FitLife Brands Q1 2025 Earnings Call Transcript

Quartr
Provided by Quartr
May 15, 2025

There are 3 speakers on the call.

Operator

is now my pleasure to turn the floor over to your host, Dayton Judd, Chief Executive Officer of FitLife Brands. Sir, the floor is yours.

Speaker 1

Thank you, Paul. I would like to welcome everyone to FitLife's first quarter twenty twenty five 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. As we typically do, I'll provide some opening commentary to get us started, and then we'll open the call up for Q and A.

Speaker 1

My opening remarks will be a bit more brief than on previous calls since we provided a fairly specific preview of our first quarter performance during our fourth quarter earnings call at the March. As a reminder, the company affected a two for one forward stock split on February 2025. All per share amounts in our 10 Q press release and discussion today have been retroactively adjusted to account for the forward split. For the company overall, for the first quarter of twenty twenty five, total revenue declined 4% year over year to 15,900,000.0. Online sales were 10,600,000.0 or 67% of total revenue.

Speaker 1

Gross profit declined 6%, and gross margin declined from 44% in the first quarter of last year to 43.1% in the first quarter of twenty twenty five. Contribution, which we define as gross profit less advertising and marketing expense, declined 4% to 5,800,000.0. Net income for the first quarter of twenty twenty five was 2,000,000 compared to 2,200,000.0 during the first quarter of twenty twenty four. Basic earnings per share declined from 23¢ last year to 22¢ this year. Diluted earnings per share declined from 21¢ last year to 20¢ this year.

Speaker 1

As is evident in our income statement, the company incurred fairly significant m and a related expense during the first quarter of twenty twenty five. Excluding the impact of that m and a expense, net income and earnings per share would have been the same as or higher than the prior year. Adjusted EBITDA for the first quarter of twenty twenty five was 3,400,000.0, a 6% decrease compared to the first quarter of twenty twenty four. With regard to the balance sheet, the company ended the quarter with 12,000,000 outstanding on its term loans and no balance on its $3,500,000 revolving line of credit. Considering our cash of 6,000,000 outstanding at the end of the first quarter, net debt was $6,000,000 which is equivalent to approximately 0.4 times the company's adjusted EBITDA of $13,900,000 for the past twelve months.

Speaker 1

With regard to brand level performance, I'll start with Legacy FitLife. Total Legacy FitLife revenue for the first quarter of twenty twenty five was 7,300,000.0, of which 63% was from wholesale customers and 37% was from online sales. This represents a 2% year over year increase in wholesale revenue and an 11% year over year increase in online revenue or a 5% increase in total revenue. Gross margin increased to 44.6% compared to 42.1 during the first quarter of twenty twenty four. Contribution increased 11% to 3,200,000.0, and contribution as a percentage of revenue increased to 43.4% compared to 40.9% in the same quarter last year.

Speaker 1

Moving on now to the brands acquired in the Means Rock transaction or MRC. Total MRC revenue for the first quarter of twenty twenty five was $6,700,000 down 11% from the previous year. MRC's gross margin declined to 45.4% for the first quarter of twenty twenty five compared to 47% during the first quarter of twenty twenty four. The primary reason for the gross margin decline is product mix. Contribution declined 9% to $2,200,000 with contribution as a percentage of revenue increasing from 32.8 last year to 33.5% during the first quarter of twenty twenty five.

Speaker 1

Revenue for the largest brand, Doctor. Tobias, declined 11%, while revenue for the skin care brands declined 14% or 9% on a constant currency basis. Last, when we began breaking out the detailed financial performance of acquired brands in our 10 Qs, 10 Ks and press releases, we indicated that the company intended to provide that level of disclosure for a period of no more than two years, after which the performance of acquired brands would be reported as part of Legacy FitLife. We completed the acquisition of MRC during the first quarter of twenty twenty three, so this is the last quarter we will provide the detailed financial breakdown. However, when relevant, we will continue to provide certain financial or operational metrics on the performance of specific brands.

Speaker 1

With regard to Muscle Farm, total Muscle Farm revenue declined 6% during the first quarter with wholesale revenue declining 41% and online revenue increasing 33%. Muscle Farm's gross margin declined from 40% last year to 30.1% during the first quarter of twenty twenty five. As previously disclosed, in the fourth quarter of twenty twenty four, the company began investing in increased promotion in an attempt to drive increased sales of Muscle Farm products. This investment in increased promotions primarily consisted of increased marketing allowances to wholesale customers. Under GAAP, these marketing allowances are accounted for in a price reduction, which lowers reported net revenue and gross profit and, therefore, gross margin.

Speaker 1

In addition, the company has invested in higher marketing and advertising spend in support of the Muscle Farm products. The company intends to continue investing in promotional support for the foreseeable future, although the timing and amounts may vary. As previously disclosed, the decline in wholesale revenue during the first quarter of twenty twenty five was primarily due to a large wholesale customer that took advantage of the company's promotional investment during the fourth quarter of twenty twenty four without increasing their sell through of the product, which affected their reorder volumes during the first quarter of twenty twenty five. As we indicated in the press release, purchases from this customer have increased more recently with their purchase volumes thus far during the second quarter exceeding those of the entire first quarter. Now let me provide a few additional high level comments, and then we can move into Q of A.

Speaker 1

As you are likely aware, the tariff environment continues to be uncertain with tariffs on ingredients from China being our primary concern. Fortunately, there was a ninety day de escalation announced recently, which is obviously encouraging for us. As previously disclosed, when the tariff noise started, we opportunistically increased some of our finished goods and raw materials inventories at pre tariff prices. So you can see inventory at an all time high as of the end of the first quarter of twenty twenty five. Again, I reiterate that these increases are intentional, and we expect to be able to free up some cash from our inventory balances once the dust settles.

Speaker 1

Our balance sheet is strong and continues to get stronger. As of quarter end, our total leverage net of cash was approximately 0.4 times adjusted EBITDA, and it is lower now due to incremental cash generated thus far during the second quarter. Earlier in my remarks, I mentioned some elevated M and A related expense. We have frequently and regularly indicated that we will be active in this regard. Spend has increased substantially in our pursuit of one or more possible transactions.

Speaker 1

I obviously cannot comment further on this other than to acknowledge the expense, and I caution everyone that increased spend may not always result in a successful transaction. Another question we frequently receive from investors relates to the number of customers that have active subscriptions to the company's products. As of about a week ago, we had approximately 104,000 active subscribers, and customers on subscription presently account for approximately 30% of the company's online revenue, with the amount ranging between 2535% depending on the brand. Last, based on analysis and commentary we have received from a number of investment banks, we believe that FitLife will likely be added to the Russell two thousand index next month. April 30 was the ranking day for purposes of Russell two thousand index reconstitution.

Speaker 1

On that day, our market capitalization was around 140,000,000. And according to the analysis communicated to us by multiple investment banks, the estimated market cap threshold for inclusion in the Russell two thousand index ranges from 95,000,000 to a hundred and 18,000,000. This is obviously outside of our control, but we wanted to share the perspectives of the investment banks since inclusion in the index would potentially be a positive catalyst for the stock. Russell is scheduled to formally announce the preliminary index additions and deletions the evening of May the '20 third with possible revisions happening prior to the actual rebalancing occurring on June. Last, as has historically been our practice, we will not be providing formal forward looking guidance.

Speaker 1

However, I do want to take a moment to briefly comment on what we've seen since the end of the first quarter. Total company revenue and adjusted EBITDA were up year over year in the month of April despite the Doctor. Tobias brand declining at a similar rate year over year as we observed in the first quarter. While we are encouraged by April's performance, those results may not be representative of the rest of the second quarter due to the timing of POs from certain wholesale customers as well as other factors. So that concludes my open opening commentary.

Speaker 1

And, Paul, you can go ahead and poll 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 telephone at this time. And the first question today is coming from Ryan Myers from Lake Street Capital Markets. Ryan, your line is live.

Operator

First

Speaker 1

one for me and Dana, know you're not providing guidance. But if we think back to last quarter, you guys did give some commentary that you expect to at least grow revenue and EBITDA for the year. So not asking to reiterate that, but have you seen any changes over the fourth quarter third quarter, sorry, in the April that would sync or that would cause you to, you know, change that expectation? No. And, yeah, I look.

Speaker 1

I'm happy to reiterate that. I guess I don't view that as formal guidance. Like, we're not giving a revenue number, you know, or an EBITDA number for the full year. But, yeah, our our hope and expectation would be that we deliver organic revenue growth for the company overall in 2025. Okay.

Speaker 1

Got it. And then just, you know, thinking about where margins for the year can look quarter on quarter, you know, there was obviously some mix dynamics that impacted the margins here in the first quarter. But, you know, maybe any commentary on how we should think think about margins for the the rest of this year? Not not specific. Like, I don't have a number for you.

Speaker 1

Obviously, you can see in the tables that we provided where we, you know, break it out by by groupings of brand. Right? Muscle Farm, there's been an intentional investment that started in q four and continued in q one. You know, q one was, you know, closer to 30%, whereas q four, I think, was around 25%. So, you know, as long as we're continuing to try and invest in Muscle Farm and and and and drive some growth for that brand, you know, something around that 30% level is probably realistic.

Speaker 1

On the the, you know, Mimi's Rock side, that kind of fluctuates between, I don't know, 4447% roughly depending on, again, product mix. We have some products that are higher margin than others, and we like when those are outperforming and but it, you know, sometimes moves against us as well. On the legacy FitLife side, you know, we we tend to be historically in the low forties there. We we did a bit better in q one, so we're seeing much stronger online growth for the legacy products. Online is the most profitable part of our business.

Speaker 1

We're earning retail gross margins as opposed to wholesale. So as we as we shift more of legacy revenue from wholesale to online, not that we're looking to move it from wholesale to online, but as we grow more online relative to wholesale, you know, we should benefit from some margin expansion there. The other thing I'll point out for legacy FIT Life gross margins because they were, you know, materially higher in in q one relative to some previous quarters. We talked last quarter about the challenges we had with GNC during the during the fourth quarter, which trickled a little bit into the first quarter. And as you you probably recall, one of our approaches to deal with that was to ship directly to the GNC franchisees, for example, when GNC corporate when we're not shipping to GNC corporate.

Speaker 1

When we ship directly to the franchisees, right, that's at a higher price than than where we were selling to GNC corporate. So a little bit of the bump in q one is is due to, you know, higher pricing. You know, we're also incurring higher expense there in terms of the logistics and the fulfillment. But, you know, hopefully, that gives you some color. Like, I I don't think Yep.

Speaker 1

There's anything dramatically different going on other than the intentional investments on the Muscle Farm side. We've kind of historically guided that, you know, gross margins are, you know, generally in the 42 to 45 ish percent range for the company overall depending on, again, mix and promotions and other other things like that. Got it. And then just the last question for me on the topic of Muscle Farms. So, you know, you called out the wholesale revenue was down.

Speaker 1

There was kind of that pull forward in orders, but I think you also called out that you didn't subsequently see a lot of reorders heading into the quarter. So just any dynamics to call out there? Maybe how has that business begun to perform at the wholesale level? Are they seeing strong, you know, end customer demand? But any commentary there would be helpful.

Speaker 1

Sure. So it's a mixed bag. There are some customers that, you know, we are we are certainly supporting and giving promotional support to that is showing very clear end consumer lift, right, where where we're it's having the desired effect. Right? The the promotional discounts are converting into higher unit movement.

Speaker 1

There are others, like the one that we called out last quarter, where that wasn't the case, where we we gave pretty substantial discounts. And, you know, they they they would say that they they spent the money and but maybe just didn't get the desired result. Right? It's hard for us to know, right, what what people do and what they don't do. We don't have the ability to audit it.

Speaker 1

So some customers may choose to just take it in terms of higher margin for themselves. Well, if they do that, right, or if we give them promotional spend, promotional support, and it's not effective, you know, the the net result of that is they don't get it anymore. Right? So that that particular customer, which is a a good customer and an important customer for us, right, the the promotional discounts they're getting now, the and that they received in the first quarter and they continue to receive in the second quarter quite a bit lower than they got in the fourth quarter. So it's a little bit like, look.

Speaker 1

We'll help you out if if you can drive volume. But if we help you out and you don't, then, you know, you don't get it anymore. So it's it's a mixed bag. Again, there's some there's some that are where we're seeing the investment translate to to UniMovement, and there's others where we don't. And, you know, as a result of that, we work you know, different customers will get different promotional support based on their ability to to increase

Speaker 2

movement.

Speaker 1

Got it. Thank you for taking my question. Yep. Thank you.

Operator

Thank you. And the next question will be from Sean McGowan from Roth Capital Partners. Sean, your line is live.

Speaker 2

Yes. Thank you. Thanks for taking the questions, Dayton. Couple of questions to tie into what you were just talking about and then a couple of unrelated questions. So any update on what the situation is with that major customer, GSE corporate?

Speaker 2

Has there been any change there? No. No. No change.

Speaker 1

Not to say I mean, that that was that was resolved in really the in January during the first quarter. You know, we called that out in the first quarter call, the impact or sorry, the fourth quarter call that we did in March. You know, we called out the impact on the fourth quarter and, you know, the impact on the first quarter and the fact that we were shipping direct. So I think it was, like, third or fourth week of of January when that was resolved, and then it was just a matter of, you know, getting shipments into their distribution network. And and, you know, that happened within a couple of weeks, and, you know, we've been kinda off to the races since then.

Speaker 1

So I I would characterize our relationship as very, very positive. Know, they they have been very constructive with us and us with them. And, you know, if anything, we're happy with the levels of inventory they're carrying now, you know, which is certainly, in our view, better than it was late last year. So, you know, everything is good from our perspective in our relationship with GNC.

Speaker 2

Okay. Thank you. And then back on on Muscle Farm. So you the way you account for that promotion is a reduction in the sales price, so it affects revenue. Can you give us an idea kind of on an apples to apples basis, like, maybe volume or units, you know, how that how much of bump compared to the first quarter of twenty four?

Speaker 2

Yeah.

Speaker 1

I don't have that in front of me. Again, it it's gonna be it's account specific. So we have, like, one account in particular, and I obviously can't can't give names, but where, you know, we're providing additional support and we see continued growth. And there's others where it's that that's not the case. Yeah.

Speaker 1

And the accounting is exactly like you described. You know, the the you know, for example, we might offer a 10% off invoice discount that is intended to be used for promotional support. The way the accounting works under GAAP is that support is recorded as a reduction in revenue for us. But our gross revenue we sold a hundred dollars worth of product. Our gross revenue would be a hundred, but our net revenue would be 90.

Speaker 1

In addition to that so that that's where you see, you know, maybe revenue not not as high perhaps, or it's really you see it in the in the lower gross margin because our costs are the same, but the revenue is, again, call it 10% lower. You you also noticed, I think, in q four, you know, slightly elevated advertising and marketing expense and then even more in q one. So in addition to giving some of those promotional discounts to customers, we're also spending more, you know, of our money on on advertising and marketing.

Speaker 2

Right. Okay. So is it fair to ask what the gross to gross comparison would be on Muscle Farm?

Speaker 1

What what do you mean by gross to gross?

Speaker 2

Gross revenue in q one of twenty five compared to gross revenue in in first

Speaker 1

quarter of twenty four. Sure. It would, but I actually don't have it in front of me. But, yeah, it's it's gonna be down clearly. Right?

Speaker 1

Because I I think what I say, our wholesale was down, where are my numbers? I think what? 40 something percent. Right? There's that issue with the one customer that that didn't reorder for much of q one.

Speaker 1

It it probably a bit more relevant to look at at q two maybe versus q four or q two. But, again, I don't have those numbers in front of me, but I will I can certainly connect with you after the call.

Speaker 2

I'll move on. A couple of other things. I can you tell us the status of the of the various new product launches that we discussed a few a ago or so or more than that at at our conference, beverage and bars? Like, how's that going?

Speaker 1

Yeah. So the I mean, the bars continue to to you know, those were coming up on, I I think, close to a year, although we did launch two flavors of those. I'm trying to think if there's any, like, in the last few weeks, any new customers that have brought those in. But we we've had decent sell in of those into some convenient, you know, again, regional convenience store chains, regional grocers, none of the big accounts yet. Continue to do fairly well online.

Speaker 1

The beverages for the ready to drink protein, again, that that's a much more recent launch. I think that was towards the March. Again, I I have to be careful because some people don't let us say their names, but, I mean, sir certainly, all the major distributors have picked it up. So there's a a couple of big distributors, one called Muscle Foods and one called Europa, that does distribution of sports nutrition products. So they, you know, they they have ordered it.

Speaker 1

We have some international customers that have brought it in. There are a number of gyms, that have, brought it in and are selling it kind of, doing their coolers in the gym for for people that go there. Again, I I probably can't say names, but there's some, you know, big gyms in Venice Beach, for example, that if somebody were to walk in there, they should see our our RTDs in the cooler. So but we we think that we think we have an amazing product. If you haven't if you haven't tried these, we'd encourage you to to try them.

Speaker 1

In our product development here, we did multiple rounds of development, but we also did blind taste tests with kind of nonemployees with with, you know, potential customers of our products. We've got a vanilla, a chocolate, and a salted caramel, and we did kinda blind taste test with pretty much everything else in the market. And, you know, occasionally, people have maybe different preferences, but for the most part, ours were pretty highly favored. So we think we've got a good product. It's just a matter of now trying to to get the sell in going and sell through.

Speaker 2

Okay. So it sounds like it wouldn't have had much of an impact then in first quarter revenue. But sometimes with these new products, there's a bit of a loading period and then maybe a lull before reorders kind of pick up. So would you expect second quarter sales of of the beverage product to be higher than the first quarter?

Speaker 1

Yeah. I would expect them to be higher in q two. I think, I mean, q one, I I don't have the date in front of me, but I'm gonna guess it was, like, mid March or something like that when when we kind of received them, when we finished production. So, yeah, there wasn't there wasn't a whole lot in q one for this.

Speaker 2

Okay. And my last question is, I thought there was an exclusion on tariffs for certain kind of supplements and wellness products that cover vitamins, etcetera. Are are your products not, you know, benefiting from that exemption?

Speaker 1

Sure. Some are and some aren't. So there are a number of exclusions. So pretty much all vitamins, all minerals have exclusions. We we've been told that certain like, the the creatine has an exclusion.

Speaker 1

There's a a document, I can't remember what it's called, the government document that lists what's excluded. I mean, so certainly, like, in our multivitamins and whatnot, we don't expect to see much impact there. But there are a number of ingredients that we use quite a bit, like carnitine is one example, that is not excluded. So it's very much on a case by case basis. And, you know, the I I can't remember if I shared this previously, but, you know, we we we've looked at all of our major products, our biggest products, and had our manufacturers essentially reprice them or tell us what what the the cost impact would would be based on the products or the the ingredients that are subject to tariff and what the, you know, tariff amount is.

Speaker 1

And, you know, the impact ranges from over about, you know, 0% impact again for some of our products where where they're not subject to tariffs. And, you know, at the high end, it was, you know, a a possible 10 or 11% increase. Right? Because it's not everything that's in these products is subject to the tariffs. And and a lot of the cost is, you know, componentry or labels, right, which is coming from onshore, and a lot of the cost is, know, the manufacturers charge, which, again, is coming from onshore.

Speaker 1

So it's kind of a zero to 10% impact depending on the product. And and you know, so it's it's not the end of the world by any stretch, but it's it's certainly not a positive thing to to have these tariffs.

Speaker 2

That's amazing. Okay. Alright. Thank you very much. That's it for me.

Speaker 2

Thank you. Yep. Thank you, Sean.

Operator

Thank you. And once again, it will be star one on your phone if you wish to ask a question today. And the next question is coming from James Baughan from Legend Capital. James, your line is live.

Speaker 2

Hi. Good afternoon. I'm the other analyst focused on muscle farm, which is what I was going to do. So I don't know if there's anything else anything else to say about it. I'm always fascinated that it used to sell over a hundred $50,000,000 worth of goods, and now it's 5,000,000 running rate per year.

Speaker 2

So I'm I'm just wondering what your long term hopes or prospects for that might be. And just a bigger bigger picture, what what are your goals? I mean, you bought this company when it was a dollar adjusted basis. It's now $29. Do you are you gonna build do do you want to build an empire?

Speaker 2

Do you wanna

Speaker 1

be acquired by Unilever? Where where where are

Speaker 2

you going with this thing, you

Speaker 1

know, over what time period? Thank you. Yeah. Two very big, broad questions. I'll I'll do my best to answer.

Speaker 1

So on on Muscle Farm, so, yeah, I think again, I don't have the numbers right in front of Like, I I we're certainly not at maybe we're at a 5,000,000 run rate based on the current quarter. Let me just see. We did Yep. 4 or less. 4,000,000, 5 million.

Speaker 1

In q q one, net revenue was it looks like we're at 2,000,000. So that's 2,000,000 for one quarter. So so so, yeah, that you know, it would look when we bought this, it was under 10. And on a run rate basis, again, based on q one, we're under 10. Again, we we think we'll do better.

Speaker 1

What what I would care the way I would characterize the situation is it certainly had a lot of brand awareness. A lot of money was spent kind of building this brand. I I would say that we are certainly disappointed that we have not been able to grow it much more than we have. Obviously, we we haven't done much to try and do to grow it until, you know, the last couple of quarters. Right?

Speaker 1

We we were focusing on, you know, getting it in stock and and develop like, they had they had dwindled their product portfolio very substantially, right, down to something like 15 products. So things like getting the bars back in stock, working on the the ready to drink. Right? So we we kind of fixed the product portfolio. We kind of changed the branding and the packaging.

Speaker 1

Right? And now we're out there trying to sell it. I I think, you know, I I would say that we probably underestimated the extent to which this brand was impaired by the bankruptcy that it went through. I see. And, you know, certainly, our hope was to be able to grow it, and we we certainly hope still that we will be able to.

Speaker 1

When we do these deals, particularly for distressed brand, the the way we like to do the math is if we if we don't grow it, right, if we're not successful at growing it, we want it to still be a good acquisition. Right. So that, you know, it I think I used the analogy on the last earnings call, you know, heads we win and tails we win a lot. Right? So we're still in kind of a heads we win scenario.

Speaker 1

In fact, if we if we decided to to flip off all of the you know, turn off all of the marketing and the the promotional discounting. Right? Like, you can you can look back and see, you know, there are quarters last year where we made more money than we're doing now, right, because of the investments we're making in growth.

Speaker 2

So I'm not a quarter guy, but

Speaker 1

If it if it doesn't if it doesn't pan out, what we're doing, right, we we can just dial back and even if this is primarily, you know, an online brand right now, about 50% of the revenue is online. Right? This, you know, this is a a brand that can throw off, you know, a a decent amount of cash at a at a, you know, mid single digit multiple in terms of what we paid for, right, if we're not able to get it to grow. Again, our goal was to get it to grow, and it's been a bit of a challenge. Right?

Speaker 1

I think we acknowledge that. So so that that's what I would say about Muscle Farm. Your other question about what's the long game here? What what's the strategy?

Speaker 1

You know, what look. I'd love to be acquired by Unilever. I don't think that's gonna happen. We think and and I think we've we've been consistent in saying this. There is a tremendous opportunity to scale and to consolidate in the nutritional supplement space.

Speaker 1

It's an incredibly fragmented industry. Depending on the size of the acquisition, right, we could do, you know, a big acquisition at a compelling multiple. There'd be re you know, decent, you know, SG and A savings. Right? And we think, you know, in many cases, we can run these brands better than than some of the, you know, maybe previous owners.

Speaker 1

In terms of smaller acquisitions, there's a very significant increment between kind of EBITDA to to the previous owner and us. You know, Muscle Farm is Mimi's Rock would be an example of one that is more like like, again, bigger acquisition where we inherited employees and an office and stuff like that. And so it's not like you you cut all of the s g and a and you just bolt it on. Right? But Muscle Farm was one where, I think we've commented before, there's one employee that we brought on from the Muscle Farm team.

Speaker 1

Right? So it's literally all of the incremental gross profit from that brand, right, minus one employee plus any, again, advertising spend that we choose to to make, you know, and maybe a little bit of legal expense. You know, the the incrementality is pretty significant. So Mhmm. We think, you know, we're not in the eighth if we're in the eighth or ninth inning, yeah, it's probably time to sell the business.

Speaker 1

And and we think that there would be people that would be interested whether they're strategic. Again, it's probably not Unilever. Maybe it is. That'd be nice. But it may be private equity or something like that.

Speaker 1

But for now, you know, we think it's more like the fifth or sixth inning, and there's, you know, plenty of M and A to do. So we we think M and A is the biggest opportunity. You can see that in terms of how we're spending our time. And to a certain extent, you can see it in the m and a expense line item on the income statement.

Speaker 2

Right. Okay. Thank you very much. Very much appreciated. Thank you, James.

Operator

Thank you. And the next question will be from Samir Patel from Ask Aladdin Capital.

Speaker 1

Just following up on that last question. I think previously, we've discussed that the multiples you typically see are maybe six, 7x for really good rapidly growing businesses, you know, south of that for businesses that aren't as attractive. You know, with the understanding that you obviously can't comment on any specific transaction, is is that still consistent with the valuation multiples that you're kind of seeing out there for prospective deals? Yes. That's fairly consistent.

Speaker 2

Okay. Thanks. That's all.

Speaker 1

Alright. Thanks, Sameer.

Operator

Thank you. And the next question will be from William Anderson from Baird Associates. William, your line is live.

Speaker 2

Yeah. Just curious how the vitamin shaft pilot program with Muscle Farm Pro is going. Any readouts there? Yeah.

Speaker 1

We do we do have some readouts. I think, you know, it's going well. We wish it were going better. We don't know it's it's still going, and, you know, we we are seeing improvements kind of week over week. It was a little bumpy at the start in terms of getting the product to the store shelves.

Speaker 1

It was supposed to be there, I think, on shelf, and it started arriving on shelf around March 15. But it was actually closer to early April before all of the stores have the product. So we're, you know, that that's a great example, by the way, of kind of what we're doing and how we're how we're spending. I mean, we are we're doing ads on your streaming services. I think we have something like 1,500,000 views of of these ads that are on, you know, anything from Hulu to whatever.

Speaker 1

Like, if you live within I can't remember if it's three or five miles of a vitamin shop store that is carrying these products. And you watch streaming, hopefully, you've seen our ads. So we're we're doing, you know, a fair amount of spending, and you can see that reflected in the numbers as well to try and make that successful. But it's it's still early days. Like, the the it's I think the intent at the beginning was it'd be a two month trial.

Speaker 1

I think we're talking about something longer than that now given the, you know, the the bumpy start in terms of the products getting to store shelves. So we're still, you know, still there, still selling, and still marketing, but hope hope to have more of a formal readout on that certainly as part of our next earnings call.

Speaker 2

Right. Okay. Just curious. Thank you very much.

Speaker 1

Yeah. Thank you.

Operator

Thank you. And if there were any And there were no other questions from the lines at this time.

Speaker 1

All right. Well, thank you all for joining our first quarter conference call. We look forward to speaking with you again in about three months. Thank you.

Operator

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

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Earnings Conference Call
FitLife Brands Q1 2025
00:00 / 00:00