FitLife Brands, Inc. (FTLF Quick QuoteFTLF - Free Report) reported earnings per share of 53 cents in the second quarter of 2024, which increased 32.5% from the year-ago figure of 40 cents.

Revenues in Detail

FitLife Brands registered revenues of $16.9 million in the second quarter, up 14.7% year over year.

The revenue uptick primarily resulted from the acquisition of the MusclePharm assets, which were acquired in October 2023. However, this was partially offset by a decline in legacy FitLife revenues.

Online revenues were 66% of net revenues in the second quarter, while it was 34% for the wholesale channel in the same period. Wholesale revenues for the reported quarter were $5.7 million (up 17.5% year over year), while Online revenues were $11.2 million (up 13.3% year over year).

Sales to customers in the United States were 96% as of Jun 30, 2024, with the balance of sales to customers primarily in Canada.

Revenue Sources

FitLife Brands derives revenues from three sources — Legacy FitLife, Mimi's Rock (MRC) and MusclePharm.

For the quarter under review, revenues from Legacy FitLife were $6.8 million, down 4.6% from the year-ago quarter. This primarily resulted from a 10.4% decline in wholesale revenues ($4.2 million) partially offset by a 6.6% increase in online revenues ($2.6 million).

MRC revenues during the second quarter were $7.5 million, down 2.2% year over year. Revenues for the largest MRC brand — Dr. Tobias — increased 4% from the year-ago quarter, while revenues for the skin care brands — Maritime Naturals and All Natural Advice — declined 37% year over year.

MRC’s wholesale revenues were $0.1 million (down 34.3% year over year), while online revenues were $7.4 million (down 1.6% year over year).

Revenues from MusclePharm totaled $2.7 million, up 27.3% sequentially. The wholesale revenues ($1.4 million) increased 24.3%, and online revenues ($1.3 million) increased 30.8%, both on a sequential basis.

Image Source: Zacks Investment Research

FitLife Brands Gross Margin

In the quarter under review, FitLife Brands’ gross profit increased 27.1% to $7.6 million. The gross margin expanded 436 basis points (bps) to 44.8%.

Adjusted Operating Expenses Analysis

Selling, general and administrative expenses increased 41.5% year over year to $2.5 million. Advertising and marketing expenses declined 8.9% year over year to $1.3 million. Total adjusted operating expenses of $3.9 million increased 18.8% year over year.

Profitability

Adjusted operating profit totaled $3.7 million, which increased 36.9% from the prior-year quarter. The adjusted operating margin in the second quarter expanded 357 bps to 22%.

In the second quarter, FitLife Brands’ net income was $2.6 million, up 33.8% from the year-ago quarter.

Adjusted EBITDA during the reported quarter was $3.8 million, up 29% from the year-ago quarter.

Liquidity & Debt Management

FitLife Brands exited second-quarter 2024 with cash and cash equivalents of $3.7 million compared with $2.5 million at the first-quarter end. Total debt at the end of second-quarter 2024 was $15.3 million compared with $16.4 million at the first-quarter end.

Cumulative net cash provided by operating activities at the end of second-quarter 2024 was $6.6 million compared with $1.8 million a year ago.

Our Take

FitLife Brands exited the second quarter of 2024 with encouraging top-line and bottom-line results. Solid MusclePharm revenues during the quarter were impressive. Revenues from Dr. Tobias were also up during the quarter, raising our optimism. During the reported quarter, both the gross and adjusted operating margins expanded, which bode well.

However, lower revenues from Legacy FitLife and MRC were discouraging. The decline in revenues from skincare brands under MRC was also disappointing.