Fitlife Brands, Inc. · NASDAQ:FTLF
Fitlife Brands — Q1 2024 Earnings Presentation
21 slides from Fitlife Brands's earnings presentation, May 9, 2024
Slide 1: Investor Presentation | May 2024
Investor Presentation | May 2024
Slide 2: Disclaimer: Forward-looking Statements
Disclaimer Forward-looking Statements This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "believe," "project
Slide 3: FitLife sells 250+ SKUs across 13 brands in wholesale and online channels
Primary FitLife Brands, Inc. (Nasdaq: FTLF) sells 250+ SKUs across 13 brands in both wholesale and online channels Secondary Other Our Brands Description # of SKUs GNC Wholesale Online Premium general health and weight loss 28 Premium sports nutrition 51 Premium weight loss and sports nutrition 13 V
Slide 4: Investment thesis
Investment thesis 1 Proven management team that is aligned with shareholders 2 Compelling financial performance 3 Growth potential 4
Slide 5: Management team of capable industry veterans and accomplished executives
1 Management team is comprised of capable industry veterans and accomplished executives from other industries Dayton Judd, Chief Executive Officer Jenna Sinnett, Chief Operating Officer Jakob York, Chief Financial Officer • CEO since Feb ‘18 • COO since Oct ‘15 • CFO since Aug ‘22 • MBA from Harvard
Slide 6: Our transformation with our current CEO began in early 2018
1 Our transformation with our current CEO began in early 2018 Total Company LTM Revenue and Adjusted EBITDA [ $, millions ] LTM Revenue LTM Adj. EBITDA 60 58-59 • Significant sales • Significant cost • Increased focus on new product development 55 decline reduction • Continued growth of online busin
Slide 7: FitLife's transformation has delivered significant equity value to shareholders
1 FitLife’s transformation has delivered significant equity value to shareholders Split Adjusted Price Per Share $35 Annualized Returns $30 (as of May 1, 2024): • 1-year: 63% $25 • 2-year: 61% • 3-year: 39% $20 • 4-year: 87% • 5-year: 75% $15 $10 New CEO $5 $0 2016 2017 2018 2019 2020 2021 2022 2023
Slide 8: FitLife has significant insider ownership, especially by CEO
1 FitLife has significant insider ownership, especially by CEO % of Total Common Shares Outstanding Comments • CEO and entities he controls own 56% of shares currently outstanding, creating strong alignment of incentives • Other employees and insiders own an 41% additional 3% of outstanding shares 5
Slide 9: Investment thesis
Investment thesis 1 Proven management team that is aligned with shareholders 2 Compelling financial performance 3 Growth potential 9
Slide 10: Compelling margins driven by differentiated brands and products
2 Compelling margins are driven by differentiated brands and products Examples of products with strong advocacy from GNC franchisees GNC franchisees promote 2023 Margins FitLife products in store because of: 50% a. High and consistent product quality b. Best-in-class unit 40% economics for GNC 40.7%
Slide 11: Capital light business, low leverage, and NOL tax carryforwards
2 Capital light business, low leverage, and net operating loss (NOL) tax carryforwards in the US and Canada result in strong cash flow generation Business has minimal capital …low leverage, used only for …and sizable NOL balances to expenditures… acquisitions… reduce cash tax liability Capital Expen
Slide 12: Growing online business with strong subscriber base
2 Growing online business with strong subscriber base underpins current financial performance Total Company Revenue [ $, millions ] Wholesale revenue CAGR Online revenue 2018 – 2023 25% 100% 90% 80% 19.3 4% 70% 21.2 20.7 60% 17.7 16.6 50% 17.5 16.2 40% 30% 33.4 106% 20% 6.7 8.1 10% 4.4 0.3 2.5 0% 0.
Slide 13: Investment thesis
Investment thesis 1 Proven management team that is aligned with shareholders 2 Compelling financial performance 3 Growth potential 13
Slide 14: Large and growing industry demonstrates organic growth potential
3 Large and growing industry demonstrates organic growth potential of existing brands Strong Industry Growth Tailwinds Key Growth Opportunities for our Brands Estimated Dietary Supplement Market Size Legacy FitLife: Continued increase in online sales $, billions and subscribers, despite declining fo
Slide 15: Industry fragmentation creates opportunity for M&A/consolidation
3 Industry fragmentation creates opportunity for inorganic growth via M&A/consolidation Consolidation Opportunity Strong Deal Flow Ability to Finance Future M&A Opportunity for “multiple Our team and infrastructure make Strong balance sheet provides arbitrage” via consolidation of us a qualified nur
Slide 16: FitLife M&A Example: Mimi's Rock
3 FitLife M&A Example: Mimi’s Rock® Deal Overview Impact Under FitLife Ownership • Closing date: February 28, 2023 • Increased run-rate annual operating income by more than $3.5 million in first • Total consideration: $17.1 million ($4.6 seven months of ownership, increasing million cash, $12.5 mill
Slide 17: FitLife M&A Example: MusclePharm
3 FitLife M&A Example: MusclePharm® Deal Overview Impact Under FitLife Ownership • Closing date: October 10, 2023 • Ramped up Amazon business as previous outsourced reseller sold through • Total consideration: $18.5 million ($8.5 inventory, including adding many new million cash, $10 million debt) s
Slide 18: Summary
Summary 1 Proven management team that is aligned with shareholders 2 Compelling financial performance 3 Growth potential Please contact us at investor@fitlifebrands.com if you have any questions. 18
Slide 19: Appendix
Appendix (19
Slide 20: Non-GAAP Reconciliations
Non-GAAP Reconciliations FITLIFE BRANDS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME $, USD thousands 2016 2017 2018 2019 2020 2021 2022 2023 Revenue 25,314 17,799 17,077 19,136 22,111 27,913 28,803 52,700 Cost of goods sold 15,243 12,708 10,332 11,155 12,574 15,409 16,769 31,268 Gross profit 1
Slide 21: Additional FitLife M&A Example: Nutrology
Additional FitLife M&A Example: Nutrology® Deal Overview Impact Under FitLife Ownership • Closing date: April 7, 2021 • Nutrology generated $897K of revenue and $346K of gross profit from April 7- • Total consideration: $529K (all cash) Dec 31, 2021 • Investment rationale • The gross profit generate