FTLF - FitLife Brands Announces Fourth Quarter and Full Year 2019 Results
OMAHA, Neb., March 30, 2020 (GLOBE NEWSWIRE) -- FitLife Brands, Inc. (“FitLife” or the “Company”) (OTC Pink: FTLF), an international provider of innovative and proprietary nutritional supplements for health-conscious consumers marketed under the brand names NDS Nutrition™, PMD®, SirenLabs®, CoreActive®, Metis Nutrition™, iSatori™, Energize, and BioGenetic Laboratories, today announced results for the three and twelve months ended December 31, 2019.
Highlights for the quarter ended December 31, 2019 include:
- Total revenue increased 5.3% to $3.7 million.
- Direct-to-consumer online sales increased to 18% of total revenue, compared to 11% in the same quarter last year.
- Gross profit improved 11.1% to $1.4 million.
- Gross margin increased to 38.3% compared to 36.3% in the same quarter last year.
- Operating expense declined 11.3% to $1.3 million.
- Net income increased to $73,000, compared to a net loss of ($244,000) last year, representing the first time in several years that the Company has been profitable in the historically slow fourth quarter.
- The Company ended the quarter with $0.3 million of cash and no borrowings on the line of credit.
- During the quarter, the Company repurchased 17,277 common shares, 50 shares of Series A preferred stock, and a warrant to purchase 3,260 shares of common stock.
- During the quarter, all remaining Series A preferred stock was converted into common stock
Highlights for the twelve months ended December 31, 2019 include:
- Total revenue increased 14.2% to $19.5 million.
- Direct-to-consumer online sales increased to 12% of total revenue, compared to 5% in 2018.
- Gross profit improved 19.5% to $8.1 million.
- Gross margin increased to 41.3% in 2019 compared to 39.5% last year.
- Operating expense declined 10.0% to $5.5 million in 2019, compared to $6.1 million in 2018.
- Net income increased 430% to $2.7 million in 2019, compared to $0.5 million in 2018.
- Net income per share available to common shareholders in 2019 increased to $2.57 per share, or $2.41 per diluted share, compared to $0.37 per basic and diluted share in 2018.
- Including the effect of the reverse/forward split, the Company repurchased 198,731 common shares during the year, or approximately 18% of the shares outstanding as of the beginning of the year.
- Subsequent to year-end, as previously disclosed, the Company drew the full $2.5 million available on its line of credit to ensure financial flexibility in the current uncertain economic environment.
For the fourth quarter ended December 31, 2019, total revenue was $3.7 million versus $3.5 million in the same quarter last year, an increase of 5.3%. The increase was primarily attributable to continued growth in our online direct-to-consumer business. During the fourth quarter of 2019, online sales accounted for approximately 18% of the Company’s revenue, compared to 11% during the fourth quarter of 2018.
Gross profit improved to $1.4 million, an increase of 11.1% from the fourth quarter of 2018. Gross margin improved from 36.3% to 38.3% over the same time period. The improvement in gross margin was driven by product mix and higher online sales volumes.
Total operating expenses decreased 11.3% from $1.5 million in the fourth quarter of 2018 to $1.3 million in the same quarter of 2019, driven by continued cost control.
During 2019, the Company was profitable during the historically slow fourth quarter, generating a net income of $73,000 compared to a net loss of ($244,000) during the fourth quarter of 2018. For the full year, basic earnings per share available to common shareholders was $2.57, compared to $0.37 in 2018, and diluted earnings per share available to common shareholders was $2.41, compared to $0.37 in 2018.
For the full year 2019, including the effects of the reverse/forward split implemented during April 2019, the Company repurchased 198,731 shares of common stock, representing approximately 18% of the common stock outstanding at the beginning of the year. In addition, the Company repurchased 50 shares of Series A preferred stock and a warrant to acquire 3,260 shares of common stock.
Dayton Judd, the Company’s Chairman and CEO, commented “By all accounts, the Company’s performance during 2019 was solid. We have returned to growth in old channels and continued growth in new channels, all while reducing operating expenses and improving the balance sheet. That said, the current economic environment is expected to materially impact the Company’s brick and mortar wholesale customers. In light of the uncertainty and in order to preserve its financial flexibility, the Company elected to draw the full $2.5 million available under its line of credit.”
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.
Contact: Dayton Judd djudd@fitlifebrands.com
| FITLIFE BRANDS, INC. |
| CONSOLIDATED BALANCE SHEETS |
| ASSETS: |
| December 31, |
| December 31, |
| 2019 |
| 2018 |
| CURRENT ASSETS |
| Cash |
| $ |
| 265,000 |
| $ |
| 259,000 |
| Accounts receivable, net of allowance of doubtful accounts, $27,000 and $10,000 respectively |
| 2,366,000 |
| 1,879,000 |
| Inventories, net of allowance for obsolescence of $130,000 and $107,000, respectively |
| 2,998,000 |
| 3,523,000 |
| Prepaid expenses and other current assets |
| 72,000 |
| 223,000 |
| Total current assets |
| 5,701,000 |
| 5,884,000 |
| Property and equipment, net |
| 136,000 |
| 189,000 |
| Right of use asset, net of amortization of $226,000 |
| 254,000 |
| - |
| Goodwill |
| 225,000 |
| 225,000 |
| Security deposits |
| 10,000 |
| 10,000 |
| TOTAL ASSETS |
| $ |
| 6,326,000 |
| $ |
| 6,308,000 |
| LIABILITIES AND STOCKHOLDERS' EQUITY: |
| CURRENT LIABILITIES: |
| Accounts payable |
| $ |
| 2,010,000 |
| $ |
| 2,628,000 |
| Accrued expense and other liabilities |
| 464,000 |
| 420,000 |
| Product returns |
| 256,000 |
| 446,000 |
| Lease liability - current portion |
| 46,000 |
| - |
| Notes payable - related parties |
| - |
| 500,000 |
| Total current liabilities |
| 2,776,000 |
| 3,994,000 |
| LONG-TERM LEASE LIABILITY, net of current portion |
| 208,000 |
| - |
| TOTAL LIABILITIES |
| 2,984,000 |
| 3,994,000 |
| STOCKHOLDERS' EQUITY: |
| Preferred stock, $0.01 par value, 10,000,000 shares authorized, none outstanding |
| as of December 31, 2019 and December 31, 2018 |
| Preferred stock Series A Preferred, $0.01 par value 1,000 shares authorized; 0 |
| and 600 shares issued and outstanding as of December 31, 2019 and December 31, 2018, respectively |
| - |
| - |
| Common stock, $0.01 par value, 15,000,000 shares authorized; 1,054,516 and 1,111,943 |
| issued and outstanding as of December 31, 2019 and December 31, 2018 respectively |
| 12,000 |
| 11,000 |
| Treasury stock, 198,731 shares |
| (1,619,000 |
| ) |
| - |
| Additional paid-in capital |
| 32,055,000 |
| 32,107,000 |
| Accumulated deficit |
| (27,106,000 |
| ) |
| (29,804,000 |
| ) |
| Total stockholders' equity |
| $ |
| 3,342,000 |
| $ |
| 2,314,000 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
| $ |
| 6,326,000 |
| $ |
| 6,308,000 |
| The accompanying notes are an integral part of these condensed consolidated financial statements |
| FITLIFE BRANDS, INC. |
| CONSOLIDATED STATEMENTS OF OPERATIONS |
| Years Ended |
| December 31, |
| 2019 |
| 2018 |
| Revenue |
| $ |
| 19,497,000 |
| $ |
| 17,077,000 |
| Cost of goods sold |
| 11,436,000 |
| 10,332,000 |
| Gross profit |
| 8,061,000 |
| 6,745,000 |
| OPERATING EXPENSES: |
| General and administrative |
| 3,049,000 |
| 3,333,000 |
| Selling and marketing |
| 2,379,000 |
| 2,690,000 |
| Depreciation and amortization |
| 52,000 |
| 69,000 |
| Total operating expenses |
| 5,480,000 |
| 6,092,000 |
| OPERATING INCOME |
| 2,581,000 |
| 653,000 |
| OTHER EXPENSES (INCOME) |
| Interest expense |
| 47,000 |
| 133,000 |
| Gain on settlement |
| (171,000 |
| ) |
| - |
| Total other expenses (income) |
| (124,000 |
| ) |
| 133,000 |
| INCOME BEFORE INCOME TAXES |
| 2,705,000 |
| 520,000 |
| PROVISION FOR INCOME TAXES |
| 7,000 |
| 11,000 |
| NET INCOME |
| 2,698,000 |
| 509,000 |
| PREFERRED STOCK DIVIDEND |
| (63,000 |
| ) |
| (105,000 |
| ) |
| NET INCOME AVAILABLE TO COMMON SHAREHOLDERS |
| $ |
| 2,635,000 |
| $ |
| 404,000 |
| NET INCOME PER SHARE AVAILABLE TO COMMON SHAREHOLDERS: |
| Basic |
| 2.57 |
| 0.37 |
| Diluted |
| $ |
| 2.41 |
| $ |
| 0.37 |
| Basic weighted average common shares |
| 1,026,204 |
| 1,094,358 |
| Diluted weighted average common shares |
| 1,092,312 |
| 1,094,358 |
| The accompanying notes are an integral part of these condensed consolidated financial statements |
| FITLIFE BRANDS, INC. |
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| Years ended December 31, |
| 2019 |
| 2018 |
| CASH FLOWS FROM OPERATING ACTIVITIES: |
| Net income |
| $ |
| 2,698,000 |
| $ |
| 509,000 |
| Adjustments to reconcile net income to net cash used in operating activities: |
| Depreciation and amortization |
| 52,000 |
| 69,000 |
| Allowance for doubtful accounts |
| 17,000 |
| (103,000 |
| ) |
| Allowance for inventory obsolescence |
| 23,000 |
| 58,000 |
| Common stock issued for services |
| 71,000 |
| 163,000 |
| Fair value of options issued for services |
| 111,000 |
| 130,000 |
| Loss on disposal of assets |
| - |
| 34,000 |
| Right of use asset net of amortization and lease liability |
| (2,000 |
| ) |
| - |
| Changes in operating assets and liabilities: |
| Accounts receivable - trade |
| (505,000 |
| ) |
| 1,334,000 |
| Inventories |
| 502,000 |
| (707,000 |
| ) |
| Deferred tax asset |
| - |
| - |
| Prepaid income tax |
| - |
| - |
| Prepaid expense |
| 151,000 |
| (2,000 |
| ) |
| Customer note receivable |
| - |
| 5,000 |
| Security deposit |
| - |
| 12,000 |
| Accounts payable |
| (618,000 |
| ) |
| (346,000 |
| ) |
| Accrued liabilities and other liabilities |
| (50,000 |
| ) |
| (192,000 |
| ) |
| Product returns |
| (189,000 |
| ) |
| (706,000 |
| ) |
| Net cash provided by operating activities |
| 2,261,000 |
| 258,000 |
| CASH FLOWS FROM INVESTING ACTIVITIES: |
| Proceeds from the sale of assets |
| - |
| 4,000 |
| Net cash provided by investing activities |
| - |
| 4,000 |
| CASH FLOWS FROM FINANCING ACTIVITIES: |
| Proceeds from issuance of notes payable |
| 300,000 |
| 500,000 |
| Proceeds from issuance of Series A preferred stock |
| - |
| 600,000 |
| Dividend payments on preferred stock |
| (63,000 |
| ) |
| - |
| Repurchases of common stock |
| (1,524,000 |
| ) |
| Repurchases of preferred stock |
| (168,000 |
| ) |
| Repayment of line of credit |
| - |
| (1,950,000 |
| ) |
| Repayments of term loan |
| - |
| (415,000 |
| ) |
| Repayments of note payable |
| (800,000 |
| ) |
| - |
| Net cash used in financing activities |
| (2,255,000 |
| ) |
| (1,265,000 |
| ) |
| CHANGE IN CASH |
| 6,000 |
| (1,003,000 |
| ) |
| CASH, BEGINNING OF PERIOD |
| 259,000 |
| 1,262,000 |
| CASH, END OF PERIOD |
| $ |
| 265,000 |
| $ |
| 259,000 |
| Supplemental disclosure operating activities |
| Cash paid for interest |
| $ |
| 47,000 |
| $ |
| 133,000 |
| Non-cash investing and financing activities |
| Accretion of beneficial conversion feature on Series A preferred stock |
| $ |
| - |
| $ |
| 105,000 |
| Recording of lease asset and liability upon adoption of ASU-2016-02 |
| $ |
| 343,000 |
| $ |
| - |
| Conversion of Series A preferred stock into common stock |
| $ |
| 567,000 |
| $ |
| - |
| The accompanying notes are an integral part of these condensed consolidated financial statements |