Fitlife Brands ((FTLF)) has held its Q4 earnings call. Read on for the main highlights of the call.
FitLife Brands’ recent earnings call conveyed a strong financial performance for 2024, marked by significant growth in revenue, profit, and online sales. Despite these positive results, challenges were acknowledged in the Legacy FitLife segment due to a dispute with GNC, and anticipated declines in MRC revenues for Q1 2025, which somewhat tempered the overall positive sentiment.
Significant Revenue and Profit Growth
For the full year 2024, FitLife Brands reported a substantial 22% increase in total revenue, reaching $64.5 million. This growth was accompanied by a 31% rise in gross profit and an expansion of the gross margin from 40.7% to 43.6%. Net income saw an impressive 70% increase, amounting to $9 million.
Impressive Online Sales Performance
Online sales were a standout performer, growing 29% year-over-year and accounting for 67% of the company’s total revenue. This highlights the company’s successful digital strategy and its ability to capture a larger share of the online market.
Robust Adjusted EBITDA Growth
FitLife Brands achieved a 39% increase in adjusted EBITDA, reaching $14.1 million for the year. This robust growth in EBITDA underscores the company’s operational efficiency and profitability.
Mimi’s Rock Contribution Growth
Mimi’s Rock Corporation (MRC) contributed significantly to the company’s performance, with its gross margin increasing from 40.4% to 48.7% year-over-year. The contribution as a percentage of revenue also rose from 28.2% to 37.1%.
MusclePharm Brand Developments
The company launched the new MusclePharm Pro Series, including nine SKUs in a Vitamin Shoppe pilot, and introduced new flavors in protein bars and ready-to-drink proteins, showcasing its commitment to product innovation and market expansion.
Legacy FitLife Revenue Decline
Despite overall growth, the Legacy FitLife segment faced challenges, with Q4 2024 revenue declining by 13% year-over-year to $5.3 million. Wholesale revenue fell by 20%, and online revenue decreased by 1%.
Commercial Dispute with GNC
A significant challenge was a commercial dispute with GNC, the company’s largest customer, which halted order acceptance from December 1, 2024, through January 23, 2025, impacting sales.
Challenges with MRC Skin Care Brands
The MRC skin care brands faced difficulties, with revenue declining 38% in Q4 2024 due to unprofitable revenue rationalization efforts.
Expected Revenue Decline in Q1 2025
Looking ahead, FitLife Brands anticipates a 4% to 6% decline in consolidated revenue for Q1 2025 compared to Q1 2024, primarily due to challenging comparisons with MRC’s strong performance in early 2024.
Forward-Looking Guidance
CEO Dayton Judd provided forward-looking guidance, emphasizing a 22% year-over-year increase in total revenue for 2024, with online sales contributing significantly. The company ended the year with a net debt of $8.6 million and is focused on optimizing brand performance and managing tariff impacts. The resolution of the GNC dispute in January 2025 is expected to stabilize future sales.
In summary, FitLife Brands’ earnings call reflected a strong financial performance for 2024, driven by impressive revenue and profit growth, particularly in online sales. However, challenges in the Legacy FitLife segment and anticipated revenue declines in early 2025 present areas to watch. The company’s strategic initiatives and resolution of the GNC dispute are expected to support continued growth and stability.