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Good day, and welcome to the FitLife Brands Fourth Quarter and Full Year 2025 Financial Results Conference Call. It's now my pleasure to turn the floor over to your host, Dayton Judd, CEO of FitLife Brands. Sir, the floor is yours.
Good afternoon. I'd like to welcome everyone to FitLife's Fourth Quarter 2025 Earnings Call. We appreciate you taking the time to join us this afternoon. Joining me on the call is FitLife's CFO, Jakob York. Ryan Hansen, our EVP, who typically joins these calls, is on vacation this week. The fourth quarter is the first full quarter that includes the financial results for Irwin Naturals, which we acquired on August 8, 2025. As has been our practice, we will provide summary financial results, including revenue, gross profit and contribution for Irwin for approximately the first 2 years of our ownership. All of our previous acquisitions were completed more than 2 years ago. So the performance of all other brands is now reported under legacy FitLife. That said, we will continue to provide commentary about individual brands when it makes sense to do so. I will start by providing some general commentary about the full year 2025, after which I will provide commentary about the fourth quarter more specifically.
And at the end of my prepared remarks, I will provide some high-level commentary on what we are seeing in the business so far during 2026. So to begin, first, for the full year 2025. 2025 was a strong year for all of our brand groupings other than MRC, whose challenges we have discussed previously. Legacy FitLife, excluding MRC and MusclePharm, delivered organic revenue growth of approximately 6%. Wholesale revenue was flat, although we did benefit during the first quarter of 2025 from the restocking of GNC's distribution centers. Online revenue for legacy FitLife during 2025 increased approximately 16%. MusclePharm delivered organic revenue growth of approximately 5% during 2025, with revenue growth occurring in both the wholesale and online channels. MRC revenue declined approximately 15% during 2025. And obviously, we are excited about the Irwin acquisition, which happened in August of last year.
Although we didn't own Irwin for the full year of 2025, let me provide some historical numbers and context for how we are thinking about this business. First, Irwin previously generated a significant portion of its revenue from Costco in the United States. However, Costco U.S. discontinued the final Irwin product in early 2025, several months before the acquisition. Second, Irwin historically sold a meaningful amount of CBD products with gross revenue from CBD during the 12 months prior to the acquisition totaling approximately $4.8 million. Subsequent to our acquisition of the company, for a number of reasons, we made the decision to discontinue all CBD products. We have been selling our remaining inventory and expect to be completely out of CBD later in 2026. And third, Rite Aid, another major customer for Irwin, went into bankruptcy and liquidation prior to our acquisition of the company.
If we remove Costco U.S., CBD and Rite Aid from the financials, Irwin's net revenue for the full year of 2024 would have been $54 million, and its revenue for the full year of 2025 would have been $54 million. In other words, if you normalize the numbers to reflect the customers and products that represent the go-forward business, the brand was flat from 2024 to 2025. If you do the same math just for the fourth quarter of 2025, which was our first full quarter of ownership, Irwin delivered organic growth of approximately 6% compared to the fourth quarter of 2024. So to recap, all of our brand groupings experienced organic growth in 2025 with the exception of MRC. Now regarding the fourth quarter of 2025. Total revenue was $25.9 million, an increase of 73%, primarily as a result of the acquisition of Irwin, partially offset by weakness in legacy FitLife. Wholesale revenue was $15.5 million or 60% of revenue, an increase of 213% compared to the fourth quarter of 2024.
Online revenue was $10.5 million or 40% of total revenue, an increase of 4% compared to the fourth quarter of 2024. Excluding the amortization of the inventory step-up related to the Irwin acquisition, gross margin was 37.0% compared to 41.4% during the fourth quarter of 2024. The decline in gross margin is primarily due to the acquisition of Irwin, which has historically operated at a lower gross margin than most of our other brands. We expect Irwin's margins to increase over time and I'll provide more detailed commentary later in the call regarding the opportunities for improvement. Contribution, which we define as gross profit less advertising and marketing expense, increased 47%, driven primarily by the addition of Irwin, partially offset by lower contribution from legacy FitLife. Net income for the fourth quarter of 2025 was $1.6 million compared to $2.1 million during the fourth quarter of 2024, with the decline driven primarily by transaction-related expense and amortization of the inventory step-up associated with the acquisition of Irwin.
Adjusted EBITDA was $3.5 million, a 14% increase compared to the fourth quarter of 2024. With regard to brand level performance, I'll start with legacy FitLife. We mentioned on our third quarter earnings call in mid-November that we were starting to see broad-based weakness across our portfolio of brands. That weakness accelerated late in the fourth quarter and into the first quarter. From a macro environment perspective, given the backdrop of economic and political volatility, we know there are broad-based consumer confidence concerns, particularly for discretionary products. Consumer sentiment remains near all-time lows and consumer discretionary spending has been declining since late last year and is at the lowest level it has been in the past 4 years. Total legacy FitLife revenue for the fourth quarter of 2025 was $13.3 million, of which 68% was from online sales and 32% was from wholesale customers.
This represents a 14% year-over-year decrease in wholesale revenue and a 10% year-over-year decrease in online revenue or a 12% decrease in total revenue. The declines were primarily attributable to MRC and MusclePharm with the other legacy FitLife brands delivering organic growth of 4% during the fourth quarter. Gross margin for legacy FitLife declined slightly from 41.4% to 40.7%. Contribution declined 18% to $4.3 million and contribution as a percentage of revenue decreased to 32.5% compared to 34.9% in the same quarter of 2024. Excluding MRC and MusclePharm, the other legacy FitLife brands delivered higher revenue, higher gross margin and higher contribution as a percentage of revenue compared to the fourth quarter of 2024. Moving on now to Irwin. We don't report Irwin's historical performance prior to the acquisition in our financials. But as mentioned previously, normalizing for the loss of Costco U.S. and Rite Aid as customers and the decision to exit CBD, Irwin delivered organic growth of approximately 6% during the fourth quarter of 2025 compared to the same quarter in 2024.
Total Irwin revenue was $12.6 million, of which $11.2 million or 89% came from wholesale customers and 11% came from online sales. Gross margin for Irwin during the fourth quarter was 28.0% and contribution as a percentage of revenue was 26.6%. Adjusting for the amortization of the inventory step-up, Irwin's gross margin and contribution as a percentage of revenue would have been 33.2% and 31.8%, respectively. We mentioned on our third quarter earnings call in November of last year that we began selling Irwin products on Amazon in mid-October. I am pleased to report that Irwin's Amazon business scaled nicely throughout the fourth quarter, delivering approximately $60,000 of revenue in October, $300,000 of revenue in November and almost $500,000 of revenue in December. Irwin's growth on Amazon has continued in the first quarter of 2026, but I'll provide more commentary on that shortly. Now let me provide a few additional high-level comments and some forward-looking remarks, and then we can move into Q&A. Regarding the balance sheet, we began paying scheduled amortization on our term loan during the fourth quarter.
In total, we paid down approximately $1.9 million of debt during the fourth quarter, bringing our debt balance to $44.7 million. We further reduced the balance on our revolver by $1.4 million during the first quarter and we made another scheduled amortization payment on our term loan of approximately $1.5 million yesterday. We are ahead of schedule on our debt reduction, and we'll continue to deploy excess free cash flow to further reduce indebtedness. As mentioned previously, we have continued to experience weakness across most brands and channels during the first quarter. We have identified and are working on 5 priorities to address the recent soft performance that we expect will favorably impact revenue and cost in the future. First, we expect to be able to significantly improve Irwin's supply chain. Prior to the acquisition, we knew that Irwin's supply chain was one of its biggest challenges, but that also means it represents a significant opportunity.
I will highlight a couple of specific areas. First, Irwin has historically had to dispose of approximately $2 million of obsolete inventory every year, which gets expensed through cost of goods sold. The primary driver of this is the combination of high MOQs, which are customary for softgel products and a short selling window driven by 2-year dating on Irwin's products. In the wholesale channel, retailers typically require a minimum of 12 months of shelf life for all products that are shipped to them. And if our products only have 24 months of shelf life at the time that they are manufactured, the selling window is only 12 months and realistically, a bit less than that when we take into account packaging time and shipping time. We are in the process of transitioning as many of our products as possible, particularly the slower-moving products to a 3-year shelf life, which will double the amount of time we have to sell the products from 12 months to 24 months and thereby significantly reduce the amount of obsolete inventory that the company has to write off.
In addition, expanding online sales provides additional flexibility as most online marketplaces have less stringent requirements regarding shelf life for inbound products. As a result, continuing to ramp up on Amazon and other platforms will create additional flexibility for us in this regard. Dramatically reducing this inventory obsolescence has the potential to increase Irwin's gross margins by as much as 300 to 400 basis points with a corresponding dollar-for-dollar impact on EBITDA. Additionally, Irwin has historically faced and continues to face stockouts, the impact of which was particularly pronounced during the first quarter. We hired a new VP of Operations for Irwin in February, and we are confident that throughout the course of 2026, we will be able to meaningfully improve Irwin's supply chain. Second, we are increasing our focus on new product development at Irwin. New product launches are important to maintain relevance in the nutritional supplement industry.
We have maintained a robust product development pipeline with our legacy FitLife brands, but Irwin lagged on this dimension during the company's financial distress and ultimate bankruptcy. We have 3 new products currently in production, which we expect to launch in the third quarter and are working to build out Irwin's longer-range product development pipeline. Third, we are focused on driving awareness and demand generation for our products off Amazon, which we believe will also drive improved performance on Amazon. We have previously discussed the challenges we began experiencing in early 2025 on Amazon with Dr. Tobias. Beginning late in 2025 and into 2026, we have been experiencing weakness on Amazon for other brands as well. In general, our product listing pages continue to convert at above average rates. So the challenge is traffic and not conversion. We believe a significant part of the weakness we are experiencing on Amazon relates to continued evolution of the Amazon algorithms.
It would take a long time to address this in detail in my prepared remarks but for those of you who are interested in the evolving dynamics of e-commerce marketplaces, I would encourage you to Google the recent shift from Amazon's A9 algorithm to what the Amazon community refers to as the A10 algorithm. For obvious reasons, Amazon doesn't provide details about their algorithmic changes, but it is becoming increasingly clear that Amazon is now prioritizing listings that bring external traffic and organic engagement to their platform. In other words, until recently, success on Amazon was primarily the result of optimizing within the Amazon ecosystem, using tools such as pay-per-click and other on-platform advertising. Now, however, it is becoming increasingly clear that success on Amazon is primarily a function of driving incremental traffic to Amazon by building off-Amazon awareness. We are seeing the correlation of this shift in the performance of our individual brands on Amazon.
For example, our brand with the highest off-Amazon awareness and distribution is Irwin. And the Irwin selling account is currently our fastest-growing Amazon account. Additionally, some of our other brands with strong off-Amazon distribution are showing growth on Amazon. At the other end of the spectrum, our worst-performing Amazon account is Dr. Tobias, which has been an Amazon exclusive brand with almost no off-Amazon exposure. In short, we are observing that the more dependent the brand is on Amazon, the more it is struggling on the platform. We have been working since last year to improve our off-Amazon awareness for the Dr. Tobias brand, primarily through TikTok via brand ambassadors and influencers. We also recently finalized a partnership between the Dr. Tobias brand and Joey Chestnut, the world record holding competitive eater, perhaps best known for his hot dog consumption on July 4.
We are excited about the partnership with Mr. Chestnut and believe it will resonate with potential consumers of Dr. Tobias' Hero Colon Cleanse product. With the help of a new Chief Marketing Officer that we hired in early February, we continue to expand our off-Amazon efforts across our most important brands. This effort will take some time, but we expect it will bear fruit in the long run. Fourth, we continue to expect long-term revenue benefits from leveraging Irwin's sales team to cross-sell other FitLife products into the wholesale channel. The sales process in the wholesale channel generally takes time as most retailers reset planograms once or potentially twice a year. However, our efforts are slowly beginning to bear fruit. We recently gained placement of 6 MusclePharm SKUs in a regional grocery chain beginning in the second quarter. In addition, conversations with other retailers are underway, and we expect to announce additional distribution gains in future earnings calls.
And fifth, as has traditionally been our practice, we will continue to look for ways to operate more efficiently with regard to our SG&A. As has been the case historically, this will be more the result of a number of small improvements over time as opposed to large onetime efforts. For example, we exited our office lease for MRC in the Toronto area when the lease expired this past January since most employees were already working from home. In addition, our office lease for Irwin expires later this year and we anticipate that the new lease will be for a smaller space and at a substantially lower cost per square foot due to softness in the office rental market in the Los Angeles area. None of these individual SG&A reduction opportunities is anticipated to be material on its own. But in total, we expect them to be compelling. I've talked a lot about some of the challenges we are facing and what we are doing to address them.
Before closing, however, I want to touch on one bright spot in our business, which is Irwin's continued growth in online revenue. I mentioned earlier that monthly revenue increased to approximately $0.5 million by the end of the fourth quarter. We are encouraged that the growth has continued throughout the first quarter with monthly revenue now approximately $0.8 million. In other words, in a few short months, this has become a business with roughly $9 million to $10 million of annual revenue on a run rate basis with higher margins than our traditional wholesale business. In addition, we think there is further upside since some of our best-selling products in the wholesale channel are not yet on Amazon, and we have been hurt somewhat by the out-of-stock situations I previously mentioned. And although we continue to see declines in subscriber counts on Amazon across most of our other brands, as we mentioned on our third quarter earnings call, we are seeing very strong subscriber growth for the Irwin brand with subscribers increasing from approximately 500 at the beginning of 2026 to over 3,600 today.
In terms of outlook for the full year, we are going to hold off on providing any kind of formal guidance at this point in time, given the weakness in the first quarter and our uncertainty about how long the exogenous challenges will persist and how quickly our internal efforts will bear fruit. The online growth we are experiencing at Irwin is encouraging, but at this point, we just don't know whether it will fully or only partially offset the weakness we are experiencing elsewhere. So with that introduction, I will conclude my opening commentary, and we can go ahead and open it up for questions.
分析師問答
The first question today is coming from Ryan Meyers from Lake Street.
First one for me, and I realize this might be a bit of a difficult question to answer. But if we think about the revenue headwinds that you called out, Dayton, both Amazon and then just kind of the broader macro pressures, I mean, is there any way to think about which one of those two dynamics is maybe impacting the business more? Or is the best way to think about it that these are headwinds and this is where the softness in the revenue is coming from?
Yes. So good question. I don't have a good answer. I don't know how to bifurcate them. I can give you some data points that may help. We have access to POS data for the retailers. Depending on the retailer, it's not always perfectly up to date. But if you go back over the last 6 months, the growth rate, and this is for supplements overall as a category, has been declining for about 6 months, and it actually flipped negative here in the last several weeks. If you look at that as just a raw percentage, it's much smaller than kind of the declines we've been seeing. So there are some other variables coming into play. It's hard for me to quantify our out-of-stocks. It's definitely in the hundreds of thousands. So I guess I don't have a great answer for you, Ryan, other than there clearly is some general weakness. And then there clearly are some areas where we're down, and I probably can't blame the market overall. So I don't know if that's helpful or not, but that's kind of what I got.
No, that's helpful. Appreciate the color there. And then thinking about gross margin, I think you guys gave the adjusted gross margin number of 37%. Is that the right way to think about the business going forward with Irwin? Or do you think that given some of the priorities you guys laid out, do you think you guys can get back into that 40% margin? Just how we should be thinking about the gross margins going forward?
Yes, 40% is probably a stretch. Irwin has historically been in the low 30s, so usually not 30%, but also not 35%. I think we can get Irwin up into the certainly mid, if not high 30s. If you look at historically, the legacy FitLife business tended to be more low 40s. So I think for the combined business, over time — not next quarter or the quarter after that — but as we're able to address some of these things like the supply chain and the two-year dating issues that I brought up, I think something closer to the high 30% is reasonable.
The next question is coming from Samir Patel from Askeladden Capital.
So first off, with the understanding that you're not providing guidance for the year, at the time of the acquisition, you kind of laid out, I think it was $120 million in revenue and $20 million to $25 million in adjusted EBITDA. I guess when you're saying that you're not sure if Irwin online is going to offset kind of the weakness you see elsewhere, should we interpret that as, obviously, the most recent quarter, even if you account for seasonality, kind of puts us below the low end of that range. Are you basically saying that if Irwin online continues to go well, then maybe that gets us back into that range. But if not, then we're below that range. Is that kind of how you're thinking about it?
Yes. I'll characterize it maybe a bit differently. Look, if I knew — if I had any confidence in what 2026 would look like, I would certainly tell you. But let me just give you the data points I have. So if you look at legacy FitLife, for 2025, you can look at our financials, and I think the number for the full year for revenue was $62 million. I kind of walked through the math for Irwin, again, making the adjustments for losing Costco and Rite Aid as well as taking out CBD, and that number was $54 million. So at the end of 2025, the combined business was about $116 million. We've got an online business now that should add to that. Although some of that online business, as you recall, we were previously selling to some third parties who are then reselling the products on Amazon. So you kind of have to back out, I don't know, a couple, $3 million of the $116 million, right? And then to that, call it, $113 million, you would add again the Amazon business, and this assumes everything else in the business is flat.
The reality is right now, though, that everything in the business is not flat. The other data point I'll give you all is Q1 is not better than Q4. In fact, I'd say we're pacing a little bit down in Q1 compared to Q4. So I certainly hope and I would expect that the rest of the year doesn't look like Q4 and Q1, but I just — I can't definitively say that it's going to be a certain amount higher in Q2, Q3, Q4. I don't know when things in the world will change. I don't know the exact timing of when we'll get everything back in stock. So that's why I hold off on giving a number. So if the incremental online business stays kind of right where it is and you subtract the, call it, $3 million of wholesale revenue that we gave up, we'd be about $120 million. And again, I don't — I'm not saying I expect that because Q1, right, is proving to be as challenging, if not a bit more challenging than Q4. So those are the data points. And because I don't know, I don't want to tell you guys what's going to happen. I'd rather give guidance when I have a reasonable degree of confidence what that number is going to be.
Okay. And just to clarify a little bit further, when you refer to Q1 tracking similar to Q4, are you saying on a year-over-year basis? Or are you saying we're not seeing the typical seasonality — I know that Q4 is typically the weakest quarter for supplements and Q1, new resolution quarter, is stronger. So are you saying that sequentially, you're expecting Q1 to be flat to down from Q4?
Yes. Q1 looks a whole lot like Q4.
Okay. Understood. And maybe talk a little bit more about the decision to exit CBD. Is that a margin decision? Or what went into that?
No. In fact, margin would be the reason to keep it. CBD is incredibly complex with respect to the legal environment. Federally, there are very challenging guidelines about what you need to do in order to be able to sell CBD, including the Farm Bill implications. Then on top of that, state-level regulations are even more complicated. So if you're selling online into 50 states, you have to be aware of and keep up with all of the regulations in the different states, which in and of itself was pretty challenging. Further compounding it, we were undecided when we bought the business. I think it was either October or November when the latest spending bill was passed. In our interpretation, that bill essentially makes it very difficult to legally sell CBD. So it's just not worth the complexity. We've had CBD topicals and ingestibles. There is no major retailer — brick-and-mortar or online — that sells ingestible CBD at scale. You can't buy it at Target, Walmart, or on Amazon. You can buy it in local health food stores. Topicals, the only major retailer we sold topical CBD in was CVS. Given the legal environment and the fact that it wasn't growing for us and was declining, we decided to move on and focus on what we know best.
Makes sense. And the final one, you mentioned the various initiatives that you have ongoing, and thanks for kind of scoping those in terms of the potential impact. What would you say on timing? I think you clarified on some of the leases and SG&A items and the distribution. But as far as, for example, the 3-year shelf life, how long will that take to get done? How long before you can kind of stop losing that $2 million a year off Irwin's P&L? And I guess more broadly, if you could go a little bit deeper into the demand generation side outside of TikTok, maybe in the things that you're doing to try and get shelf placement for some of your legacy products and also drive more traffic to Amazon?
On the dating, I think you'll start to see the impact of that in Q2 and beyond. We have received some of our first products with 3-year dating. To change the expiration date on the bottle, you have to be sure that the product when it hits the 2- or 3-year mark, if someone were to open it up and send it to a lab and test it, still meets the label claim. To go from 2- to 3-year dating entails revising and updating formulas, making sure you have enough in there so it will not just get to 2 years but to 3 years. Almost every single product we've had to update the formula. That takes time and takes time to get our manufacturers on board, because they are part of the process of approving what they're making and stamping the 3-year shelf life on it. That said, we have started to receive our first products with 3-year dating and we'll continue to do so. We're starting with the products that are slower movers for us, where we're more likely to have to throw products away.
Fast-moving products are not a priority because we turn them quickly. I think you'll start to see that flow through the P&L, hopefully in Q2. You'd see it in higher margin and lower charge-offs to inventory, lower inventory reserve and therefore higher gross profit. On the off-Amazon front, what we're doing varies across brands. We have been focused on Dr. Tobias first because it has the biggest exposure to Amazon. We've talked about TikTok. We continue to see increased engagement, increased GMV, increased sales on TikTok. There's spillover value: when you sell more on TikTok, you see more branded search and hopefully more sales on Amazon. It takes time to scale in these channels. It's marketing 101: the same fundamentals we've been trying to do with our brands from the beginning, except brands like Dr. Tobias have been Amazon-focused historically. I mentioned it's not coincidental that if you graph percent of revenue coming off Amazon and the growth rate for that brand on Amazon, it looks linear: the best growth is where we have the highest off-Amazon distribution. That said, it's still a bit of a black box. We have to figure out what works as we go.
The next question is coming from Sean McGowan from Roth Capital.
A couple of questions here. Is the impact of the inventory step-up complete, largely complete, where are we on that?
It is done. The last expensing of that was in Q4. So in the Q1 numbers and beyond, you will not see any amortization of inventory step-up.
Okay. And circling back to an earlier question about the gross margin opportunity at Irwin. I think you ended that comment with something that you're talking about the high 30s not right now, but eventually. Did you mean consolidated gross margin or just Irwin itself in the high 30s?
I was thinking consolidated. I think Irwin can get better — FitLife legacy has been low 40s lately. I think Irwin, I can get 300 to 400 basis points out of that, and they're roughly 50-50 of the combined business. So if Irwin is, call it, 37 and legacy FitLife is 41, you get to kind of the 39. I'm giving approximate numbers. The biggest thing is $2-plus million of product thrown away every year is shocking. We carry a similar amount of inventory on the FitLife side, but our reserve on the FitLife side is a fraction of the reserve on the Irwin side. Because of shelf life flexibility, most of our FitLife products have third-year dating or more. That will create flexibility, and selling more online also helps bolster margins. We're confident that over time we can do better for Irwin's gross margins.
On that shelf life issue, at the risk of getting too much into the weeds, I was just wondering: you've only had this business since August. If it was that easy for you to fix it, why wasn't it done before? They just didn't pay attention to it?
I don't want to point fingers. People have different priorities. The stock-outs are related to the shelf life issue because you have about a 12-month sell-through period. If you want to avoid throwing inventory away, you try to time delivery of purchase orders around the time you run out. If you get it too early, you sell old stuff while holding new stuff that could expire; if it shows up too late, you have stock-outs. The transition is lots of people spending many hours, revising formulas and spending tens of thousands of dollars on testing. It's a lot of work to get to that point, but it's unequivocally worth the effort.
How will you be confident that the three-year shelf life stands the test of time, if you haven't experienced that amount of time? Is the testing accurate enough?
Yes. Most of these products we've been making for more than three years and it's called retains. You have to keep a certain number of every production lot of every product you've ever made. We can pull something off our internal storage that was made three years ago and test it to see how it performs. That tells us what adjustments to make to the formula — how much overage to include initially. Vitamins are tricky because they diminish more rapidly over time, and it's hard to get three- or four-year dating on a multivitamin with many ingredients. For many other products, you can get three-year dating. You increase overages in initial production, which can increase raw material cost a bit, but you make up for it by not having to throw product away.
Irwin in the first quarter of 2025 before you owned it did around $18 million, but that would include some of the things we should exclude on a pro forma basis. Can you share what that would have looked like excluding those items?
Yes. The adjusted net revenue taking out Costco U.S., CBD and Rite Aid was $14.3 million in Q1 of 2025.
Okay. That's very helpful. And then my last question, I feel like we have this question every time, but what's going on in MusclePharm and what's the remedy there?
We reported organic growth of about 5% for MusclePharm in 2025, with growth online and in wholesale. MusclePharm continues to be impacted by dynamics in the protein market: MusclePharm is probably 80% protein. Protein commodity costs have gone up dramatically; WPC is now around $11 a pound in the recent quarters, which is a material increase. As an example, during Q1 we turned down about $1.5 million of MusclePharm purchase orders from an international customer who wanted bottom-fished pricing; selling at that price would have been the lowest gross margin we've ever achieved on the products. Part of what you're seeing is an effort to protect margin rather than chase revenue at any cost. We're preferring to sell product to customers willing to pay more. We're continuing to work on distribution and cross-sell opportunities and we'll update when we have meaningful wins.
The next question is coming from James Bogan from Legends Capital.
I also was going to just ask about MusclePharm. I'm not sure what you can add. But when I initially invested, I remember that MusclePharm used to be a brand that sold like $150 million of stuff a year more or less, and now it's down to single-digit millions or whatever. I consider your company kind of a leverage play on MusclePharm until the recent acquisition of Irwin, of course. I understand you have this problem with protein. Assuming prices stay where they are, what's the game plan? You can sell to the good customers for a while, but eventually you have to sell to everybody and push product. How might this play out and what are you doing about passing costs to customers without killing sales? MusclePharm is an important brand you're rebuilding.
Thanks for the question. At its peak MusclePharm was about $175 million wholesale many years ago and then steadily decayed until we bought it in bankruptcy. When we bought MusclePharm, it had no distribution in the U.S. We bought the intellectual property and about $120,000 of inventory — it was essentially a dead brand. The goal has been to revitalize it and regain lost wholesale distribution. We've been at it for 2.5 years and we've gotten some wins. You can see where it's sold; some customers are growing 100% year-over-year, but it's not on major store shelves like it once was. The buyer landscape moved on; once you get kicked off the shelf it's hard to get back in. We'll keep trying to grow the brand and regain distribution, but anyone expecting a rapid return to $175 million should temper expectations. We aim to grow it but realistically it's a long, gradual process.
Right, but I thought even a fraction, say a quarter of that would be good.
Our plan is to grow it. We continue to pursue distribution and marketing initiatives. We hope to have a couple of MusclePharm SKUs into a national grocery chain soon; it's not 100% confirmed yet, but we expect to have purchase orders and store counts in the next month or two if it comes through. Those would be single wins, not a home run. On protein input costs, protein is a global commodity everyone has to pay the same price. In hindsight, it makes us cautious about buying brands that are IP-only or protein-dominant. MusclePharm wasn't a horrible acquisition, but it's not the type we would seek going forward.
The next question is coming from an analyst at 2by2 Capital.
I had a couple of questions on Irwin. First, Irwin lost two SKUs at Costco U.S. in early 2025. Have you had any conversations about relisting? Second, on online sales: I think you've mentioned you're running at $9 million to $10 million and you still have some SKUs you plan to list. Any update on online sales for Irwin?
On the Costco SKUs: they had two SKUs in Costco U.S.; the second was discontinued in early 2025. Have we had discussions with Costco? Yes. We're not getting back in there anytime soon, which is why I gave the numbers without those adjustments. Similar with Rite Aid — we are not getting back in because the company went into liquidation. There are a couple of other retailers where Irwin lost distribution during bankruptcy where there's a chance we might get them back; I didn't make adjustments for those. Costco U.S. is an extreme example: if you get kicked out of Costco, the likelihood of getting back in is incredibly low because they carry very limited SKUs in each category. Costco Canada is different: we still sell in Costco Canada and haven't lost distribution there since we bought the company. On online sales, our focus has been getting on listings that were already set up for a seamless transition.
Setting up new products on Amazon takes time because Amazon requires third-party testing for supplements. We have products in the testing phase and hope to set them up soon. Some products have strong wholesale distribution and we expect uptake on Amazon. Another upside is Amazon Canada — we're not yet selling on Amazon Canada, but Irwin has products registered with Health Canada and sold to Canadian retailers; we're close to opening a Canadian storefront. In terms of recent growth, we went from about $500,000 in December to over $600,000 in January, closer to $700,000 in February, and expect around $800,000 for March. We're still seeing growth, though not as dramatic as the early days. We are dealing with out-of-stocks on Amazon; we prioritize sending stock to our biggest wholesale customers over Amazon when constrained. Long term, I think we'll see continued growth on Amazon, but I can't give a specific guidance number.
The next question is from Tyler Hill, a private investor.
Given the recent traffic headwinds for brands like Dr. Tobias, how is the company pivoting its social or organic media strategy to help drive direct engagement outside of paid affiliates alone? Specifically, are you seeing any shift in improvements in customer lifetime value or retention rates of the MRC portfolio compared to legacy brands?
I haven't seen recent updates on lifetime value specifically. Our challenge has not been retention; conversion on listings is the same or up across the board. The challenge is traffic. On off-Amazon efforts, we hired a new CMO and centralized marketing. We're doing a lot more email marketing, building Shopify sites, social media advertising, SMS, and more activity on Instagram and Facebook — in particular for Irwin. These efforts are early but consistent with marketing fundamentals. For Dr. Tobias, which was Amazon-focused, we've been working on TikTok and influencer programs. Regarding subscribers, across the portfolio subscribers have declined since late September, which we identified earlier. We think Amazon made a change in September: previously the buy box defaulted to Subscribe & Save in many cases, so customers were unknowingly subscribing; Amazon flipped the default to one-time purchase, which resulted in subscriber declines across many brands. Irwin, which grew on Amazon after we listed, has seen strong subscriber growth from approximately 500 at the start of 2026 to over 3,600 today. So Tyler, the primary focus is driving off-Amazon traffic and awareness to improve on-platform performance.
That was the main question, and I wasn't sure how different the shift from the Amazon changes is versus broader changes in Google or social platforms and how you're addressing it across channels.
I'm not familiar with any recent major changes at Google. We've historically focused more on Amazon and TikTok for the brands that needed it. As you see more ads from us on social platforms, they'll either drive to our website or to Amazon. Amazon is rewarding listings that bring off-Amazon traffic; they have programs that reduce referral fees if you drive traffic to Amazon from external sources. Those dynamics are part of our strategy now.
There are no further questions at this time. I will now hand the call back to Dayton Judd for closing remarks.
Well, thank you all for joining the call and for your interest in FitLife. If you have any follow-up questions, feel free to reach out to us. Otherwise, we will talk to you all again here in a few weeks for our first quarter earnings call. 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.