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FitLife Brands Announces Second Quarter 2018 Results

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Reports Second Consecutive Profitable Quarter

FitLife Brands, Inc. ("FitLife") (OTC: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

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