SOURCE: iSatori

iSatori

March 23, 2015 19:54 ET

iSatori Reports Fiscal Year 2014 Results and Recent Developments

GOLDEN, CO--(Marketwired - March 23, 2015) - iSatori, Inc. (OTCQB: IFIT), an emerging leader in the development and marketing of scientifically engineered nutritional supplements for healthier lifestyles, today announced results for the fiscal year ended December 31, 2014.

"Results for the second half of 2014 were disappointing, although we remain confident about our future based on our current developments," said Stephen Adelé, Founder and Chief Executive Officer of iSatori. "After a strong first half of the year, a downturn in sales in the weight-loss segment combined with unanticipated product returns affected overall revenues and profitability in the second half," he added.

"Early in 2014, we recognized what we believed to be substantial growth opportunities in the sports fitness market, based on our growth of our category-creating Bio-Gro™ bio-active peptides innovation. In the second half of 2014, we moved aggressively to expedite planned product development and new product introductions based on this novel dietary ingredient." 

Additionally, iSatori added to its Energize brand with a new 5-day (10-tablet count) size blister-pack sold into Walgreens during December 2014 and has subsequently acquired new distribution in CVS and Rite-Aid retail drugstores on a national basis. 

"We have been very pleased with the initial response to this and other new products introduced in early 2015. We have streamlined our operations, and we expect a return to growth and operational profitability in the first half of 2015," Mr. Adelé continued.

Net product revenues, after discounts, returns, and marketing trade promotions, for the year ended December 31, 2014 were $9,513,606 compared with net product revenues of $10,507,038 in 2013. The reduction in revenues is primarily a result of an industry-wide disruption in the dietary supplement weight-loss segment of its business beginning in the third quarter and running through the fourth quarter 2014, compounded with a non-reoccurring, but an unplanned substantial product return from a retail customer. As a result, net loss for the year was ($1,170,409) or $(.09) per share compared with a net loss of $(958,642) or $(.08) the previous year.

Recent Highlights

Bank Line of Credit Resolution. On March 17, 2015, iSatori reached a preliminary agreement with their primary banking institution, Colorado Business Bank ("CoBiz"), in which the loan agreement and covenants will be modified and the Company will no longer be in forbearance. iSatori and CoBiz have agreed on the principal terms of the arrangement and are currently awaiting documentation from their respective legal teams.

In January, the Company introduced two products to complement its growing Bio-Gro™ product line within its sports nutrition assortment. Pre-Gro™ is a pre-workout powder designed to deliver a high-energy, muscle-building workout experience. Fortified with iSatori's own patent-pending creation, clinically tested Bio-Gro™ bio-active peptides, and HydroMax®, a patented, stabilized glycerol to provide a noticeable muscle pump effect, combined of which will help users trigger new muscular growth from a more intense workout. Pre-Gro™ currently is available in four flavors (Arctic Blue Razz, Delicious Fruit Punch, Cherry Limeade, and Lemon Drop Supreme), and more are anticipated to be released during the year. Distribution for Pre-Gro™ was secured for the Company's primary channels, such as GNC, Vitamin Shoppe, Vitamin World, Europa Sports Wholesalers, Bodybuilding.com, and other retailers and international markets will be shipped as product is made available. The second product innovation from iSatori, Hyper-Gro™, is a lean muscle mass gainer shake mix that contains an exclusive 5-Phase Instantized Protein Blend with beef protein isolate as its number one source. Hyper-Gro™ is also fortified with clinically tested Bio-Gro™ bio-active peptides to help maximize lean muscle growth, without adding fat weight. Distribution for Hyper-Gro™ is similar to Pre-Gro™, and all primary channels have been secured. Additional retailers and international markets are planned for the remainder of the year as more product becomes available. Initial response to the new Energize entries and Gro series products has exceeded projections, and the Company is currently awaiting shipment to fulfill over $1.4-million on backlog orders.

New Distribution Customers. In December 2014, iSatori partnered with Sportika Export (based in Connecticut), the largest dietary supplement exporter in the world. Led by industry veterans Richard White and Barry Griffing, with their expertise in the export of sports supplements and wide distribution into over 130+ countries, the Company expects to gain new international distribution in the coming year through this new, exciting channel.

In February 2015, the Company shipped the opening orders of its Energize 28-count tablet to CVS Health drugstores. The Company also received initial purchase orders for their Energize product in February, which would expand distribution in Rite-Aid drugstores from partial to full national distribution. This customer acquisition will increase iSatori's retail footprint by more than 11,000+ retail stores domestically -- increasing the Company's ACV (all commodity volume, a measure of maximum retail distribution volume) from 18.6% to 34.1%. This includes such current retail distribution as Walmart, Walgreens, Super Value, Meijer, and other food, drug, and mass retailers.

New and More Functional Warehouse & Distribution Center.  In January 2015, the Company opened its 17,426-square-foot warehouse and distribution center, located in Denver, Colorado. The facility is occupied under a four-year lease and will allow the Company to house its finished goods in one facility. New machinery also allows the Company to bundle and package promotions, internally, and thereby reduce incurred expenses normally paid for these services. The new warehouse and distribution center is expected to decrease overall costs to the company by removing outside warehousing costs and reducing long-distance and intermittent freight expense back and forth, as well as improve customer satisfaction with its retail partners. In conjunction with the move, a new freight agreement with a major carrier was executed to add additional cost savings. 

Celebrity-Athlete Endorsement Deal. In January 2015, iSatori signed a multi-year endorsement agreement with one of the industry's biggest influencers, CT Fletcher. The Company expects that this partnership will increase brand awareness and consumption of iSatori products, through Mr. Fletcher's wide reach and influence on social media platforms, including YouTube, where he has close to 800,000 subscribers and his videos have had over 74,000,000 views. In all, Mr. Fletcher has over 2-milliion followers in social media, making him one of the largest celebrities in the industry. CT Fletcher has begun to make a series of special retail and trade show appearances. The Company believes the endorsement deal, which was only recently executed in January, should begin to yield dividends for the brand's equity over time.

  
iSatori, Inc. 
Balance Sheets 
December 31, 2014 and 2013 
        
  December 31,  December 31,  
ASSETS 2014  2013  
Current assets:         
 Cash and cash equivalents $738,725  $822,876  
 Investments  -   -  
 Accounts receivable trade  925,506   2,398,178  
 Income tax receivable  -   102,452  
 Note receivables - current portion  28,939   11,013  
 Inventories  2,483,602   1,985,764  
 Assets held for sale  34,979   108,228  
 Deferred tax asset, net  -   53,081  
 Prepaid expenses  217,668   222,466  
  Total current assets  4,429,419   5,704,058  
          
Property and equipment:         
 Leasehold improvements  11,485   11,485  
 Furniture and fixtures  128,902   112,362  
 Office equipment  57,408   52,908  
 Computer equipment  332,171   312,403  
 Dies and cylinders  43,942   43,942  
 Less accumulated depreciation  (425,238 ) (359,464 )
  Net property and equipment  148,670   173,636  
          
Note receivable - net of current portion  52,695   81,714  
          
Other assets:         
 Deferred tax asset, net  57,314   147,941  
 Deposits and other assets  45,207   61,167  
  Total other assets  102,521   209,108  
          
   Total assets $4,733,305  $6,168,516  
          
LIABILITIES AND STOCKHOLDERS' EQUITY         
Current liabilities:         
 Trade accounts payable $819,918  $1,248,490  
 Accrued expenses  253,208   187,608  
 Deferred revenues  191,127   292,215  
 Deferred tax liability, net  57,314   -  
 Line of credit  1,620,519   1,220,655  
 Notes payable  15,708   20,464  
  Total current liabilities  2,957,794   2,969,432  
          
Long-term liabilities         
 Derivative liability  152,849   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; 12,909,278 shares issued and outstanding  129,093   128,797  
 Additional paid-in capital  4,796,241   4,731,535  
 Accumulated deficit  (3,302,897 ) (2,132,488 )
  Total stockholders' equity  1,622,662   2,728,069  
   Total liabilities and stockholders' equity $4,733,305  $6,168,516  
          
  
iSatori, Inc. 
Statements of Operations 
December 31, 2014 and 2013 
      
   For the Years Ended  
   December 31  
   2014   2013  
Revenues:           
 Product revenue (Net of returns and discounts)  $9,513,606   $10,507,038  
 Royalty revenue   103,975    115,749  
 Other revenue   37,207    42,251  
  Total revenue   9,654,788    10,665,038  
            
Cost of sales   4,727,660    4,686,708  
  Gross profit   4,927,128    5,978,330  
            
Operating Expenses:           
 Selling and marketing   2,353,018    2,974,203  
 Salaries and labor related expenses   2,499,719    2,241,470  
 Administration   1,082,962    1,586,526  
 Depreciation and amortization   78,574    95,148  
  Total operating expenses   6,014,273    6,897,347  
            
Loss from operations   (1,087,145 )  (919,017 )
            
Other income (expense)   300,800    74,346  
Financing expense   (55,827 )  (78,533 )
Interest expense   (49,540 )  (32,610 )
            
Loss before income taxes   (891,712 )  (955,814 )
            
Income tax expense   (278,697 )  (2,828 )
            
Net loss  $(1,170,409 ) $(958,642 )
            
Net loss per common share           
 Basic  $(0.09 ) $(0.08 )
 Diluted  $(0.09 ) $(0.08 )
            
Weighted average shares outstanding:           
 Basic   12,890,840    12,763,946  
 Diluted   12,890,840    12,763,946  
          

About iSatori, Inc.

iSatori is a consumer products firm that develops and sells scientifically engineered 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 at http://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.

Contact Information

  • Contacts
    Self & Associates
    Trudy M. Self
    Investor Relations
    909.336.5685
    Email contact

    iSatori, Inc.
    Sue Mosebar
    Corporate Communications
    303.215.9174
    Email contact