I'm pleased to turn the floor over to your host, Dayton Judd, Chief Executive Officer at FitLife Brands. Sir, the floor is yours. Thank you, Paul. I would like to welcome everyone to FitLife's First Quarter 2025 Earnings Call. We appreciate you taking the time to join us this afternoon. Joining me on this call is FitLife's CFO, Jakob 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&A. 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 end of March. As a reminder, the company effected a two-for-one forward stock split on February 7, 2025. All per-share amounts in our 10Q press release and discussion today have been retroactively adjusted to account for the forward split. For the company overall, for the first quarter of 2025, total revenue declined 4% year-ov er- year to $15.9 million. Online sales were $10.6 million, or 67% of total revenue. 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 2025. Contribution, which we define as gross profit less advertising and marketing expense, declined 4% to $5.8 million. Net income for the first quarter of 2025 was $2 million compared to $2.2 million during the first quarter of 2024. Basic earnings per share declined from $0.23 last year to $0.22 this year. Diluted earnings per share declined from $0.21 last year to $0.20 this year. As is evident in our income statement, the company incurred fairly significant M&A-related expense during the first quarter of 2025. Excluding the impact of that M&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 2025 was $3.4 million, a 6% decrease compared to the first quarter of 2024. With regard to the balance sheet, the company ended the quarter with $12 million outstanding on its term loans and no balance on its $3.5 million revolving line of credit. Considering our cash of $6 million outstanding at the end of the first quarter, net debt was $6 million, which is equivalent to approximately 0.4 times the company's adjusted EBITDA of $13.9 million for the past 12 months. With regard to brand-level performance, I'll start with legacy FitLife. Total legacy FitLife revenue for the first quarter of 2025 was $7.3 million, 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 2024. Contribution increased 11% to $3.2 million, and contribution as a percentage of revenue increased to 43.4% compared to 40.9% in the same quarter last year. Moving on now to the brands acquired in the Mimi's Rock transaction, or MRC. Total MRC revenue for the first quarter of 2025 was $6.7 million, down 11% from the previous year. MRC's gross margin declined to 45.4% for the first quarter of 2025 compared to 47% during the first quarter of 2024. The primary reason for the gross margin decline is product mix. Contribution declined 9% to $2.2 million, with contribution as a percentage of revenue increasing from 32.8% last year to 33.5% during the first quarter of 2025. Revenue for the largest brand, Dr. Tobias, declined 11%, while revenue for the skincare 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 10Qs, 10Ks, 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 2023, 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. With regard to MusclePharm, total MusclePharm revenue declined 6% during the first quarter, with wholesale revenue declining 41% and online revenue increasing 33%. MusclePharm's gross margin declined from 40% last year to 30.1% during the first quarter of 2025. As previously disclosed, in the fourth quarter of 2024, the company began investing in increased promotion in an attempt to drive increased sales of MusclePharm products. This investment in increased promotions primarily consisted of increased marketing allowances to wholesale customers. Under GAAP, these marketing allowances are accounted for as a price reduction, which lowers reported net revenue and gross profit, and therefore gross margin. In addition, the company has invested in higher marketing and advertising spend in support of the MusclePharm 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 2025 was primarily due to a large wholesale customer that took advantage of the company's promotional investment during the fourth quarter of 2024 without increasing their sell-through of the product, which affected their reorder volumes during the first quarter of 2025. 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&A. 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 90-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. You can see inventory at an all-time high as of the end of the first quarter of 2025. 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. 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&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. 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 25%-35%, 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 2000 index next month. April 30th was the ranking day for purposes of the Russell 2000 index reconstitution. On that day, our market capitalization was around $140 million, and according to the analysis communicated to us by multiple investment banks, the estimated market cap threshold for inclusion in the Russell 2000 index ranges from $95 million-$118 million. 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 23rd, with possible revisions happening prior to the actual rebalancing occurring on June the 27th. Last, as has historically been our practice, we will not be providing formal forward-looking guidance. 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 Dr. 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. That concludes my opening commentary, and Paul, you can go ahead and poll for questions. 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. We ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Once again, please press star one on your phone at this time if you wish to ask a question. Please hold while we poll for questions. The first question today is coming from Ryan Meyers from Lake Street Capital Markets. Ryan, your line is live. Hey, guys. Thanks for taking my question. First one for me is, and I 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. Not asking to reiterate that, but have you seen any changes over the first quarter in the first month of April that would think or that would cause you to change that expectation? No. Yeah, I'm happy to reiterate that. I guess I don't view that as formal guidance, like we're not giving a revenue number or an EBITDA number for the full year. Yeah, our hope and expectation would be that we deliver organic revenue growth for the company overall in 2025. Okay. Got it. Just thinking about where margins for the year can look quarter on quarter, there was obviously some mix dynamics that impacted the margins here in the first quarter. Maybe any commentary on how we should think about margins for the rest of this year? Not specific. I don't have a number for you. Obviously, you can see in the tables that we provided where we break it out by groupings of brand. MusclePharm, there's been an intentional investment that started in Q4 and continued in Q1. Q1 was closer to 30%, whereas Q4, I think, was around 25%. As long as we're continuing to try and invest in MusclePharm and drive some growth for that brand, something around that 30% level is probably realistic. On the Mimi's Rock side, that kind of fluctuates between, I don't know, 44-47%, roughly, depending on, again, product mix. We have some products that are higher margin than others, and we like when those are outperforming, but it sometimes moves against us as well. On the legacy FitLife side, we tend to be historically in the low 40s there. We did a bit better in Q1, so we're seeing much stronger online growth for the legacy FitLife products. Online is the most profitable part of our business. We're earning retail gross margins as opposed to wholesale. As we shift more of legacy FitLife 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, we should benefit from some margin expansion there. The other thing I'll point out for legacy FitLife gross margins, because they were materially higher in Q1 relative to some previous quarters. We talked last quarter about the challenges we had with GNC during the fourth quarter, which trickled a little bit into the first quarter. As you probably recall, one of our approaches to deal with that was to ship directly to the GNC franchisees, for example, when we were not shipping to GNC corporate. When we shipped directly to the franchisees, that's at a higher price than where we were selling to GNC corporate. A little bit of the bump in Q1 is due to higher pricing. We're also incurring higher expense there in terms of the logistics and the fulfillment. Hopefully, that gives you some color. I don't think there's anything dramatically different going on other than the intentional investments on the MusclePharm side. We've kind of historically guided that gross margins are generally in the 42-45% range for the company overall, depending on, again, mix and promotions and other things like that. Okay. Got Got it. Just the last question for me on the topic of MusclePharm. You called out the wholesale revenue was down. 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. Just any dynamics to call out there? Maybe how has that business begun to perform at the wholesale level? Are they seeing strong end customer demand? Any commentary there would be helpful. Sure. It is a mixed bag. There are some customers that we are certainly supporting and giving promotional support to that is showing very clear end consumer lift, right, where we are having the desired effect, right? The promotional discounts are converting into higher unit movement. There are others, like the one that we called out last quarter, where that was not the case, where we gave pretty substantial discounts. They would say that they spent the money, but maybe just did not get the desired result. It is hard for us to know what people do and what they do not do. We do not have the ability to audit it, so some customers may choose to just take it in terms of higher margins for themselves. If they do that, right, or if we give them promotional spend, promotional support, and it's not effective, the net result of that is they don't get it anymore. That particular customer, which is a good customer and an important customer for us, right, the promotional discounts they're getting now and that they received in the first quarter and they continue to receive in the second quarter are quite a bit lower than they got in the fourth quarter. It's a little bit like, "Look, we'll help you out if you can drive volume, but if we help you out and you don't, then you don't get it anymore." It's a mixed bag. Again, there's some that are where we're seeing the investment translate to unit movement, and there's others where we don't. As a result of that, we work different customers will get different promotional support based on their ability to increase movement. Got it. Thank you for taking my question. Yep. Thank you. Thank you. The next question will be from Sean McGowan from Roth Capital Partners. Sean, your line is live. Yeah. Thank you. Thanks for taking the questions, Dayton. A couple of questions to tie into what you were just talking about, and then a couple of unrelated questions. Any update on what the situation is with that major customer, the GNC corporate? Has there been any change there? No change. I mean, that was resolved in really the in January during the first quarter. We called that out in the first quarter call, the impact or sorry, the fourth quarter call that we did in March. We called out the impact on the fourth quarter and the impact on the first quarter and the fact that we were shipping direct. I think it was like third or fourth week of January when that was resolved, and then it was just a matter of getting shipments into their distribution network, and that happened within a couple of weeks, and it's been kind of off to the races since then. I would characterize our relationship as very, very positive. They have been very constructive with us and us with them. If anything, we're happy with the levels of inventory they're carrying now, which is certainly, in our view, better than it was late last year. Everything is good from our perspective in our relationship with GNC. Okay. Thank you. Back on MusclePharm, 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, how MusclePharm compared to the first quarter of 2024? Yeah. I do not have that in front of me. Again, it is account-specific, so we have one account in particular, and I obviously cannot give names, but where we are providing additional support and we see continued growth, and there are others where that is not the case. Yeah. The accounting is exactly like you described. 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, right? Our gross revenue, if we sold $100 worth of product, our gross revenue would be $100, but our net revenue would be $90. In addition to that, so that's where you see maybe revenue not as high, perhaps, or it's really you see it in the lower gross margin because our costs are the same, but the revenue is, again, call it 10% lower. You'll also notice, I think, in Q4, slightly elevated advertising and marketing expense, and then even more in Q1. In addition to giving some of those promotional discounts to customers, we're also spending more of our money on advertising and marketing. Right. Okay. Is it fair to ask what the gross-to-growth comparison would be on MusclePharm? What do you mean by gross-to-growth? Gross revenue in Q1 of 2025 compared to gross revenue in the first quarter of 2024? Sure, it would, but I actually don't have it in front of me. Yeah, it's going to be down clearly, right, because 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 didn't reorder for much of Q1. It'd probably be a bit more relevant to look at Q2 maybe versus Q4 or Q2. Again, I don't have those numbers in front of me, but I can certainly connect with you after the fact. Okay. I'll move on. A couple of other things. Can you tell us the status of the various new product launches that we discussed a month ago or so, or more than that at our conference, beverage and bars? How's that going? Yeah. I mean, the bars continue to—those were coming up on, I think, close to a year, although we did launch two new 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. We've had decent sell-in of those into some, again, regional convenience store chains, regional grocers, none of the big accounts yet. Continue to do fairly well online. The beverages, so the ready-to-drink protein, again, that's a much more recent launch. I think that was towards the end of March. I have to be careful because some people do not let us say their names, but certainly all the major distributors have picked it up. There are a couple of big distributors, one called Muscle Foods and one called Europa that does distribution of sports nutrition products. They have ordered it. 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 in their coolers in the gym for people that go there. Again, I probably can't say names, but there's some big gyms in Venice Beach, for example, that if somebody were to walk in there, they should see our RTDs in the cooler. We think that we have an amazing product. If you haven't tried these, we'd encourage you to try them. In our product development here, we did multiple rounds of development, but we also did blind taste tests with kind of non-employees, with potential customers of our products. We've got a vanilla, a chocolate, and a salted caramel. We did kind of blind taste tests with pretty much everything else in the market. Occasionally, people have maybe different preferences, but for the most part, ours were pretty highly favored. We think we have a good product. It is just a matter of now trying to get the sell-in going and sell through. Okay. It sounds like it would not have had much of an impact then in first quarter revenue, but sometimes with these new products, there is a bit of a load-in period, and then maybe a lull before reorders kind of pick up. Would you expect second quarter sales of the beverage product to be higher than the first quarter? Yeah. I would expect them to be higher in Q2. I mean, Q1, I do not have the date in front of me, but I am going to guess it was like mid-March or something like that when we kind of received them, when we finished production. Yeah, there was not a whole lot in Q1 for this. Okay. My last question is, I thought there was an exclusion on tariffs for certain kind of supplements and wellness products that cover vitamins, etc. Are your products not benefiting from that exemption? Some are and some are not. There are a number of exclusions. Pretty much all vitamins, all minerals have exclusions. We have been told that creatine has an exclusion. There is a document, I cannot remember what it is called, a government document that lists what is excluded. I mean, certainly in our multivitamins and whatnot, we do not expect to see much impact there. There are a number of ingredients that we use quite a bit, like carnitine is one example, that is not excluded. It is very much on a case-by-case basis. I cannot remember if I shared this previously, but we have looked at all of our major products, our biggest products, and had our manufacturers essentially reprice them or tell us what the cost impact would be based on the products or the ingredients that are subject to tariff and what the tariff amount is. The impact ranges from about 0% impact, again, for some of our products where they are not subject to tariffs. At the high end, it was a possible 10% or 11% increase, right? Because not everything that is in these products is subject to the tariffs. A lot of the cost is components for your labels, right, which is coming from onshore. A lot of the cost is the manufacturer's charge, which again is coming from onshore. It is kind of a zero-10% impact depending on the product. It is not the end of the world by any stretch, but it is certainly not a positive thing to have these tariffs. That is amazing. Okay. All right. Thank you very much. That is it for me. Thank you. Thank you, Sean. Thank you. Once again, it will be star one on your phone if you wish to ask a question today. The next question is coming from James Bogan from Legend Capital. James, your line is live. Hi. Good afternoon. I am the other analyst focused on MusclePharm, which is what I was going to do. I do not know if there is anything else to say about it. I am always fascinated that it used to sell over $150 million worth of goods, and now it is $5 million running rate per year. I am just wondering what your long-term hopes or prospects for that might be. Just a bigger picture, what are your goals? I mean, you bought this company when it was a dollar of tested basis. It's now $29. Are you going to build—do you want to build an empire? Do you want to be acquired by Unilever? Where are you going with this thing and over what time period? Thank you. Yeah. Two very big, broad questions. I'll do my best to answer. On MusclePharm, yeah, I think, again, I don't have the numbers right in front of me. We're certainly not at—maybe we're at a $5 million run rate based on the current quarter. Let me just see. We did a—yeah, more or less, $4 million run rate. In Q1, net revenue was—it looks like we're at $2 million. That's $2 million for one quarter. Yeah, look, when we bought this, it was under $10 million. On a run rate basis, again, based on Q1, we're under 10. Again, we think we'll do better. 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 would say that we are certainly disappointed that we have not been able to grow it much more than we have. Obviously, we haven't done much to try and grow it until the last couple of quarters, right? We were focusing on getting it in stock and developing. They had dwindled their product portfolio very substantially, right, down to something like 15 products. Things like getting the bars back in stock, working on the ready-to-drink, right? We kind of fixed the product portfolio. We kind of changed the branding and the packaging, right? We are out there trying to sell it. I think I would say that we probably underestimated the extent to which this brand was impaired by the bankruptcy that it went through. Certainly, our hope was to be able to grow it, and we certainly hope still that we will be able to. When we do these deals, particularly for a distressed brand, the way we like to do the math is if we do not grow it, right, if we are not successful at growing it, we want it to still be a good acquisition. I think I used the analogy on the last earnings call, heads we win and tails we win a lot, right? We are still in kind of a heads we win scenario. In fact, if we decided to flip off all of the—turn off all of the marketing and the promotional discounting, right? You can look back and see there were quarters last year where we made more money than we're doing now, right, because of the investments we're making in growth. Yeah. I'm not a quarter guy, but okay. If it doesn't pan out what we're doing, right, we can just dial back. Even if this is primarily an online brand, right now about 50% of the revenue is online, right? This is a brand that can throw off a decent amount of cash at a mid-single-digit multiple in terms of what we paid for it, 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? I think we acknowledge that. That is what I would say about MusclePharm. Your other question about what is the long game here, what is the strategy? Look, I would love to be acquired by Unilever. I do not think that is going to happen. We think, and I think we have been consistent in saying this, there is a tremendous opportunity to scale and to consolidate in the nutritional supplement space. It is an incredibly fragmented industry. Depending on the size of the acquisition, right, we could do a big acquisition at a compelling multiple. There would be decent SG&A savings, right? We think in many cases we can run these brands better than some of the maybe previous owners. In terms of smaller acquisitions, there is a very significant increment between kind of EBITDA to the previous owner and us. MusclePharm is—Mimi's Rock would be an example of one that is more like, again, a bigger acquisition where we inherited employees and an office and stuff like that. It is not like you cut all of the SG&A and you just bolt it on, right? MusclePharm was one where I think we've commented before, there is one employee that we brought on from the MusclePharm team, right? It is literally all of the incremental gross profit from that brand, right, minus one employee plus any, again, advertising spend that we choose to make and maybe a little bit of legal expense. The incrementality is pretty significant. We think we are not in the—if we are in the eighth or ninth inning, yeah, it is probably time to sell the business. We think that there would be people that would be interested, whether they are strategic. Again, it's probably not Unilever. Maybe it is. That'd be nice. Maybe private equity or something like that. For now, we think it's more like the fifth or sixth inning, and there's plenty of M&A to do. We think M&A is the biggest opportunity. You can see that in terms of how we're spending our time. To a certain extent, you can see it in the M&A expense line item on the income statement. Right. Okay. Thank you very much. Much appreciated. Thank you, James. Thank you. The next question will be from Samir Patel from Askeladden Capital. Samir, your line is live. Hey, Dayton. Just following up on that last question. I think previously we've discussed that the multiples you typically see are maybe six, seven times for really good, rapidly growing businesses, south of that for businesses that aren't as attractive. With the understanding that you obviously can't comment on any specific transaction, is that still consistent with the valuation multiples that you're kind of seeing out there for prospective deals? Yes. That's fairly consistent. Okay. Thanks. That's all. All right. Thanks, Samir. Thank you. The next question will be from William Anderson from Bard Associates. William, your line is live. Yeah. Just curious how the Vitamin Shoppe pilot program with MusclePharm Pro is going. Any readouts there? Yeah. We do have some readouts. I think it's going well. We wish it were going better. We don't know. It's still going, and 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. It was supposed to be there, I think, on shelf, and it started arriving on shelf around March 15th, but it was actually closer to early April before all of the stores had the product. That is a great example, by the way, of kind of what we're doing and how we're spending. I mean, we're doing ads on streaming services. I think we have something like 1.5 million views of these ads that are on everything from Hulu to whatever. If you live within, I can't remember if it's three or five miles of a vitamin shoppe store that is carrying these products, and you watch streaming, hopefully you've seen our ads. We are doing a fair amount of spending, and you can see that reflected in the numbers as well to try and make that successful. It is still early days. I think the intent at the beginning was it'd be a two-month trial. I think we're talking about something longer than that now given the bumpy start in terms of the products getting to store shelves. So we're still there, still selling, and still marketing. Hope to have more of a formal readout on that, certainly as part of our next earnings call. Right. Okay. Just curious. Thank you very much. Yeah. Thank you. Thank you. If there were any other questions at this time, please press star one on your phone. There were no other questions from the lines at this time. All right. Thank you all for joining our first quarter conference call. We look forward to speaking with you again in about three months. Thank you. 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.