FITLIFE BRANDS, INC.

FitLife Brands, Inc. operates in the nutrition industry, which is segmented into Natural & Organic Foods, Functional Foods, Natural & Organic Personal Care and Household Products, and Supplements. Management identifies key growth drivers in this industry as increasing public awareness of diet-health connections, an aging population that uses more nutritional supplements, rising healthcare costs leading to preventative medicine trends, and new product introductions based on scientific studies. The company differentiates its products and marketing through quality, benefits, and functional ingredients, and seeks to protect its intellectual property through patent and trademark applications.

The company's core business model revolves around providing innovative and proprietary nutritional supplements and wellness products to health-conscious consumers. Revenue is generated through a mix of wholesale and direct-to-consumer online sales. The company acts as the principal in its e-commerce transactions, owning the goods, directing inventory, retaining back-end inventory risk, and setting prices. Customer segments include franchised GNC stores, specialty and mass market retailers, and direct online consumers via platforms like Amazon and the company's own websites.

FitLife Brands markets products under five main categories. NDS Products, including NDS Nutrition, PMD Sports, SirenLabs, Core Active, Nutrology, and Metis Nutrition, are primarily distributed through approximately 600 GNC franchise locations in the U.S. and internationally, with Metis Nutrition also distributed through over 1,300 corporate GNC stores. iSatori Products, comprising Energize, iSatori, and BioGenetic Laboratories, are sold through retail locations such as Vitamin Shoppe and Walgreens, and online directly to consumers. MRC Products, including Dr. Tobias, All Natural Advice, and Maritime Naturals, are primarily distributed online through e-commerce platforms like Amazon. MusclePharm products are sold to wholesale customers and directly to consumers online. Irwin Products, acquired on August 8, 2025, include Irwin Naturals, Applied Nutrition, and Nature’s Secret, and are sold principally through wholesale channels in mass market and health food stores, with major customers including CVS, Walmart, Walgreens, and Costco Canada, and are now also sold online directly to consumers.

For the fiscal year ended December 31, 2025, FitLife Brands reported total revenue of $81,458 thousand ¹, an increase from $64,469 thousand ² in 2024. Cost of goods sold increased to $50,005 thousand ³ from $36,389 thousand ⁴ in the prior year. Gross profit rose to $31,453 thousand ⁵ from $28,080 thousand ⁶, but the gross margin percentage decreased to 38.6% ⁷ from 43.6% ⁸. Operating income was $10,062 thousand ⁹, down from $13,119 thousand ¹⁰ in 2024. Net income for the year was $6,326 thousand ¹¹, a decrease from $8,984 thousand ¹² in 2024. Basic EPS was $0.68 ¹³ and diluted EPS was $0.63 ¹⁴. Net cash provided by operating activities was $7,439 thousand ¹⁵. As of December 31, 2025, cash and cash equivalents stood at $1,646 thousand ¹⁶, total debt (term loan and revolving line of credit) was $44,702 thousand ¹⁷, and net debt was $43,056 thousand.

Year-over-year, total revenue increased by 26% ¹⁸, primarily driven by the acquisition of Irwin, which contributed $19,465 thousand ¹⁹ in revenue from August 8, 2025, through December 31, 2025. This growth was partially offset by a 4% ²⁰ decrease in Legacy FitLife revenue to $61,993 thousand ²¹. The gross margin declined by 5.0% ²² percentage points, mainly due to the Irwin acquisition, which historically generated lower gross margins, and a $1,045 thousand ²³ amortization of the inventory step-up. Excluding this amortization, the gross margin would have been 39.9% ²⁴. Advertising and marketing expense increased by 5% ²⁵ to $4,860 thousand ²⁶, and SG&A expense increased by 41% ²⁷ to $14,036 thousand ²⁸, both primarily due to the Irwin acquisition. Merger and acquisition related expenses surged by 714% ²⁹ to $2,075 thousand ³⁰ due to transaction costs for the Irwin acquisition.

A significant operational development during the period was the acquisition of substantially all assets of Irwin Naturals and its related affiliates on August 8, 2025, for a total consideration of $42,500 thousand ³¹. This acquisition was funded by a new $40,625 thousand ³² term loan and $6,000 thousand ³³ from a new $10,000 thousand ³⁴ revolving line of credit, with the remainder from available cash. The company also introduced 36 new products in 2025, including 20 completely new products and 16 reformulations or flavor extensions, compared to 23 new products in 2024. The company also effected a 2-for-1 stock split on February 7, 2025.

The company anticipates that the percentage of sales to GNC will continue to decrease in the fiscal year ending December 31, 2026, primarily due to the full-year recognition of sales attributable to the Irwin brands acquired in August 2025. Management is focused on increasing sales to wholesale customers, both domestically and internationally, and expanding the number of retailers carrying its other brands, which represent a growing percentage of revenue. Additionally, a key growth area is increasing direct-to-consumer revenue through e-commerce platforms such as Amazon.

The acquisition of Irwin Naturals on August 8, 2025, for $42,500 thousand ³⁵ is a major growth vector, intended to augment and diversify the company's product offerings and lineup. The acquisition is expected to complement existing operations and generate future synergies within the nutritional supplement and wellness business. The company has already begun selling Irwin products on Amazon in mid-October 2025, with sales reaching approximately $0.5 million ³⁶ in December 2025. The company is also in the process of exiting Irwin's CBD business.

Regarding operational outlook, the company's gross margin was impacted by the Irwin acquisition, which historically generated lower gross margins than Legacy FitLife. Excluding the amortization of the inventory step-up, Irwin's gross margin would have been 33.2% ³⁷ during the fourth quarter of 2025. The company is also focused on cost reduction through operating efficiency, as many costs like freight, raw materials, and energy are outside its control.

The company plans to allocate capital towards its share repurchase program, which was extended and amended on May 13, 2025, authorizing management to repurchase up to $5,000 thousand ³⁸ of the company's Common Stock over the subsequent 24 months. No shares were repurchased under this program during the year ended December 31, 2025. The company also has ongoing capital expenditures for property and equipment, which amounted to $42 thousand ³⁹ in 2025. R&D spending is implied by the continuous expansion of the product line through new product development and reformulations, with 36 new products introduced in 2025.

The company anticipates that cash derived from operations and existing cash reserves, along with available borrowings under the Line of Credit, will be sufficient to provide for its liquidity for the next twelve months.

The company faces significant competition in the nutrition industry from numerous resellers, manufacturers, and wholesalers, many of whom possess greater financial and human resources, more established brands, and better access to capital. A substantial portion of the company's revenue, approximately 49% ⁴⁰ in 2025, is derived from sales on Amazon's U.S. marketplace, making it vulnerable to changes in Amazon's terms of service, platform fees, or account termination. Dependence on GNC for a substantial portion of sales, accounting for 14% ⁴¹ of total sales in 2025, also poses a risk, as GNC franchisees are not obligated to carry the company's products, and a reduction in purchases could materially impact revenue. The company relies on a limited number of third-party suppliers and manufacturers, and any inability to satisfy supply requirements, manufacture products timely, or provide services at competitive costs could delay product shipments and adversely affect revenue. Adverse publicity related to products, ingredients, or similar companies, whether accurate or not, could diminish public perception and sales. The efficacy of nutritional supplements is supported by limited conclusive clinical studies, and new scientific evidence could disprove efficacy or reveal unknown effects, leading to reduced market acceptance. A slower growth rate in the nutritional supplement industry, potentially influenced by competing products like GLP-1 pharmaceuticals, could hinder revenue growth. The company has incurred substantial debt of approximately $44,702 thousand ⁴² as of December 31, 2025, in conjunction with acquisitions, and may incur additional debt, which could limit its ability to obtain future financing, make debt payments, or respond to changing market conditions. The Credit Agreement contains covenants requiring maintenance of a Senior Funded Debt to EBITDA Ratio of not more than 2.75 to 1.00 ⁴³ through June 30, 2026, and 2.50 to 1.00 ⁴⁴ thereafter, and a Fixed Charge Coverage Ratio of at least 1.25 to 1.00 ⁴⁵, with failure to comply potentially leading to accelerated debt maturity. Increases in interest rates could negatively affect earnings due to variable-rate debt exposure. Impairment in the carrying value of intangible assets, including goodwill, could result in significant charges. Unsuccessful implementation of cost-reduction strategies or unintended consequences could adversely affect financial results. The company is subject to extensive and evolving laws and regulations in the U.S. and internationally, with non-compliance potentially leading to investigations, penalties, and product sales injunctions. Products may not meet health and safety standards or could become contaminated, leading to recalls, liability claims, and negative publicity.

Management's overall tone emphasizes strategic growth through acquisitions and a focus on expanding distribution channels, particularly direct-to-consumer online sales. They explicitly state that the acquisition of Irwin Naturals is expected to decrease the percentage of sales to GNC in the fiscal year ending December 31, 2026, due to the recognition of a full year of sales from the acquired brands. A key strategic priority is to increase sales to wholesale customers, both domestically and internationally, and to expand the number of retailers carrying their other brands. Concurrently, management is committed to increasing direct-to-consumer revenue through e-commerce platforms like Amazon. They also highlight ongoing efforts to manage costs through operating efficiency, acknowledging that many costs are external to their control.