FitLife Brands, Inc. ("FitLife") 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 its fiscal year ended December 31, 2018.
Highlights for the full year ended December 31, 2018 include:
- Total revenue declined 4.2% to $17.1 million
- Gross profit improved 32.5% to $6.7 million
- Gross margin increased from 28.6% in 2017 to 39.5% in 2018
- Excluding the impairment charge in 2017, operating expense declined 24.9%, or $2.0 million
- Net income improved from a loss of $(9.8) million, or $(0.93)/share, in 2017 to $0.5 million, or $0.04/share, in 2018
- Outstanding debt declined from $2.4 million at the end of 2017 to $0.5 million at the end of 2018
For the full year ended December 31, 2018, total revenue was $17.1 million versus $17.8 million in 2017. The decline was primarily attributable to a reduction in store count and declining customer traffic at our largest customer.
Despite the revenue decline, gross profit improved to $6.7 million in 2018 from $5.1 million in 2017, an increase of 32.5%. The improvement in gross margin was primarily driven by a reduction in both sales returns and customer discounts. Gross margin improved from 28.6% in 2017 to 39.5% in 2018.
Total operating expenses declined approximately $7.9 million, from $14.0 million in 2017 to $6.1 million in 2018. Excluding the impairment of $5.9 million in intangible assets during 2017, total operating expenses declined $2.0 million, or 24.9% due to continued focus on cost reduction.
Net income for 2018 was $0.5 million, or $0.04 per common share, versus a loss of $(9.8) million, or $(0.93) per common share, in 2017. Over the course of the year, the company reduced its debt burden from $2.4 million to $0.5 million. The company ended the year with $0.3 million of cash.
Dayton Judd, the company's Chairman and CEO, stated, "2018 was a year of transition for FitLife Brands. While revenue declined for the full year, we returned the company to year-over-year revenue growth in the third and fourth quarters of the year. We also right-sized the company's cost structure, eliminating over $2 million, or 25%, of our annual operating expense. The combination of returning to revenue growth and a reduced cost structure should drive improved performance for the business going forward. We also significantly improved the company's balance sheet, transitioning from being in default on $2.4 million of debt at the end of 2017 to a much more manageable debt load of $0.5 million at the end of 2018."
Mr. Judd added, "We continue to focus on selling more of our products online. We expect to launch a new, integrated website within the next couple of weeks, offering the full product lines for each of our eight brands to the end consumer in one location. In addition, we continue to experience growth in sales of our products on Amazon and on eBay. Beginning with the first quarter of 2019, we intend to provide a breakdown of our online revenue compared to our wholesale revenue."
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. |
||||||||
| 2018 | 2017 | |||||||
| Revenue | $ | 17,077,000 | $ | 17,799,000 | ||||
| Cost of Goods Sold | 10,332,000 | 12,708,000 | ||||||
| Gross Profit | 6,745,000 | 5,091,000 | ||||||
| OPERATING EXPENSE: | ||||||||
| General and administrative | 3,333,000 | 4,180,000 | ||||||
| Selling and marketing | 2,690,000 | 3,525,000 | ||||||
| Impairment of intangible assets and goodwill | - | 5,929,000 | ||||||
| Depreciation and amortization | 69,000 | 409,000 | ||||||
| Total operating expense | 6,092,000 | 14,043,000 | ||||||
| OPERATING INCOME (LOSS) | 653,000 | (8,952,000 | ) | |||||
| OTHER EXPENSE | ||||||||
| Interest expense | 133,000 | 112,000 | ||||||
| Other | - | 8,000 | ||||||
| Total other expense | 133,000 | 120,000 | ||||||
| INCOME (LOSS) BEFORE INCOME TAXES | 520,000 | (9,072,000 | ) | |||||
| PROVISION FOR INCOME TAXES | 11,000 | 689,000 | ||||||
| NET INCOME (LOSS) | 509,000 | (9,761,000 | ) | |||||
| PREFERRED STOCK DIVIDEND | (105,000 | ) | - | |||||
| NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS | $ | 404,000 | $ | (9,761,000 | ) | |||
| NET INCOME (LOSS) PER SHARE AVAILABLE TO COMMON SHAREHOLDERS: | ||||||||
| Earnings (loss) Per Share - Basic and diluted | $ | 0.04 | $ | (0.93 | ) | |||
| Weighted average shares - Basic and diluted | 10,943,578 | 10,518,239 | ||||||
The accompanying notes are an integral part of these consolidated financial statements
|
FITLIFE BRANDS, INC. |
||||||||
| ASSETS: | December 31, | December 31, | ||||||
| 2018 | 2017 | |||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | 259,000 | $ | 1,262,000 | ||||
| Accounts receivable, net of allowance for doubtful accounts, product returns, sales returns and incentive programs of $455,000 and $1,264,000, respectively | 1,433,000 | 1,958,000 | ||||||
| Inventories, net of allowance for obsolescence of $107,000 and $49,000, respectively | 3,523,000 | 2,874,000 | ||||||
| Note receivable | - | 5,000 | ||||||
| Prepaid expenses and other current assets | 223,000 | 221,000 | ||||||
| Total current assets | 5,438,000 | 6,320,000 | ||||||
| Property and equipment, net | 189,000 | 296,000 | ||||||
| Goodwill | 225,000 | 225,000 | ||||||
| Security deposits | 10,000 | 22,000 | ||||||
| TOTAL ASSETS | $ | 5,862,000 | $ | 6,863,000 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY: | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 2,628,000 | $ | 2,974,000 | ||||
| Accrued expense and other liabilities | 420,000 | 612,000 | ||||||
| Line of credit | - | 1,950,000 | ||||||
| Term loan agreement | - | 415,000 | ||||||
| Notes payable – Related Parties | 500,000 | - | ||||||
| Total current liabilities | 3,548,000 | 5,951,000 | ||||||
| CONTINGENCIES AND COMMITMENTS | ||||||||
| STOCKHOLDERS' EQUITY: | ||||||||
| Preferred stock, $0.01 par value 1,000 shares authorized; 600 shares and no shares issued and outstanding as of December 31, 2018 and 2017, respectively | - | - | ||||||
| Common stock, $0.01 par value, 150,000,000 shares authorized; 11,119,430 and 10,681,710 shares issued and outstanding as of December 31, 2018 and 2017, respectively | 111,000 | 107,000 | ||||||
| Additional paid-in capital | 32,007,000 | 31,013,000 | ||||||
| Accumulated deficit | (29,804,000 | ) | (30,208,000 | ) | ||||
| Total stockholders' equity | 2,314,000 | 912,000 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 5,862,000 | $ | 6,863,000 | ||||
The accompanying notes are an integral part of these consolidated financial statements
|
FITLIFE BRANDS, INC. |
||||||||
| 2018 | 2017 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income (loss) | $ | 509,000 | $ | (9,761,000 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 69,000 | 409,000 | ||||||
| Allowance for doubtful accounts, product returns, sales returns and incentive programs | (809,000 | ) | 1,097,000 | |||||
| Allowance for inventory obsolescence | 58,000 | (90,000 | ) | |||||
| Loss on disposal of assets | 34,000 | 5,000 | ||||||
| Fair value of common stock issued for services | 163,000 | 96,000 | ||||||
| Fair value of options issued for services | 130,000 | 44,000 | ||||||
| Impairment of intangible assets and goodwill | - | 5,929,000 | ||||||
| Loss on write-off of note receivable | - | 44,000 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 1,334,000 | (429,000 | ) | |||||
| Inventories | (707,000 | ) | 973,000 | |||||
| Deferred taxes | - | 689,000 | ||||||
| Prepaid expenses | (2,000 | ) | 35,000 | |||||
| Customer note receivable | 5,000 | 7,000 | ||||||
| Security deposits | 12,000 | 3,000 | ||||||
| Accounts payable | (346,000 | ) | 1,377,000 | |||||
| Accrued expense and other liabilities | (192,000 | ) | 238,000 | |||||
| Net cash provided by operating activities | 258,000 | 666,000 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of property and equipment | - | (185,000 | ) | |||||
| Proceeds from the sale of property and equipment | 4,000 | - | ||||||
| Net cash provided (used) in investing activities | 4,000 | (185,000 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from issuance of Notes Payable – Related Parties | 500,000 | - | ||||||
| Proceeds from issuance of Series A Preferred Stock | 600,000 | - | ||||||
| Repayment of line of credit | (1,950,000 | ) | - | |||||
| Repayments of term loan | (415,000 | ) | (512,000 | ) | ||||
| Net cash used in financing activities | (1,265,000 | ) | (512,000 | ) | ||||
| CHANGE IN CASH | (1,003,000 | ) | (31,000 | ) | ||||
| CASH, BEGINNING OF PERIOD | 1,262,000 | 1,293,000 | ||||||
| CASH, END OF PERIOD | $ | 259,000 | $ | 1,262,000 | ||||
| Supplemental disclosure operating activities | ||||||||
| Cash paid for interest | $ | 133,000 | $ | 112,000 | ||||
|
Non-Cash investing and financing activities |
||||||||
|
Cancellation of Treasury Stock |
- |
$ |
44,000 |
|||||
|
Accretion of beneficial conversion feature on Series A Preferred stock |
$ |
105,000 |
- |
|||||
The accompanying notes are an integral part of these consolidated financial statements
View source version on businesswire.com: https://www.businesswire.com/news/home/20190322005451/en/
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