Supplement marketer prospers despite GNC nose dive

29-Mar-2021 - Last updated on 29-Mar-2021 at 16:28 GMT

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Supplement marketer FitLife Brands prospered in 2020 despite the bankruptcy of GNC, its biggest customer. The company recorded the highest annual revenue it has achieved for a number of years.

In reporting the revenue figure on Friday, CEO Dayton Judd said, “The company’s performance continues to exceed expectations in both our wholesale and direct-to-consumer channels. As a result, the company has been able to achieve strong revenue growth and profitability, and our balance sheet continues to strengthen, despite the effects of the COVID-19 pandemic and the bankruptcy of the company’s largest customer during 2020.”

Surviving the GNC slide

FitLife hitched its star fully to the GNC wagon with a captive nutrition deal it entered into in 2015. At the time the company’s annual revenues were hovering around $20 million, and the deal was seen as a way to boost profits through greater volume even as margins were squeezed.

But FitLife’s timing on the GNC move was unfortunate, and coincided with that company’s steep decline, which culminated in a bankruptcy sale to Chinese company Harbin.

But the GNC slide wasn’t the company’s only issue. The company merged with Denver, CO-based sports nutrition brand iSatori in 2015 and by 2018 that move was avowed to have failed. Judd took over as interim CEO around the same time.

The company wrote off iSatori assets after sales declined by more than 40% in 2017 and set up a $1.1 million reserve fund to account for product returns. Despite the issues, iSatori products remain on the market. FitLife no longer breaks out sales figures by brand.

Online sales to rescue

Around the time that the speed of GNC’s downward spiral became fully apparent in 2018, FitLife opened its first Amazon store front. Now, online sales account for an increasing amount of the company’s revenue. In the fourth quarter of 2020, direct-to-consumer online sales increased 107.7% to $1.3 million, representing 21% of total revenue compared to 18% in the same quarter the previous year.

FitLife Brands, which is based in Omaha, NE, sells a variety of sports nutrition and general dietary supplement products under a number of brand names, including NDS Nutrition, PMD, SirenLabs, CoreActive, Metis Nutrition, iSatori, Energize, and BioGenetic Laboratories.

Earnings details

FitLife’s fourth quarter revenue came in at $5.9 million, a 60% increase from the same period a year previously. For the full year, FitLife notched $21.7 million in total revenue, an increase of 11.5% over 2019. In addition, direct-to-consumer online sales increased 82.2% to $4.5 million, representing 20% of total revenue compared to 12% in 2019.