FitLife Brands Announces Fiscal First Quarter 2016 Results

OMAHA, Neb.--(BUSINESS WIRE)-- FitLife Brands, Inc. (“FitLife”) (OTCBB: 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 first quarter ended March 31, 2016.

Highlights for the quarter-ended March 31, 2016 include:

• Total revenue increased 105% to $7.9 million for the quarter
• Net income for the quarter was $814,000 or $0.07 per fully diluted share, versus a loss of ($42,000) or ($0.01) per share in the first quarter of 2015
• iSatori achieved profitability in the quarter, contributing $160,000 to net income

For the first quarter ended March 31, 2016, total revenue was $7.9 million, a 105% increase over reported revenue of $3.8 million for the first quarter of 2015. Adjusted for the accounting reclassification of vendor-funded discounts (VFD) adopted during the fourth quarter of 2015, total revenue increased 113% as compared to $3.7 million in the first quarter of 2015. Core FitLife revenue for the quarter was $5.3 million, an increase of 37% on an as reported basis, or 42% on an adjusted basis. iSatori revenue was $2.6 million for the first quarter of 2016.

Gross margin was 45.9% for the quarter compared to 41.0% as reported, or 38.8% as adjusted for VFD, in the same period a year ago. Operating expenses declined to 34.3% of revenue in the first quarter from 41.4% as reported, or 39.2% as adjusted for VFD last year. Operating expenses in the first quarter of 2016 and 2015 included approximately $44,000 and $400,000 in non-cash compensation expense, respectively, related to the partial vesting of a previously issued stock grant in both periods and the issuance of options to certain employees during the first quarter of 2015.

First quarter net income was $814,000 or $0.07 per fully diluted share versus a loss of ($42,000) or ($0.01) per share last year. iSatori was profitable during the quarter and contributed $160,000 to net income. The core FitLife business generated net income of $655,000 or $0.06 per diluted share.

The Company ended the first quarter with $0.7 million in cash, down from $4.4 million in the same period a year ago and $1.5 million at December 31, 2015. At quarter end, total debt increased to $3.4 million from $3.0 million at the end of 2015.

“During the first quarter our strong sell-through at retail continued as we saw significant growth across our product lines, driven primarily by our sports nutrition segment,” said John S. Wilson, Chief Executive Officer of FitLife Brands. “We returned to more normalized quarter over quarter comparisons, which were clouded during 2015, and saw results from the strong foundation we have built. During the quarter we introduced 36 new products, including 20 on the FitLife side and 16 for iSatori. We are very pleased with the continued growth, development and evolution of our existing franchise exclusive brands, along with our corporate exclusive brand Metis Nutrition, and believe we are well positioned for accelerated growth in the core FitLife business during 2016. We also began to see the fruits of our labor with the integration of iSatori, as we continued to achieve operating leverage from the implementation of cost restructuring during the fourth quarter of 2015. This, along with a continued focus on driving sales for more profitable products, led to significantly better margins and a return to profitability for the quarter, which is a significant milestone for the iSatori business,” concluded Mr. Wilson.

About FitLife Brands

FitLife Brands is a marketer and manufacturer 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. FitLife is headquartered in Omaha, Nebraska. For more information please visit our new website at www.fitlifebrands.com.

Forward-Looking Statement

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

This press release includes the following financial measures defined as “non-GAAP financial measures” by the Securities and Exchange Commission: non-GAAP net income, non-GAAP earnings per share. 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 accordance with generally accepted accounting principles. Reconciliations of these non-GAAP financial measures to the nearest comparable GAAP measures will be provided upon the completion of the Company’s annual audit.

Non-GAAP net income excludes items such as impairment charges, allowance for doubtful accounts, charges to consolidate and integrate recently acquired businesses, costs of closing corporate facilities, non-cash stock based compensation and other one-time cash and non-cash charges. Non-GAAP EPS excludes items such as non-cash stock based compensation, charges to consolidate and integrate recently acquired businesses, costs for closing corporate facilities, amortization of acquired intangible assets and other one-time cash and non-cash charges. The Company believes the non-GAAP measures provide useful information to both management and investors by excluding certain expenses, gains and losses or net purchases of property and equipment, as the case may be, which may not be indicative of its core operation results and business outlook.

FITLIFE BRANDS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
		(Unaudited)
ASSETS:		March 31,				December 31,
		2016				2015
CURRENT ASSETS
Cash		$	707,599			$	1,532,550
Accounts receivable, net			5,217,809				2,684,567
Security deposits			25,448				26,077
Inventory			3,536,784				4,790,301
Note receivable, current portion			12,580				16,517
Prepaid income tax			77,000				152,000
Prepaid expenses and other current assets			297,012				334,483
Total current assets			9,874,232				9,536,494
PROPERTY AND EQUIPMENT, net			215,923				226,804
Note receivable, net of current portion			52,695				52,695
Deferred Taxes			689,000				812,879
Intangibles assets, net			6,824,005				6,929,505
TOTAL ASSETS		$	17,655,856			$	17,558,378
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts payable		$	2,310,397			$	3,363,906
Accrued expenses and other liabilities			901,610				1,003,832
Litigation Reserve			90,000				95,775
Income tax payable			-				-
Line of credit			2,010,305				1,490,305
Term loan agreement, current portion			530,333				525,589
Notes payable			49,546				54,036
Total current liabilities			5,892,190				6,533,443
LONG-TERM DEBT, net of current portion			779,718				914,138
TOTAL LIABILITIES			6,671,908				7,447,581
CONTINGENCIES AND COMMITMENTS			-				-
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value, 150,000,000 shares authorized; 10,368,112 and 8,198,516 issued and outstanding as of March 31, 2016 and December 31, 2015, respectively			103,681				104,443
Subscribed common stock			402				97
Treasury stock			-				(142,228	)
Additional paid-in capital			30,880,348				30,963,122
Accumulated deficit			(20,000,483	)			(20,814,637	)
Total stockholders' equity		$	10,983,948			$	10,110,797
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	17,655,856			$	17,558,378
The accompanying notes are an integral part of these consolidated financial statements

FITLIFE BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2016 AND 2015
		(Unaudited)
		2016				2015
Revenue		$	7,882,953			$	3,842,422
Total			7,882,953				3,842,422
Cost of Goods Sold			4,264,691				2,266,711
Gross Profit			3,618,262				1,575,711
OPERATING EXPENSES:
General and administrative			1,378,859				932,246
Selling and marketing			1,196,629				603,804
Depreciation and amortization			124,756				55,277
Total operating expenses			2,700,244				1,591,327
OPERATING INCOME (LOSS)			918,018				(15,616	)
OTHER (INCOME) AND EXPENSES
Interest expense			29,429				20,648
Other expense (income)			(565	)			-
Total other (income) expense			28,864				20,648
INCOME TAXES (BENEFIT)			75,000				6,000
NET INCOME (LOSS)		$	814,154			$	(42,263	)
NET INCOME (LOSS) PER SHARE:
Basic		$	0.08			$	(0.01	)
Diluted		$	0.07			$	(0.01	)
Basic			10,385,890				8,184,126
Diluted			11,398,715				8,184,126
The accompanying notes are an integral part of these consolidated financial statements

FITLIFE BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2016 AND 2015
		(Unaudited)
		2016				2015
Net income		$	814,154			$	(42,263	)
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization			124,756				55,277
Capitalization of select merger costs			-				-
Common stock issued (cancelled) for services			43,831				402,411
Warrants and options issued (cancelled) for services			15,166				-
Gain on write-up of investment			-				-
Intercompany transfer			-				-
Changes in operating assets and liabilities:
Accounts receivable			(2,533,243	)			(699,734	)
Inventory			1,253,518				630,806
Deferred tax asset			123,879				-
Prepaid income tax			75,000				-
Prepaid expenses			37,471				(8,719	)
Note receivable			3,936				-
Deposits			-				-
Accounts payable			(1,053,510	)			43,845
Accrued liabilities			(102,222	)			19,768
Litigation reserve			(5,775	)			-
Income tax payable			-				6,000
Net cash provided by (used in) operating activities			(1,203,040	)			407,391
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment			(9,772	)			(2,214	)
Long-term investment			2,027				-
Repurchases of common stock			-				(255,981	)
Net cash provided by (used in) investing activities			(7,745	)			(258,196	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt			520,000				-
Payments for redemption of preferred stock			-				-
Repayments of note payable			(134,166	)			(125,247	)
Net cash provided by (used in) financing activities			385,834				(125,247	)
INCREASE (DECREASE) IN CASH			(824,951	)			23,948
CASH, BEGINNING OF PERIOD			1,532,550				4,353,699
CASH, END OF PERIOD		$	707,599			$	4,377,646
Supplemental disclosure operating activities
Cash paid for interest		$	29,429			$	20,648
The accompanying notes are an integral part of these consolidated financial statements

View source version on businesswire.com: http://www.businesswire.com/news/home/20160516006534/en/

Investor Relations Contact:
Three Part Advisors, LLC for FitLife Brands, Inc.
David Mossberg, 817-310-0051
or
Jeff Elliott, 972-423-7070

Source: FitLife Brands, Inc.

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