FitLife Brands (FTLF) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue declined 4% year-over-year to $15.9M, mainly due to lower MRC and MusclePharm sales, partially offset by 5% growth in Legacy FitLife brands; online sales comprised 67% of total revenue.

• Net income was $2.0M, down from $2.2M in Q1 2024, with EPS at $0.22 basic and $0.20 diluted; adjusted EBITDA was $3.4M, a 6% decrease year-over-year.

• Significant M&A-related expenses impacted reported net income and EPS; excluding these, results would have matched or exceeded prior year.

• Online sales represented 67% of total revenue, up from 65% in the prior year; U.S. sales accounted for 96% of total revenue.

• A 2-for-1 stock split was effected in February 2025, doubling authorized shares and adjusting all share data retroactively.

Financial highlights

• Gross margin declined to 43.1% from 44.0% year-over-year; gross profit was $6.87M, down 6%.

• Contribution margin (non-GAAP) was 36.5%, nearly flat year-over-year.

• Net debt at quarter end was $6.0M, or 0.4x trailing 12-month adjusted EBITDA; cash balance was $6.0M.

• Operating cash flow was $2.33M, down from $5.04M in Q1 2024, mainly due to working capital changes.

• No outstanding balance on the $3.5M line of credit at quarter-end.

Outlook and guidance

• No formal forward-looking guidance provided, but expectation is for organic revenue growth in 2025.

• Management expects continued promotional investments in MusclePharm to impact margins and contribution in future quarters.

• Cash flow from operations and available credit are expected to provide sufficient liquidity for the next twelve months.

• April saw year-over-year increases in both revenue and adjusted EBITDA.

• Gross margins expected to remain in the 42-45% range, with mix and promotions influencing results.