SOURCE: iSatori


August 14, 2013 22:18 ET

iSatori, Inc. Reports Second Quarter Operating Results

Company Achieves Positive After-Tax Net Income and Growth in Net Revenues on New Channel Expansion and Product Launches

GOLDEN, CO--(Marketwired - Aug 14, 2013) - iSatori, Inc. (OTCQB: IFIT), an emerging leader in the development and marketing of scientifically engineered nutritional supplements for healthier lifestyles, today announced its operating results for the second quarter and first half of 2013, which are summarized in the following table. A complete report of the Company's (GAAP) financial results for the three and six months ending June 30, 2013 will be available via its quarterly report filed with the Securities and Exchange Commission today on Form 10-Q.

iSatori, Inc.
Comparative Summary of Second Quarter Results
for 2013 ($000's) Per GAAP
    Second Quarter: June 30
    2013   2012
Total Net Revenues   $2,280   $2,226
Gross Profit   $1,322   $1,344
Income (Loss) Before Taxes   ($61)   ($394)
Add: Income Tax Benefit   $194   $142
Net Income (Loss) After Tax   $133   ($252)

The Company's consolidated net revenue increased 2.4% to $2.28 million for the three months ending June 30, 2013, compared with $2.23 million for the same period in 2012. The increase in net sales was attributable to continued expansion into mass-market retail, along with the introduction of iSatori's new category-defining product, Bio-Gro™. The Company has begun to aggressively market and promote its brand as it expands distribution into mass-market retail.

In the most recent quarter, after taking the effect of a favorable $194 thousand income tax benefit, the Company reported positive net income of $133 thousand for the three months ending June 30, 2013, compared to a net loss of $252 thousand for the same period in 2012. Prior to taking the effect of the income tax benefit, the Company reported a loss before income taxes of $61 thousand for the three months ending June 30, 2013, compared to a loss of $394 thousand for the same period in 2012. The Company's profitability has been impacted by recently induced aggressive marketing and promotion of its brand, investing over $1.2 million year-to-date in mass media marketing activities, which will remain commensurate with expanded distribution into mass-market retail.

"We remain optimistic about the growth prospects available to the Company during the remainder of 2013 and throughout 2014," stated Stephen Adele, Chief Executive Officer of iSatori, Inc. "Our optimism revolves around the strategic initiatives we began implementing during the first half of 2013, including expansion into mass-market retail outlets and further research and development efforts to fuel future product launches."

Recent Company developments include:

  • During the second quarter of 2013, iSatori launched its new, category-defining product Bio-Gro™ Protein Synthesis Amplifier, powered by Bio-Pro Bio-Active Peptides™, which is now protected by USPTO patent file number 61/832,610.

  • iSatori achieved a significant breakthrough in the "mass market" with its entry into Walmart, the nation's largest retailer, which is now carrying the Company's time-released Energize™ tablet product nationwide in the "energy section" of its nutritional supplements department. Additionally, Walgreens, the nation's largest drugstore retailer is prominently displaying the Energize product in over 6,000 of its drugstores throughout the United States.

  • To augment its national mass-market distribution of Energize, iSatori began airing a national TV and Internet ad campaign on a number of prominent websites and stations, including TLC, Comedy Central, MTV, DIY, The Travel Channel, and ESPN News, among others.

  • The Company also noted that its $1.17 million operating line of credit with CoBiz Bank of Colorado expired on July 12, 2013. CoBiz Bank has extended the Company's line of credit for 90 days under the same terms and conditions.

  • The Company engaged as its auditors the accounting firm EKS&H, the largest accounting firm based in Colorado, which has extensive experience in the nutritional supplements sector.

  • The Company launched its newest website,, in June, to sell the Biogenetic Laboratories line of leading weight-loss supplements directly to consumers. The product line is also sold by specially retailers, such as GNC and Vitamin Shoppe, and online retailers, including and Groupon.

  • In June, the Company hired industry veteran and the former VP of Sales/General Manager at nutritional supplements company EAS (now owned and operated by Abbott Laboratories), Rick Anderson, as its Executive Vice President of Sales. Mr. Anderson has over 20 years of proven sales and marketing experience with nutritional supplements and consumer packaged goods companies.

Mr. Adele went on to say, "We continue to stay the course regarding our strategic initiatives to accelerate research and development activities, protect our intellectual properties, and introduce multiple new innovative products annually. Also, although delayed in our planned entry by six months, in June 2013 we achieved a significant breakthrough in our 'mass-market' initiative with our entry into Walmart, the nation's largest retailer, and Duane Reade, one of America's most respected drugstore chains. By driving awareness of our brand and purchases of our products through continued marketing programs and sales promotions, our objective is to aggressively pursue the mass-market channel, which is responsible for more than 70 percent of the annual $30 billion market for nutritional supplements in the U.S."

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. 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. All forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update any such statement.

iSatori, Inc.  
Condensed Consolidated Balance Sheet (Unaudited)  
    June 30,
    December 31,
Current assets:                
  Cash and cash equivalents   $ 2,402,908     $ 1,655,453  
  Investments     -       965,886  
  Accounts receivable                
      Trade, net of allowance for doubtful accounts     1,345,304       1,240,736  
  Income tax receivable     102,452       102,452  
  Note receivable - current portion     9,613       9,850  
  Inventories     1,692,232       1,292,105  
  Assets held for sale     62,170       29,338  
  Deferred tax asset, net     131,824       119,032  
  Prepaid expenses     297,183       156,431  
    Total current assets     6,043,686       5,571,283  
Property and equipment:                
  Leasehold improvements     9,458       -  
  Furniture and fixtures     104,615       56,680  
  Office equipment     65,901       36,600  
  Computer equipment     341,923       323,648  
  Dies and cylinders     49,422       49,422  
  Less accumulated depreciation     (380,418 )     (333,388 )
      Net property and equipment     190,901       132,962  
Note Receivable - net of current portion     81,714       81,714  
Other assets:                
  Deferred tax asset, net     249,427       97,844  
  Deposits and other assets     59,190       42,956  
  Debt Issuance Costs     625       4,375  
    Total other assets     309,242       145,175  
      Total assets   $ 6,625,543     $ 5,931,134  
Current liabilities:                
  Trade accounts payable   $ 671,365     $ 518,150  
  Accrued expenses     286,939       242,301  
  Deferred Revenues     396,451       -  
  Line of credit     1,173,155       1,173,155  
  Notes payable     22,760       -  
    Total current liabilities     2,550,670       1,933,606  
Long-term liabilites                
  Derivative liability     726,996       701,852  
    Total long-term liabilities     726,996       701,852  
    Commitments and contingencies (Notes 1,2 and 3)                
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; 12,871,560 shares issued and outstanding     128,717       126,228  
  Additional paid-in capital     4,522,679       4,343,069  
  Accumulated deficit     (1,303,744 )     (1,173,846 )
    Total stockholders' equity     3,347,877       3,295,676  
      Total liabilities and stockholders' equity   $ 6,625,543     $ 5,931,134  
iSatori, Inc.  
Condensed Consolidated Statement of Operations (Unaudited)  
  Quarter Ended   Six Months Ended  
  June 30
  June 30
  June 30
  June 30
  Product revenue (net of returns and discounts) $ 2,240,574   $ 2,177,758   $ 4,444,430   $ 4,617,192  
  Royalty revenue   33,813     30,085     66,524     60,666  
  Other revenue   5,541     17,985     25,341     41,713  
    Total revenue   2,279,928     2,225,828     4,536,295     4,719,571  
Cost of sales   957,452     881,571     2,002,566     1,832,599  
    Gross profit   1,322,476     1,344,257     2,533,729     2,886,972  
Operating expenses:                        
  Selling and marketing   295,023     418,349     611,199     886,055  
  Salaries and labor related expenses   511,006     547,137     1,045,334     1,027,673  
  Administration   452,711     365,725     869,158     645,520  
  Depreciation and amortization   27,339     17,916     52,355     35,745  
    Total operating expenses   1,286,079     1,349,127     2,578,046     2,594,993  
Income (loss) from operations   36,397     (4,870 )   (44,317 )   291,979  
Gain on sale of product lines   -     -     -     499,525  
Other expense   (77,518 )   (15,418 )   (201,877 )   (31,497 )
Financing expense   (8,572 )   (237,523 )   (55,333 )   (288,126 )
Interest expense   (11,433 )   (136,462 )   (12,585 )   (198,551 )
Income (loss) before income taxes   (61,126 )   (394,273 )   (314,112 )   273,330  
Income tax benefit/(expense)   194,348     142,434     184,214     (112,300 )
Net income (loss) $ 133,222   $ (251,839 ) $ (129,898 ) $ 161,030  
Net income (loss) per common share:                        
  Basic $ 0.01   $ (0.02 ) $ (0.01 ) $ 0.01  
  Diluted $ 0.01   $ (0.02 ) $ (0.01 ) $ 0.01  
Weighted average shares outstanding:                        
  Basic   12,686,928     12,622,756     12,654,842     12,622,756  
  Diluted   13,834,586     12,622,756     12,654,842     13,603,986  

Contact Information

  • Contacts:
    iSatori, Inc.
    Stephen Adele
    Michael Wilemon
    Email Contact