[May 23, 2017] |
|
FitLife Brands Announces Fiscal First Quarter 2017 Results
FitLife Brands, Inc. ("FitLife") (OTCBB: FTLF), an international
provider of innovative and proprietary nutritional supplements for
health conscious consumers marketed under the brand names NDS (News - Alert) 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 its fiscal first quarter ended March 31,
2017.
Highlights for the quarter-ended March 31, 2017 include:
-
Total revenue decreased 29% to $5.6 million for the quarter.
-
Net loss for the quarter was $0.3 million or ($0.03) per share, versus
a gain of $0.8 million or $0.07 per share.
For the first quarter ended March 31, 2017, total revenue was $5.6
million, a 29% decrease over reported revenue of $7.9 million last year.
During the quarter, the Company incurred a one-time non-recurring
adjustment to revenue of $700,000 related to a credit memorandum with
our largest customer. Excluding the one-time charge, total revenue would
have been $6.3 million for the first quarter of 2017. Core FitLife
revenue for the quarter was $4.1 million versus $5.3 million a year ago.
Excluding the revenue adjustment, core FitLife revenue would have been
$4.8 million, a decline of 8% from the prior period. iSatori generated
$1.5 million in revenue compared to $2.6 million for the first quarter
of 2016. In addition to the non-recurring credit, core FitLife and
iSatori's revenue declines were both primarily attributable to fewer new
product introductions during the first quarter of 2017 as compared to
the first quarter of 2016. On average we introduce approximately 8 to 10
new products every 6 months, but the timing of such product launches can
vary from quarter to quarter.
Gross margin was 34.4% for the quarter compared to 45.9% in the same
period a year ago. Excluding the revenue adjustment, gross margin would
have been 46.9%. Operating expenses were 39.8% of revenue as reported
and 35.4% excluding the revenue adjustment versus 34.3% last year.
First quarter net loss was $0.3 million or ($0.03) per share versus a
gain of $0.8 million or $0.07 per share last year. Excluding the
one-time revenue adjustment, net income would have been $0.4 million or
$0.03 per share. The core FitLife business posted a net loss of $0.2
million relative to net income of $0.7 million in the first quarter of
2016. Absent the revenue adjustment, net income for the core FitLife
business would have been $0.5 million. iSatori lost ($115,000) as a
result of lower sales levels compared to a gain of $159,000 in the same
period a year ago.
The Company ended the first quarter with $1.1 million in cash, down from
$1.3 million at December 31, 2016. At quarter end, total debt decreased
to $2.7 million from $2.9 million at the end of 2016.
"Facing a challenging retail environment, many of our customers are
choosing to hold less inventory, which has led to some lumpiness in the
year over year comparisons," said John S. Wilson, Chief Executive
Officer of FitLife Brands. "We also absorbed a non-recurring credit from
our largest customer of $700,000 in the quarter, which further reduced
our revenue in the first quarter. In fact, without the one-time
adjustment to revenue we incurred during the quarter, we would have
generated positive net income, which we feel is a testament to our
strong fundamentals and conservative management of the business. We
continue with our efforts to streamline the business and reduced our
expenses in the quarter by almost $500,000 and our cash position remains
solid with cash flow from operations essentially breakeven."
Following the issuance of first quarter financial results, the company
will provide recorded comments that can be accessed on the FitLife
Brands' website under the "Investor Relations" section.
About FitLife Brands
FitLife Brands is a marketer and manufacturer 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.
FitLife is headquartered in Omaha, Nebraska. For more information please
visit our new website at www.fitlifebrands.com.
Forward-Looking Statement 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 This press release includes the
following financial measures defined as "non-GAAP financial measures" by
the Securities and Exchange Commission: non-GAAP net income, non-GAAP
earnings per share. 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 accordance with generally accepted accounting principles.
Reconciliations of these non-GAAP financial measures to the nearest
comparable GAAP measures will be provided upon the completion of the
Company's annual audit.
Non-GAAP net income excludes items such as impairment charges, allowance
for doubtful accounts, charges to consolidate and integrate recently
acquired businesses, costs of closing corporate facilities, non-cash
stock based compensation and other one-time cash and non-cash charges.
Non-GAAP EPS excludes items such as non-cash stock based compensation,
charges to consolidate and integrate recently acquired businesses, costs
for closing corporate facilities, amortization of acquired intangible
assets and other one-time cash and non-cash charges. The Company
believes the non-GAAP measures provide useful information to both
management and investors by excluding certain expenses, gains and losses
or net purchases of property and equipment, as the case may be, which
may not be indicative of its core operation results and business outlook.
|
FITLIFE BRANDS, INC.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
(Unaudited)
|
|
|
|
ASSETS:
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
Cash
|
|
|
$
|
1,133,148
|
|
|
|
$
|
1,293,041
|
|
Accounts receivable, net
|
|
|
|
4,385,965
|
|
|
|
|
2,792,649
|
|
Security deposits
|
|
|
|
24,956
|
|
|
|
|
24,956
|
|
Inventory
|
|
|
|
2,895,670
|
|
|
|
|
3,756,716
|
|
Note receivable, current portion
|
|
|
|
53,227
|
|
|
|
|
2,782
|
|
Prepaid income tax
|
|
|
|
120,000
|
|
|
|
|
120,000
|
|
Prepaid expenses and other current assets
|
|
|
|
48,549
|
|
|
|
|
136,014
|
|
Total current assets
|
|
|
|
8,661,514
|
|
|
|
|
8,126,158
|
|
|
|
|
|
|
|
|
PROPERTY AND EQUIPMENT, net
|
|
|
|
157,166
|
|
|
|
|
171,004
|
|
|
|
|
|
|
|
|
Note receivable, net of current portion
|
|
|
|
-
|
|
|
|
|
52,695
|
|
Deferred Taxes
|
|
|
|
689,000
|
|
|
|
|
689,000
|
|
Intangibles assets, net
|
|
|
|
6,402,006
|
|
|
|
|
6,507,505
|
|
TOTAL ASSETS
|
|
|
$
|
15,909,686
|
|
|
|
$
|
15,546,363
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
2,446,192
|
|
|
|
$
|
1,596,748
|
|
Accrued expenses and other liabilities
|
|
|
|
494,769
|
|
|
|
|
539,765
|
|
Litigation Reserve
|
|
|
|
-
|
|
|
|
|
-
|
|
Income tax payable
|
|
|
|
-
|
|
|
|
|
-
|
|
Line of credit
|
|
|
|
1,950,000
|
|
|
|
|
1,950,000
|
|
Term loan agreement, current portion
|
|
|
|
549,743
|
|
|
|
|
544,825
|
|
Notes payable
|
|
|
|
9,860
|
|
|
|
|
12,700
|
|
Total current liabilities
|
|
|
|
5,450,564
|
|
|
|
|
4,644,038
|
|
|
|
|
|
|
|
|
LONG-TERM DEBT, net of current portion
|
|
|
|
229,779
|
|
|
|
|
369,177
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
|
5,680,344
|
|
|
|
|
5,013,215
|
|
|
|
|
|
|
|
|
CONTINGENCIES AND COMMITMENTS
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY:
|
|
|
|
|
|
|
Preferred stock, $0.01 par value, 10,000,000 shares authorized as
of March 31, 2017 and December 31, 2016:
|
|
|
|
|
|
|
Preferred stock Series A; 10,000,000 shares authorized; 0 shares
issued and outstanding as of March 31, 2017 and December 31, 2016
|
|
|
|
-
|
|
|
|
|
-
|
|
Preferred stock Series B; 1,000 shares authorized; 0 shares issued
and outstanding as of March 31, 2017 and December 31, 2016
|
|
|
|
-
|
|
|
|
|
-
|
|
Preferred stock Series C; 500 shares authorized; 0 shares issued
and outstanding as of March 31, 2017 and December 31, 2016
|
|
|
|
-
|
|
|
|
|
-
|
|
Common stock, $.01 par value, 150,000,000 shares authorized;
10,441,469 and 10,449,520 issued and outstanding as of March 31,
2017 and December 31, 2016, respectively
|
|
|
|
104,415
|
|
|
|
|
104,495
|
|
Subscribed common stock
|
|
|
|
287
|
|
|
|
|
339
|
|
Treasury stock
|
|
|
|
-
|
|
|
|
|
(44,416.17
|
)
|
Additional paid-in capital
|
|
|
|
30,904,089
|
|
|
|
|
30,919,289
|
|
Accumulated deficit
|
|
|
|
(20,779,449
|
)
|
|
|
|
(20,446,559
|
)
|
Total stockholders' equity
|
|
|
$
|
10,229,342
|
|
|
|
$
|
10,533,148
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
$
|
15,909,686
|
|
|
|
$
|
15,546,363
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated
financial statements
|
|
|
|
|
|
|
|
|
FITLIFE BRANDS, INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
FOR THE THREE MONTHS ENDED MARCH 31, 2017 AND 2016
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
Revenue
|
|
|
$
|
5,589,354
|
|
|
|
$
|
7,882,953
|
|
Total
|
|
|
|
5,589,354
|
|
|
|
|
7,882,953
|
|
|
|
|
|
|
|
|
Cost of Goods Sold
|
|
|
|
3,668,790
|
|
|
|
|
4,264,691
|
|
Gross Profit
|
|
|
|
1,920,564
|
|
|
|
|
3,618,262
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
General and administrative
|
|
|
|
1,160,069
|
|
|
|
|
1,378,859
|
|
Selling and marketing
|
|
|
|
947,386
|
|
|
|
|
1,196,629
|
|
Depreciation and amortization
|
|
|
|
119,338
|
|
|
|
|
124,756
|
|
Total operating expenses
|
|
|
|
2,226,793
|
|
|
|
|
2,700,244
|
|
OPERATING INCOME (LOSS)
|
|
|
|
(306,229
|
)
|
|
|
|
918,018
|
|
|
|
|
|
|
|
|
OTHER (INCOME) AND EXPENSES
|
|
|
|
|
|
|
Interest expense
|
|
|
|
26,661
|
|
|
|
|
29,429
|
|
Other expense (income)
|
|
|
|
-
|
|
|
|
|
(565
|
)
|
Total other (income) expense
|
|
|
|
26,661
|
|
|
|
|
28,864
|
|
|
|
|
|
|
|
|
INCOME TAXES (BENEFIT)
|
|
|
|
-
|
|
|
|
|
75,000
|
|
|
|
|
|
|
|
|
NET (News - Alert) INCOME (LOSS)
|
|
|
$
|
(332,890
|
)
|
|
|
$
|
814,154
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) PER SHARE:
|
|
|
|
|
|
|
Basic
|
|
|
$
|
(0.03
|
)
|
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
$
|
(0.03
|
)
|
|
|
$
|
0.07
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
10,441,469
|
|
|
|
|
10,385,890
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
11,472,013
|
|
|
|
|
11,398,715
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated
financial statements
|
|
|
FITLIFE BRANDS, INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
FOR THE THREE MONTHS ENDED MARCH 31, 2017 AND 2016
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
(332,890
|
)
|
|
|
$
|
814,154
|
|
Adjustments to reconcile net income to net cash used in operating
activities:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
119,338
|
|
|
|
|
124,756
|
|
Capitalization of select merger costs
|
|
|
|
-
|
|
|
|
|
-
|
|
Common stock issued (cancelled) for services
|
|
|
|
17,500
|
|
|
|
|
43,831
|
|
Warrants and options issued (cancelled) for services
|
|
|
|
11,585
|
|
|
|
|
15,166
|
|
Gain on write-up of investment
|
|
|
|
-
|
|
|
|
|
-
|
|
Intercompany transfer
|
|
|
|
-
|
|
|
|
|
(0
|
)
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
(1,593,316
|
)
|
|
|
|
(2,533,242
|
)
|
Inventory
|
|
|
|
861,047
|
|
|
|
|
1,253,518
|
|
Deferred tax asset
|
|
|
|
-
|
|
|
|
|
123,879
|
|
Prepaid income tax
|
|
|
|
-
|
|
|
|
|
75,000
|
|
Prepaid expenses
|
|
|
|
87,466
|
|
|
|
|
37,470
|
|
Note receivable
|
|
|
|
2,250
|
|
|
|
|
3,936
|
|
Deposits
|
|
|
|
-
|
|
|
|
|
-
|
|
Accounts payable
|
|
|
|
849,444
|
|
|
|
|
(1,053,510
|
)
|
Accrued liabilities
|
|
|
|
(44,996
|
)
|
|
|
|
(102,222
|
)
|
Litigation reserve
|
|
|
|
-
|
|
|
|
|
(5,775
|
)
|
Income tax payable
|
|
|
|
-
|
|
|
|
|
-
|
|
Net cash provided by (used in) operating activities
|
|
|
|
(22,573
|
)
|
|
|
|
(1,203,040
|
)
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
|
-
|
|
|
|
|
(9,772
|
)
|
Long-term investment
|
|
|
|
-
|
|
|
|
|
2,027
|
|
Repurchases of common stock
|
|
|
|
-
|
|
|
|
|
-
|
|
Net cash provided by (used in) investing activities
|
|
|
|
-
|
|
|
|
|
(7,745
|
)
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
Proceeds from issuance of long-term debt
|
|
|
|
-
|
|
|
|
|
520,000
|
|
Payments for redemption of preferred stock
|
|
|
|
-
|
|
|
|
|
-
|
|
Repayments of note payable
|
|
|
|
(137,320
|
)
|
|
|
|
(134,166
|
)
|
Net cash provided by (used in) financing activities
|
|
|
|
(137,320
|
)
|
|
|
|
385,834
|
|
|
|
|
|
|
|
|
INCREASE (DECREASE) IN CASH
|
|
|
|
(159,893
|
)
|
|
|
|
(824,951
|
)
|
CASH, BEGINNING OF PERIOD
|
|
|
|
1,293,041
|
|
|
|
|
1,532,550
|
|
CASH, END OF PERIOD
|
|
|
$
|
1,133,148
|
|
|
|
$
|
707,599
|
|
|
|
|
|
|
|
|
Supplemental disclosure operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
|
$
|
26,661
|
|
|
|
$
|
29,429
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated
financial statements
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170523005897/en/
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