Omaha, Aug. 14, 2024 (GLOBE NEWSWIRE) -- FitLife Brands, Inc. ("FitLife" or the "Company") (NASDAQ:FTLF), a provider of innovative and proprietary nutritional supplements and wellness products, today announced financial results for the second quarter ended June 30, 2024. Highlights for the second quarter ended June 30, 2024 include: Total revenue was $16.9 million, an increase of 15% compared to the second quarter of 2023.   Online sales were $11.2 million, representing 66% of total revenue and an increase of 13% compared to the second quarter of 2023. Gross margin was 44.8% compared to 40.4% during the second quarter of 2023. Net income was $2.6 million compared to $2.0 million during the second quarter of 2023. Basic earnings per share and diluted earnings per share were $0.57 and $0.53, respectively, compared to $0.44 and $0.40 during the second quarter of 2023. Adjusted EBITDA was $3.8 million, a 29% increase compared to the second quarter of 2023. The Company ended the quarter with $15.4 million outstanding on its term loans and cash of $3.7 million, or total net debt of $11.7 million. For the second quarter ended June 30, 2024, total revenue was $16.9 million, an increase of 15% compared to $14.8 million during the same period last year. Online revenue for the quarter was $11.2 million, an increase of 13% compared to the quarter ended June 30, 2023. Online revenue accounted for 66% and 67% of the Company's total revenue during the quarters ended June 30, 2024 and 2023, respectively. Wholesale revenue for the quarter ended June 30, 2024 was $5.7 million, an increase of 18% compared to the same period last year.   The Company's recent acquisitions of Mimi's Rock Corp ("MRC") and the MusclePharm assets contributed $1.5 million of wholesale revenue during the second quarter of 2024, while Legacy FitLife wholesale revenue was down $0.5 million, or 10%, compared to the same period last year.   Gross margin for the quarter ended June 30, 2024 was 44.8% compared to 40.4% during the same period in the prior year. Excluding the impact of the inventory step-up resulting from the acquisition of MRC, gross margin during the quarter ended June 30, 2023 would have been 41.9%. Net income for the second quarter of 2024 was $2.6 million compared to $2.0 million during the quarter ended June 30, 2023. Basic and diluted earnings per share were $0.57 and $0.53 respectively, compared to $0.44 and $0.40 during the second quarter of 2023.   Net income during the second quarter of 2023 was adversely impacted by $0.1 million of merger and acquisition related costs as well as $0.2 from the amortization of the inventory step-up from the MRC acquisition. Adjusted EBITDA for the quarter ended June 30, 2024 was $3.8 million, an increase of 29% compared to the same period in 2023. Adjusted EBITDA for the last twelve months, which includes four full quarters of MRC's financial performance but approximately only two and a half quarters of MusclePharm, was $12.4 million. As of June 30, 2024, the Company had $15.4 million outstanding on its term loans and cash of $3.7 million, or total net debt of approximately $11.7 million. The Company's $3.5 million revolving line of credit remains undrawn. Performance of Acquired Brands Management frequently receives questions from investors regarding the performance of brands subsequent to their acquisition by the Company. In an effort to be responsive to these questions, the Company has provided additional disclosure in this press release and in the Management's Discussion and Analysis section of the Company's Form 10-Q filed with the SEC. The Company currently intends to provide this level of disclosure for no more than two years following a transaction, after which the performance of acquired brands will be reported as part of Legacy FitLife results. One of the primary metrics used by management to evaluate the performance of the Company's brands is contribution, a non-GAAP financial measure which management defines as gross profit less advertising and marketing expenditures.   Other companies may also report contribution as a performance metric, but their definition or calculation of contribution may differ from the Company's. Management believes that contribution, as defined by the Company, is a particularly relevant performance metric since it incorporates the gross profit associated with a specific brand or collection of brands as well as the advertising and marketing expenditures associated with the same brand or brands. With limited exceptions, other operating expenses incurred by the Company are generally not allocable to a specific brand or collection of brands. Other than for MusclePharm, the numbers in the contribution tables presented below in the body of the press release represent the performance of a collection of brands. Legacy FitLife consists of nine brands and MRC consists of three brands. These collections of brands do not meet the definition of operating segments and are not managed as such. Legacy FitLife             (Unaudited)               2023 2024     Q2 Q3 Q4   Q1 Q2  Wholesale revenue 4,715   4,361   4,011     4,506   4,224    Online revenue 2,418   2,339   2,134     2,455   2,578    Total revenue 7,133   6,700   6,145     6,961   6,802    Gross profit 2,999   2,490   2,480     2,928   3,006   Gross margin 42.0 % 37.2 % 40.4 %   42.1 % 44.2 % Advertising and marketing 63   79   71     80   94   Contribution 2,936   2,411   2,409     2,848   2,912   Contribution as a % of revenue 41.2 % 36.0 % 39.2 %   40.9 % 42.8 % For the second quarter of 2024, legacy FitLife revenue declined 5% compared to the same period last year, driven by a 10% decline in wholesale revenue partially offset by 7% increase in online revenue. Despite the revenue decline, gross profit for legacy FitLife increased slightly and contribution decreased slightly compared to the same period last year. Gross margin increased from 42.0% during the second quarter of 2023 to 44.2% during the second quarter of 2024. Contribution as a percentage of revenue increased from 41.2% to 42.8% over the same time period. The Company's wholesale revenue continues to be challenged by declining customer counts in the brick-and-mortar stores of our wholesale partners. However, at least some of the customers choosing to no longer shop in brick-and-mortar locations continue to purchase legacy FitLife products online, and when a customer buys online the Company earns substantially higher gross profit and contribution. More specifically, on a year-over-year basis during the second quarter of 2024, wholesale revenue for legacy FitLife declined by $0.5 million and online revenue increased by $0.2 million, yet gross profit and contribution were approximately unchanged compared to the same period last year.                 Mimi's Rock (MRC)               (Unaudited)                 2023 2024       Q2 Q3 Q4   Q1 Q2    Wholesale revenue 137   85   91     94   90      Online revenue 7,490   7,117   6,811     7,399   7,371      Total revenue 7,627   7,202   6,902     7,493   7,461      Gross profit 2,966   3,206   2,790     3,520   3,597     Gross margin 38.9 % 44.5 % 40.4 %   47.0 % 48.2 %   Advertising and marketing 1,394   1,196   846     1,062   1,071     Contribution 1,572   2,010   1,944     2,458   2,526     Contribution as % of revenue 20.6 % 27.9 % 28.2 %   32.8 % 33.9 %                   For the second quarter of 2024, MRC revenue declined 2% compared to the same period in 2023. Over the same time period, gross profit increased 21% and contribution increased 61%.   For the second quarter of 2024, gross margin increased to 48.2% from 38.9% last year. Excluding the impact of the inventory step-up resulting from the acquisition of MRC, gross margin during the quarter ended June 30, 2023 would have been 41.7%. Revenue for the largest MRC brand—Dr. Tobias—increased 4% while revenue for the skin care brands—Maritime Naturals and All Natural Advice—declined 37% in the second quarter of 2024. At the time of the MRC acquisition in 2023, the skin care brands were sold in a number of countries. Analysis subsequent to the acquisition determined that—in almost all countries other than Canada and the US—the products were being sold at levels resulting in negative contribution. Even worse, in many of those countries, the products were being sold at negative gross margins. To optimize performance of the skin care brands, management exited a number of countries and raised prices in other countries. As a result of these changes, a substantial amount of unprofitable revenue was eliminated. The substantial year-over-year increase in gross profit for the MRC brands is primarily the result of this optimization of the skin care brands as well as beneficial product mix within the Dr. Tobias brand. The substantial year-over-year increase in contribution for the MRC brands is a function of the optimization of the skin care brands, beneficial product mix within the Dr. Tobias brand, as well as the optimization of advertising spend across all MRC brands. MusclePharm               (Unaudited)                 2023 2024       Q2 Q3 Q4   Q1 Q2    Wholesale revenue -   -   180     1,117   1,388      Online revenue -   -   73     978   1,279      Total revenue -   -   253     2,095   2,667      Gross profit -   -   93     839   977     Gross margin 0.0 % 0.0 % 36.8 %   40.0 % 36.6 %   Advertising and marketing -   -   -     86   161     Contribution -   -   93     753   816     Contribution as % of revenue 0.0 % 0.0 % 36.8 %