Thank you so much for being here with us. I am excited to introduce to you Ryan Hansen, President, and Dayton Judd, Chairman of the Board and CEO of FitLife.
Good afternoon, everyone. My name is Dayton Judd, and this is Ryan Hansen. Thank you for that introduction. We are here to talk about FitLife Brands. I am going to start by giving a brief overview of the company and what we do, and then Ryan will spend a bit of time talking about the opportunities that we have going forward. Just to give you a sense, again, for who we are, this page shows the different brands that we own. We own a portfolio of nutritional supplement and wellness brands. We own 16 different brands at this point. Many of the brands on the left-hand side of the page were internally developed. But over the last five to seven years or so, we have grown the portfolio significantly through acquisition, and I will walk you through that in a bit more detail.
Everything you see on the right-hand side of the page, Mimi's Rock Corp, MusclePharm, Irwin Naturals, those are all fairly recent transactions that happened in the last three years. So, the best way to think about us, again, portfolio of wellness brands, particularly in the nutritional supplement space. We do not own manufacturing. We are not asset intensive at all. We own the brands, we own the intellectual property, we market the brands and distribute them through a number of channels. You can see the channels here on this page. Some of the brands are exclusive to GNC's franchise network. We are very aggressive at selling online. About half of the company's revenue come from online sales. But we also sell through a lot of other retailers, wholesale partners. Walmart is a big customer. CVS is probably one of our biggest customers. Walgreens, Costco Canada.
Sprouts, Fresh Thyme, Whole Foods, just about any food, drug, and mass location in the United States is going to carry some of our products. The investment thesis that we are going to walk you through today is that we have a proven management team that is aligned with shareholders, and I will present this section to you a bit about our history and who we are and how we are aligned with shareholders, and then Ryan will walk you through some of the economics of our business. I am not going to dwell on this page. This is kind of the bios of our team. This presentation, by the way, is filed on our webpage, on the investor relations page on our website, as well as filed on an 8-K with the SEC. But here you can see the senior management team. It is a mix.
Some of us are relatively new in the last couple of years, but many people within the company, Jenna Sinnett, our Chief Operating Officer, has been with the company for something like 20 years. Pat Ryan, same thing, 20 years. A team with significant experience, and talk to you a bit more now about the history of our company. This is a pretty busy chart, and where we'll probably spend a decent chunk of our time, but I think it's important to tell you the story of who we are and how we got where we are. The story starts back in 2015, 2016. By way of background, I'm the CEO of the business, but my day job, until I became CEO of the business, is investment management. Normally, I'm at these conferences sitting out there. I run a hedge fund.
The fund is called Sudbury Capital. Back in, gosh, 2014, 2015, I started buying FitLife stock. At the time, FitLife was traded over-the-counter. We're now traded on Nasdaq. I owned, I don't know, call it 7%, 8% of the company. Some things happened within the company going back to 2015, that were not self-inflicted. At that time, the company sold almost all of its products through GNC, and really, it was through the GNC franchise network. Some things happened with GNC that resulted in the company wanting to diversify away from GNC. In 2015, they went out and bought another company, and that company was called iSatori. It was a small public company. The previous management of FitLife took those products that were not in GNC and went and sold them into GNC. In some ways, defeated the strategic rationale for the transaction.
You can see kind of the impact in late 2016 into 2017, declining revenue, EBITDA flips negative. It was in the middle of 2017 when I, as, again, an external investor, started agitating a little bit, asked for a seat on the board. I gained a board seat in June of 2017. I became Chairman in October of 2017, and by, really immediately, but it took until about February of 2018 to convince the other independent directors that we needed to make a change, right? Again, you can see the declining revenue, you can see the negative EBITDA. We defaulted on our debt. The company was in a very bad place. When everyone agreed to finally make a change, again, the company was literally on the verge of bankruptcy. There was no way we were going to recruit an external CEO into the business.
In some ways, the prize I won for fighting the fight was I was the guy. I was deputized as the interim CEO to go in and stabilize the business. That was then, you can see it labeled there in the chart, about $16.8 million of revenue, and again, negative EBITDA. We started doing a lot of things to improve the business, started selling online. It's something that I had been pretty focused on with previous management in terms of encouraging them to do that. Up to this point, 99% of our revenue was coming from wholesale, and most of that from GNC. We started selling online, in particular Amazon, and that began to grow very quickly. As we grew, you can see, again, the return to growth from, again, bottoming at $16.2 million of revenue, EBITDA flipping positive. But you can see the revenue growing.
You can see the EBITDA growing as we continue to sell online. We pretty quickly were out of debt. We were building cash, but we were still pretty beholden to GNC. What we did, as we had strengthened our balance sheet, is embarked upon a strategy of acquisition. This is what we're still doing today. We take the cash flow that we generate from our existing brands. We use that to acquire other brands. Through that, we were looking to diversify away from GNC. Nothing against GNC. We love them. They're still a very big customer of ours, but we didn't love them 90% of our business. We diversified away and continued to grow online. As we move to the right, you can see cost reductions. You can see the e-commerce, the recapitalization, the debt reduction. Share repurchases.
Once the balance sheet was in shape, we started buying back shares. In 2019, we bought back 20% of the outstanding shares of the company. I'll talk a bit more about my ownership and how we're aligned with shareholders. That was after I bought a lot of the stock myself and through my fund. Just to jump ahead a little bit, I own about 60% of the company, so very much aligned with shareholders. If the stock goes down, it hurts me a lot more than it hurts any other individual shareholder. As we move to the right on the chart, you can see the acquisitions. The acquisition of Nutrology was the first one in April of 2021. Acquisition of MRC, which gave us the Dr. Tobias brand in February of 2023. Some of you have heard of MusclePharm. We acquired MusclePharm in October of 2023.
It was formerly a publicly traded company that went bankrupt, and we acquired their assets out of bankruptcy. Then you can see the revenue growing, the EBITDA growing as we continued to employ this strategy. Then last year, a little bit more than a year ago, we acquired Irwin Naturals. That transaction, again, roughly doubled the size of the company. So we're now on an LTM basis, a little over $100 million of revenue, and that's with almost all of a full year of Irwin. Including a full year of Irwin, it'd be a bit more. You can see on an LTM basis, EBITDA of a little over $14 million. So that is the history of the company.
I won't spend a ton of time on this chart other than to show, you can see this is just the stock price and how it's trended over time from the time I took over as CEO. I think it was $0.35 a share on that day. So it's been a multi-bagger despite the recent declines. We traded above $20 as recently as late 2025. We're now down around eight. This chart was pulled together, I think in September is when we put this out. So stock's down now around eight, so in some regards, it's on sale. Another point that we're trying to make with this chart is we have done what we've done in terms of the growth in both revenue and profitability without dilution. We've not issued a single share of stock.
There was some preferred stock that was issued way back in the beginning in 2018, right after I took over to help recapitalize the balance sheet. All of which has been converted to common. We are nothing but common shares at this point, a little bit less than We got 9.4 million shares outstanding on a fully diluted basis with options, a little bit more than that, a little bit less than 10 million. Even with the pullback recently, it has been a good run. We are obviously sensitive to what the stock has done over the last year or so. In many regards, we think is on sale. We will spend some time talking about, in particular, Ryan will spend some time talking about some of the reasons for that.
The short story is over the last year or so, like a lot of consumer-oriented businesses, we have had some organic top-line challenges. You are going back to this previous chart, revenue is continuing to go up. That is inorganic. On the organic front, we have managed to grow organically through this whole time period after 2018 when I took over.
It has just been recently in the last year where we have got some organic growth challenges that we will talk a bit about. Ryan will talk a bit about here in just a bit. Again, last page, I already touched on this. In terms of alignment of the management team with shareholders. Again, about 60% on a fully diluted basis, 56.4% on a currently outstanding basis, and then with other insiders as well. We very much are aligned with shareholders, very clean and simple capital structure, common stock only.
We have some debt that we use for acquisitions, but we acquire for cash. Again, we have never issued a single share for acquisitions, and we borrow, we pay cash, we pay it down, we rinse and repeat, and do it again. I will stop there and hand it over to Ryan to walk you through some of the other aspects of the investment thesis.
Let me speak to a bit of just the kind of margin profile of our business. When we acquired Irwin Naturals about a year ago, they traditionally had slightly lower margins than we did, and it roughly doubled the size of our business. You kind of blend those together, and so we are sitting mid 30s to high 30s gross margin there.
Previous to that acquisition, it was more like low 40s, and we are hopeful that we can get back to some of those markers. You see where adjusted EBITDA is here. We have been as high as 20 in the past. Want to speak to a bit of what we are doing to improve margin. On the gross margin side of things, the Irwin Naturals acquisition was transformative for us. One of the things that was just historical practice there, almost all of their products had a two-year shelf life. When you sell into a retailer like a CVS, Walgreens, Walmart, Sprouts, whoever it might be, they are going to require 12 months of dating left in that product before they put it on shelf. We essentially had a 12-month clock the minute that that comes off the production line to sell it.
Some products move slower than others, right? The MOQs for some of these are quite large, given the complexity of the product. Irwin has been throwing away over $1 million, probably close to $2 million of product or kind of obsolescence, year after year that hits your gross margin. You are just expensing COGS with no revenue. We have undergone a very significant effort over the last year to transition every formula that we can, that we own, to a three-year shelf life that actually doubles the sellable life from that original 12 months to 24. That will significantly reduce inventory obsolescence, which will have a positive impact on gross margin. That, unfortunately, is not an immediate capture. That is not going to happen in a quarter.
All of the formulas are done, but we have to kind of replenish and cycle through all the old inventory as that comes on. We really look forward to fully monetizing that here in the next year or two. Additionally, we have made some significant improvements that have been captured on the fulfillment side. Many of these quite recently, but should see some impact beginning here in Q4 and even partially in Q3. That essentially is through our 3PL provider, transportation providers, looking at how we distribute direct-to-consumer as well as B2B, have taken a decent amount of cost out of the business, so excited for that. On the EBITDA side, we have also acted on a number of SG&A savings.
When we did the deal, this was a brand bought out of bankruptcy that was in bankruptcy, not for the supplement business, but for some analogous kind of unrelated business endeavors that were not performing well and unfortunately dragged the whole thing into bankruptcy. We were not very well acquainted with the team after we bought the business, so we have made some adjustments there just from a headcount perspective and feel really good about kind of what we have on a go-forward basis. Again, much of that has already happened, and we are excited to see that kind of run through the P&L. I will go through a few of these quickly. I just want to maybe make one other key point before we wrap up. As Dayton mentioned, this is a very capital-light business as we do not own manufacturing. You can see our debt here.
We only take debt to do deals, and then we will aggressively pay it down thereafter. That is the approach kind of here, postmortem with Irwin. Then you can see where we are just from a kind of cash flow perspective. So, on 14 of EBITDA, we are throwing off, I think, a reasonable adjusted kind of free cash flow there. We report contribution separately for businesses that we have acquired within the last two years, at least for that two-year period, to give investors a bit more of a purview. So you can see kind of Irwin's contribution, which we define as gross profit less advertising expense specific to that brand or portfolio of brands. Anyway, you can kind of see more information there. As Dayton mentioned, about half of our sales are online. This is just a chart showing over time how that has evolved.
It didn't come down because we chose to walk away from online. These are just percentages. But as the base grew and Irwin was predominantly a wholesale brand, that's why you see those numbers come lower in 2025 in the TTM period. This is maybe one I want to spend the last few minutes on before we open up to questions. We are in a category that has some strong tailwinds and is indeed growing, but it's not evenly distributed amongst competitors in the category. It's a very fragmented market. That's a big part of our thesis. We hope to be a consolidator in that space, and we'll continue to be on the lookout for good deals to do. But we have been challenged here and recognize that here in the last 12 months. Let me just articulate three of those key challenges.
This is on the right-hand side here. Our online business is predominantly sold on Amazon. We do not sell to Amazon. We are the seller of our brands. We control our product detail pages. We do our own advertising, kind of allocate all of that ourselves. There's been some meaningful changes algorithmically on that platform in the last couple of years that has prioritized external traffic or brands that have a presence outside of Amazon above those who were just Amazon native. We have a brand, one of our larger brands, that really was an Amazon native brand that has been punished more severely than our others on that platform. We have a brand like Irwin that was very well-distributed, kind of outside of the Amazon ecosystem, that's done phenomenally well and frankly surpassed our expectations since doing that deal just over a year ago.
We're certainly navigating that, and those are things like working on the TikTok platform, working through Google and Meta advertising, working on generative engine optimization on our websites to make sure we kind of show up in AI search and whatnot. What I'll also point to here, declining foot traffic at key wholesale accounts. This is probably concentrated in specialty retail. These are retailers that typically command a price premium relative to more mass-type accounts. In the current environment where we are and the consumer being quite challenged, those retailers have suffered disproportionately than the Walmarts of the world, so to speak. We have products in those places, and we're kind of suffering right alongside many of our competitors.
The last point here, not only do we have some exposure to some of those retailers, but we also have outsized exposure in a couple of segments that are declining in the market. The two primary ones being kind of weight loss and cleanse, which GLP-1s have certainly taken a toll on, as well as kind of men's health, kind of testosterone-focused products there. We do really well there. We continue to want to do well there, right, but need to round out the portfolio. Irwin's product development efforts historically had focused on those centers of strength, which unfortunately, were declining portions of the market. We feel really good about the portfolio we have coming into 2025, 100% focused outside of those categories where we believe we have permission to win or frankly, already have a presence, but just not enough of a presence.
So that's a bit of what we're doing to address the organic side of things. I guess my final kind of concluding summary here, look, to believe in what we're doing, I think you need to believe that the organic growth is fixable, which we do. And once that is, and it's on kind of the right trajectory, this is not a business that has to grow at a kind of hockey stick organic growth rate. This is a business that just needs to be positive, right? If we can continue to throw off more and more cash from the base business and finance the inorganic growth through that mechanism, right, and taking prudent levels of debt, we believe there is just a ton of headway for this consolidation play, right?
To buy at a lower multiple, rerate in a public vehicle, and kind of keep that going for a long period of time. So anyway, there's a few more slides you're welcome to look at on our website, but I'll open up to questions. Looks like we have about five minutes left. Please.
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Yeah, so the question's about kind of shopping agents, right, via Instinct or whatnot. Is that a benefit or hindrance, right, to what we're trying to do as a company? I'd say it's something we have to adapt to, right? It's something we've been working on, less from a shopping agent perspective, but more just even being discovered and recommended, right, by AI as consumers now are not going to your website to check you out, but just going to Claude or Gemini or whatever it might be.
So we're absolutely focused on that. There's a lot of overlap between kind of traditional search engine optimization and generative engine optimization. The degree to which you showed up well before certainly is going to be a leg up here. So we are absolutely interested and continue to focus on that, right? Let me know if you know someone who's cracked the code. We've not found them yet, but certainly a lot of activity in our space around that.
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In terms of where they transact?
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Yeah, look, we are generally ambivalent to where a consumer chooses to purchase our products. We want to make them available in channels and kind of allow the consumer to make their choice. Yeah, I think Amazon is also being a bit more open to omni-channel type approaches. They're even making some of their tools available for your own D2C Shopify site. I think they recognize some of that as a reality. I think it's a bit of a maybe fight there, but we'll see where things end. Any other questions? Oh, there's answer. Please.
I just want to clarify one thing. We've talked a bit about organic growth headwinds. I just want to maybe put a finer point on it. As a company, we have some pockets that Ryan talked about. Again, some Amazon algorithm changes, some specialty retail challenges.
If you look at our historical over the last three quarters revenue, I don't have it here in front of me, but it's generally in the $25 million-$26 million range. As a business, I just want to point out, we're talking about organic revenue growth headwinds. By that, we're not saying the business is rapidly declining. I just want to make that point. We've gone from growing fairly consistently to, again, having some headwinds. We do have brands that are declining, but they're being, to a large extent, if not fully, offset by growth in some other brands and some other channels. Again, this organic growth headwinds, just want to make the point that we used to trade at 12x, 13x, 14x EBITDA, when we were growing organically and laying on the inorganic growth on top of that.
Again, buying at 3x-6x cash flow, and then those cash flows are synergy adjusted. We save money, and then the cash flows rerate at 12x-14x EBITDA. What's going on now is we're just not at 14 x EBITDA anymore, 12 x EBITDA anymore. We're more like 8x. Our hope is not. It's not like we've got this rapidly declining business, and we need to turn it around. We've got a fairly stable business.
We just need to get the growth going again, and we're highly confident or certainly highly hopeful that as we do that, and would fully expect that as we do that, again, the multiple re-rates. That's why we spent so much time talking about organic growth. It's not that we're declining dramatically. It's that we think that has been the reason why our multiple has come down, and as we demonstrate our ability to grow, it will rerate accordingly. Yes.
When you look at the acquisition landscape, do you see a lot of companies within the valuation target you are looking for?
The question was, as we look at the acquisition landscape, do we see a lot of companies in the multiple? Is that what you mean by target of what we are looking for? Yeah. Here is what I would say. We have closed four deals. Over the last five years or so, we have probably signed 75+ NDAs, maybe even closer to 100. We look at a lot of deals.
We have closed four. What we have seen over the last year, we have not seen a single deal presented to us, and there has probably been two dozen deals. We have not seen a single deal presented to us of a company that is growing. This consumer challenge, this challenged consumer is very much a real thing. Many of the businesses we have been shown over the last year or so are DTC-oriented. Also, we have talked a lot about Amazon.
We sell a lot on Amazon. We sell on our websites as well. The businesses that are out there for sale, many of them are declining. On top of that, they are spending 40% of their revenue trying to arrest the declines without success. Long story short, we are in the market. We are always looking, but we have not seen anything that we feel compelled to acquire. We are going to run out of time here in five seconds. We will conclude here. Thank you very much for your interest, and we will be in the back of the room if anyone has questions. Thank you.