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FITLIFE BRANDS, INC. (FTLF)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 delivered small beats vs S&P Global consensus on revenue and EPS, aided by strength in Legacy FitLife online sales, but margins compressed and EBITDA declined year over year; the quarter closed days before FitLife completed the Irwin Naturals acquisition (8/8) [Revenue $16.13M vs $16.08M cons; EPS $0.18 vs $0.175 cons; Adjusted EBITDA $3.33M, -13% YoY] . Consensus values marked with * are retrieved from S&P Global.*
  • Consolidated revenue fell 5% YoY to $16.13M as MRC (Dr. Tobias and skincare) declined 16% on lower Amazon sessions and Canadian tariffs; gross margin fell 200 bps to 42.8% on mix and promo investment at MusclePharm .
  • Post-quarter, FitLife closed Irwin Naturals for $42.5M, guiding the combined business to >$120M revenue and $20–$25M adjusted EBITDA in the first full year; Irwin TTM revenue was ~$60M at ~35% gross margin with expected mix/supply-chain driven improvement .
  • Tactical near-term catalysts: pro forma 8‑K with historical and abbreviated pro forma financials due within 75 days of close (expected by ~Oct 22), plus integration updates and online channel internalization for Irwin; management also flagged record July wholesale for MusclePharm as evidence of distribution momentum .

What Went Well and What Went Wrong

What Went Well

  • Legacy FitLife grew revenue 7% YoY on 17% online growth; contribution rose 5% despite slight margin compression (43.8% vs 44.2%) . Management: “the second quarter of 2025 was strong for our Legacy FitLife business” .
  • MusclePharm distribution momentum: “Monthly wholesale revenue for MusclePharm in July was the highest it has ever been since we bought the brand,” with MusclePharm Pro Series piloted at ~60% of Vitamin Shoppe stores and selectively continuing post pilot .
  • Closed Irwin Naturals (asset deal, minimal assumed liabilities) funded with new term loan/revolver; management expects combined revenue >$120M and adjusted EBITDA $20–$25M in the first full year and $1.5M lower Irwin SG&A run‑rate post-rehire footprint .

What Went Wrong

  • MRC revenue down 16% YoY (Dr. Tobias -16%; skincare -20%) driven by lower Amazon sessions; gross margin fell to 46.5% (−170 bps) with Canadian tariffs (25%) on US‑manufactured skincare cited as a headwind .
  • Consolidated gross margin compressed to 42.8% (−200 bps YoY) on mix, MusclePharm promotional investments, and tariffs; adjusted EBITDA declined 13% YoY to $3.33M .
  • Net income fell to $1.75M (from $2.63M) primarily on elevated M&A-related expenses tied to the Irwin process; diluted EPS $0.18 vs $0.27 last year .

Financial Results

Headline metrics by quarter

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$15.013 $15.936 $16.127
Gross Margin %41.4% 43.1% 42.8%
Gross Profit ($USD Millions)$6.212 $6.874 $6.904
Operating Income ($USD Millions)—$2.958 $2.518
Net Income ($USD Millions)$2.1 $2.018 $1.747
Diluted EPS ($)$0.21 $0.20 $0.18
Adjusted EBITDA ($USD Millions)$3.1 $3.416 $3.327

Q2 2025 vs Prior Year and vs Prior Quarter

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$16.930 $15.936 $16.127
Gross Margin %44.8% 43.1% 42.8%
Net Income ($USD Millions)$2.628 $2.018 $1.747
Diluted EPS ($)$0.27 $0.20 $0.18
Adjusted EBITDA ($USD Millions)$3.827 $3.416 $3.327

Segment (brand collection) breakdown – revenue

Brand Collection Revenue ($USD Millions)Q4 2024Q1 2025Q2 2025
Legacy FitLife$5.322 $7.299 $7.303
MRC (Dr. Tobias, Maritime Naturals, All Natural Advice)$6.872 $6.674 $6.269
MusclePharm$2.819 $1.963 $2.555
Total$15.013 $15.936 $16.127

KPIs and mix

KPIQ4 2024Q1 2025Q2 2025
Online Revenue ($M)$10.074 $10.630 $10.431
Online Mix of Total67% 67% 65%
Wholesale Revenue ($M)$4.939 $5.306 $5.696
Contribution ($M)$5.233 $5.821 $5.713
Contribution % of Revenue34.9% 36.5% 35.4%
Net Debt ($M)$8.6 $6.0 $4.3
TTM Adjusted EBITDA ($M)$14.125 $13.9 $13.4

Results vs Wall Street consensus (S&P Global)

MetricConsensus* (S&P Global)ActualSurprise
Revenue ($USD Millions)$16.083*$16.127 +$0.044 (+0.3%); small beat
Diluted EPS ($)$0.175*$0.18 +$0.005; small beat

Consensus values marked with * are retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Combined Revenue (FitLife + Irwin)First full year post-closen/a>$120M New
Combined Adjusted EBITDAFirst full year post-closen/a$20–$25M New
Irwin Gross Margin (baseline; expected to improve)TTM to 6/30/2025n/a~35% (expect improvement via online mix/supply efficiency) New qualitative
Irwin SG&A run-rateForward (run-rate)n/a~$14.5M TTM; ~$1.5M lower expected post-rehires New qualitative

Note: Management did not issue standalone FitLife ex-Irwin quantitative guidance. Q3 will include incremental one-time transaction costs .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q2 2025)Trend
Irwin acquisition, integration, outlookTransaction preview and financing; noted seasonally softer H2 for Irwin; strategic channel complementarity Closed 8/8; combined FY1 revenue >$120M, adj EBITDA $20–$25M; baseline Irwin GM ~35% with expected improvement; $1.5M SG&A savings; pro forma/abbreviated financials due ~Oct 22 Improving (closed; clearer outlook)
Amazon traffic (Dr. Tobias) and SEOQ1 noted weaker seasonality and MRC online down ~10–13%; Dr. Tobias comparisons challenging since Feb YoY MRC −16% on lower sessions; conversion stable; initiatives: ad spend, SEO, external traffic; sessions stable sequentially in 2025 Stabilizing sequentially; YoY still soft
Tariffs / macroTariff risk flagged (10% + 10% China tariffs); mitigating via raw material buys 25% Canadian tariffs impacted skincare GM; total MRC GM −170 bps; impact “low tens of thousands” but negative Modestly negative but manageable
GNC dispute and wholesale dynamicsDispute resolved Jan 23; resumed DC shipments early Feb Legacy FitLife +7% YoY; wholesale “lumpy”; MusclePharm July record wholesale month Improving distribution momentum
MusclePharm brand refresh / RTD / Pro SeriesRebranding and new RTD launches; Vitamin Shoppe pilot planned Pro Series piloted at ~60% of stores; select items remain post pilot; July wholesale record Positive execution, uneven quarterly sell-in
M&A appetite and leverageActive pipeline; strong balance sheet to pursue deals Focus on Irwin integration; stay in deal flow; tuck-ins possible; target ≥$1.5–$2.0M EBITDA for small deals Integration focus near term

Management Commentary

  • “Among our existing brands, the performance of the Dr. Tobias brand is our primary concern, primarily due to reduced session counts on Amazon… we are focused on… targeted increases in advertising spend, optimizing SEO… and driving external traffic” .
  • “Monthly wholesale revenue for MusclePharm in July was the highest it has ever been since we bought the brand” .
  • On Irwin: “For the trailing twelve months as of June 30, 2025… Irwin generated revenue of approximately $60 million at a gross margin of approximately 35%. We expect to generate improved gross margins over time as we increase… online sales and… make our supply chain more efficient” .
  • “For the first full year of operations, we expect the combined FitLife and Irwin businesses to generate in excess of $120,000,000 of revenue and adjusted EBITDA of between $20,000,000 to $25,000,000” .

Q&A Highlights

  • Organic growth outlook: Management remains “hopeful” to deliver 2025 organic growth ex‑Irwin, noting H1 softness was concentrated in Dr. Tobias; rest of portfolio up ~4% .
  • Combined gross margin math: With Irwin at ~35% GM and FitLife higher, blended GM in the high‑30s initially, with a path to improve as Irwin’s online mix grows and accounting is normalized .
  • Irwin revenue synergies: Plan to internalize online (Amazon) sales previously via third parties; leverage Irwin’s mass-market salesforce (CVS, Walmart, Walgreens, Costco Canada) to help MusclePharm distribution .
  • Tariffs on skincare: 25% Canada tariff on US‑made skincare is a small P&L headwind (“low tens of thousands”); fix is lower priority vs larger opportunities .
  • Pro forma and abbreviated historicals: SEC filing required within 75 days post-close; will include abbreviated income statements (rev to operating income) and opening balance sheet for acquired assets .

Estimates Context

  • Q2 2025 results compared to consensus: Revenue $16.13M vs $16.08M consensus*; Diluted EPS $0.18 vs $0.175 consensus* — small beats. Adjusted EBITDA was $3.33M vs S&P Global’s EBITDA consensus $3.31M*; note definitional differences between company’s adjusted EBITDA and S&P EBITDA may exist .
  • With Irwin closed and management outlining first-year combined targets, Street models may need to update FY2025 exit run-rate and FY2026 revenue/EBITDA, incorporate integration costs in Q3, and adjust gross margin trajectory as Irwin online internalization ramps .

Consensus values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

  • Small top/bottom-line beats with YoY margin pressure: revenue +$0.04M and EPS +$0.005 vs cons*, but gross margin −200 bps YoY on mix, MusclePharm promo, and tariffs; adjusted EBITDA −13% YoY . Consensus values marked with * are retrieved from S&P Global.
  • Portfolio bifurcation: Legacy FitLife strong (+7% YoY) while MRC (Dr. Tobias/skincare) is the drag (−16% YoY) due to lower Amazon sessions and tariffs; stabilization in sessions suggests easier comps later in 2025 if traffic holds .
  • Strategic inflection via Irwin: the all-cash, no‑dilution deal roughly doubles revenue with complementary channels and expected SG&A and mix-driven margin uplift; early priorities are internalizing Amazon sales and leveraging Irwin’s mass retail relationships .
  • Near-term print risk: expect higher Q3 transaction costs; watch for pro forma/abbreviated financials by ~Oct 22 that can recalibrate models and rerate the stock on pro forma scale/leverage .
  • Trading set-up: integration milestones, online channel ramp for Irwin, MusclePharm distribution wins (e.g., RTD, Pro Series continuity) and evidence of Amazon session recovery are likely stock-moving data points over the next 1–2 quarters .
  • Balance sheet: pre-Irwin quarter-end net debt was $4.3M (~0.3x TTM adj EBITDA), providing flexibility; post-close leverage rises per new term loan/revolver but with targeted EBITDA scale-up .
  • Watch macro/tariffs: tariff headwinds are manageable but persistent; the bigger swing factor remains Amazon traffic/SEO for Dr. Tobias and mix management across the portfolio .