FitLife Brands Announces Second Quarter 2018 Results

Reports Second Consecutive Profitable Quarter

OMAHA, Neb.--()--FitLife Brands, Inc. (“FitLife”) (OTC PINK: 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 the three and six months ended June 30, 2018.

For the second quarter ended June 30, 2018, total revenue was $4.4 million compared to $5.0 million reported in the second quarter of 2017. The decline in revenue was primarily attributable to a challenging retail environment driven by declining traffic and lower same store sales at our single largest customer. Gross margin was 41.2% for the quarter compared to 30.3% during the same period a year ago. The improvement in gross margin was primarily driven by lower discounting and reduced inventory write-off activity. Total operating expenses were down approximately $448,000, or 22.0%, as a result of the Company’s ongoing initiatives to reduce costs, which included certain reductions in total headcount, reduced facilities expense and enhanced budgetary controls. Net income for the second quarter was $0.2 million or $0.02 per share versus a loss of $(0.6) million or $(0.05) per share last year.

For the six months ended June 30, 2018, total revenue was $9.0 million versus $10.6 million for the comparable period last year. Gross margin was 41.4% for the six month period ended June 30, 2018 versus 32.5% for the comparable period last year. The improvement in gross margin was a function of higher net pricing and reduced inventory write-off activity. Comparative numbers for the six month period ended June 30, 2018 were not burdened by the $700,000 one-time charge in connection with a margin support agreement and a $376,000 non-recurring inventory write-off that negatively impacted results for the six month period ended June 30, 2017. Total operating expenses declined $1.0 million, or 23.4%, to $3.3 million for the six months ended June 30, 2018 from $4.3 million during the comparable period last year. Net income for the six month period ended June 30, 2018 was $0.4 million or $0.04 per share compared to a net loss of $(0.9) million or $(0.08) per share last year.

The Company ended the second quarter with $0.9 million in cash, versus $1.4 million at the same time a year ago, and $1.3 million at December 31, 2017. At quarter end, the company was debt-free.

“While significant challenges and uncertainties remain, I am encouraged by our return to profitability for both the three and six month periods ended June 30, 2018. We continue to work closely with our single largest customer to create value for FitLife and our distribution partners with a renewed focus on developing innovative products across all our brands. We are hopeful that this commitment, in concert with our new omni-channel approach, will return the Company to revenue growth,” said Dayton Judd, Chief Executive Officer of FitLife Brands. “I am particularly excited about the early success we have had on Amazon, which has shown impressive initial growth since launching early in the second quarter. In all that we do, we remain committed to growing shareholder value,” concluded Mr. Judd.

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.

 
FITLIFE BRANDS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
  (Unaudited)  
ASSETS: June 30, December 31,
2018 2017
 
CURRENT ASSETS
Cash $ 940,000 $ 1,262,000
Accounts receivable, net of allowance of doubtful accounts of $742,898 and $1,263,674, respectively 382,000 1,958,000
Accounts receivable, factored 1,466,000 -
Inventories, net of allowance for obsolescence of $23,984 and $48,730, respectively 2,757,000 2,874,000
Note receivable, current portion - 5,000
Prepaid expenses   82,000     221,000  
Total current assets $ 5,627,000 $ 6,320,000
 
PROPERTY AND EQUIPMENT, net 257,000 296,000
 
Intangibles assets, net 225,000 225,000
Security deposits   22,000     22,000  
TOTAL ASSETS $ 6,131,000   $ 6,863,000  
 
LIABILITIES AND STOCKHOLDERS' EQUITY:
 
CURRENT LIABILITIES:
Accounts payable $ 3,017,000 $ 2,974,000
Accrued expenses and other liabilities 538,000 612,000
Secured payable 1,159,000 -
Line of credit - 1,950,000
Term loan agreement, current portion   -     415,000  
Total current liabilities   4,714,000     5,951,000  
 
CONTINGENCIES AND COMMITMENTS - -
 
STOCKHOLDERS' EQUITY:

Common stock, $.01 par value, 150,000,000 shares authorized; 10,997,958 and 10,681,710 issued and outstanding as of June 30, 2018 and December 31, 2017, respectively

110,000 107,000
Additional paid-in capital 31,127,000 31,013,000
Accumulated deficit   (29,820,000 )   (30,208,000 )
Total stockholders' equity $ 1,417,000   $ 912,000  
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,131,000   $ 6,863,000  
 
The accompanying notes are an integral part of these consolidated financial statements
 
FITLIFE BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2018 AND 2017
       
(Unaudited) (Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
2018 2017 2018 2017
 
Revenue $ 4,379,000 $ 5,022,000 $ 8,993,000 $ 10,612,000
 
Cost of Goods Sold   2,573,000   3,499,000     5,271,000     7,168,000  
Gross Profit   1,806,000   1,523,000     3,722,000     3,444,000  
 
OPERATING EXPENSES:
General and administrative 856,000 1,010,000 1,709,000 2,170,000
Selling and marketing 718,000 913,000 1,523,000 1,861,000
Depreciation and amortization   18,000   117,000     38,000     237,000  
Total operating expenses   1,592,000   2,040,000     3,270,000     4,268,000  
OPERATING INCOME (LOSS)   214,000   (517,000 )   452,000     (824,000 )
 
OTHER (INCOME) AND EXPENSES
Interest expense 44,000 29,000 65,000 56,000
Other expense (income)   -   5,000     (1,000 )   4,000  
Total other (income) expense 44,000 34,000 64,000 60,000
 
INCOME TAXES - - - -
       
NET INCOME $ 170,000 $ (551,000 ) $ 388,000   $ (884,000 )
 
NET INCOME (LOSS) PER SHARE:
Basic and diluted $ 0.02 $ (0.05 ) $ 0.04   $ (0.08 )
 
Basic and diluted weighted average common shares   10,955,099   10,470,158     10,840,905     10,455,814  
 
The accompanying notes are an integral part of these consolidated financial statements
 
FITLIFE BRANDS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2018
         
Additional
Common Stock Paid-in Accumulated
Shares Amount Capital Deficit Total
December 31, 2017 10,681,710 107,000 31,013,000 (30,208,000 ) 912,000
 
Common stock issued for services 316,248 3,000 95,000 - 98,000
 
Fair value of options issued for services - - 19,000 - 19,000
 
Net income - - - 388,000   388,000
 
June 30, 2018 10,997,958 110,000 31,127,000 (29,820,000 ) 1,417,000
 
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, 2018 AND 2017
   
(Unaudited)
2018 2017
 
Net income (loss) $ 388,000 $ (884,000 )
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 38,000 237,000
Allowance for doubtful accounts (521,000 ) -
Allowance for inventory obsolescence (25,000 ) (119,000 )
Common stock issued for services 98,000 35,000
Fair value of options issued for services 19,000 23,000
Loss (gain) on disposal of assets (1,000 ) 5,000
Changes in operating assets and liabilities:
Accounts receivable - trade 2,097,000 (884,000 )
Accounts receivable - factored (1,466,000 ) -
Inventories 142,000 1,311,000
Prepaid expenses 139,000 14,000
Customer note receivable 5,000 5,000
Accounts payable 43,000 552,000
Accrued liabilities and other liabilities   (74,000 )   129,000  
Net cash provided by operating activities   882,000     424,000  
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment - (10,000 )
Proceeds from the sale of assets   2,000     -  
Net cash used in investing activities   2,000     (10,000 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of line of credit (1,950,000 ) -
Secured payable to Factor 1,159,000 -
Repayments of term loan   (415,000 )   (276,000 )
Net cash provided by (used in) financing activities   (1,206,000 )   (276,000 )
 
INCREASE IN CASH (322,000 ) 138,000
CASH, BEGINNING OF PERIOD   1,262,000     1,293,000  
CASH, END OF PERIOD $ 940,000   $ 1,431,000  
 
Supplemental disclosure operating activities
Cash paid for interest $ 65,000   $ 56,000  
 
Non-cash investing and financing activities
Cancellation of Treasury Stock $ -   $ 44,000  
 
 
The accompanying notes are an integral part of these consolidated financial statements

Contacts

FitLife Brands, Inc.
Mike Abrams
mabrams@fitlifebrands.com

Contacts

FitLife Brands, Inc.
Mike Abrams
mabrams@fitlifebrands.com