Exhibit 99.1
iSatori Reports Profitable Growth for the First Quarter of 2014
Product Revenues Increased 46 Percent Year Over Year. Recorded Net Income of $336,238 or $0.02 Per Fully Diluted Share.
FOR IMMEDIATE RELEASE
GOLDEN, CO--(Marketwired - May 8, 2014) -iSatori, Inc. (OTCQB: IFIT), an emerging leader in the development and marketing of scientifically engineered nutritional supplements for healthier lifestyles, today announced financial results for the first quarter ended March 31, 2014.
The Company’s net product revenues increased 46 percent over the same quarter 2013, which resulted in net sales for the first quarter 2014 of $3.2 million compared to $2.2 million in the same period last year. The increase was due primarily to the introduction and store sales growth of three new products: (i) Meratrim® Platinum+ (ii) Garcinia Trim™, and (iii) Bio-Gro™. Garcinia Trim™ and Meratrim® Platinum+ are weight-loss pills based on newly released clinical evidence. Bio-Gro™ has been described as a category-defining sports nutrition product based on a new creation called “bioactive peptides” to help athletes enhance physical performance, strength, and muscular development. GNC, America’s largest sports supplement retailer, started carrying Bio-Gro™ nationally in January 2014.
Gross profit margins increased from 55 percent of net product revenue (or $1.2 million) to 63 percent of net product revenue (or $2.0 million) over the same period in the prior year, based primarily on the higher margins associated with the three new products mentioned above. Additionally, revenue and gross margin were positively impacted by fewer returns and discounts during the first quarter.
Selling and marketing expense increased in dollar terms and as a percent of revenue (from 14 percent of net product revenue to 24 percent of net product revenue). The increase was due in part to an increase in advertising to support mass market retail expansion and expenses related to the launch of a new, bestselling book,Diets Suck!
Salaries increased in dollar terms due to the addition of two executive sales and marketing professionals, but decreased as a percent of net product revenue (from 24 percent to 20 percent). Administrative expenses decreased both in dollar terms and as a percent of net product revenue (from 19 percent to 7 percent) due primarily to a decrease in professional fees. Overall, operating expenses increased in dollar terms, but decreased as a percent of net product revenue (from 59 percent to 52 percent). Operating income improved from loss of $80,713 (or negative 4 percent of revenue) to income of $354,263 (or 11 percent of net product revenue) compared to the same quarter last year.
Net income increased from a loss $263,119 (or negative 12 percent of net product revenue) to income of $336,238 (or positive 10 percent of net product revenue) compared to the same quarter last year. As a result, basic EPS increased from $(0.02) to $0.03, while fully diluted EPS increased from $(0.02) to $0.02.
Cash flow from operations increased from $129,557 to $323,485 when comparing the three month periods ended March 31, 2012 and 2013. The company’s cash balance increased to $1,219,678 as of March 31, 2014 compared to $822,876 at December 31, 2013. Accounts receivable decreased from $2,398,178 as of December 31, 2013, to $1,931,026 as of March 31, 2014. Inventory increased from $1,985,764 as of December 31, 2013, to $2,287,203 as of March 31, 2014.
The Company’s current ratio increased from 1.92 as of December 31, 2013, to 2.17 as of March 31, 2014. Debt was virtually unchanged and shareholders’ equity increased 13 percent for the quarter.
Highlights from the first quarter of 2014 were:
·
First quarter net product revenue increased by 46 percent year over year.
·
Reported 10 percent net income.
·
GNC started carrying Bio-Gro™, a breakthrough, category-defining, muscle-enhancement product. iSatori launched product line extensions for Bio-Gro™ into new size and delivery configurations.
·
Released bestselling book entitledDiets Suck! to espouse iSatori and its philosophies in making a physical transformation and to help promote the Eat-Smart® line of nutritional products. Book reached Top 10 on Amazon.com during launch week.
·
Presented at the 26th annual ROTH Capital Conference.
·
Added executive vice presidents, for both sales and marketing divisions, to drive innovation, sales, and brand equity.
Stephen Adele, founder and Chief Executive Officer of iSatori, commented: "In our last earnings release, we stated that growth in 2014 and beyond would be driven by the improved talent level of our management team and the introduction of innovative new products. Our first quarter results are an indication that our strategic plan is working, encouraging us to continue to pursue our goals of expanding our distribution, improving our rate of sales velocity and driving continued profitable growth.”
A complete report of the company's (GAAP) financial results for the quarter ended March 31, 2014, are available via its quarterly report filed with the Securities and Exchange Commission today on Form 10-Q.
About iSatori, Inc.
iSatori is a consumer products firm that develops and sells nutritional products through online marketing, Fortune 500 retailers, and thousands of retail stores around the world. The Company is headquartered in Golden, Colorado, and its common stock trades on the OTCQB under the symbol "IFIT." More information about the Company is available athttp://www.isatori.com.
Forward-Looking Statements
Statements made in this news release relating to the Company's future sales, expenses, revenue, product developments, and all other statements except statements of historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We have used the words "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," "will," "potential," and similar terms and phrases to identify forward-looking statements in this press release. These statements are based on assumptions and estimates that management believes are reasonable based on currently available information; however, management's assumptions and the Company's future performance are both subject to a wide range of business risks and uncertainties, and there is no assurance that these goals and projections can or will be met. Any number of factors could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to, the timing and extent of changes in demand for the Company's products, the availability and price of ingredients necessary to manufacture such products, and the outcome of any current or future litigation regarding such products or similar products of competitors. Please see our Risk Factor disclosures included in our Registration Statement on Form S-1, as amended, initially filed with the Securities and Exchange Commission on April 30, 2013, and in subsequent filings with the Securities and Exchange Commission. All future written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the previous statements. The forward-looking statements herein speak as of the date of this press release. We undertake no obligation to update any information contained herein or to publicly release the results of any revisions to any forward-looking statements that may be made to reflect events or circumstances that occur, or that we become aware of, after the date of this press release.
Contacts
iSatori, Inc.
Michael Wilemon, CFO
(303) 215-9174
pr@isatori.com
iSatori, Inc
Condensed Balance Sheet
(Unaudited)
March 31, 2014 and 2013
| | | | | |
| March 31, | | December 31, |
| 2014 | | 2013 |
ASSETS | | | | | |
Current assets: | | | | | |
Cash and cash equivalents | $ | 1,219,678 | | $ | 822,876 |
Accounts receivable | | | | | |
Trade, net of allowance for doubtful accounts | | 1,931,026 | | | 2,398,178 |
Income tax receivable | | - | | | 102,452 |
Note receivables - current portion | | 10,325 | | | 11,013 |
Inventories | | 2,287,203 | | | 1,985,764 |
Assets held for sale | | 21,824 | | | 108,228 |
Deferred tax asset, net | | 95,176 | | | 53,081 |
Prepaid expenses | | 167,008 | | | 222,466 |
Total current assets | | 5,732,240 | | | 5,704,058 |
| | | | | |
Property and equipment, net of accumulated depreciation | | 171,070 | | | 173,636 |
| | | | | |
Note receivable – net of current portion | | 81,714 | | | 81,714 |
| | | | | |
Other assets: | | | | | |
Deferred tax asset, net | | 152,970 | | | 147,941 |
Deposits and other assets | | 41,997 | | | 61,167 |
Total other assets | | 194,967 | | | 209,108 |
| | | | | |
Total assets | $ | 6,179,991 | | $ | 6,168,516 |
| | | | | |
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | |
| | | | | |
Current liabilities: | | | | | |
Trade accounts payable | $ | 976,943 | | $ | 1,248,490 |
Accrued expenses | | 182,768 | | | 187,608 |
Deferred revenues | | 239,624 | | | 292,215 |
Line of credit, less debt discount | | 1,220,655 | | | 1,220,655 |
Notes payable | | 19,297 | | | 20,464 |
Total current liabilities | | 2,639,287 | | | 2,969,432 |
| | | | | |
Long-term liabilites | | | | | |
Derivative liability | | 470,292 | | | 471,015 |
| | | | | |
Commitments and contingencies (Notes 1,2,5, and 6) | | | | | |
| | | | | |
Stockholders' Equity: | | | | | |
Convertible preferred stock, $0.01 par value, 750,000 shares authorized; 22,500 shares issued and outstanding ($450,000 of liquidation value) | | 225 | | | 225 |
Common stock, $0.01 par value, 56,250,000 shares authorized; 12,879,651 shares issued and outstanding | | 128,797 | | | 128,797 |
Additional paid-in capital | | 4,737,640 | | | 4,731,535 |
Accumulated deficit | | (1,796,250) | | | (2,132,488) |
Total stockholders’ equity | | 3,070,412 | | | 2,728,069 |
| | | | | |
Total liabilities and stockholders' equity | $ | 6,179,991 | | $ | 6,168,516 |
iSatori, Inc.
Condensed Statements of Operations
(Unaudited)
Quarter Ended March 31, 2014 and 2013
| | | | | |
| March 31, | | March 31, |
| 2014 | | 2013 |
Revenues: | | | | | |
Product revenue (Net of returns and discounts) | $ | 3,219,244 | | $ | 2,203,856 |
Royalty revenue | | 32,627 | | | 32,710 |
Other revenue | | 9,396 | | | 19,800 |
Total revenue | | 3,261,267 | | | 2,256,366 |
| | | | | |
Cost of sales | | 1,243,797 | | | 1,045,113 |
Gross profit | | 2,017,470 | | | 1,211,253 |
| | | | | |
Operating Expenses: | | | | | |
Selling and marketing | | 782,687 | | | 316,175 |
Salaries and labor related expenses | | 647,413 | | | 534,328 |
Administration | | 213,978 | | | 416,447 |
Depreciation and amortization | | 19,129 | | | 25,016 |
Total operating expenses | | 1,663,207 | | | 1,291,966 |
| | | | | |
Income/(loss) from operations | | 354,263 | | | (80,713) |
| | | | | |
Other income (expense) | | 30,199 | | | (124,359) |
Financing expense | | (21,353) | | | (46,761) |
Interest expense | | (11,048) | | | (1,152) |
| | | | | |
Income/(loss) before income taxes | | 352,061 | | | (252,985) |
| | | | | |
Income tax expense | | (15,823) | | | (10,134) |
| | | | | |
Net income/(loss) | $ | 336,238 | | $ | (263,119) |
| | | | | |
Net income/(loss) per common share | | | | | |
Basic | $ | 0.03 | | $ | (0.02) |
Diluted | $ | 0.02 | | $ | (0.02) |
| | | | | |
Weighted average shares outstanding: | | | | | |
Basic | | 12,879,651 | | | 12,622,756 |
Diluted | | 14,546,736 | | | 12,622,756 |
