Q2 2024 FitLife Brands Inc Earnings Call

Speaker Change: Please hold the line and we'll be right back with you.

Speaker Change: [music] Thank you for holding. We look forward to talking with you soon. Please hold the line and we'll be right back with you.

Operator: We look forward to talking with you soon. Please hold the line and we'll be right back with you. Thanks for holding. We appreciate your time and patience. Please stay on the line and we'll be back in just a moment. FitLife Brands, Good day and welcome to the FitLife Brands second quarter 2024 financial results conference call. At this time, all participants have been placed on a listen-only mode.

Speaker Change: [music] Thanks for holding.

Speaker Change: We appreciate your time and patience. Please stay on the line and we'll be back in just a moment.

Speaker Change: Good day and welcome to the FitLife Brands second quarter 2024 financial results conference call.

Operator: The floor will be open for questions and comments following the presentation. It is now my pleasure to turn the floor over to your host, Dayton Judd, CEO of FitLife Brands. Sir, the floor is yours.

Dayton Judd: At this time, all participants have been placed on a listen-only mode. The floor will be open for questions and comments following the presentation. It is now my pleasure to turn the floor over to your host, Dayton Judd, CEO of FitLife Brands. Sir, the floor is yours.

Dayton Judd: Thank you, Paul. Welcome, everyone, to FitLife's second quarter 2024 earnings call. We appreciate you taking the time to join us this afternoon. Joining me on this call is FitLife's CFO, Jacob York, and FitLife's EVP, Ryan Hansen. For this call, we'll follow a similar pattern to our previous earnings calls. I'll provide some opening commentary about the different parts of our business, and then open the call up for Q&A. Beginning with our reporting for the second quarter of 2024, we've provided some additional metrics for some groups of our brands.

Dayton Judd: Thank you, Paul. Welcome everyone to FitLife's second quarter 2024 earnings call. We appreciate you taking the time to join us this afternoon. Joining me on this call is FitLife's CFO, Jacob York, and FitLife's EVP, Ryan Hansen.

Dayton Judd: For this call we'll follow a similar pattern to our previous earnings calls. I'll provide some opening commentary about the different parts of our business and then open the call up for Q&A.

Speaker Change: Beginning with our reporting for the second quarter of 2024, we've provided some additional metrics for some groups of our brands. This reporting is in response to investor questions about the performance of brands subsequent to their acquisition by the company.

Dayton Judd: This reporting is in response to investor questions about the performance of brands subsequent to their acquisition by the company. We've previously provided some revenue numbers, but we are now providing a breakdown of wholesale revenue versus online revenue. Gross Profit and Gross Margin, advertising and marketing spends, as well as a metric we call contribution. There may be other companies that report a similar metric, and they may define contribution differently than we do.

Speaker Change: We've previously provided some revenue numbers, but we are now providing a breakdown of wholesale revenue versus online revenue, gross profit and gross margin, advertising and marketing spent, as well as a metric we call contribution.

Speaker Change: There may be other companies that report a similar metric and they may define contribution differently than we do.

Dayton Judd: So, for the purposes of our company and our reporting and our discussion today, we define contribution as gross profit, less advertising and marketing expense, for the brands in question. The reason we do this is that, other than advertising and marketing expense, almost all other operating expenses are not easily allocable to specific brands or groups of brands, which is why we utilize this metric, contribution, as a key performance metric for our brands.

Speaker Change: So, for purposes of our company and our reporting and our discussion today, we define contribution as gross profit, less advertising and marketing expense for the brands in question.

Speaker Change: The reason we do this is other than advertising and marketing expense, almost all other operating expenses are not easily allocable to specific brands or groups of brands, which is why we utilize this metric, contribution, as a key performance metric for our brands.

Speaker Change: We're providing this level of detail for Legacy FitLife, which consists of nine brands.

Dayton Judd: MRC, or Mimi's Rock, which consists of the three brands acquired in the Mimi's Rock transaction, and MusclePharm. Further, our current intention is to provide this level of detail for Acquired Brands for a period of no more than two years following the acquisition of the brands, after which the results of the Acquired Brands will be reported as part of Legacy FitLife. We hope you'll find this level of disclosure helpful and informative. I'll begin by providing a short overview of the performance of the consolidated business and then provide some commentary on the performance of the brands as outlined in the contribution table.

Speaker Change: MRC, or Mimi's Rock, which consists of the three brands acquired in the Mimi's Rock transaction, and muscle farm.

Speaker Change: Further, our current intention is to provide this level of detail for acquired brands for a period of no more than two years following the acquisition of the brands, after which the results of the acquired brands will be reported as part of Legacy FitLife.

Speaker Change: We hope you'll find this level of disclosure helpful and informative.

Speaker Change: I'll begin by providing a short overview of the performance of the consolidated business and then provide some commentary on the performance of the brands as outlined in the contribution tables.

Dayton Judd: So first, with regard to consolidated performance. For the second quarter of 2024, total revenue increased 15% year-over-year with wholesale revenue increasing 18% and online revenue increasing 13%. Gross profit increased 27% and excluding the impact of the inventory step-up resulting from the acquisition of MRC, gross margin expanded from 41.9% last year to 44.8% this year. Contribution increased 39% driven by the addition of mussel farms.

Speaker Change: So, first, with regard to consolidated performance, for the second quarter of 2024, total revenue increased 15% year-over-year, with wholesale revenue increasing 18% and online revenue increasing 13%.

Speaker Change: Gross profit increased 27% and excluding the impact of the inventory step-up resulting from the acquisition of MRC, gross margin expanded from 41.9% last year to 44.8% this year.

Speaker Change: Contribution increased 39% driven by the addition of muscle farm, gross margin expansion, and the reduction in advertising and marketing spend.

Dayton Judd: Gross Margin Expansion and the Reduction in Advertising and Marketing Spend, Net income increased 34%, basic earnings per share increased 30%, and fully diluted earnings per share increased 33%. Adjusted EBITDA for the second quarter of 2024, increased 29% to $3.8 million, bringing our LTM-adjusted EBITDA to $12.4 million. So now, with regard to brand-level performance, let me start with an overview of Legacy FitLife.

Speaker Change: Net Income increased 34%, Basic Earnings Per Share increased 30%, and Fully Diluted Earnings Per Share increased 33%.

Speaker Change: Adjusted EBITDA for the second quarter of 2024 increased 29% to $3.8 million bringing our LTM adjusted EBITDA to $12.4 million.

Dayton Judd: Total Legacy FitLife revenue for the second quarter of 2024 was $6.8 million, of which roughly 62% was from wholesale customers, and 38% was from online sales. This represents a 10% year-over-year decline in wholesale revenue, and a 7% year-over-year increase in online revenue, or a 5% decline in total revenue. Despite the revenue decline, gross profit increased slightly due to the increase in higher margin online revenue more than offsetting the gross profit impact of the declining wholesale revenue. Gross margin increased from 42.0% last year to 44.2% in this year's second quarter.

Speaker Change: So now, with regard to brand level performance, let me start with an overview of Legacy FitLife.

Speaker Change: Total Legacy FitLife revenue for the second quarter of 2024 was $6.8 million, of which roughly 62% was from wholesale customers and 38% was from online sales.

Speaker Change: This represents a 10% year-over-year decline in wholesale revenue and a 7% year-over-year increase in online revenue or a 5% decline in total revenue.

Speaker Change: Despite the revenue decline, gross profit increased slightly due to the increase in higher margin online revenue more than offsetting the gross profit impact of the declining wholesale revenue.

Speaker Change: Gross margin increased from 42.0% last year to 44.2% in this year's second quarter. Contribution was down less than 1% due to increased advertising spend in support of online sales.

Dayton Judd: Contribution was down less than 1% due to increased advertising spend in support of online sales. We also continue to experience strong subscriber growth, with subscriber count for our Legacy FitLife products increasing approximately 19% on a year-over-year basis. Moving on now to the brands acquired in the Mimi's Rock transaction, or MRC, just as a reminder this is a company we purchased, on February the 28th, 2023. Total MRC revenue for the second quarter of 2024 was $7.5 million, almost all of which came from online sales. This represents a two percent year-over-year decline in total revenue.

Speaker Change: We also continue to experience strong subscriber growth, with subscriber count for our Legacy FitLife products increasing approximately 19% on a year-over-year basis.

Dayton Judd: Just to drill down a little bit further though, MRC consists of three brands, a supplement brand called Dr. Tobias, which represents about 90% of MRC's revenue, and two smaller skin care brands. Revenue for the Dr. Tobias brand was up 4% during the quarter, while revenue for the skincare brands was down 37%. The increased revenue for Dr. Tobias is encouraging, particularly given the significant reductions in advertising expenditures over the same period. At the time we acquired MRC, advertising spend in support of Dr. Tobias was materially higher and revenue was declining.

Speaker Change: Moving on now to the brands acquired in the Mimi's Rock transaction, or MRC. Just as a reminder, this is a company we purchased on February the 28th, 2023.

Speaker Change: Total MRC revenue for the second quarter of 2024 was $7.5 million, almost all of which came from online sales. This represents a 2% year-over-year decline in total revenue.

Speaker Change: Just to drill down a little bit further though, MRC consists of three brands. A supplement brand called Dr. Tobias which represents about 90% of MRC's revenue and two smaller skin care brands.

Speaker Change: Revenue for the Dr. Tobias Brand was up 4% during the quarter, while revenue for the skincare brands was down 37%.

Speaker Change: The increased revenue for Dr. Tobias is encouraging, particularly given the significant reductions in advertising expenditures over the same period.

Speaker Change: At the time we acquired MRC, advertising spend in support of Dr. Tobias was materially higher and revenue was declining.

Dayton Judd: Today, advertising spend is significantly lower and revenue is growing. Now with regard to the skin care brands, at the time of the acquisition, those brands were sold in a number of geographies, different countries on Amazon, and unfortunately the brands were experiencing negative gross margins in some markets and negative contribution in almost all markets. To address this problem, we exited a number of geographies and we raised prices in all other geographies.

Speaker Change: Today, advertising spend is significantly lower, and revenue is growing.

Speaker Change: Now, with regard to the skin care brands, at the time of the acquisition, those brands were sold in a number of geographies.

Speaker Change: different countries on Amazon and unfortunately the brands were experiencing negative gross margins in some markets and negative contribution in almost all markets.

Speaker Change: To address this problem, we exited a number of geographies and we raised prices in all other geographies.

Dayton Judd: The result of these changes is lower revenue, but substantially higher gross margins and positive contribution as opposed to negative contribution. Overall, Gross Profit for MRC increased 21% year over year, while Gross Margin, excluding the impact of the inventory step-up resulting from the acquisition of MRC, increased from 41.7% to 48.2%. This significant increase in gross margin was due to the previously described optimization of the skincare brand, as well as beneficial product mix within the Dr. Tobias, Contribution for MRC for the second quarter of 2024 increased 61% year over year, driven by the skincare brand optimization, beneficial mix within the Dr. Tobias product line, and a 23% year over year reduction in advertising and marketing expenditures.

Speaker Change: The result of these changes is lower revenue but substantially higher gross margins and positive contribution as opposed to negative contribution.

Speaker Change: Overall, gross profit for MRC increased 21% year-over-year, while gross margin, excluding the impact of the inventory step-up resulting from the acquisition of MRC, increased from 41.7% to 48.2%.

Speaker Change: This significant increase in gross margin was due to the previously described optimization of the skincare brands, as well as beneficial product mix within the Dr. Tobias brand.

Speaker Change: Contribution for MRC for the second quarter of 2024 increased 61% year-over-year.

Speaker Change: driven by the skincare brand optimization, beneficial mix within the Dr. Tobias product line, and a 23% year-over-year reduction in advertising and marketing expenditures.

Dayton Judd: On an LTM basis, contribution for MRC was $8.9 million, which compares very favorably to the $17.1 million we paid for the brand. In addition, I would point out that the 8.9 million LTM contribution for MRC does not yet include the full LTM impact of the skin care brand optimization, and the Reductions in Advertising and Marketing Spend. For the quarter, Amazon subscribers for MRC products grew 5% year over year. Skincare subscribers declined due to the previously discussed price and geography optimization, but Dr. Tobias subscribers grew approximately 8%. So now I'll move on to discuss MusclePharm.

Speaker Change: On an LTM basis, contribution for MRC was $8.9 million, which compares very favorably to the $17.1 million we paid for the brands.

Speaker Change: In addition, I would point out that the $8.9 million LTM contribution for MRC does not yet include the full LTM impact of the skin care brand optimization and the reductions in advertising and marketing spend.

Speaker Change: For the quarter, Amazon subscribers for MRC products grew 5% year-over-year. Skincare subscribers declined due to the previously discussed price and geography optimization, but Dr. Tobias subscribers grew approximately 8%.

Dayton Judd: As a reminder, we purchased the MusclePharm assets out of bankruptcy, in October of last year. Muscle Farm revenue was approximately $2.7 million for the second quarter of 2024, of which 52% was from online sales and 48% was from wholesale customers. Total revenue increased 27% sequentially from the first quarter of 2024 to the second quarter of 2021, with wholesale growing 24% sequentially and online revenue growing 31% sequentially. Gross profit increased 16% sequentially while gross margin declined due to increased promotional activity intended to drive revenue growth.

Speaker Change: So now I'll move on to discuss MusclePharm. As a reminder, we purchased the MusclePharm assets out of bankruptcy in October of last year.

Speaker Change: Muscle Farm revenue was approximately $2.7 million for the second quarter of 2024 of which 52% was from online sales and 48% was from wholesale customers.

Speaker Change: Total revenue increased 27% sequentially from the first quarter of 2024 to the second quarter of 2024.

Speaker Change: with wholesale growing 24% sequentially and online revenue growing 31% sequentially.

Speaker Change: Gross profit increased 16% sequentially, while gross margin declined due to increased promotional activity intended to drive revenue growth.

Dayton Judd: Contribution increased 8% sequentially, with contribution as a percentage of revenue declining due to increased promotional activity and increased advertising and marketing expenditures. Our subscriber growth on Amazon for Muscle Farm continues to be strong. In previous calls, we disclosed that our subscriber count for MusclePharm products on Amazon grew from 5 subscribers as of the end of 2023, December 31, 2023, over 1600 at the end of the first quarter of 2024. As of the end of the second quarter, 2024, the subscriber count was over 3,700, and it has continued to grow at an encouraging pace during the first half of the third quarter.

Speaker Change: Contribution increased 8% sequentially, with contribution as a percentage of revenue declining due to increased promotional activity and increased advertising and marketing expenditures.

Speaker Change: Our subscriber growth on Amazon for MuscleFarm continues to be strong.

Speaker Change: In previous calls, we disclosed that our subscriber count for MusclePharm products on Amazon grew from five subscribers as of the end of 2023, December 31, 2023, to over 1,600 at the end of the first quarter of 2024.

Speaker Change: As of the end of the second quarter, 2024, the subscriber count was over 3,700 and it has continued to grow at an encouraging pace during the first half of the third quarter.

Dayton Judd: For comparison purposes, when we began selling the Legacy FitLife products on Amazon, it took more than two years to achieve the number of subscribers that MusclePharm has acquired in our first six months of selling the brand on Amazon.

Speaker Change: For comparison purposes, when we began selling the Legacy FitLife products on Amazon, it took more than two years to achieve the number of subscribers that MusclePharm has acquired in our first six months of selling the brand on Amazon.

Dayton Judd: Now let me give a few more high-level comments about the business before moving into Q&A. For the Consolidated Business, approximately two-thirds of our revenue now comes from online sales. When the current management took over the company in 2018, less than 1% of revenue came from online sales.

Speaker Change: Now, let me give a few more high-level comments about the business before moving into Q&A.

Speaker Change: For the consolidated business, approximately two-thirds of our revenue now comes from online sales.

Speaker Change: When the current management took over the company in 2018, less than 1% of revenue came from online sales.

Dayton Judd: We are pleased with the results of this strategic shift with the company achieving record growth, record gross margins and strong cash flow while simultaneously reducing its concentration risk with large wholesale customers. With regard to the back half of 2024, please keep in mind that our business does experience seasonality with the first half of the year being stronger than the second half of the year. You can see those trends in the five-quarter contribution tables that we provided in the press release and in the 10-Q.

Speaker Change: We are pleased with the results of this strategic shift, with the company achieving record growth, record gross margins and strong cash flow, while simultaneously reducing its concentration risk with large wholesale customers.

Speaker Change: With regard to the back half of 2024, please keep in mind that our business does experience seasonality, with the first half of the year being stronger than the second half of the year.

Speaker Change: You can see those trends in the five-quarter contribution tables that we provided in the press release and in the 10-Q. That said, we expect to continue to deliver double-digit year-over-year revenue growth for the remainder of the year.

Dayton Judd: That said, we expect to continue to deliver double-digit, year-over-year revenue growth for the remainder of the year. In my remarks, I provided some commentary about Amazon subscribers. We love all of our customers, but we especially love our subscribers. Historically, revenue from subscribers has typically accounted for approximately 20% of our online revenue. Sometimes higher and sometimes lower, but in general, it's in that range.

Speaker Change: In my remarks, I provided some commentary about Amazon subscribers. We love all of our customers, but we especially love our subscribers.

Speaker Change: Historically, revenue from subscribers has typically accounted for approximately 20% of our online revenue. Sometimes higher and sometimes lower, but in general, it's in that range.

Dayton Judd: We don't plan to regularly provide subscriber counts for our individual brands or groups of brands, but as a company, we recently surpassed over 100,000 subscribers on Amazon. We are happy about this milestone, but look forward to acquiring the next 100,000 subscribers. With regard to our balance sheet, it remains strong with $15.4 million of term loans outstanding at a rate of SOFR plus $275, and we have no outstanding balance on our 3.5 million dollar revolver.

Speaker Change: We don't plan to regularly provide subscriber counts for our individual brands or groups of brands, but as a company we recently surpassed over 100,000 subscribers on Amazon.

Speaker Change: We are happy about this milestone but look forward to acquiring the next 100,000 subscribers.

Speaker Change: With regard to our balance sheet, it remains strong with $15.4 million of term loan outstanding at a rate of SOFR plus $275 and we have no outstanding balance on our $3.5 million revolver.

Dayton Judd: We ended the second quarter of 2024 with $3.7 million of cash, bringing net debt to $11.7 million, or approximately 0.9 times LTM adjusted EBITDA. As of the end of 2023, the company's net debt was 18.2 million.

Speaker Change: We ended the second quarter of 2024 with $3.7 million of cash, bringing net debt to $11.7 million, or approximately 0.9 times LTM adjusted EBITDA.

Speaker Change: As of the end of 2023, the company's net debt was $18.2 million, so we have reduced our net debt by $6.5 million, or 36% during the first half of 2024.

Dayton Judd: So we have reduced our net debt by $6.5 million or 36% during the first half of 2024. So now we can shift to the Q&A before we open it up for questions. We've had one investor, a long-time investor, that has emailed some questions. So let me – I'll read you the – he's unable, I think, to participate in the call today.

Speaker Change: So now we can shift to the Q&A before we open it up for questions.

Speaker Change: We've had one investor, a long-time investor, that has emailed some questions, so I'll read you the question. He's unable, I think, to participate in the call today.

Dayton Judd: So let me read the questions that he has asked, and I'll do my best to answer them, and then we can pull for additional questions. So the questions asked are, what are the goals management has for the company in five to 10 years? I think we know the strategy for the next six to 12 months. So that's the first question.

Speaker Change: So let me read the questions that he has asked, and I'll do my best to answer them, and then we can pull for additional questions. So the questions asked are, what are the goals management has for the company in 5 to 10 years?

Dayton Judd: Next question, will share buybacks be reinitiated? Third question is, is a dividend being considered? And number four, the question is, I'm sure everyone including me will be very interested in hearing about progress with muscle farming, getting some color around how much revenue we can expect from muscle farm when it levels out. So let me address those one by one, I'll maybe go in, in reverse order muscle farm. We're just very reluctant to give a number.

Speaker Change: I think we know the strategy for the next six to 12 months. That's the first question. Next question, will share buybacks be reinitiated?

Speaker Change: The third question is, is a dividend being considered?

Speaker Change: And number four, the question is, I'm sure everyone, including me, will be very interested in hearing about progress with muscle farm and getting some color around how much revenue we can expect from muscle farm when it levels out. So let me let me address those one by one. I'll maybe go in.

Dayton Judd: If I had a really good idea what it was going to be in in 12 months or in 24 months or in 5 years I would tell you. But the reality of the situation is I don't know and I'd rather just tell you we're going to grow it without kind of putting parameters around that. I think we would be disappointed if we're not kind of, if we haven't doubled our run rate in this business over the next 12 months.

Speaker Change: in reverse order. Muscle farm, we're just very reluctant to give a number. If I had a really good idea what it was going to be in 12 months or in 24 months or in 5 years I would tell you.

Speaker Change: but the reality of the situation is I don't know and I'd rather just tell you you know we're going to grow it without kind of putting parameters around that. You know I think we would be disappointed if we're not kind of

Dayton Judd: So we expect to continue to grow. As I indicated in my remarks and you can see in the contribution table, we're investing in growth through promotional offers to wholesale partners through increased advertising online. And we'll continue to invest in growth as we seek to restore the brand to what it was before. So I apologize that we're not going to give anything more specific, but we certainly expect it to grow going forward.

Speaker Change: If we haven't doubled our run rate in this business, you know over the next 12 months, so

Operator: www.mesmerism.info Thank you for holding. We look forward to talking with you soon. Please hold the line and we'll be right back with you. Thanks for holding. We appreciate your time and patience. Please stay on the line and we'll be back in just a moment.

Speaker Change: We expect to continue to grow as I indicated in

Speaker Change: my remarks and you can see in the contribution table we're investing in growth.

Speaker Change: through promotional offers to wholesale partners, through increased advertising online.

Speaker Change: And we'll continue to invest in growth as we seek to restore the brand to what it was before. So, I apologize that we're not going to give anything more specific, but we certainly expect it to grow going forward.

Dayton Judd: On the question on the share buybacks and dividend, let me maybe lump those two together. Those are kind of capital allocation questions, and I guess the way I would answer that is, Right now, we think the best use of our capital is to acquire other brands, attractive multiples, and bring them into the fold. Hopefully, with Mimi's Rock, you can see.., several quarters now of history of what we've been able to do there. Again, just looking at contribution, not EBITDA. It's pretty much impossible at this point to calculate an EBITDA for those brands given the fact that SG&A is spread across all of our brands.

Speaker Change: The question on the share buybacks and dividend, let me maybe lump those two together, those are kind of capital allocation questions, and I guess the way I would answer that is

Speaker Change: Right now, we think the best use of our capital is to acquire other brands, attractive multiples, and bring them into the fold. Hopefully, with Mimi's Rock, you can see...

Speaker Change: several quarters now of history of, you know, what we've been able to do there. Again, just looking at contribution, not EBITDA, it's pretty much impossible at this point to calculate an EBITDA for those brands given the fact that SG&A is spread across all of our brands.

Dayton Judd: But again, using contribution, I mean, we're under two times contribution in terms of what we paid for that business, and we think that number will continue to improve. So we think that's the highest and best use of capital. And so we continue to look for acquisitions. If we can't find any, you know, at that point I think we would look to things like shared by facts and dividends. With regard to share buybacks, certainly if there was a big pullback in the stock for whatever reason, we would evaluate that on a case-by-case basis.

Speaker Change: But again, using contribution, I mean, we're under two times contribution in terms of what we paid for that business.

Operator: Good day and welcome to the FitLife Brands 2nd quarter 2024 Financial Results Conference call.

Speaker Change: And, you know, we think that number will continue to improve. So, we think that's the highest and best use of capital.

Operator: At this time all participants have been placed on a snowly note. The floor will be open for questions and comments following the presentation.

Speaker Change: And so we continue to look for acquisitions. If we can't find any, you know, at that point, I think we would look to things like share buybacks and dividends.

Dayton Judd: It is now my pleasure to turn the floor over to your host, Dayton Judd, CEO of FitLife Brands. Sir, the floor is yours. Thank you Paul. Welcome everyone to FitLife 2nd quarter 2024 earnings call. We appreciate you taking the time to join us this afternoon.

Speaker Change: With regard to share buybacks, certainly if there was a big pullback in the stock for whatever reason, we would evaluate that on a case-by-case basis, but right now, our capital allocation strategy is first and foremost to M&A.

Dayton Judd: Joining me on this call is FitLife CFO, Jacob York and FitLife's EVP Ryan Hanson. For this call we'll follow a similar pattern to our previous earnings call. I'll provide some opening commentary about the different parts of our business and then open the call up for Q&A. Beginning with our reporting for the 2nd quarter of 2024, we've provided some additional metrics for some groups of our brands. This reporting is in response to investor questions about the performance of brands subsequent to their acquisition by the company.

Dayton Judd: But right now, our capital allocation strategy is first and foremost for M&A. And with regard to goals the management has for the company in five to ten years, I think that's somewhat related to what I just said regarding capital allocation; we think that the biggest opportunity here is to consolidate within the supplement industry. We've had a good track record of doing that. It's an incredibly fragmented industry, and we think there are a lot of brands. In fact, we know there are because we're looking at them.

Speaker Change: And with regard to goals that management has for the company in 5 to 10 years, I think that's somewhat related to what I just said regarding capital allocation.

Speaker Change: I think that the biggest opportunity here is to consolidate within the supplement industry. We've had a good track record of doing that. It's an incredibly fragmented industry and we think there are a lot of brands

Dayton Judd: We have pretty good deal flow. We get to look at a lot of deals, and we'll wait for the right pitch. But when we do, we expect to drive hopefully similar results like we did with Mimi's Rock.

Speaker Change: to consider. In fact, we know there are, because we're looking at them. We have pretty good deal flow. We get to look at a lot of deals and

Speaker Change: We'll wait for the right pitch and but when we do we we expect to

Dayton Judd: We've previously provided some revenue numbers, but we are now providing a breakdown of wholesale revenue versus online revenue, gross profit and gross margin, advertising and marketing expense, as well as a metric we call contribution. There may be other companies that report a similar metric and they may define contribution differently than we do. So for purposes of our company and our reporting and our discussion today, we define contribution as gross profit, less advertising and marketing expense for the brands in question.

Speaker Change: to drive, you know, hopefully similar results.

Paul: like we have with Mimi's Rock. We hope to do the same with Muscle Farm and with other brands that we may look at as well. So with that, Paul, why don't we go ahead and open the line up for questions.

Operator: We hope to do the same with Muscle Farm and with other brands that we may look at as well. So with that, Paul, why don't we go ahead and open the line up for questions. Certainly at this time we will be conducting a question and answer session. If you have any questions or comments please press star 1 on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality, once again please press star one on your phone at this time, If you wish to ask a question on today's course.

Paul: Certainly at this time we will be conducting a question and answer session. If you have any questions or comments please press star 1 on your phone at this time.

Speaker Change: We ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality.

Dayton Judd: The reason we do this is other than advertising and marketing expense, almost all other operating expenses are not easily allocable to specific brands or groups of brands, which is why we utilize this metric contribution as a key performance metric for our brands. We are providing this level of detail for Legacy FitLife, which consists of nine brands, MRC, or Mimi's Rock, which consists of the three brands acquired in the Mimi's Rock Transaction and Muscle Farm.

Speaker Change: once again please press star one on your phone at this time if you wish to ask a question on today's call

Operator: Please call the number you have dialed at this time, again that will be star one on your phone at this time if you wish to ask a question, I have a question. Come in, first questions from James Balken from Legend Capital. James, your line of life.

Speaker Change: One moment please while we poll for questions.

Speaker Change: i

Speaker Change: Once again, that will be star 1 on your phone at this time if you wish to ask a question.

Speaker Change: We did have a question come in. The first question is from James Boggan from Legend Capital. James, your line is live.

James Balken: Hello, good afternoon, and thanks for your presentation. In the last call, you spoke about muscle farm, the acquisition and how vendors of MusclePharm products have been very disappointed by MusclePharm's demise and that you were trying to rebuild that up. And I'd just like to get a little more color into how that's going and whether you anticipate getting to... MusclePharm had huge sales and they had very few sales. I'm wondering how you're doing.

James Bogen: Hello, good afternoon.

James Bogen: Thanks for your presentation. In the last call, you spoke about MusclePharm and the acquisition and how vendors of MusclePharm products have been very disappointed by MusclePharm's demise and that you were trying to rebuild that up.

Dayton Judd: Further, our current intention is to provide this level of detail for acquired brands for a period of no more than two years following the acquisition of the brands after which the results of the acquired brands will be reported as part of Legacy FitLife. We hope you'll find this level of disclosure helpful and informative. I'll begin by providing a short overview of the performance of the consolidated business and then provide some commentary on the performance of the brands as outlined in the contribution tables.

James Bogen: And I'd just like to get a little more color into how that's going and whether you anticipate getting to, you know, the muscle part had huge sales and they had very few sales. I'm wondering how you're doing.

James Balken: I'm building that back up basically. I know it's a long-term project and I don't expect, number estimates, but I'm just wondering, in general, how's it going in getting the faith back amongst the companies? the stores and people who buy MusclePharm products.

James Bogen: I'm in building that back up basically. I know it's a long-term project and I don't expect new

Speaker Change: number estimates, but I'm just wondering in general, how's it going in getting the faith back amongst the companies amongst the stores and people who buy MusclePharm products? Thank you.

Dayton Judd: Yeah, thanks James for the question. Happy to provide commentary but I won't talk about specific potential wholesale customers but we have had and continue to have dialogue with a number of potential partners and that the good news is I mean nobody is saying no get out of here and don't ever talk to us again right that the dialogue is happening which is good. We've had a number of meetings with kind of large national type chains and we have others that are scheduled here in the you know, during this quarter. So there are others who have indicated that they're likely to bring in some of the products, but until we see POs, we don't want to celebrate and we don't want to declare success.

Dayton Judd: So first with regard to consolidated performance, for the second quarter of 2024 total revenue increased 15% year-over-year with wholesale revenue increasing 18% and online revenue increasing 13%. Gross profit increased 27% and excluding the impact of the inventory step-up resulting from the acquisition of MRC, gross margin expanded from 41.9% last year to 44.8% this year. Contribution increased 39% driven by the addition of muscle farm, gross margin expansion, and the reduction in advertising and marketing spend.

Speaker Change: Yeah, thanks James for the question.

Speaker Change: Happy to provide commentary, but I won't talk about specific potential wholesale customers, but we have Have had and continue to have dialogue with a number of potential partners

Speaker Change: and that the good news is nobody is saying no get out of here and don't ever talk to us again right that the dialogue is happening which is good

Speaker Change: We've had a number of meetings with kind of large national type chains, and we have others that are scheduled here in the, you know,

Speaker Change: During this quarter, so so you know that there are others who have indicated that they're likely to bring in some of the products But but you know until we see po's

Dayton Judd: Net income increased 34%, basic earnings per share increased 30% and fully diluted earnings per share increased 33%. Adjusted EBITDA for the second quarter of 2024 increased 29% to 3.8 million bringing our LTM adjusted EBITDA to 12.4 million. So now with regard to brand level performance, let me start with an overview of Legacy FitLife. Total Legacy FitLife revenue for the second quarter of 2024 was 6.8 million of which roughly 62% was from wholesale customers and 38% was from online sales.

Dayton Judd: So those customers who have said they plan to bring in some of the products, again, we continue to work with them and there are agreements that are being negotiated and documented. Again, we fully expect that we'll be starting small with some of these folks, but the good news is that I think we're getting some traction. You know, I hope as we continue to have these calls going forward, we'll have more to report.

Speaker Change: You know, we don't want to celebrate and we don't want to declare success. So those customers who have said they plan to bring in some of the products, again, we continue to work with them and there are agreements that are being negotiated and documented.

Speaker Change: Again, we fully expect that we'll be starting small with some of these folks, but the good news is that I think we're getting some traction.

Dayton Judd: But the dialogue is happening, meetings are taking place and we're having good discussions, and the customers who have brought it in already that are reported in our wholesale revenue numbers for muscle farm. For example, in the contribution tables, roughly 50% of our revenue, those folks have been happy so far with what they've seen. I think with pretty much all of them, I don't have the numbers in front of me but I can't think of an exception right now.

Speaker Change: I hope as we continue to have these calls going forward, we'll have more to report. But the dialogue is happening, meetings are taking place, and we're having good discussions.

Speaker Change: and the customers who have brought it in.

Dayton Judd: This represents a 10% year-over-year decline in wholesale revenue and a 7% year-over-year increase in online revenue or a 5% decline in total revenue. Despite the revenue decline, gross profit increased slightly due to the increase in higher margin online revenue more than offsetting the gross profit impact of the declining wholesale revenue. Gross margin increased from 42.0% last year to 44.2% in this year's second quarter. Contribution was down less than 1% due to increased advertising spend in support of online sales. We also continue to experience strong subscriber growth with subscriber count for our Legacy FitLife products increasing approximately 19% on a year-over-year basis.

Speaker Change: already and that are reported in our wholesale revenue numbers for Muscle Farm.

Speaker Change: For example, in the contribution tables, roughly 50% of our revenue, those folks have been happy so far with what they've seen. I think with pretty much all of them, I don't have the numbers in front of me, but I can't think of an exception right now. I think every single one of them is growing with the brand.

Dayton Judd: I think every single one of them is growing with the brand. So we're seeing encouraging uptake when we get back in, you know, we're excited and then kind of each week-to-week and month-to-month we're seeing increased purchases from them and increased sales to their end consumers. So we're encouraged by the trends. It certainly is a marathon and not a sprint.

Speaker Change: So we're seeing encouraging uptake, right? When we get back in, you know, we're excited and then kind of each week to week and month to month we're seeing increased purchases from them and increased sales to their end consumers. So we're encouraged by the trends. It certainly is a marathon and not a sprint.

Dayton Judd: So we're continuing to run the marathon and are encouraged by what we're seeing so far in the early stages. Thank you very much. Yeah, you're welcome.

Speaker Change: So, we're continuing to run the marathon and are encouraged by what we're seeing so far in the early stages.

Speaker Change: Thank you very much. Yeah, you're welcome.

Operator: Thank you and once again it will be star one on your phone at this time if you wish to ask a question that's star one if you wish to ask a question on today's call, and there were no other questions in queue at this time. I would now like to hand the call, actually i think we've got james just came in with a follow-up date just one more please it james your line of life It's an unrelated question, but I was just wondering if, given that Dayton is on the, Board of LifeVantage.

Speaker Change: Thank you and once again it will be a star one on your phone at this time if you wish to ask a question that's star one if you wish to ask a question on today's call.

Dayton Judd: Moving on now to the brands acquired in the Mimi's Rock transaction or MRC, just as a reminder this is a company we purchased on February the 28th, 2023. Total MRC revenue for the second quarter of 2024 was $7.5 million, almost all of which came from online sales. This represents a 2% year-over-year decline in total revenue.

Speaker Change: And there were no other questions in queue at this time. I would now like to hand the call.

Speaker Change: Actually, I think we've got James just came in with a follow-up date and just one moment, please. James your line is live

Operator: I'm just wondering if there are any synergies between the two companies, LifeVantage and FitLife. The answer to that is no. We're obviously not competitors or I couldn't be on the board of LifeVantage and I couldn't be on the board of FitLife and run FitLife. They operate in a completely different channel.

James Bogen: It's an unrelated question, but I was just wondering if given that Dayton is on the on the board of LifeVantage I'm just wondering if there are any synergies between the two companies LifeVantage and FitLife

Dayton Judd: Just to drill down a little bit further though, MRC consists of three brands, a supplement brand called Dr. Tobias, which represents about 90% of MRC's revenue, and two smaller skincare brands. Revenue for the Dr. Tobias brand was up 4% during the quarter, while revenue for the skincare brands was down 37%. The increased revenue for Dr. Tobias is encouraging, particularly given the significant reductions in advertising expenditures over the same period. At the time we acquired MRC, advertising spend in support of Dr. Tobias was materially higher, and revenue was declining. Today, advertising spend is significantly lower, and revenue is growing.

Speaker Change: The answer to that is no. We're obviously not competitors.

Dayton Judd: Or I couldn't be on the board of LifeVantage and I couldn't be on the board of FitLife and run FitLife. So they operate in a completely different channel.

Dayton Judd: I think many of you know my background, which is I'm an investor. Primarily, I run a hedge fund. I still run my fund and it still invests in a number of other companies. LifeVantage just happens to be one of those companies. FitLife has nothing to do with LifeVantage, but my fund, Sudbury Capital, does have a stake in LifeVantage. Anything further related to LifeVantage, I'm sure that the LifeVantage team would love to talk to more investors. I'm a shareholder in both.

Speaker Change: And so, I mean, I think many of you know my background, which is I'm an investor, you know, primarily I run a hedge fund.

Speaker Change: I still run my fund and it still invests in a number of other companies and LifeVantage just happens to be one of those companies. So FitLife has nothing to do with LifeVantage, but my fund Sudbury Capital does have a stake in LifeVantage.

Dayton Judd: Now with regard to the skincare brands, at the time of the acquisition, those brands were sold in a number of geographies, different countries on Amazon, and unfortunately the brands were experiencing negative gross margins in some markets, and negative contribution in almost all markets. To address this problem, we exited a number of geographies, and we raised prices in all other geographies. The result of these changes is lower revenue, but substantially higher gross margins, and positive contribution as opposed to negative contribution.

Speaker Change: Really, anything further related to LifeVantage, I'm sure that the LifeVantage team would love to talk to more investors.

Speaker Change: Right, I appreciate the question. I'm a shareholder in both

Speaker Change: All right. Appreciate that. Thank you.

James Balken: I appreciate that. Thank you and there were no other questions in queue at this time. I would now like to hand the call back to Dayton Judd for closing remarks. All right, well, thank you, everyone, for your participation in our call. If you have questions going forward, please feel free to reach out to us. The best way to contact us initially is through our investor relations email, which is investor. Just singular, not Investor, but Investor at FitLifeBrands.com, You send us an email with your questions, we'd be happy to answer them or happy to get on a call and talk about our company.

Speaker Change: Thank you and there were no other questions in queue at this time. I would now like to hand the call back to date and judge for closing remarks.

Dayton Judd: But we appreciate your interest and look forward to talking to you next quarter. Thank you. Thank you. This does conclude today's conference call. You may disconnect your lines at this time and have a wonderful day. Thank you for your participation.

Speaker Change: All right. Well, thank you everyone for your participation in our call. If you have questions going forward, please feel free to reach out to us. The best way to contact us initially is through our investor relations email, which is investor.

Dayton Judd: Overall, gross profit for MRC increased 21% year-over-year, while gross margin excluding the impact of the inventory step-up resulting from the acquisition of MRC increased from 41.7% to 48.2%. This significant increase in gross margin was due to the previously described optimization of the skincare brands, as well as beneficial product mix within the Dr. Tobias brand. Contribution for MRC for the second quarter of 2024 increased 61% year-over-year, driven by the skincare brand optimization, beneficial mix within the Dr. Tobias product line, and a 23% year-over-year reduction in advertising and marketing expenditures.

Speaker Change: That's just singular, not Investor, but Investor at FitLifeBrands.com

Speaker Change: So if you send us an email with your questions, we'd be happy to answer them or happy to get on a call and talk about our company. But we appreciate your interest and look forward to talking to you next quarter. Thank you.

Speaker Change: Thank you. This does conclude today's conference call. You may disconnect your lines at this time and have a wonderful day. Thank you for your participation.

Dayton Judd: On an LTM basis, contribution for MRC was 8.9 million dollars, which compares very favorably to the 17.1 million we paid for the brands. In addition, I would point out that the 8.9 million LTM contribution for MRC does not yet include the full LTM impact of the skincare brand optimization and the reductions in advertising and marketing spend. For the quarter, Amazon subscribers for MRC products grew 5% year-over-year, skincare subscribers declined due to the previously discussed price and geography optimization, but Dr. Tobias subscribers grew approximately 8%.

Dayton Judd: So now I'll move on to discuss muscle farm. As a reminder, we purchased the muscle farm assets out of bankruptcy in October of last year. Muscle Farm Revenue was approximately 2.7 million for the second quarter of 2024, of which 52% was from online sales, and 48% was from wholesale customers. Total revenue increased 27% sequentially from the first quarter of 2024 to the second quarter of 2024, with wholesale growing 24% sequentially and online revenue growing 31% sequentially.

Dayton Judd: Gross profit increased 16% sequentially, while gross margin declined due to increased promotional activity intended to drive revenue growth. Contribution increased 8% sequentially, with contribution as a percentage of revenue declining due to increased promotional activity and increased advertising and marketing expenditures. Our subscriber growth on Amazon for Muscle Farm continues to be strong. In previous calls, we disclosed that our subscriber count from Muscle Farm products on Amazon grew from 5 subscribers as of the end of 2023, December 31, 2023, to over 1600 at the end of the first quarter of 2024.

Dayton Judd: As of the end of the second quarter, 2024, the subscriber count was over 3,700, and it has continued to grow at an encouraging pace during the first half of the third quarter. For comparison purposes, when we began selling the legacy FitLife products on Amazon, it took more than two years to achieve the number of subscribers that Muscle Farm has acquired in our first six months of selling the brand on Amazon.

Dayton Judd: Now, let me give a few more high-level comments about the business before moving into Q&A. For the consolidated business, approximately two-thirds of our revenue now comes from online sales. When the current management took over the company in 2018, less than 1% of revenue came from online sales. We are pleased with the results of the strategic shift with the company achieving record growth, record growth margins, and strong cash flow while simultaneously reducing its concentration risk with large wholesale customers.

Dayton Judd: With regard to the back half of 2024, please keep in mind that our business does experience seasonality with the first half of the year being stronger than the second half of the year. You can see those trends in the five-quarter contribution tables that we provided in the press release and in the 10Q. That said, we expect to continue to deliver double-digit year-over-year revenue growth for the remainder of the year. In my remarks, I've provided some commentary about Amazon subscribers.

Dayton Judd: We love all of our customers, but we especially love our subscribers. Historically, revenue from subscribers has typically accounted for approximately 20% of our online revenue. Sometimes higher and sometimes lower, but in general, it's in that range. We don't plan to regularly provide subscriber counts for our individual brands or groups of brands, but as a company, we recently surpassed over 100,000 subscribers on Amazon. We are happy about this milestone to look forward to acquiring the next 100,000 subscribers.

Dayton Judd: With regard to our balance sheet, it remains strong with 15.4 million of term loan outstanding at a rate of sofa plus 275, and we have no outstanding balance on our $3.5 million revolver. We ended the second quarter of 2024 with 3.7 million of cash bringing net debt to 11.7 million or approximately 0.9 times LPM adjusted EBITDA. As of the end of 2023, the company's net debt was 18.2 million. So we have reduced our net debt by 6.5 million or 36 percent during the first half of 2024.

Dayton Judd: So now we can shift to the Q&A before we open it up for questions.

Dayton Judd: We've had one investor, a long time investor, that has emailed some questions. So let me I'll read you the questions he's unable I think to participate in the call today.

Dayton Judd: So let me read the questions that he has asked and I'll do my best to answer them and then we can pull for additional questions.

Dayton Judd: So the questions asked are what are the goals management has for the company in 5 to 10 years? I think we know the strategy for the next 6 to 12 months. So that's the first question.

Dayton Judd: Next question will share buybacks be re-initiated. The third question is is it dividend being considered? And number four, the question is I'm sure everyone including me will be very interested in hearing about progress with muscle farm and getting some color around how much revenue we can expect from muscle farm when it levels out. So let me let me address those one by one. I'll maybe go in in reverse order muscle farm.

Dayton Judd: We're just very reluctant to give a number. If I had a really good idea what it was going to be in in 12 months or in 24 months or in five years I would tell you but the reality of the situation is I don't know and I'd rather just tell you you know we're going to grow it without kind of putting parameters around that. I think we would be disappointed if we're not kind of if we haven't doubled our run rate in this business you know over the next 12 months.

Dayton Judd: So we expect to continue to grow as I indicated in in my remarks and you can see in the contribution table we're investing in growth through promotional offers to wholesale partners through increased advertising online and we'll continue to invest in growth as we seek to restore the brand to to what it was before. So apologize that we're not going to give anything more specific but you know we certainly expected to grow going forward.

Dayton Judd: The question on the share buybacks and dividend let me maybe lump those two together. Those are kind of capital allocation questions and I guess the way I would answer that is right now we think the best use of our capital is to acquire other brands at attractive multiples and and bring them into the fold. You know hopefully you know with with Mimi's rock you can see several quarters now of history of you know what we've been able to do there.

Dayton Judd: Again just looking at contribution not not EBITDA. It's pretty much impossible at this point to calculate an EBITDA for those brands given the fact that SGNA is spread across all of our brands but again using contribution. I mean we're under two times contribution in terms of what we paid for that business and and you know we think that number will continue to improve. So we think that's the highest and best use of capital and so we continue to look for acquisitions if we can't find any you know at that point I think we would look to things like share buybacks and and dividends with regard to share buybacks you know certainly if there was a big pullback in the stock for whatever reason we would evaluate that on a you know case by case basis but right now right our capital allocation strategy is first and foremost With regard to goals, the management has for the company in five to ten years.

Dayton Judd: I think that's somewhat related to what I just said regarding capital allocation. We think that the biggest opportunity here is to consolidate within the supplement industry. We've had a good track record of doing that. There's an incredibly fragmented industry and we think there are a lot of brands to consider. In fact, we know there are because we're looking at them. We have pretty good deal flow. We get to look at a lot of deals and we'll wait for the right pitch. But when we do, we expect to drive hopefully similar results. Like we have with Mimi's Rock, we hope to do the same with Muscle Farm and with other brands that we may look at as well.

Dayton Judd: So with that, Paul, why don't we go ahead and open the line up for questions?

Operator: Certainly at this time, we'll be conducting a question and answer session. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on speaker phone to provide optimum sound quality. Once again, please press star one on your phone at this time, if you wish to ask a question on today's call. One moment please, while we pull for questions. Once again, that will be star one on your phone at this time, if you wish to ask a question. To have a question, come in.

Operator: The first question is from James Boggen from Legend Capital. James, your line of life.

James Boggen: Hello, good afternoon and thanks for your presentation. In the last call, you spoke about Muscle Farm and the acquisition and how vendors of Muscle Farm products had been very disappointed by Muscle Farm's demise. And that you were trying to rebuild that up. And I just like to get a little more color into how that's going and whether you anticipate getting to, you know, Muscle Farm had huge sales and they had very few sales.

James Boggen: I'm wondering how you're doing in building that back up basically. I know it's a long-term project and I don't expect new number estimates, but I'm just wondering in general, how's it going and getting the faith back amongst the companies, amongst the stores and people who buy Muscle Farm products? Thank you. Thanks, James, for the question. Happy to provide commentary, but I won't talk about specific potential wholesale customers. But we have had and continued to have dialogue with a number of potential partners and that the good news is, I mean, nobody is saying no, get out of here and don't ever talk to us again.

James Boggen: That the dialogue is happening, which is good. We've had a number of meetings with kind of large national type chains and we have others that are scheduled here during this quarter. So there are others who have indicated that they're likely to bring in some of the products, but until we see POs, we don't want to celebrate and we don't want to declare success. So those customers who have said they plan to bring in some of the products, again, we continue to work with them and they're agreements that are being negotiated and documented.

James Boggen: And again, we fully expect that we'll be starting small with some of these folks, but the good news is that I think we're getting some traction and I hope as we continue to have these calls going forward, we'll have more to report. But the dialogue is happening, meetings are taking place and we're having good discussions. And the customers who have brought it in already that are reported in our wholesale revenue numbers for muscle farm.

James Boggen: For example, in the contribution tables, roughly 50% of our revenue, those folks have been happy so far with what they've seen. I think with pretty much all of them, I don't have the numbers in front of me, but I can't think of an exception right now. I think every single one of them is growing with the brand. So we're seeing encouraging uptake when we get back in, we're excited and then each week and month to month we're seeing increased purchases from them and increased sales to their end consumers. So we're encouraged by the trends.

Dayton Judd: It certainly is a marathon and not a sprint. So we're continuing to run the marathon and are encouraged by what we're seeing so far in the early. Thank you very much. Yeah, you're welcome. Thank you. And once again, it will be a star one on your phone at this time. If you wish to ask a question, that's a star one. If you wish to ask a question on today's call.

Operator: And there were no other questions.

Operator: In Q at this time, I would now like to hand the call.

James Boggen: Actually, I think we've got James just came in with a follow-up date and just one more.

Dayton Judd: Please, James, your line of life. It's an unrelated question, but I was just wondering if, given that date is on the board of life vantage, I'm just wondering if there are any synergies between the two companies life vantage and FitLife? Yeah, the answer to that is no. We're not in, we're obviously not competitors, or I couldn't be on the board of life vantage and I couldn't be on the board of FitLife and Run FitLife.

Dayton Judd: So, they operate in a completely different channel. And so, I mean, I think many of you know my background, which is I'm an investor, you know, primarily I run a hedge fund. And my, you know, I still run my fund and it's still invests in a number of other companies and life vantage just happens to be one of those companies. So, FitLife has nothing to do with life vantage, but my fund Sudbury Capital does have a stake in life vantage. But really, anything further related to life vantage, I'm sure that the life vantage team would love to talk to more investors. So, I appreciate the question. I'm a shareholder in both. I appreciate that. Thank you.

Operator: And there were no other questions in Q at this time.

Dayton Judd: I would now like to hand the call back to Dayton Judd for closing remarks. All right. Well, thank you everyone for your participation in our call. If you have questions going forward, please feel free to reach out to us. The best way to contact us initially is through our investor relations email, which is investor. That's just singular, not investors, but investor at FitLifeBrands.com. So, if you send us an email with your questions, we're happy to answer them or happy to get on a call and talk about our company, but we appreciate your interest and look forward to talking to you next quarter.

Operator: Thank you.

Operator: This does conclude today's conference call.

Operator: You may disconnect your lines at this time and have a wonderful day. Thank you for your participation.