FitLife Brands Announces Third Quarter 2022 Results

Omaha, Nov. 10, 2022 (GLOBE NEWSWIRE) -- FitLife Brands Announces Third Quarter 2022 Results

OMAHA, NE – November 10, 2022 -- FitLife Brands, Inc. (“FitLife” or the “Company”) (OTC: 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 nine months ended September 30, 2022.

Highlights for the third quarter ended September 30, 2022 include:

  • Total revenue increased 24% to $8.3 million.
  • Online revenue increased 28% to $2.2 million and accounted for 26% of total revenue.
  • Wholesale revenue increased 23% to $6.1 million and accounted for 74% of total revenue.
  • Gross profit increased 10% to $3.2 million.
  • The Company generated net income of $1.2 million compared to $1.1 million during the same quarter last year.
  • Adjusted EBITDA increased to $1.9 million compared to $1.7 million during the third quarter of 2021.
  • The Company generated $2.6 million of cash in the third quarter of 2022, resulting in a quarter-end cash balance of $14.9 million.

For the third quarter ended September 30, 2022, total revenue was $8.3 million compared to $6.7 million in the same quarter last year, an increase of 24%. The increase reflects increased demand from both wholesale and online channels.

Management expects the Company’s wholesale revenue trends to remain lumpy based on the ordering patterns of our customers. As a result, we encourage investors to evaluate revenue trends for the wholesale channel over periods of two or more quarters. Growth in consumer purchases of the Company’s products in the wholesale channel, which tends to be a more stable indicator of demand, was positive during the third quarter, and remains positive thus far in the fourth quarter.

After growing approximately 21% year-over-year during the first and second quarters of 2022, online revenue increased 28% during the third quarter. Online revenue growth has remained strong thus far during the fourth quarter, with a 31% growth rate during the month of October.

Gross profit for the three months ended September 30, 2022 increased 10% to $3.4 million. Gross margin decreased to 39.0% compared to 43.9% during the same period last year. The reduction in the gross margin percentage for the quarter is primarily attributable to higher product costs. We expect the recent margin pressure will be temporary as production costs decline and as higher-margin online sales become a larger percentage of the Company’s total revenue.

Net income for the third quarter of 2022 was $1.2 million compared to $1.1 million during the same quarter in 2021. Basic earnings per share was $0.27 and diluted earnings per share was $0.24, compared to $0.25 and $0.23 during the same quarter in 2021, respectively.

For the quarter ended September 30, 2022, adjusted EBITDA, was $1.9 million compared to $1.7 million in the same period last year. Please see the non-GAAP financial measures table below for a reconciliation of net income to adjusted EBITDA.

For the nine-month period ending September 30, 2022, total revenue was $23.4 million, an increase of 13% over the comparable period in 2021, with wholesale revenue increasing 10% and online revenue increasing 24%. Gross profit increased 5% to $9.8 million, and the gross margin decreased to 42.0% compared to 45.5% last year.

For the nine months ended September 30, 2022, net income decreased 5% to $4.0 million from $4.2 million, primarily due to the forgiveness of the Company’s PPP loan during 2021. Basic earnings per share for the same time period was $0.87 compared to $0.95 last year, and diluted earnings per share decreased to $0.79 from $0.87 last year.

For the nine months ended September 30, 2022, adjusted EBITDA was $5.8 million compared to $5.3 million in the same period last year. Please see the non-GAAP financial measures table below for a reconciliation of net income to adjusted EBITDA.

Dayton Judd, the Company’s Chairman and CEO, commented, “Despite a somewhat challenging operating environment, I am encouraged by the continued growth in our wholesale and online businesses. We continue to actively pursue opportunities to deploy our strong and growing cash balance into 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, M&A/integration activities, restatement related expenses 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:September 30, December 31,
  2022   2021 
 (Unaudited)  
CURRENT ASSETS   
   Cash$14,929,000  $9,897,000 
Accounts receivable, net of allowance of doubtful accounts of $50,000 and $55,000, respectively 1,535,000   945,000 
Inventories, net of allowance for obsolescence of $203,000 and $56,000, respectively 7,578,000   6,520,000 
Prepaid expenses and other current assets 229,000   322,000 
      Total current assets 24,271,000   17,684,000 
    
Property and equipment, net 53,000   70,000 
Right of use asset, net of amortization of $363,000 and $322,000, respectively 117,000   158,000 
Intangibles, net of amortization of $62,000 and $30,000, respectively 160,000   192,000 
Goodwill 358,000   358,000 
Deferred tax asset 1,992,000   3,045,000 
    TOTAL ASSETS$26,951,000  $21,507,000 
    
LIABILITIES AND STOCKHOLDERS' EQUITY:   
    
CURRENT LIABILITIES:   
   Accounts payable$3,966,000  $2,880,000 
   Accrued expense and other liabilities 625,000   491,000 
   Product returns 617,000   632,000 
   Lease liability - current portion 54,000   55,000 
      Total current liabilities 5,262,000   4,058,000 
    
Long-term lease liability, net of current portion 63,000   103,000 
      TOTAL LIABILITIES 5,325,000   4,161,000 
    
STOCKHOLDERS' EQUITY:   
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none outstanding   
as of September 30, 2022 and December 31, 2021   
Common stock, $0.01 par value, 60,000,000 shares authorized; 4,555,957 and 4,552,485   
issued and outstanding as of September 30, 2022 and December 31, 2021, respectively 46,000   46,000 
Treasury stock, 0 and 881,311 shares, respectively -   (2,087,000)
   Additional paid-in capital 30,766,000   32,529,000 
   Accumulated deficit (9,186,000)  (13,142,000)
      TOTAL STOCKHOLDERS' EQUITY 21,626,000   17,346,000 
    
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$26,951,000  $21,507,000 
    
 
    



FITLIFE BRANDS, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021 
(Unaudited) 
          
  Three months ended Nine months ended 
  September 30 September 30 
   2022   2021   2022   2021  
          
          
 Revenue $8,314,000  $6,705,000  $23,433,000  $20,710,000  
 Cost of goods sold  5,070,000   3,760,000   13,587,000   11,289,000  
 Gross profit  3,244,000   2,945,000   9,846,000   9,421,000  
          
OPERATING EXPENSES:         
     Selling, general and administrative  1,686,000   1,496,000   4,834,000   4,655,000  
     Depreciation and amortization  17,000   18,000   49,000   41,000  
         Total operating expenses  1,703,000   1,514,000   4,883,000   4,696,000  
OPERATING INCOME  1,541,000   1,431,000   4,963,000   4,725,000  
          
OTHER INCOME         
Interest income  (43,000)  (7,000)  (59,000)  (18,000) 
Gain on debt forgiveness  -   -   -   (453,000) 
        Total other income  (43,000)  (7,000)  (59,000)  (471,000) 
          
PRE-TAX NET INCOME  1,584,000   1,438,000   5,022,000   5,196,000  
          
PROVISION FOR INCOME TAXES  364,000   313,000   1,066,000   1,034,000  
          
NET INCOME $1,220,000  $1,125,000  $3,956,000  $4,162,000  
          
NET INCOME PER SHARE         
  Basic $0.27  $0.25  $0.87  $0.95  
  Diluted $0.24  $0.23  $0.79  $0.87  
  Basic weighted average common shares  4,555,957   4,422,760   4,555,347   4,374,212  
  Diluted weighted average common shares 4,988,271   4,818,096   4,978,828   4,808,708  
          
  
          



FITLIFE BRANDS, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021 
      
      
  Nine months ended September 30 
   2022   2021  
  (Unaudited) 
CASH FLOWS FROM OPERATING ACTIVITIES:     
  Net income $3,956,000  $4,162,000  
  Adjustments to reconcile net income to net cash provided by operating activities:     
    Depreciation and amortization  49,000   41,000  
    Right of use asset amortization and lease liability  41,000   37,000  
    Allowance for doubtful accounts  (5,000)  13,000  
    Allowance for inventory obsolescence  147,000   (19,000) 
Stock compensation expense  295,000   345,000  
    Forgiveness of PPP loan  -   (453,000) 
  Changes in operating assets and liabilities:     
    Accounts receivable  (585,000)  572,000  
    Inventories  (1,205,000)  (2,786,000) 
    Deferred tax asset  1,053,000   1,034,000  
    Prepaid expense and other current assets  93,000   (77,000) 
    Accounts payable  1,086,000   354,000  
Lease liability  (41,000)  (37,000) 
    Accrued expense and other liabilities  134,000   (39,000) 
    Product returns  (15,000)  53,000  
          Net cash provided by operating activities  5,003,000   3,200,000  
      
CASH FLOWS FROM INVESTING ACTIVITIES:     
    Cash paid for acquistion of Nutrology  -   (529,000) 
          Net cash used in investing activities  -   (529,000) 
      
CASH FLOWS FROM FINANCING ACTIVITIES:     
Proceeds from exercise of stock options  29,000   54,000  
   Repurchases of common stock and options  -   (444,000) 
          Net cash provided by (used in) financing activities  29,000   (390,000) 
      
CHANGE IN CASH  5,032,000   2,281,000  
CASH, BEGINNING OF PERIOD  9,897,000   6,336,000  
CASH, END OF PERIOD $14,929,000  $8,617,000  
      
      
  
      



FITLIFE BRANDS, INC. 
EBITDA AND ADJUSTED EBITDA 
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021 
                  
                  
   For the three months ended September 30,  For the nine months ended September 30, 
   2022  2021  2022  2021 
   (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited) 
 Net income $1,220,000  $1,125,000  $3,956,000  $4,162,000 
 Interest income, net  (43,000) (7,000)  (59,000) (18,000)
 Provision for income taxes  364,000   313,000   1,066,000   1,034,000 
 Depreciation and amortization  17,000   18,000   49,000   41,000 
 EBITDA  1,558,000   1,449,000   5,012,000   5,219,000 
 Non-cash and non-recurring adjustments                
 Stock compensation expense  91,000   107,000   295,000   345,000 
 M&A/integration expenses  6,000   109,000   214,000   204,000 
 Restatement-related costs  220,000   -   275,000   - 
 Non-recurring gains  -   -   -   (453,000)
 Adjusted EBITDA $1,875,000  $1,665,000  $5,796,000  $5,315,000 
                  



 


investor@fitlifebrands.com

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