FitLife Brands Announces Second Quarter 2021 Results

Rhea-AI Summary

FitLife Brands reported remarkable second quarter results for 2021, with total revenue hitting $8.1 million, a 197% increase compared to the same period in 2020. Direct-to-consumer online sales rose 52%, now comprising 21% of total revenue. Gross profit soared 170% to $3.6 million, although gross margin decreased to 43.7%. The Company achieved net income of $1.5 million against a loss of $0.1 million last year. Adjusted EBITDA grew to $2.0 million. FitLife ended the quarter with $8.4 million in cash and no debt.

Positive

• Total revenue increased by 197% to $8.1 million.
• Direct-to-consumer online sales rose 52%, contributing to 21% of total revenue.
• Gross profit increased by 170% to $3.6 million.
• Net income was $1.5 million compared to a net loss of $0.1 million last year.
• Adjusted EBITDA improved to $2.0 million from a loss of $0.1 million.
• Company ended the quarter with $8.4 million in cash and no debt.

Negative

• Gross margin declined to 43.7% due to a reduction in higher-margin online sales as a percentage of total revenue.

Omaha, Aug. 16, 2021 (GLOBE NEWSWIRE) -- FitLife Brands Announces Second Quarter 2021 Results

OMAHA, NE – August 16, 2021 -- FitLife Brands, Inc. (“FitLife” or the “Company”) (OTCQX: 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 six months ended June 30, 2021.

Highlights for the second quarter ended June 30, 2021 include:

• Total revenue increased 197% to $8.1 million.
• Direct-to-consumer online sales increased 52% and accounted for 21% of total revenue.
• Gross profit increased 170% to $3.6 million.
• The Company generated net income of $1.5 million compared to a net loss of ($0.1) million during the same quarter last year.
• Adjusted EBITDA increased to $2.0 million compared to an adjusted EBITDA loss of ($0.1) million during the second quarter of 2020.
• Adjusted EBITDA for the trailing twelve months increased to $6.8 million.
• The Company ended the quarter with no debt and $8.4 million of cash.
  
  

For the second quarter ended June 30, 2021, total revenue was $8.1 million compared to $2.7 million in the same quarter last year, an increase of 197%.   The increase was attributable to the closure of some of our retail partners’ store locations and the stay-at-home orders during the second quarter of 2020 caused by the COVID-19 pandemic, continued organic growth in our online and wholesale businesses, and the acquisition of Nutrology. During the quarter, online sales increased 52% and accounted for approximately 21% of the Company’s revenue.

Gross profit increased 170% to $3.6 million, driven primarily by higher revenue. Gross margin declined to 43.7% due primarily to a reduction in higher-margin online sales as a percent of total revenue during the quarter.

Net income for the second quarter of 2021 was $1.5 million compared to a net loss ($0.1) million during the same quarter in 2020.   Basic earnings per share was $1.37 and diluted earnings per share was $1.26, compared to a loss of ($0.09) per basic and diluted share 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 that is not subject to procedures by our Independent Registered Public Accounting Firm. Please see the non-GAAP financial measures table below for a reconciliation of net income to adjusted EBITDA. For the quarter ended June 30, 2021, adjusted EBITDA was $2.0 million compared to an adjusted EBITDA loss of ($0.1) million in the same period last year. As of June 30, 2021, adjusted EBITDA for the trailing twelve months was $6.8 million.

Dayton Judd, the Company’s Chairman and CEO, commented, “The second quarter of 2021 was one of the strongest quarters in the Company’s history. We continue to experience robust organic growth in both our wholesale and our online businesses. We have successfully integrated Nutrology into our operations, and we continue to look for opportunities to deploy our strong and growing cash balance into additional 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 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:		June 30,				December 31,
			2021				2020
		(Unaudited)
CURRENT ASSETS
Cash		$	8,425,000			$	6,336,000
Accounts receivable, net of allowance of doubtful accounts of $59,000 and $51,000, respectively			1,757,000				2,044,000
Inventories, net of allowance for obsolescence of $28,000 and $56,000, respectively			4,834,000				3,401,000
Income tax receivable			40,000				40,000
Prepaid expenses and other current assets			228,000				52,000
Total current assets			15,284,000				11,873,000
Property and equipment, net			85,000				98,000
Right of use asset, net of amortization of $296,000 and $272,000, respectively			183,000				208,000
Intangibles, net of amortization of $10,000 and $0, respectively			212,000				-
Goodwill			358,000				225,000
Deferred tax asset			3,639,000				4,370,000
TOTAL ASSETS		$	19,761,000			$	16,774,000
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts payable		$	3,542,000			$	3,246,000
Accrued expense and other liabilities			635,000				498,000
Product returns			326,000				335,000
Lease liability - current portion			53,000				50,000
Total current liabilities			4,556,000				4,129,000
Long-term lease liability, net of current portion			131,000				158,000
PPP loan			-				453,000
TOTAL LIABILITIES			4,687,000				4,740,000
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none outstanding
as of June 30, 2021 and December 31, 2020			-				-
Common stock, $0.01 par value, 15,000,000 shares authorized; 1,105,690 and 1,060,818
issued and outstanding as of June 30, 2021 and December 31, 2020, respectively			12,000				12,000
Treasury stock, 219,654 and 210,631 shares, respectively			(2,050,000	)			(1,790,000	)
Additional paid-in capital			32,312,000				32,204,000
Accumulated deficit			(15,200,000	)			(18,392,000	)
TOTAL STOCKHOLDERS' EQUITY			15,074,000				12,034,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	19,761,000			$	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 AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020
(Unaudited)
		Three months ended								Six months Ended
		June 30								June 30
			2021				2020				2021				2020
Revenue		$	8,141,000			$	2,740,000			$	14,299,000			$	8,891,000
Cost of goods sold			4,580,000				1,421,000				7,661,000				4,835,000
Gross profit			3,561,000				1,319,000				6,638,000				4,056,000
OPERATING EXPENSES:
General and administrative			917,000				1,001,000				1,774,000				1,734,000
Selling and marketing			716,000				435,000				1,385,000				1,106,000
Depreciation and amortization			15,000				10,000				23,000				23,000
Total operating expenses			1,648,000				1,446,000				3,182,000				2,863,000
OPERATING INCOME (LOSS)			1,913,000				(127,000	)			3,456,000				1,193,000
OTHER EXPENSES (INCOME)
Interest expense (income)			(5,000	)			5,000				(11,000	)			8,000
Gain on settlement			-				-				-				(70,000	)
Gain on debt forgiveness			-				-				(453,000	)			-
Total other expenses (income)			(5,000	)			5,000				(464,000	)			(62,000	)
PRE-TAX NET INCOME (LOSS)			1,918,000				(132,000	)			3,920,000				1,255,000
PROVISION (BENEFIT) FOR INCOME TAXES			410,000				(40,000	)			728,000				(81,000	)
NET INCOME (LOSS)		$	1,508,000			$	(92,000	)		$	3,192,000			$	1,336,000
NET INCOME (LOSS) PER SHARE
Basic		$	1.37			$	(0.09	)		$	2.94			$	1.27
Diluted		$	1.26			$	(0.09	)		$	2.68			$	1.19
Basic weighted average common shares			1,098,000				1,060,033				1,087,385				1,055,893
Diluted weighted average common shares			1,194,880				1,060,033				1,189,069				1,126,631
The accompanying notes are an integral part of these condensed consolidated financial statements

FITLIFE BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020
(Unaudited)
												Additional
	Common Stock						Treasury					Paid-in				Accumulated
	Shares			Amount			Stock					Capital				Deficit					Total
THREE MONTHS ENDED JUNE 30, 2021
MARCH 31, 2021	1,090,818			$	12,000		$	(1,790,000			)	$	32,335,000			$	(16,708,000			)	$	13,849,000
Repurchase of common stock	(9,023	)			-			(260,000	)				-				-					(260,000	)
Exercise of stock options	3,895				-			-					54,000				-					54,000
Repurchase of options	-				-			-					(184,000	)			-					(184,000	)
Stock-based compensation	20,000				-			-					107,000				-					107,000
Net income	-				-			-					-				1,508,000					1,508,000
JUNE 30, 2021	1,105,690			$	12,000		$	(2,050,000	)			$	32,312,000			$	(15,200,000	)			$	15,074,000
THREE MONTHS ENDED JUNE 30, 2020
MARCH 31, 2020	1,060,033			$	12,000		$	(1,790,000			)	$	32,154,000			$	(25,678,000			)	$	4,698,000
Fair value of common stock issued for services	-				-			-					10,000				-					10,000
Repurchase of common stock	-				-			-					-				-					-
Exercise of stock options	-				-			-					-				-					-
Stock-based compensation	-				-			-					12,000				-					12,000
Net income	-				-			-					-				(92,000	)				(92,000	)
JUNE 30, 2020	1,060,033			$	12,000		$	(1,790,000	)			$	32,176,000			$	(25,770,000	)			$	4,628,000
SIX MONTHS ENDED JUNE 30, 2021
DECEMBER 31, 2020	1,060,818			$	12,000		$	(1,790,000			)	$	32,204,000			$	(18,392,000			)	$	12,034,000
Repurchase of common stock	(9,023	)			-			(260,000	)				-				-					(260,000	)
Exercise of stock options	3,895				-			-					54,000				-					54,000
Repurchase of options	-				-			-					(184,000	)			-					(184,000	)
Stock-based compensation	50,000				-			-					238,000				-					238,000
Net income	-				-			-					-				3,192,000					3,192,000
JUNE 30, 2021	1,105,690			$	12,000		$	(2,050,000	)			$	32,312,000			$	(15,200,000	)			$	15,074,000
SIX MONTHS ENDED JUNE 30, 2020
DECEMBER 31, 2019	1,054,516			$	12,000		$	(1,619,000			)	$	32,055,000			$	(27,106,000			)	$	3,342,000
Fair value of common stock issued for services	417				-			-					26,000				-					26,000
Repurchase of common stock	(11,900	)			-			(171,000	)				-				-					(171,000	)
Exercise of stock options	17,000				-			-					71,000				-					71,000
Stock-based compensation	-				-			-					24,000				-					24,000
Net income	-				-			-					-				1,336,000					1,336,000
JUNE 30, 2020	1,060,033			$	12,000		$	(1,790,000	)			$	32,176,000			$	(25,770,000	)			$	4,628,000
The accompanying notes are an integral part of these condensed consolidated financial statements

		For the three months ended June 30,								For the six months ended June 30,
			2021				2020				2021				2020
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
Net income		$	1,508,000			$	(92,000	)		$	3,192,000			$	1,336,000
Interest expense (income)			(5,000	)			5,000				(11,000	)			8,000
Provision (benefit) for income taxes			410,000				(40,000	)			728,000				(81,000	)
Depreciation and amortization			15,000				10,000				23,000				23,000
EBITDA			1,928,000				(117,000	)			3,932,000				1,286,000
Non-cash and non-recurring adjustments
Stock compensation expense			107,000				26,000				238,000				54,000
Non-recurring losses (gains)			-				-				(453,000	)			(70,000	)
Adjusted EBITDA		$	2,035,000			$	(91,000	)		$	3,717,000			$	1,270,000

FAQ

What were FitLife Brands' total revenues for Q2 2021?

FitLife Brands reported total revenues of $8.1 million for Q2 2021.

How much did net income increase for FitLife Brands in Q2 2021?

Net income increased to $1.5 million in Q2 2021, compared to a net loss of $0.1 million in Q2 2020.

What is the adjusted EBITDA for FitLife Brands in Q2 2021?

Adjusted EBITDA for FitLife Brands in Q2 2021 was $2.0 million.

How did online sales perform for FitLife Brands in Q2 2021?

Online sales increased by 52% and accounted for 21% of total revenue in Q2 2021.

What was the gross margin for FitLife Brands in Q2 2021?

The gross margin for FitLife Brands in Q2 2021 declined to 43.7%.