On November 14, 2024, FitLife Brands Inc (FTLF, Financial) released its 8-K filing detailing the financial results for the third quarter ended September 30, 2024. FitLife Brands Inc, a provider of proprietary nutritional supplements, markets its products under various brand names including NDS, PMD, Siren Labs, and others. The company offers a diverse range of products such as sports nutrition, energy drinks, meal replacements, and weight loss products.
Financial Performance Overview
FitLife Brands Inc reported a total revenue of $16.0 million for the third quarter of 2024, marking a 15% increase from $13.9 million in the same period last year. However, this figure fell short of the analyst estimate of $16.95 million. The company's online revenue, which constituted 68% of total revenue, rose by 14% to $10.8 million. Meanwhile, wholesale revenue increased by 16% to $5.2 million, bolstered by recent acquisitions, although legacy wholesale revenue saw a decline.
Key Financial Achievements
The company's gross margin improved to 43.8% from 41.0% in the previous year, reflecting enhanced profitability. Net income for the quarter was $2.1 million, up from $1.7 million in the third quarter of 2023. Earnings per share also saw an increase, with basic and diluted EPS at $0.46 and $0.43 respectively, compared to $0.38 and $0.35 in the prior year. Adjusted EBITDA rose significantly by 41% to $3.6 million, highlighting the company's operational efficiency.
Income Statement and Balance Sheet Insights
FitLife Brands Inc's financial statements reveal a robust performance with a notable increase in gross profit and contribution margins. The company reported a gross profit increase of 23% and a contribution increase of 34% year-over-year. As of September 30, 2024, the company had $14.3 million outstanding on its term loans and $4.7 million in cash, resulting in a net debt of approximately $9.6 million. The company's revolving line of credit remains undrawn, indicating financial flexibility.
Performance of Acquired Brands
The acquisitions of Mimi’s Rock Corp and MusclePharm assets contributed positively to the company's wholesale revenue. However, legacy FitLife wholesale revenue declined by 12%. The company has been optimizing its acquired brands, particularly focusing on improving the profitability of Mimi's Rock's skin care brands by exiting unprofitable markets and adjusting pricing strategies.
Management Commentary
Dayton Judd, the Company’s Chairman and CEO, commented, “I am pleased with the Company’s continued strong performance. At MRC, the Dr. Tobias brand—which represents just over 90% of the MRC business—continued to grow despite significant year-over-year reductions in advertising and marketing spend. And although revenue for MRC’s skin care brands has declined significantly due to our decision to exit unprofitable markets and raise prices in others, the brands are substantially more profitable.”
Analysis and Outlook
FitLife Brands Inc's third-quarter performance demonstrates solid growth and improved profitability, although it fell short of revenue expectations. The company's strategic focus on online sales and optimization of acquired brands has contributed to its financial achievements. However, challenges remain in the wholesale segment, particularly with declining customer counts in brick-and-mortar stores. The company's ability to adapt to these challenges and leverage its online presence will be crucial for sustained growth.
Explore the complete 8-K earnings release (here) from FitLife Brands Inc for further details.
