FitLife Brands Announces Third Quarter 2018 Results

November 15, 2018

OMAHA, Neb.--(BUSINESS WIRE)--Nov 15, 2018--FitLife Brands, Inc. (“FitLife”) (OTC Pink: 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 nine months ended September 30, 2018.

For the third quarter ended September 30, 2018, total revenue was $4.6 million compared to $4.0 million in the third quarter of 2017. Gross margin was 38.2% for the quarter compared to 36.6% during the same period a year ago. The improvement in gross margin was primarily driven by lower discounting and growth in ecommerce sales, which generate a higher gross margin. Total operating expenses declined approximately $0.6 million, or 31.0%, as a result of the Company’s ongoing initiatives to reduce costs. Net income for the third quarter was $0.4 million, or $0.03 per share, versus a loss of $(0.5) million, or $(0.05) per share, last year.

For the nine months ended September 30, 2018, total revenue was $13.6 million versus $14.6 million for the comparable period last year. Gross margin was 40.3% for the nine months ended September 30, 2018 versus 33.6% for the comparable period last year. The improvement in gross margin was a function of higher net pricing and higher ecommerce revenues. Total operating expenses declined $1.6 million, or 26%, to $4.6 million for the nine months ended September 30, 2018 from $6.2 million during the comparable period last year. Net income for the nine months ended September 30, 2018 was $0.8 million, or $0.07 per share, compared to a net loss of $(1.4) million, or $(0.13) per share, last year.

The Company ended the third quarter with $0.5 million in cash, versus $1.1 million at the same time a year ago, and $1.3 million at December 31, 2017.

As previously disclosed, during the fourth quarter of 2017, the Company established a reserve to account for the pending return of several iSatori products from our largest retail partner. Although the Company has not fully exhausted the reserve, the majority of those returns have occurred, resulting in the Company using substantially all of its cash generated from operations year-to-date to pay for those returns.

On November 13, 2018, the Company raised $0.6 million through the sale of preferred stock to a small number of investors, including two members of the Company’s board of directors. The fourth quarter is seasonally difficult in the supplement industry, and the Company will use the proceeds to strengthen its working capital and position the company for the seasonally strong first half of the year.

“We continue to face revenue pressures with our brick and mortar retail partners, driven by declining traffic and lower sell-through at retail. To counter these challenges, we have significantly reduced our cost structure to restore the Company to profitability. We are also focused on developing our ecommerce capability, and have achieved a significant increase in ecommerce revenue over the course of the year,” said Dayton Judd, Chief Executive Officer of FitLife Brands.

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.

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