure our products stay in stock, we are placing orders much earlier than usual and carrying larger quantities of inventory. We will continue to adapt our operations as necessary to compete effectively in the current environment.”

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: March 31, December 31, 
   2021   2020  
  (Unaudited)   
CURRENT ASSETS     
   Cash $6,625,000  $6,336,000  
Accounts receivable, net of allowance of doubtful accounts of $60,000 and $51,000, respectively  2,372,000   2,044,000  
Inventories, net of allowance for obsolescence of $25,000 and $56,000, respectively  4,738,000   3,401,000  
   Income tax receivable  40,000   40,000  
Prepaid expenses and other current assets  22,000   52,000  
      Total current assets  13,797,000   11,873,000  
      
Property and equipment, net  90,000   98,000  
Right of use asset, net of amortization of $285,000 and $272,000, respectively  195,000   208,000  
Goodwill  225,000   225,000  
Deferred tax asset  4,042,000   4,370,000  
    TOTAL ASSETS $18,349,000  $16,774,000  
      
LIABILITIES AND STOCKHOLDERS' EQUITY:     
      
CURRENT LIABILITIES:     
   Accounts payable $3,410,000  $3,246,000  
   Accrued expense and other liabilities  590,000   498,000  
   Product returns  304,000   335,000  
   Lease liability - current portion  52,000   50,000  
      Total current liabilities  4,356,000   4,129,000  
      
Long-term lease liability, net of current portion  144,000   158,000  
PPP loan  -   453,000  
      TOTAL LIABILITIES  4,500,000   4,740,000  
      
STOCKHOLDERS' EQUITY:     
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none outstanding     
as of March 31, 2021 and December 31, 2020     
Common stock, $.01 par value, 15,000,000 shares authorized; 1,090,818 and 1,060,818     
issued and outstanding as of March 31, 2021 and December 31, 2020, respectively  12,000   12,000  
Treasury stock, 210,631 and 210,631 shares, respectively  (1,790,000)  (1,790,000) 
   Additional paid-in capital  32,335,000   32,204,000  
   Accumulated deficit  (16,708,000)  (18,392,000) 
      TOTAL STOCKHOLDERS' EQUITY  13,849,000   12,034,000  
      
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $18,349,000  $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 MONTHS ENDED MARCH 31, 2021 AND 2020 
(Unaudited) 
      
  Three months ended 
  March 31, 
   2021   2020  
      
      
 Revenue $6,158,000  $6,152,000  
 Cost of goods sold  3,081,000   3,415,000  
 Gross profit  3,077,000   2,737,000  
      
OPERATING EXPENSES:     
     General and administrative  857,000   733,000  
     Selling and marketing  669,000   671,000  
     Depreciation and amortization  8,000   12,000  
         Total operating expenses  1,534,000   1,416,000  
OPERATING INCOME  1,543,000   1,321,000  
      
OTHER EXPENSES (INCOME)     
Interest expense (income)  (6,000)  4,000  
Gain on settlement  -   (70,000) 
Gain on debt forgiveness  (453,000)  -  
        Total other expenses (income)  (459,000)  (66,000) 
      
PRE-TAX NET INCOME  2,002,000   1,387,000  
      
PROVISION (BENEFIT) FOR INCOME TAXES  318,000   (41,000) 
      
NET INCOME  1,684,000   1,428,000  
      
NET INCOME PER SHARE     
  Basic $1.56  $1.36  
  Diluted $1.43  $1.27  
  Basic weighted average common shares  1,076,651   1,051,752  
  Diluted weighted average common shares  1,174,666   1,126,303  
      
                                             The accompanying notes are an integral part of these condensed consolidated financial statements 
      



FITLIFE BRANDS, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 
(Unaudited) 
      
  Three months ended March 31, 
   2021   2020  
      
CASH FLOWS FROM OPERATING ACTIVITIES:     
  Net income $1,684,000  $1,428,000  
  Adjustments to reconcile net income to net cash used in operating activities:     
    Depreciation and amortization  8,000   12,000  
    Right of use asset amortization  14,000   16,000  
    Allowance for doubtful accounts  9,000   6,000  
    Allowance for inventory obsolescence  (31,000)  -  
    Fair value of stock and options issued for services  131,000   28,000  
    Forgiveness of PPP loan  (453,000)  -  
  Changes in operating assets and liabilities:     
    Accounts receivable - trade  (337,000)  (2,332,000) 
    Inventories  (1,307,000)  (25,000) 
    Deferred tax asset  328,000   -  
    Prepaid expense  30,000   46,000  
    Accounts payable  164,000   737,000  
Lease liability  (12,000)  (14,000) 
Accrued interest  -   4,000  
    Accrued liabilities and other liabilities  92,000   75,000  
    Product returns  (31,000)  20,000  
          Net cash provided by operating activities  289,000   1,000  
      
CASH FLOWS FROM INVESTING ACTIVITIES:     
          Net cash provided by investing activities  -   -  
      
CASH FLOWS FROM FINANCING ACTIVITIES:     
Proceeds from exercise of stock options  -   71,000  
Proceeds from line of credit  -   2,500,000  
   Repurchases of common stock  -   (171,000) 
          Net cash provided by (used in) financing activities  -   2,400,000  
      
CHANGE IN CASH  289,000   2,401,000  
CASH, BEGINNING OF PERIOD  6,336,000   265,000  
CASH, END OF PERIOD $6,625,000  $2,666,000  
      
Supplemental disclosure operating activities     
Cash paid for interest $-  $-  
Cash paid (refunded) for income taxes $(10,000) $-  
      
The accompanying notes are an integral part of these condensed consolidated financial statements 
      



FITLIFE BRANDS, INC. 
RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA 
FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 
(Unaudited) 
      
  For the three months ended  
  March 31, 
   2021   2020  
      
   Net income $1,684,000  $1,428,000  
   Interest expense (income)  (6,000)  4,000  
   Provision for income taxes  318,000   (41,000) 
   Depreciation and amortization  8,000   12,000  
EBITDA  2,004,000   1,403,000  
Non-cash and non-recurring adjustments     
   Stock compensation expense  131,000   28,000  
   Non-recurring losses (gains)  (453,000)  (70,000) 
Adjusted EBITDA $1,682,000  $1,361,000  
      



 

 

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