Fitlife Brands Aktie

Good day, and welcome to the FitLife Brands Second Quarter 2026 Earnings Call. [Operator Instructions]

It is now my pleasure to turn the floor over to your host, Dayton Judd, CEO of FitLife Brands. Sir, please go ahead.

Good afternoon. I'd like to welcome everyone to FitLife's Second Quarter 2026 Earnings Call. We appreciate you taking the time to join us this afternoon. Joining me on the call is FitLife's President, Ryan Hansen; and FitLife's CFO, Jakob York.

For the second quarter of 2026, total revenue was $26.5 million, an increase of 65% compared to the same quarter last year. with the increase driven primarily by the acquisition of Irwin, partially offset by lower revenue for Legacy Fitlife. Wholesale revenue was $14.6 million or 55% of revenue, an increase of 156% compared to the second quarter of 2025.

Online revenue was $11.9 million or 45% of total revenue, an increase of 14% compared to the second quarter of 2025.

Gross margin was 37.0% compared to 42.8% during the second quarter of 2025. The decline in gross margin is primarily due to the acquisition of Irwin, which has historically operated at a lower gross margin than legacy Fit life. -- contribution, which we define as gross profit less advertising and marketing expense increased 46%, driven primarily by the addition of Irwin, partially offset by lower contribution from Legacy FitLife.

Net income for the second quarter of 2026 was $2.0 million compared to $1.7 million during the second quarter of 2025.

Adjusted EBITDA was $3.7 million, a 10% increase compared to the second quarter of 2025. In addition to the year-over-year numbers, I would like to highlight some sequential comparisons. Total revenue increased 4.8% sequentially compared to the first quarter of 2026, with wholesale revenue increasing 3.7% and online revenue increasing 6.3%.

And diluted earnings per share has increased sequentially in each of the past 3 quarters. So although we have been working through a number of challenges in the business over the past 3 quarters, we are pleased with the progress the team is making.

With regard to brand level performance, I'll start with Legacy FitLife. Total Legacy FitLife revenue for the second quarter of 2026 was $12.4 million, of which 68% was from online sales and 32% was from wholesale customers. This represents a 31% year-over-year decrease in wholesale revenue and a 19% year-over-year decrease in online revenue, or a 23% decrease in total revenue. The online revenue decline was primarily attributable to MRC, and the wholesale revenue decline was primarily attributable to reduced sales to GNC.

Sequentially, total revenue for Legacy FitLife for the second quarter of 2026 declined less than 0.5% compared to the first quarter of 2026, with wholesale revenue increasing 3.0% and online revenue declining 2.0%. So although the year-over-year declines are still high, we were happy to see the sequential stability during the quarter.

Gross margin for Legacy FitLife declined from 42.8% in the second quarter of 2025 to 41.7% in the second quarter of 2026. However, gross margin for Legacy FitLife increased sequentially from 41.2% in the first quarter of 2026 to 41.7% in the second quarter of 2026. In fact, the second quarter of 2026 represents the third quarter in a row that gross margin for Legacy FitLife has increased sequentially. So we are encouraged by that trend.

Contribution for Legacy FitLife in the second quarter of 2026 declined 25.9% to $4.2 million, and contribution as a percentage of revenue decreased to 34.1% compared to 35.4% in the same quarter of 2025. Sequentially, contribution and contribution as a percentage of revenue were approximately flat from the first quarter of 2026 to the second quarter of 2026.

Moving on now to Irwin. Total Irwin revenue for the second quarter was $14.1 million, of which $10.7 million or 76% came from wholesale customers and 24% came from online sales. Gross margin for Irwin for the second quarter was 32.8% and contribution as a percentage of revenue was 29.2%. As previously mentioned, we began selling Irwin products on Amazon in mid-October, and the business has scaled nicely for the past several months. Monthly revenue for Irwin on Amazon reached approximately $0.5 million in December of 2025, approximately $0.8 million in March of 2026 and just under $1 million in June of 2026. Although June revenue was helped by Prime Day, which took place June 23 through the 26.

Sales for Irwin on Amazon have remained strong since the end of the second quarter with July revenue comparable to June, but without the benefit of Prime Day.

In early April on our fourth quarter earnings call, I outlined 5 initiatives we were focused on to drive improved performance in our business. I thought it would be productive to provide a brief update on our progress against each of those. The first initiative was to significantly improve Irwin's supply chain. This is a project that will take several more months before we can declare victory, but I'm pleased with the tangible progress we have made.

More specifically, the biggest opportunity was to transition as many of our products as possible to 3-year dating compared to the 2-year dating the products had at the time of the acquisition. As a reminder, Irwin has historically written off and disposed off approximately $2 million worth of inventory each year, largely because of a combination of high MOQs and a short 12-month selling window since retail partners required 12 months of shelf life on incoming products. Increasing the shelf life to 3 years doubles the selling period, resulting in lower inventory obsolescence.

As of today, we have approved 3-year formulas for 85% of Irwin's products. We have inventory on hand with 3-year dating for 12% of Irwin's products with POs outstanding for an additional 22%. We will continue to transition more and more of our formulas to 3 years as we reach reorder points.

Another supply chain improvement opportunity is to reduce the number of out-of-stock situations. While we don't have this fully behind us yet, I am pleased that lost revenue due to out-of-stock declined over 50% in the second quarter of 2026 compared to the first quarter of 2026.

Additionally, we are working on other supply chain initiatives around better managing logistics expense, which we expect to favorably impact cost of goods sold. Bottom line, we are making progress improving Irwin supply chain, which we expect to translate into improved margins in the coming quarters.

The second initiative was to improve new product development at Irwin. New product launches are important to maintaining relevance in the nutritional supplement industry. When we bought Irwin, the new product pipeline was almost nonexistent. A related problem was that Irwin has historically focused on the nutritional supplement categories where it was the strongest. Unfortunately, its 2 strongest categories, weight loss and men's health, are declining significantly. In other words, Irwin was previously focused primarily on defending share in declining categories rather than strengthening its presence in growing categories.

We have 3 new products currently in production and slated for launch late during the third quarter or early in the fourth quarter, although, unfortunately, most of those are in men's health or weight loss. For future product launches, however, we have a robust pipeline of products in development that are more focused on attractive and growing nutritional supplement categories. Our goal is to launch at least 4 of these new products each quarter beginning in 2027.

The third initiative was to drive off Amazon awareness for our products, which we expect to translate into strength on Amazon as well. This strategic shift is in response to the Amazon algorithm changes that we have previously highlighted. During the second quarter, we increased our advertising and marketing expense by 16.4% sequentially compared to the first quarter of 2026. And importantly, off Amazon spend is a much higher percentage of that number than it has ever been.

Like many of our other initiatives, it is going to take some time before we know the outcome, but we are beginning to see some recent encouraging metrics. For example, average weekly sessions on Amazon for our portfolio of brands, including Dr. Tobias, is higher in the last 5 weeks compared to the 13-week period prior to Prime Day at the end of June.

The fourth initiative was to leverage Irwin's sales team to cross-sell other FitLife products into the wholesale channel. The sales process in wholesale is long with many retailers resetting planograms only once or potentially twice a year. We previously announced the 2 muscle farm SKUs that were added to over 700 Kroger locations late during the second quarter. We also previously announced the placement of 6 muscle farm SKUs in a regional grocery chain, which was supposed to happen in the second quarter, but has been delayed until later this year. We continue to have productive discussions with a number of retailers and hope to have other updates on this initiative in the coming quarters.

The fifth initiative was to operate more efficiently with regard to SG&A. SG&A for the second quarter of 2026 was approximately $4.8 million, down 3.8% sequentially from approximately $5.0 million in the first quarter of 2026. On an annualized basis, this improvement is equivalent to approximately $0.8 million. In addition, since the end of the second quarter, we have acted on other SG&A reductions and have identified other improvement opportunities we intend to implement over the remainder of this year. As previously indicated, we don't believe any individual SG&A reduction opportunity will be material on its own. But in total, we expect them to be compelling.

Now let me provide a few additional high-level comments, and then we can move into Q&A. We have previously fielded questions and provided commentary about subscriber counts on Amazon, particularly when subscriber count started declining after Amazon made onetime purchase, the default buying option about a year ago rather than subscribe and safe. Following this change, our subscriber counts declined for several months with our weakness on Amazon over the past several months, probably contributing to the decline. Our total subscriber count on Amazon across all brands bottomed in mid-April, a little above 90,000 subscribers before starting to grow again, and it has increased almost every week since then. Currently, we have approximately 94,000 active subscribers on Amazon across all of our brands.

Regarding the balance sheet, we made a scheduled amortization payment of approximately $1.5 million during the second quarter, bringing our term loan balance to $36.1 million. We also paid down an additional $2.2 million on our revolving line of credit during the second quarter, bringing the balance to $2.0 million. Since closing the Irwin acquisition through the end of the second quarter of 2026, we have paid off approximately $8.6 million of indebtedness in addition to paying approximately $2.0 million of transaction-related expenses.

At the company's current 6.5% weighted average interest rate, this $8.6 million debt reduction over a period of roughly 3 quarters saves us approximately $0.6 million in annual interest expense. We intend to continue to deploy excess free cash flow to further reduce indebtedness. So on a full year basis, we expect the interest savings to be even greater.

To conclude, we've been dealing with a number of challenges over the past 3 quarters. Some of these challenges such as general consumer weakness and changes in the Amazon algorithms are out of our control, and we have to figure out how to adapt. Other challenges such as supply chain difficulties and new product development are largely within our control. And although these challenges persist, we believe we are focused on the right priorities, and we are encouraged by the sequential improvements in revenue and profitability during the second quarter.

So that concludes my opening commentary, and we can go ahead and open it up for questions.

[Operator Instructions] And the first question today is coming from Sean McGowan from ROTH Capital Partners.

My first question is about the priority you placed on getting -- growing the share of Irwin sales online relative to wholesale. Has that met your expectations so far? I know -- I would imagine that you have further to go. But so far, has that met your expectations? And I guess related to that, has it eaten into Irwin's wholesale sales? Or is it been largely incremental?

Yes. Sean, thanks for the questions. In terms of expectations, I think it's exceeded our expectations. I think early in the process, we -- shortly after the acquisition, I can't remember the number off the top of my head, but you all may remember that we sold products wholesale to a third party that was kind of like the exclusive seller on Amazon. But that was kind of in the range of $2 million to $3 million a year. And if you looked at the total kind of dollars paid for those products, it was quite a bit lower than what we're getting right now, right? So an easy expectation would have been for us just to take over what they were selling. In a matter of a few months, we not only did that, but we've grown it significantly. And there's a number of products that have a lot of momentum and continue to grow.

We've got kind of one product in particular that we're having a hard time keeping in stock, and it's -- I mean, just one product on its own out of 250, 300 that we sell on Amazon under the Irwin brands that's probably $1.5 million to $2 million a year kind of pacing right now. So we're pleased, right, with the results, and it certainly exceeded our expectations.

As far as your second question, it's really hard to determine how much that is cannibalized wholesale, although I think it would be indefensible to argue that it hasn't at all that it's entirely incremental, like certainly some of those sales that we're getting on Amazon are people that used to buy the products in the store. So unfortunately, that we can't quantify it. We're obviously very happy to trade a wholesale unit for a retail unit, right? That's higher revenue for us, it's higher gross profit for us. And so it's a trade we're happy to make. But that said, we wouldn't be where we are without our wholesale partners. And so we want to grow with them. We're not looking to take volumes out of the wholesale channels and move them to online. We want it to be incremental.

And a follow-up then on GNC. This has been a subject for every conference call, it seems like. But relative to your expectations, how is that situation evolving?

Yes. So that one, I would say, is lower than our expectations. It's not -- I'm probably not -- it would not be appropriate for me to comment on other -- someone else's business. But suffice it to say, specialty retail is quite challenged in the U.S. right now. There is significant store closures that are happening. And for the stores that remain open, there are significant drops in kind of comp store sales, traffic, however you want to look at it.

So as we kind of try and get a sense for what those numbers are, we think our declines are in excess of that right now. Another thing to remember though, if you go back and look historically, Q1 and Q2 of 2025 was very strong for the Legacy FitLife wholesale channel, in particular, GNC. You may recall, we had a dispute with them late '24 that resulted in us stopping shipments to them. And Q1 in particular, and it probably bled a little bit into Q2, they were kind of restocking their DCs. So it's a little bit of a not apples-to-apples comp.

But that said, I mean, this is -- if you look at -- as I look at my business, right, the things I worry the most about are, number one, declining sales with some of those retail partners where we really can't do much about it, right? There's nothing I can do that's going to reverse course for a GNC or any of our other retail partners that are struggling. So that's kind of ONE thing where in some ways, we're along for the ride.

The second is, and we've talked about this quite a bit, is MRC where we have been struggling for about 1.5 years. And we think we are -- I don't want to say we even inflected or we're nearing an inflection point, but we're certainly seeing some positive indications. So both of those now roll up into Legacy FitLife and GNC for the most part, explains the declines on the wholesale side. And MRC, for the most part, explains the declines on the online side. The rest of the business, I'm quite content with how things are going.

[Operator Instructions] We did have another question coming from Sean from ROTH Capital Partners.

It just might be the first car headway haven't mentioned muscle farm we any kind of details. So what are you seeing in that line?

Yes. Yes. Happy to talk about that. It's -- I think it's -- I mean, things -- look, I'm happy about MusclePharm right now. Revenue, I would say, is down a bit year-over-year, but up significantly Q1 to Q2. We've talked about the challenges with protein pricing in the past. If you look at our -- the numbers we historically reported for MusclePharm, of course, it now rolls into Legacy FitLife, but we started discounting significantly in the third quarter of last year and investing in advertising to try and kind of grow the brand. We got a lot of uptake with very margin-sensitive primarily international protein companies or people that wanted to take the protein internationally. And then when protein prices went up and we tried raising our prices, all of a sudden they went away.

So the bulk of the decline for MuscleFarm revenue has been there in those types of customers. If you take those out, the business is actually growing very nicely. And the other benefit is margins are up significantly, like Q2, for example, relative to Q3, Q4, Q1, margins are several hundred basis points higher for MuscleFarm, right, as we've moved away from the very price-sensitive large kind of international customers.

We launched the 2 new SKUs in Kroger stores or in Kroger as well as a number of their other banners. Those didn't hit the shelves until late during the second quarter, but for the first several weeks, kind of every week was an uptick. So we're continuing to see decent growth there, and we're pleased with where we are and have some additional marketing initiatives to try and continue to drive volume there. So all things considered, pretty happy.

I'll also add MusclePharm on Amazon. It may be right now our best performing Amazon account, right? So where Dr. Tobias is struggling and declining double digits. MusclePharm right now is growing double -- it was growing in 2025, kind of flip negative like a lot of our accounts did late '25, early '26 and was probably down a bit even for Q2 overall. But late in Q2 and then in July and thus far in August, we're seeing kind of some very nice double-digit growth.

So all things considered -- the numbers might look bad on a headline basis or on a revenue basis because we're walking away from less profitable volume. But in terms of profitability, margins and all the other accounts, right, we're seeing everything going in the right direction.

Which is consistent with what you've said.

[Operator Instructions] As there were no other questions from the lines at this time, I will now hand the call back to Dayton Judd for closing remarks.

All right. Thank you all for your participation in the call. If any of you have additional questions, feel free to reach out to me or to our [email protected] e-mail. And we look forward to talking to you on our next earnings call in November. Thank you.

Thank you. This concludes today's conference. You may disconnect at this time, and have a wonderful day. Thank you for your participation.

Good day, and welcome to the FitLife Brands First Quarter 2026 Earnings Conference Call. [Operator Instructions]

It is now my pleasure to turn the floor over to your host, Dayton Judd, CEO of FitLife Brands. Sir, please go ahead.

Good afternoon. I'd like to welcome everyone to FitLife's First Quarter 2026 Earnings Call. We appreciate you taking the time to join us this afternoon. Joining me on the call is FitLife's EVP, Ryan Hansen; and FitLife's CFO, Jacob York. I will start by providing some general commentary about the first quarter of 2026.

For the first quarter of 2026, total revenue was $25.3 million, an increase of 59% compared to the same quarter last year, with the increase driven primarily by the acquisition of Irwin, partially offset by weakness in Legacy FitLife. Wholesale revenue was $14.1 million or 56% of revenue, an increase of 166% compared to the first quarter of 2025. Online revenue was $11.2 million or 44% of total revenue, an increase of 6% compared to the first quarter of 2025.

Gross margin was 37.6% compared to 43.1% during the first quarter of 2025. The decline in gross margin is primarily due to the acquisition of Irwin, which has historically operated at a lower gross margin than Legacy FitLife. Gross margins increased sequentially for both Legacy FitLife and Irwin for the first quarter of 2026 compared to the fourth quarter of 2025. We expect Irwin's margins to continue to increase over time as we work through a number of supply chain and other initiatives.

Contribution, which we define as gross profit less advertising and marketing expense, increased 42%, driven primarily by the addition of Irwin, partially offset by lower contribution from Legacy FitLife. Net income for the first quarter of 2026 was $1.7 million compared to $2.0 million during the first quarter of 2025, with the decline driven primarily by higher amortization expense and interest expense associated with the acquisition of Irwin. Adjusted EBITDA was $3.3 million, a 3% decrease compared to the first quarter of 2025.

With regard to brand level performance, I'll start with Legacy FitLife. Total Legacy FitLife revenue for the fourth quarter of 2025 was $12.5 million, of which 70% was from online sales and 30% was from wholesale customers. This represents a 28% year-over-year decrease in wholesale revenue and an 18% year-over-year decrease in online revenue or a 22% decrease in total revenue. The declines were primarily attributable to lower online revenue for MRC and lower wholesale revenue from GNC.

The year-over-year wholesale comparison for Legacy FitLife was particularly challenging due to the restocking of GNC's distribution centers during the first quarter of 2025 following the resolution of the previously disclosed commercial dispute that resulted in the company stopping shipments to GNC.

Gross margin for Legacy FitLife declined from 43.1% in the first quarter of 2025 to 41.2% in the first quarter of 2026. However, gross margin for Legacy FitLife increased sequentially from 40.7% in the fourth quarter of 2025 to 41.2% in the first quarter of 2026.

Contribution for Legacy FitLife declined 27% to $4.3 million and contribution as a percentage of revenue decreased to 34.1% compared to 36.5% in the same quarter of 2025. Sequentially, contribution was approximately flat from the fourth quarter of 2025 to the first quarter of 2026, with contribution as a percentage of revenue increasing from 32.5% to 34.1% over the same time period.

Moving on now to Irwin. Total Irwin revenue for the first quarter was $12.8 million, of which $10.3 million or 80% came from wholesale customers and 20% came from online sales. Gross margin for Irwin for the first quarter was 34.0% and contribution as a percentage of revenue was 31.3%. As previously mentioned, we began selling Irwin products on Amazon in mid-October, and the business scaled nicely throughout the fourth quarter of 2025, reaching almost $500,000 of revenue in December of 2025. Amazon revenue continued to climb throughout the first quarter of 2026, reaching approximately $800,000 in March of 2026.

Adjusting for the loss of Costco U.S. and Rite Aid as customers prior to our acquisition of Irwin and removing CBD for both periods due to the company's decision to exit the CBD market, organic revenue for Irwin during the first quarter of 2026 declined approximately 13% year-over-year. We estimate that approximately $1 million to $1.5 million or more than half of the decline is due to lost revenue from the out-of-stock situations discussed on our previous earnings call.

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 made a scheduled amortization payment of approximately $1.5 million during the first quarter, bringing our term loan balance to $37.6 million. We also paid down an additional $1.4 million on our revolving line of credit during the first quarter, bringing the balance to $4.2 million. We intend to continue to deploy excess free cash flow to further reduce indebtedness.

Although the first quarter was challenging, we are encouraged that monthly revenue increased sequentially throughout the quarter. In addition, many of our Amazon selling accounts showed sequential improvement late in the quarter and into April. We are also encouraged by the continued growth of Irwin's Amazon business with revenue in April reaching approximately $900,000. Although the pace of growth is slowing, Irwin's Amazon account has continued to experience sequential growth in the May month-to-date period.

We believe Irwin is positioned for further growth on Amazon as we continue to resolve the out-of-stock situations, successfully set up listings for the remaining products that have not yet been available for sale on Amazon and launch our portfolio of Canadian products on Amazon Canada later in the second quarter.

The subscriber count for Irwin products on Amazon also continues to scale rapidly, increasing from approximately 500 at the beginning of the first quarter of 2026 to approximately 3,600 as of the end of the first quarter of 2026. to over 5,700 today. Last, we are excited to announce the launch of 2 MusclePharm SKUs in several hundred Kroger stores nationwide beginning in June.

So this concludes my opening commentary, and we can now go ahead and open the call up for questions.

[Operator Instructions] And the first question today is coming from Ryan Meyers from Lake Street Capital Markets.

First one for me, Dayton, you had mentioned that monthly revenue improved sequentially through the quarter. Can you just talk a little bit about what you saw in April and then maybe what you're seeing here into the first couple of weeks of May?

Yes. So thanks for the question. The trend throughout the first quarter, so January was kind of tough. February was similar to January, although it obviously had 3 fewer days. So if you kind of look on a revenue per day basis, it was stronger than January. So both January and February were in the kind of low 8s range. March, we were kind of above 9% in terms of revenue. April is higher than January or February, but a bit lower or lower than March. April was actually our highest sales order month that we have had this year. We just had a lot of shipments at the end of the month of April. And for most of our customers, we don't recognize revenue until the shipments have been received.

So just to kind of put it in context, I think at the end of March, we had just under $1 million in transit that would have been adjusted out of March revenue and into April. At the end of April, we had about $1.65 million. So again, so April was decent, higher than January, February. And if you normalize or look based on shipments, it was actually a pretty strong month.

Okay. Got it. No, that's good to hear. And then thinking about the Irwin business, congrats on the strong success that you've seen there. I'm just curious, how much additional upside do you think remains in that business before you hit kind of a steady-state revenue rate, if you will, rather than growing from virtually nothing to close to $1 million? What is that number? What do you think that number is to where it kind of just kind of steadies out?

Yes. That's hard to say. I think we -- I don't see a reason why we wouldn't get to at least $1 million a month. I mentioned kind of 2 or 3 things that I think is still kind of wind at our backs. One of them is that there are still a number of products that's probably -- it's probably around 20 products that are still not set up to be sold on Amazon. I think I mentioned when we had our call last time, when you put up a new listing, most of the time Amazon flags it. And before you can sell it, you have to get it tested by a third -- one of their third parties, and there's a -- I mean that process can take weeks.

So the good news is when we get some of those SKUs up and we get 1 or 2 up kind of every week, we're getting some traction with those, especially if there are SKUs that have high wholesale presence. So that's one thing that I think will continue to help us.

Another thing is out of stocks have hurt us. They've absolutely hurt us on the wholesale side. But just so you all know, if we're out of stock on something, right, we prioritize the Walmarts and CVSs of the world, not Amazon. So there are some of our highest selling products. There's one product in particular, probably one of our biggest sellers in the wholesale space that we're hardly selling at all on Amazon, right, because it's been out of stock. So getting those back in stock and selling, I think, is additional tailwind.

And then I think I mentioned Canada in my prepared remarks. We don't have a -- we have a number of SKUs, say, between 8 and 10 products that are sold in Canada. Canada is tricky because you can't just sell there. You've got to get what's called NPN numbers. There's a whole process you have to go through Health Canada, can take a year to get products approved. So it's not going to be a huge number, but we do a decent amount of business in Canada, and we just, in the last 2 or 3 days, got that account opened. And now it's just a matter of getting kind of the inventory shipped in. So I would be surprised if we don't at least hit $1 million.

The other thing I would say is initially, we ramp up without a lot of marketing push or advertising push. We have turned on ads on Amazon for Irwin, and we're doing more off Amazon as well for Irwin. So as we continue to spend more on advertising, we would hope to see the impact -- the benefit of that on Amazon as well. I think if you look in the tables we provide, they give a breakdown of the spend for Irwin for advertising.

If you just look at the trend, Q3, again, that was a partial quarter when we had just bought them, but we spent $72,000 advertising Irwin. In Q4, the first full quarter of our ownership, it was $182,000. And in Q1, it was $358,000, right? So we are investing in advertising and marketing for Irwin, not just on Amazon. In fact, most of that spend is not on Amazon, but we would hope and expect that some of that spend, the benefit will translate to Amazon as well.

Your next question is coming from Sean McGowan from ROTH Capital.

I know you don't break out MusclePharm in detail the way you used to but can you give us some sense of how it's doing directionally, both in terms of revenue performance as well as the realized margins there?

Yes. So revenue is down, but what I would say is by choice, I think I mentioned this in our last call, like if you look across the board and you take out some of these international players that are very protein heavy and super, super kind of margin aggressive, like if I want to sell to them at a 10% margin, I can. We've just chosen not to. So revenue was down but if I were selling to them, or if I look at the other accounts that we're continuing to sell to, we see good traction there.

Online is doing well. Online was up for MusclePharm in 2025 for the full year. It started trailing off like many of our accounts late in '25 and actually hit a point where it was declining double digits kind of early this year, and it's now back to barely being down kind of single digits. So we're getting some momentum there back there, particularly online. So I guess what I would say is it's doing okay if we exclude the international customers that tend to be super, super price sensitive on protein.

Okay. And maybe you answered this partially, but if you kind of ex out those accounts that you decided not to sell to, are you seeing what kind of margin you'd like to see?

Yes. Yes. Sorry, I forgot that part. Yes, margin, we expect margin will be higher there, right? Because the biggest drag on margins, like the least profitable customers in the set for us are those large international buyers of protein. And so when I no longer sell to them, like well over half of our revenue in the quarter for MusclePharm was online, and that is where we get the best margins. So yes, margins, we expect to be better for MusclePharm going forward, right, unless or until we decide to get more aggressive with some of the large international accounts.

Okay. And then switching to a question about Amazon. So you've talked in the past about some changes that they've made, and we're hearing that from some other people. And without asking you to just give away secrets that could turn around and bite you and we don't, could you talk about how you were able to address that and fix it? Is it fixed?

Yes, I would definitely say we haven't fixed it. I think we are -- I think this will be a long fix. I alluded to the fact or mentioned in the call, right, we are seeing some sequential improvement, right? But if an account had flipped negative, right like MusclePharm is a great example. It's probably our best-performing account in terms of -- it went from positive to flipping pretty negative and has made a pretty good turnaround. I think this is a multi-month process.

We are doing a whole lot more on Google ads, Meta ads, TikTok. We've been doing TikTok for Dr. Tobias for a while, but I think we started TikTok or we're starting TikTok this month for Irwin. We've talked before, I think I mentioned in our last earnings call, kind of an endorsement arrangement we have with Joey Chestnut for Dr. Tobias, particularly the colon cleanse product. So you'll start to see some stuff on social media, ours and his here in the next couple of few weeks.

So our emphasis, right, we're spending less of our advertising and marketing dollars on Amazon and more off Amazon. And from everything we've heard and from both Amazon people and colleagues in the industry is that's kind of the new formula for success on Amazon is drive success off Amazon. So I would -- we're absolutely not declaring victory. We've got a lot of work to do, but I think we've got some positive trends emerging.

[Operator Instructions] And our next question is coming from Samir Patel from Askeladden Capital.

A couple of things. I guess the first is we talked a lot last quarter about the dating initiative with the bottles. And I think you mentioned that you kind of expected shrink to start improving in Q2. Maybe just an update on how that's going and how you expect that to play out over the course of the year?

Yes. Good question. I think when we did the last call, I think right around the time we were doing the last call, we were just receiving our first shipment of product with 3-year dating. So we have received several products now with 3-year dating. We probably have somewhere between 15 and 20 products that are currently in production that when we receive them here in the next few weeks, we'll have 3-year dating. And then we have a whole number of other formulas that were ready to go with 3-year dating right next time we place a PO. So definitely making progress.

We've whittled that obsolescence down quite a bit. I think we're going to hit an inflection point here pretty soon where we've done all we can to salvage the inventory that we bought and when I say bought, at the time of the transaction. And as we get more and more 3-year dating in, then I think the reserve will come down and margins should go up as we write off less inventory. Does that answer your question?

Yes. I mean, I guess to put a little finer point on it, if memory serves, you said it was about $2 million a year, I think, that you're basically writing off. I wonder if you can just provide some sort of cadence in terms of like are we still at kind of that $2 million a year level? And then I guess, when do you expect that to go to 0? And I think there's probably some slight incremental costs related to -- you talked about the overages that you need to hit that 3-year dating. So I guess just sort of the cadence of like are you expecting pretty slow and linear improvement over the next year? Or is it a longer-term process, kind of a shorter-term process? Just any color would be helpful.

Yes. I think -- I don't have any specific numbers to give you. I would say it's -- much of it is behind us. Like we're not expensing anything close to $2 million a year, right? So when we bought it, when we bought the company, if you look at our inventory reserve, right, in the 10-Q, I don't have it in front of me, and I can probably look it up here really quick. But the amount that's in the reserve is not significant. It's maybe a hundred and something thousand dollars. The reason for that is when you buy a company, you have to record the inventory at its net realizable value.

And so there was like a $2.4 million or $2.7 million reserve that effectively was taken out of gross inventory, right, at the time we booked it. And so we can't go back and claw that back. To the extent we improve things it would be reflected in higher margin, right? We kind of wrote off the inventory. And if we're able to date, extend it or sell it or something, right, that's one of the ways you can see higher margins, right, because you've already written off the inventory.

But again, that was -- the transaction was now, what, 9 months ago, and we are working our way through that inventory. The amount that was expensed to obsolescence in Q1, again, I don't have the number in front of me, but it would have been very small, right? So we're kind of there or we're getting much closer. So I think we're doing better, and I think we'll continue to do marginally better over time.

Okay. That's helpful. And then second, maybe I'd love some more color on the new MusclePharm placement, anything you can share about that customer? And maybe if that goes well, if that's going to -- obviously, that customer has a lot more stores that could roll out to. And then maybe compare and contrast, I know last year, we had the Vitamin Shoppe pilot that I guess, didn't end up working out so well. So just any learnings from that as you continue to try to get more wholesale distribution for MusclePharm?

Yes. So yes, the 2 products that are going in there, it's 2 flavors of a liquid L-Carnitine. It's a relatively new product. So this was not a product that MusclePharm had when we bought them. It's one that we developed and launched after we bought them. We, as a company, do a lot of liquid L-Carnitine. It's a very big SKU for us in iSatori, our iSatory brand, where we sell thousands of units a week on Amazon and also has distribution in places like Vitamin Shoppe. We also sell liquid Carnitine under some of our other brands that are sold in GNC.

So it's a product type that we're very familiar with. So it's 2 flavors of Liquid L-Carnitine going into Kroger. I don't know the exact store count that Kroger has nationwide. I think there are 2,000-plus stores across all of their banners, so Fred Meyer, Smith's, Kroger, et cetera. We're going into between 700 and 800 stores nationwide. So it's not like concentrated in one region. And I know it's multiple banners as well. So we're going to be in some Kroger stores, some Fred Meyer stores, some Smith's stores. The product should be on shelf. I think we're shipping it kind of later this month and product should be on shelf in June.

We're doing some of the same things we did with the Vitamin Shoppe launch, but doing a lot of other things. We do what's called CTV. We did this with Vitamin Shoppe too, but had obviously a bad outcome there in terms of some of the products being discontinued. Some of those MusclePharm Pro products are still in Vitamin Shoppe, just to be clear, but not all of them. The CTV is where you can put an ad at the beginning of streaming services and it's geolocated.

So we know the physical store address, street address for every one of the stores that is going to have the product. And anybody living within 3 miles of that store, right, we can run ads on streaming services. We may do some direct mail. They're going to launch with a neck band coupon, right? So $5 like instantly like the day you buy it, right, here's $5 off to encourage trial. So this has been a big initiative and a big focus for our new CMO and our new kind of consolidated marketing team, and we're going to do everything we can to make it successful.

Yes. And I'll drop off after this one. Just is that something that was kind of already in the works from your own team? Or is that something that the Irwin team helped with? Like do they have a wholesale relationship? Or how did that kind of come -- how did you kind of win that customer?

Yes. So this one was a bit of a hybrid or actually more -- this one actually started. I've talked before about the sales process for these types of sell-ins really to any major brick-and-mortar chain. It takes months if you're lucky and years, right, if it is more the normal case because they'll do a reset once or twice a year. This is one we actually started before we bought Irwin, right, in terms of going and meeting with Kroger and doing the presentation and getting some initial traction. Now it just so happens that the Irwin team, we have a number of products, right, in Kroger on the Irwin side. We use the same broker to approach Kroger. So there's a lot of synergies there that benefit us after the acquisition, but this one actually started with meetings before we even acquired Irwin.

And there are no further questions in queue at this time. I would now like to hand the floor back to Dayton Judd for closing remarks.

Thank you all for joining us on the call. We appreciate it and look forward to speaking with you all again in the middle of August. Thank you very much.

Thank you. This does conclude today's conference call. You may disconnect at this time, and have a wonderful day. Thank you once again for your participation.

Good day, and welcome to the FitLife Brands Fourth Quarter and Full Year 2025 Financial Results Conference Call. [Operator Instructions]

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.

[Operator Instructions]

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 2 dynamics is maybe impacting the business more? Or it's just the best way to think about it is, look, these are headwinds, and this is kind of 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 we saw -- if you go back over the last 6 months, right, 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 -- our out-of-stocks are kind of hard to quantify. It's definitely in the hundreds of thousands. Yes. 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 kind of 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. So Irwin has kind of historically been in the low 30%, so usually not 30%, but also not 35% I think we can get Irwin up into the certainly mid, if not high 30%. If you look at historically, the Legacy FitLife business, we tended to be more low 40%. So I think for the combined business, over time, again, 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 2-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, the online sales are 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 mean 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 guys. 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, okay? 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 and we need to get back in stock. So that's why I hold off on giving a number.

So if the online -- the incremental online business, if it 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 Q1 kind of tracking similar to Q4, are you saying like on a year-over-year basis? Or are you saying like we're not seeing the typical -- I know that Q4 is typically the weakest quarter for supplements in Q1, new resolution 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 an incredibly complex as it relates to the legal environment. So federally, there are very challenging guidelines about what you need to do in order to be able to sell CBD, stuff like the farm bill and whatnot. But then on top of that, the state-level regulations are even more complicated. And so if you're selling online and you're selling 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, I would say we were undecided when we bought the business. We certainly didn't buy Irwin because of the CBD. But in the -- I think it was either October or November when the latest spending bill was passed against federally, that bill in our interpretation, essentially makes it -- I don't want to say impossible, but certainly very difficult to legally sell CBD. And so it's just not worth the complexity. And so for that reason, we're choosing to get out.

We've had CBD topicals and we've had CBD ingestibles. There is no retailer because of the legal environment and some of the challenges out there, there's no retailer, no major retailer, I should say, brick-and-mortar or online that sells ingestible CBD. You can't buy it at Target, Walmart, you can't buy it on Amazon. You can buy it in local health food stores and whatnot. And so topicals, the only place we sell CBD in kind of a major retailer is we sell topical CBDs in CVS. And so we're just -- given just the legal environment and the fact that it wasn't growing for us anyway, it was declining, and it's particularly challenging to keep up with. We just decided to move on and focus on kind of 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?

Yes. So on the dating, I think you'll start to see the impact of that in Q2 and beyond. So we have received at this point now our first -- some of our first products with the 3-year dating. And just to give you a bit more color on how that works, you don't just get to decide to kind of change your expiration date on the bottle. You've got to be sure that the product when it hits the 2-year mark or the 3-year mark, if someone were to open it up and send it to a lab and test it, that it still meets the label claim. And so to go from 2- to 3-year dating, that entails revising, updating all of your formulas, making sure you have enough in there that it will not just get to 2 years, but we'll get to 3 years, right?

So almost every single product we've had to kind of update the formula. And that takes time, and it takes time to get our manufacturers on board, right, because they are part of the process of approving kind of what they're making and stamping the 3-year shelf life on it. So 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. We've got some very, very fast-moving products where it doesn't matter like moving to 3-year dating won't really help us because we turn it so quickly. It's just not a priority right now.

So I think you'll start to see that flow through the P&L, hopefully in Q2. And what you'd see it in is certainly higher margin, but also just lower charge-off to inventory, right, lower inventory reserve and therefore, higher COGS.

Your second question on the off Amazon. What we're doing there, it just varies across brands. We have been focused on Dr. Tobias first because it has the biggest exposure to Amazon. But we've talked about TikTok, and I don't want to provide numbers that get people too excited because it's definitely slow going, but we continue to see increased engagement, increased kind of GMV, increased sales on TikTok. There clearly is some spill over value. So when you sell more on TikTok, you see more sales or you see more branded search and hopefully more sales on Amazon.

So it just takes time to scale in some of these other channels. It's no different than kind of marketing 101, what we've been trying to do with all of our brands from the beginning, except again, something like Dr. Tobias, which has had an Amazon focus. So I think I mentioned in the comments, I don't think it's coincidental that if I graph percent of revenue coming off Amazon and the growth rate for that brand on Amazon, where it's like linear, where we're seeing the best growth is where we have the highest off Amazon distribution.

So that said, it is still a black box, right? I wish I could knew exactly what to do and exactly how the algorithms work, but you just kind of have to figure it out as you go. So I don't know if that answers your question, but that's what our focus is right now.

And 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. So that's been fully -- 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 kind of 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?

Yes. I was thinking consolidated, right? I think Irwin can get -- FitLife has been -- legacy FitLife has been low 40s lately. I think Irwin, I can get 300, 400 basis points out of that, and I think they're roughly 50-50. So if Irwin is, call it, 37 and legacy FitLife is 41, you get to kind of the 39. Again, I have not modeled it out. I'm giving you approximate numbers. I know I can get it higher because of the -- look, the biggest thing that $2-plus million of just throwing away product every year is shocking.

We carry a similar amount of inventory on the FitLife side of the business. our reserve on the FitLife side of the business is a fraction, like 10% of the reserve on the Irwin side of the business. And because of the shelf life flexibility that we have, most of our products on the FitLife side, I can probably count on 2 or 3 fingers the number of products we have that is less than 3-year shelf life. So that will create a bunch of flexibility.

And then I think I mentioned it in my prepared remarks, but not in the response to the question. But the other thing is as you sell more retail, right, as you sell more online, that also helps to kind of bolster the margin of it. So that's why we're confident that over time we can do better for gross margins for Irwin.

And 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 know. I don't want to point fingers or cast blame. I think people have different priorities and look, the stock out, I mentioned stock-outs, that's related to the shelf life issue because I mentioned you've got about a 12-month sell-through period, right? And so if you want to avoid throwing inventory away, you try and time the delivery of your next purchase order for right around the time you run out because if you get it 4 months too early, you're still selling the old stuff and then you only have to all the new stuff, right, before it expires.

And so you get in this game of trying to time your inventory purchases, and then you've only got 12 months to sell it, right? If you order too early your reserve, your obsolescence goes up, if you order to late or if it shows up too late, I should say, because you always order on time, but there's variability in supply chain. If it shows up too late, then you're dealing with stock-outs. So we think kind of this transition -- and I mean me talking about it makes it sound easy. Like this is not easy. This is lots and lots of people spending lots and lots of hours, right, and revising formulas and spending tens of thousands of dollars on testing and -- it's a lot of work to get to that point, but it's unequivocally worth the effort.

Yes. But okay. And then looking at it from a different perspective, how can you be -- how will you be able to be confident that it kind of stands the test of time or a 3-year shelf life, if you haven't been able to actually experience that amount of time. Is the testing accurate enough?

Yes. And the reason is, most of these products we've been making for more than 3 years and it's called retains. You have to keep a certain number of every production lot of every product you've ever made. So we can pull something off of our internal storage shelves that were made 3 years ago. We can test it and we can see how it tests out and we can know what the deficiency is. And then that tells you, you now know how much more you need to put in it when you make it, you know kind of the decay is the wrong word, but the extent to which certain products diminish over time.

Vitamins are very, very tricky. Vitamins diminish more rapidly over time. And it's very hard to get 3- or 4-year dating on a multivitamin that has a lot of ingredients, right? But on a lot of other products, you can get 3-year dating. So you have to put in -- you have to increase what's called the overages, right, in the initial production, which, by the way, can increase your cost a bit because more raw materials into the product, but you make up for it in not having to throw a product away over time.

Right. Okay. A couple more then. On -- my notes just tell me that Irwin in the first quarter of '25 before you owned it did around $18 million, but that would include some of the things that we should exclude on a pro forma basis. Can you share with us what that would have looked like excluding the cost.

Yes. The adjusted net revenue. So if you -- again, the same math I explained in the kind of commentary at the beginning of the call, 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 the MusclePharm and what's the remedy there?

Yes. Yes. I think we gave or you can kind of figure -- I don't have the revenue number in front of me, but I gave -- you have 2024 revenue, and I gave you the organic growth number for 2025 of 5%. So again, growing online, growing in wholesale, slow going. I mentioned in the call, we've got some initial wins from this kind of cross-selling effort that we've got going on and are in discussions on some others.

The other thing though I would say is MusclePharm continues to be impacted by the dynamics in the protein market. So again, MusclePharm is probably 80% protein. I spent a lot of time talking about protein in the third quarter, but you can't get protein now in the second quarter unless it's off spec. Third quarter protein is now $11 a pound, for WPC kind of whey protein concentrates. So I mean it's just astronomically gone up in terms of cost.

Look, I turned down probably $1.5 million muscle farm purchase order during the first quarter from an international customer, we've done business with before, that they're just bottom fishing and it would -- at the lowest -- it would have been the lowest gross margin we would have ever kind of sold products. So part of what you're seeing in the business, too, is trying to protect margin as opposed to just -- I can give you guys higher revenue. I can deliver higher revenue, but it's going to come at a cost.

So we're trying to be smart about kind of who we're selling it to and trying to protect margin somewhat. So it's continuing along, and I'd say nothing dramatic to report in Q1 other than we're preferring to sell product to people willing to pay a bit more than some of our customers.

[Operator Instructions] 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. And so I consider your company kind of a leverage play on MusclePharm until you -- until the recent acquisition of Irwin, of course. And so I understand you have this problem with protein. And I'm just wondering assuming prices stay where they are, we move resurging inflation. I'm just wondering what is the game plan? I mean you can sell to the good customers for a while, but eventually have to sell to everybody and push product.

So I'm just wondering how this might play out or how you're gaming it or what sort of volumes you can generate or what you can do about passing this on to your customer without killing sales? I'm just wondering what the game plan is as I view MusclePharm is such an important brand that you're in the midst of rebuilding.

Yes. Yes, thanks for the question, James. I think I may have commented on this somewhat in the third quarter call. I think -- not I think, you mentioned $150 million. I think at its peak, it was about $175 million wholesale that was 10, 15 years it was a long time ago and then it was a consistent and steady decay until we bought it in bankruptcy. I think what we've learned from MusclePharm is that it's been a really -- it's been a challenge. And the reason it's been a challenge, and I contrast it with Irwin, which we also -- that was an asset purchase out of bankruptcy.

When we bought MusclePharm, they had 0 distribution, they weren't on a single store shelf in the United States anymore out. We bought the intellectual property and about 120,000 of inventory, right? So this was -- this was literally buying a brand that was essentially dead, right? It had some online sales through a third party. And the goal was, can we revitalize this brand? Can we regain lost wholesale distribution? And we have been at it now for 2.5 years, and we've gotten some, right? I can't -- I mean you can go look and see where it's sold, right? But there's some customers where we're growing 100% year-over-year, right? It's just not on any major store shelves, right? We got it in The Vitamin Shoppe with the Pro Series and did okay and some of them are still there, and some of those SKUs are no longer there, right?

So we'll keep trying. We're going to keep trying to sell it. But anyone that has any expectation that this is going to be $175 million brand again? I would just encourage you to temper, right, your enthusiasm, right, our intention is to grow it.

Right, but I thought even if you could achieve a fraction of 1/4 of that.

Yes. Our plan is to grow like we still want to grow it, right? But the thought that we could buy it and just get back into everyone that used to sell it from Walmart to Costco U.S. to everybody else, it didn't happen, and not for lack of trying, right? So the world and buyers in particular, move on. So once they kick you off the shelf, they're not very keen to bring you back.

So that's how I would characterize the kind of the MusclePharm. Now that said, again, I hopefully, in the next earnings call, we'll have a couple of SKUs. We've been told we have a couple of MusclePharm SKUs getting into a national grocery chain. It's not 100% confirmed. We've been told to expect POs and store counts, and we'll see if that comes through. I don't want to talk about it prematurely, probably within the next month or 2, right? There will be something like that, that are on the next earnings call, we'll have something we can talk about.

But also, those are singles. It's not a home run. It's not going to double the size of the business overnight.

And what can you do about the cost -- the input cost, that protein is what it is.

It is what it is. I cannot get -- I mean protein is a global commodity, right? I have -- everyone is going to be paying the same price. In hindsight, I -- well, I will never buy another brand that is IP only, and I will never buy another brand that is protein-dominant just given kind of what we've seen and what we experienced.

Now that said, I'd probably stop short of saying MusclePharm was a bad acquisition or a horrible acquisition, but it certainly wasn't a great one, right? It's going to be okay, in terms of the multiple of what we paid. But it's -- it's not the type of acquisition we'd be looking for going forward.

[Operator Instructions] And the next question is coming from [indiscernible] 2by2 Capital.

I had a couple of questions on Irwin. First, I know Irwin lost [ 2 ] SKUs at Costco U.S. in early 2025. I wanted to ask, just on that front that you guys had any conversations about relisting. Is there any thing kind of going on that front? And then the second question is around online sales. I think we've already mentioned you're running at $9 million to $10 million in online sales, and you still have some SKUs that you plan to list do you have an update to you on kind of online sales for Irwin as well?

Yes. So let me take -- the first question was the Costco SKU. So they had if I'm remembering correctly, 2 SKUs in Costco U.S., sorry, I'm talking about Costco U.S. here. The first 1 was lost quite a while ago. The second one, the last one was lost in the -- 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 you guys the numbers without the adjustments.

Similar Rite Aid, right? We're not getting back into Rite Aid because it doesn't exist. There's a couple of other retailers where Irwin lost distribution in the kind of bankruptcy period where there's a chance we might get them back. And so I didn't make any adjustments for those.

But Costco U.S., you should not plan on us getting back in there anytime soon. and Rite Aid is obviously not going to happen. So -- and I was mentioning this a bit with MusclePharm, but Costco is the extreme example of if you get kicked out of Costco the likelihood of getting back in is incredibly low. And the reason why is they carry -- I'll use protein as an example. They carry 2 or 3 powdered proteins, right? And they carry 3 or 4, right, ready-to-drink protein and so when they kick someone out and they give someone else that spot, right, it's going to take something miraculous for them to say, "You know what, let me kick out somebody who's actually performing and take another shot with a brand that didn't perform.

So we've learned through MusclePharm and now through Irwin that it is very unlikely, right, to restore distribution in Costco. Particularly in the U.S. Now we do still sell in Costco Canada, and we haven't had any loss of distribution or any loss of SKUs in Costco Canada since we bought the company. So we're still optimistic about that. But Costco U.S. is kind of different story.

And then I think your second question was about online sales and the potential from kind of where we are. Is that right?

Yes. Yes. Just you're kind of already hitting the $9 million to $10 million and you still have some SKUs you haven't taken online yet.

Yes. So there's -- yes, our focus has been obviously getting on the listings that were already set up so that there's a seamless transition from other people who are selling to us continuing to meet that need. Setting up new products on Amazon can take some time. And the main reason for that is, Amazon -- to their credit, actually, this is, I think, it's hard because we have to pay a lot of money, but it's a positive for the supplement industry as far as selling on Amazon.

You have to get your products tested you have to send them to a third party approved by Amazon and then that third party sends the test results directly to Amazon, right? So that Amazon knows that what you say you're selling is actually what you're selling. So we have a number of products that are kind of in that testing phase and will hopefully be set up here pretty soon. Some of those products, again, have quite good wholesale distribution.

So we're optimistic that we'll see good uptake on Amazon. That said, in some cases, there are variations. So like Green Tea Fat Burner is a product we sell a lot of, across tens of thousands of stores in the United States. Some of the products we're setting up maybe a size variation or a slight formula difference or something like that. We're out there selling Green Tea Fat Burner, just not all of the different variations.

Another potential upside, I have no idea how big it's going to be is we're not yet selling on Amazon Canada. So Irwin has a number of products that are registered with Health Canada that are sold to retailers in Canada. A bunch of different retailers up in Canada. We're not selling anything up in Canada, but we're, I think, pretty close to being able to open a Canadian storefront.

So I think there's still upside. I mean the growth is slowing. I mentioned we went from kind of 500,000 or so in December. Just kind of looking at the app here, it was kind of more than 600,000 in January and closer to 700,000 in February. And we'll probably be right around 800,000 for March. So we're still seeing growth, not as dramatic as we did in the early days.

But I think, again, in the long run, we'll continue to see growth there. We are dealing with out of stocks on Amazon. We have, again, some -- unfortunately, some of our high-moving SKUs that we sell to very large retailers in the U.S. we're out of stock. And we don't send stock to Amazon if we're shorting kind of our biggest and most important customers. But in the long run, I think we'll get past that, and I think we'll see continued growth on Amazon, but I can't -- I don't have a number that I can guide you to.

And the next question is coming from Tyler Hill, Tyler is 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, and specifically, are you seeing any shift in improvements in the LVT or retention rates of the MRC portfolio compared to legacy brands?

Yes, I missed part of that last question. Have you seen any improvement in what?

Improvements in that. Yes, the customer lifetime value or retention rates within the MRC portfolio compared to the legacy brands.

Yes. I haven't seen recent updates on that. Our challenge has not been retention, although let me come back and talk about subscribers here in just a bit because I think that might be an interesting point for some of you. It's really just it's traffic, right? Like our conversion is the same or up almost across the board on our listings. So the challenge is traffic.

But to your first question about -- so what are we doing off Amazon? I talked about TikTok. I mentioned we've hired a new CMO we've completely kind of restructured our kind of marketing team actually centralized marketing because it was kind of embedded in kind of different brands and different kind of acquisitions that we've done. But we've got someone now a couple of people that are -- we're doing a whole lot more in e-mail marketing.

We're doing a whole lot more on kind of Shopify our own websites. We're going to do a lot more, we're -- Irwin we're doing a lot on social media advertising, right? If you're out there on Instagram or Facebook Hopefully, you're seeing Irwin ads. And if you're not go to our website and then go back to Instagram and you'll probably start seeing ads, SMS, so it's still early days on a lot of that, but it's -- again, marketing 101 is just stuff that we historically never had to do with Dr. Tobias because it was an Amazon-focused brand.

I don't have anything to report, but we -- if our hypothesis is correct, that off Amazon distribution will help on Amazon, then it would behoove us to be talking to some of the big retailers that we know about some of the Dr. Tobias products, right? We sell 10,000-plus units probably more than that a week of Dr. Tobias and some Dr. Tobias products on Amazon. That's pretty good movement that some wholesale retailers may be interested in. Again, nothing to report, nobody's kind of given us any indication that they're bringing it in.

But it's that type of stuff that we're looking at as we work to kind of get that brand back on track. Also you talked about kind of customer retention to subscribers. I want to give maybe an update on that. I think I mentioned subscriber growth, at least for Irwin, right, it's strong, it's scaling very nicely, but I mentioned subscriber counts are down across the rest of the portfolio. I've talked on our third quarter earnings call about that, right, that we had seen starting in late September, subscribers across the board, literally every account declining. What we've kind of discovered since then is Amazon made a change where previously, before the change, if you went to a product listing page on Amazon, much of the time the buy box defaulted to subscribe and save.

In other words, the consumer didn't actively select. I want to subscribe to this product, Amazon, if they clicked add to cart and buy, they were subscribed. Amazon flipped the switch and we think it was again late September. And now if you go to any listing on Amazon, you will see that the default is kind of onetime purchase. So they were effectively -- I'm not sure the right word to use. I don't want to say duping people, but they were -- people were unknowingly subscribing to products And so that was result as Amazon as the platform was growing as brands were growing, your subscriber count was growing. So that -- and by the way, we've talked to a number of brands, lots of brands who sell on Amazon and everyone is seeing kind of declines.

With Irwin, we're seeing increases, which is good, but that all went onto the platform after that change was made in September. So just kind of give you all an update on subscribers. So Tyler, did that answer your question? Or do you have a follow-up?

Yes. So that was kind of the main -- important question there, and I wasn't sure how different the shift from the Amazon changes in their algorithm versus Google itself actually changing and how it's being addressed in multiple ways.

Yes. I'm not familiar with any recent changes in Google and meta or social, just because we haven't done -- we have advertised there in years past with other brands, but it hasn't been a focus. But to the extent you see more ads from us on those platforms, they will either drive to our website or in some cases, they will push to Amazon because again, that's what Amazon is looking for people that are bringing traffic to them, and they'll reward you for that.

In fact, they have I think it's called a brand referral bonus or something like that, where if the click -- if traffic is coming from off the Amazon platform, it's normally like a 15% -- for supplement a 15% referral fee commission that you pay to Amazon. They'll give you a discount off of that if you bring traffic to them from off Amazon. So those are the dynamics at play right now.

And there were no other questions from the lines at this time. I would now like to 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.

Good afternoon, and welcome to the FitLife Brands Third Quarter 2025 Financial Results Conference Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Dan Judd, CEO of FitLife Brands. Dan, the floor is yours.

Thank you, Tom. I would like to welcome everyone to FitLife's Third 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; 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.

Before jumping into the numbers, let me begin by saying how excited we are about our previously announced acquisition of Irwin Naturals, which closed on August 8, 2025. FitLife's financial results for the third quarter of 2025 include Irwin's performance for the 53-day period from August 9 through September 30.

In addition, beginning with this quarter, the results of MRC are now reported as part of Legacy FitLife. However, we will continue to provide more detailed disclosure about MRC when it makes sense to do so.

For the company overall, for the third quarter of 2025, total revenue increased 47% year-over-year to $23.5 million. Revenue from Irwin accounted for $6.8 million of the $7.5 million revenue increase during the quarter. This means that our other brands collectively delivered $0.7 million of organic growth during the quarter. MRC declined, but Legacy FitLife, excluding MRC, delivered 8% organic growth during the quarter, and MusclePharm delivered 55% organic growth. On a year-to-date basis, MusclePharm and Legacy FitLife, excluding MRC, have delivered organic growth of 15% and 7%, respectively.

However, total organic growth for the company on a year-to-date basis is slightly negative due to the previously discussed MRC headwinds. Wholesale revenue for the quarter was $13.2 million, an increase of 156% compared to the third quarter of 2024. Excluding the $6.5 million of wholesale revenue generated by Irwin, wholesale revenue for the company's other brands increased 30% year-over-year, with wholesale revenue for Legacy FitLife and MusclePharm increasing 4% and 112%, respectively.

Online revenue was $10.3 million or 44% of total revenue, a decrease of 5% compared to the third quarter of 2024. MRC online revenue declined 16%, while Legacy FitLife online revenue, excluding MRC, increased 14% and MusclePharm online revenue declined 3%. Gross margin declined to 37.2% during the third quarter of 2025 compared to 43.8% during the same period in the prior year.

Excluding the impact of the amortization of the inventory step-up in the Irwin business, which I'll explain in more detail a bit later, gross margin for the company overall was 38.9%. The decline is due to lower gross margin in the MusclePharm business as well as the addition of Irwin during the quarter, which has historically generated a lower gross margin than FitLife.

I'll provide more detail on margins for both of these businesses a bit later in my commentary. Contribution, which we define as gross profit less advertising and marketing expense, increased 25%, driven primarily by the addition of Irwin, partially offset by lower contribution from MRC and MusclePharm.

Net income for the third quarter of 2025 was $0.9 million compared to $2.1 million during the third quarter of 2024. The decline is primarily due to elevated merger and acquisition-related expense associated with the acquisition of Irwin Naturals, but also due to lower gross margin and higher income tax expense. Income tax expense was unusually high during the third quarter due to a true-up of the company's 2024 tax provision and the amount actually owed when the company filed its 2024 tax return.

With regard to brand level performance, I'll start with Legacy FitLife. Total Legacy FitLife revenue for the third quarter of 2025 was $12.9 million, of which 68% was from online sales and 32% was from wholesale customers. This represents a 4% year-over-year increase in wholesale revenue and an 8% year-over-year decrease in online revenue or a 5% decrease in total revenue.

Excluding MRC, online revenue for the other Legacy FitLife brands was up 14%. Gross margin for Legacy FitLife declined very slightly from 45.3% to 45.0% Contribution declined 9% to $4.7 million and contribution as a percentage of revenue decreased to 36.2% compared to 37.9% in the same quarter last year. Excluding MRC, both contribution and contribution as a percentage of revenue for Legacy FitLife increased during the quarter.

Moving on now to MusclePharm. Total MusclePharm revenue increased 55% during the third quarter, with wholesale revenue increasing 112% and online revenue declining slightly at 3%. MusclePharm's gross margin declined to 19.8%, which is a function of 2 primary factors. First, gross margin from wholesale revenue is lower than from online revenue. And due to our strong wholesale growth, total gross margin for the MusclePharm brand was lower. And second, the cost of whey protein continues to climb, and MusclePharm's product portfolio is heavily weighted to protein.

Thus far, the company has elected to absorb these cost increases rather than increase prices to its customers. We anticipate that the cost of whey protein will continue to increase during the fourth quarter and early in 2026. We have begun communicating the potential for price increase to many of our MusclePharm customers effective January 1.

Now, I will provide our report on the performance of Irwin Naturals. The numbers we are reporting for the third quarter reflect about 7.5 weeks of operations for Irwin. Irwin's revenue during the period from August 9 through September 30 was $6.8 million. Of this amount, roughly 95% or $6.5 million was from wholesale customers and $0.3 million was from online sales.

The company did not start selling Irwin products on Amazon until October. So there is no Amazon revenue included in Irwin's third quarter numbers. There are a couple of items worth calling out that impacted Irwin's revenue during the quarter. First, the previous owner pulled forward approximately $0.6 million of sales prior to the transaction closing. He did this by offering an aggressive discount to the customer along with extended payment terms.

As a result, we didn't get the credit for the revenue, although we did get to collect the receivable. And second, as part of our strategy to grow online revenue, we ceased wholesale sales of our products to the third party who has been the primary seller of Irwin products on Amazon. Pre-transaction, wholesale revenue from this customer was roughly $0.5 million per quarter or approximately a $0.3 million impact for the 7.5 weeks we owned Irwin during the third quarter. So this is a situation where we are choosing to give up wholesale revenue in the short term in order to generate higher and more profitable online revenue in future quarters.

Regarding margin, Irwin's gross margin was 32.2% during the third quarter, including the effects of $0.4 million of inventory step-up amortization. Under GAAP, when you acquire a company, the inventory has to be stepped up to its net realizable value. The effect of that is a lower reported gross margin, which, although in accordance with GAAP, does not reflect the economic reality or the cash flow profile of the sale of the underlying inventory.

Excluding the effect of the amortization of the inventory step-up, gross margin for Irwin during the quarter would have been 37.9%. We are actually pleased with that number for a couple of reasons. First, the gross margin in the mid- to high 30s is very typical for a wholesale-oriented supplement company. If you go back in time and look at FitLife's margins before we began focusing on online sales, you'll see a similar margin profile.

And second, Irwin's historical margins have been much lower. We filed abbreviated financial statements for Irwin with the SEC on October 20. And from those, you can see that Irwin's gross margin in 2023 was 24.7%. In 2024, it was 32.3%. And for the first half of 2025, it was 35.7%. We expect Irwin's gross margin to continue to slowly increase over time as we optimize supply chain and fulfillment and as our percentage of revenue from online sales increases.

Regarding online sales trends, as previously mentioned, following the consummation of the acquisition, we ceased wholesale sales to the customer who has been the primary seller of Irwin products on Amazon. As that customer sells through their remaining inventory, we expect to replace them as the primary seller of Irwin products on Amazon. Our first sales on Amazon were on October 11, and sales have grown steadily since then.

We are currently generating approximately $10,000 of revenue daily from Amazon or approximately $3.6 million on an annualized basis. And we are now actively selling on only 116 of our 242 product listings. So we expect online sales to continue to grow.

Now let me provide a few additional high-level comments and some forward-looking remarks, and then we can move into Q&A. We continue to work on generating revenue from the Dr. Tobias brand off Amazon as well as driving increased traffic to the brand's listings on Amazon.

We have made some progress, but there's still a lot of work to do. We began to experience the Amazon revenue declines for Dr. Tobias during February of 2025. So we are nearing the point in time when the year-over-year comparisons will be easier, and we are hopeful that we can achieve greater revenue stability for that brand in the near future.

In terms of balance sheet, we did not pay down any debt during the third quarter, instead using our cash flow to pay expenses associated with the Irwin acquisition. For example, we had accrued a very substantial legal bill over the several months leading up to the transaction. Much of this was paid during the third quarter and the remainder was paid early during the fourth quarter.

Going forward, we expect to incur additional nonrecurring expense related to the transaction, but certainly not at the scale you saw during the third quarter. Our term loan balance begins amortizing at the end of December, so you will start to see debt reduction in the fourth quarter and beyond. Last, we referenced in the earnings press release a couple of exogenous factors we are seeing in the business.

The first was the cost of whey protein, which I mentioned earlier in my remarks. If you have additional questions about this, I would be happy to answer them during the Q&A. And second, late in the third quarter, we began to see evidence of across-the-board general consumer weakness. For example, beginning in September, our subscriber counts on Amazon started to decline.

Excluding the MRC brands, this is something that hasn't happened as long as we have been selling on Amazon. For pretty much 7 years, every week, the chart of our Amazon subscriber count only went up and to the right. In fact, our first reaction when it happened was to let Amazon know that there was something wrong with their data. But in our discussions with our account executives at Amazon, who also support other supplement sellers, they indicated that other accounts are seeing the same trend.

We are also seeing a reduced pace of replenishment orders from our wholesale customers, which is corroborated by the reduced traffic counts many of them are experiencing in their brick-and-mortar locations. It is not unusual to see performance fluctuations within a specific brand as each brand can have its ups and downs driven by a number of considerations.

But what we are seeing now is across all brands and all channels, and we have heard similar commentary from other consumer-driven companies when they have reported their performance. We also note that consumer confidence, as measured by the widely accepted University of Michigan Consumer Sentiment Index is close to the lowest level it has ever been since they started tracking the data in 1951.

The government shutdown in the U.S. certainly contributed to the consumer sentiment and weakness. So hopefully, the fact that the bill was passed and signed yesterday will help. To be clear, the sky is not falling, but in the spirit of transparency and good disclosure, we just wanted to communicate what we are seeing in the business. The subscriber count declines are very small, but when you're used to seeing them only going up, it catches your attention.

Total revenue for October came in a bit softer than we would have otherwise expected. Bottom line, we started to see cracks in September and October was a bit soft. But if things pick up from here, it will be largely immaterial in the grand scheme of things. But of course, there's always the risk that the consumer weakness persists or accelerates. So that concludes my opening commentary. And operator, you can go ahead and poll for questions.

[Operator Instructions] And your first question today is coming from Ryan Meyers from Lake Street Capital Markets.

First one for me, Dayton, I just want to kind of piggyback off of what you just had commented on as far as the consumer softness and the impact on the subscription side of the business. Can you remind us what percentage of the business came from some of these recurring subscriptions?

And then just so I understand it correctly, was it less new subscriber adds that you saw? Or was it also customers just turning off their subscription? Just want to make sure I understand all that correctly.

Yes. So yes, good question. So before we acquired Irwin, we were getting -- I think Ryan can jump in and correct me, but it's somewhere between 20% and 25% of our online revenue was coming from subscribers. So our online revenue, again, pre-Irwin was 2/3 of our revenue and then 20% to 25% of that was from subscription. So that -- post-Irwin it's very different because Irwin has very little online revenue and pretty much no subscribers. So as a percentage of our total revenue, it's a much lower number now.

As far as your second question, it's -- we actually don't give visibility at least on Amazon. We do to our subscribers on our websites. But on Amazon, we don't give visibility into additions and deletions or cancellations. All we get is a net number. So we couldn't tell you. I couldn't tell you whether people are signing up slower or churning faster. We just see the net effect.

And again, I don't want to make a mountain out of a bike at this point, it really isn't a big deal. We're talking about like 1% declines. It's not anything dramatic. I just -- we knew we were having the call and just wanted to bring everyone up to date on what we're seeing in the business. So it's not -- this is not like we're seeing a massive drop-off in subscribers. It's just -- like I said in my remarks, when for 7 years, every week, it goes up, and then that trend stops, you notice. So I just wanted to point it out.

Okay. Got it. No, that's good to know. And then just kind of looking at the MusclePharm business, first off, congrats kind of getting that business to where you guys were able to during the quarter. Just as we understand sort of the wholesale part of that business, how much of that growth was new versus existing customers? It sounds like you saw positive signs from both those avenues. But is there any way to kind of unpack how much was new versus existing?

Not numerically. I just certainly don't have those numbers in front of me. If I had to guess, it's much more heavily weighted to existing customers. So we had some customers that have been pushing the brand and selling a lot more. And again, if I had to guess, it's 80-20. I mean the other consideration when you sell into a new customer, it's typically not -- right, you're starting from the beginning. There's not a huge installed base and they're making replenishment orders. Sell-in orders tend to be pretty small.

So if I had to guess, I'd say 80-20. But again, I don't have the numbers in front of me, but it is primarily increased sales to existing customers. But we continue to have new sell-in. No major accounts yet, no kind of nationwide accounts, but a lot more regional chains, regional grocers, decent traction with our RTD proteins.

In fact, we've made 3 flavors: chocolate, vanilla, salted caramel. We've sold out completely of the vanilla and salted caramel and are waiting to get more made, and we still have a little bit of chocolate, but we're trying to keep up with demand on that front.

Okay. Got it. And then last question for me, and I don't think I saw this in the press release, but the Irwin business during the quarter, can you give us a sense of what the year-over-year business looked like for Irwin? Was it flat? Did it grow? Was it a decline? Just so we can get a sense of maybe how that business trended at least during the third quarter?

Yes. I don't have that. I can tell you it will be a decline. But if I did it on an apples-to-apples basis, I don't know. And maybe we can do that and look at it on a future call. The reason it would be a decline, I think we've referenced in previous press releases and conversations. Irwin used to sell a lot of product through Costco.

And when they were in bankruptcy, actually, before they went into bankruptcy, Costco discontinued one of their items. And while they were in bankruptcy, Costco discontinued the second one. So any year-over-year, look, I would do right now would show a decline because of the loss of the Costco business.

What I haven't done is look at the period that we owned it or the period -- the same period last year when we didn't own it to the period this year when we did own it, take out Costco and then compare. So I would expect -- I mean, the declines were down to low single digits when we did that math as of the time of the acquisition. And my best guess would be we're still in the same range, right, like somewhere between stable and down low single digits.

Your next question is coming from Sean McGowan from ROTH Capital Partners.

A couple of questions, if I can. First, have you worked through all or substantially all of the stepped up inventory? And if not, what kind of an impact would you expect to see in the fourth quarter on that?

So no, we have not. It ends up being, I think, about 4 months' worth of inventory. And I'm going to try -- I think we've worked through about 40% of it. The total inventory step-up amount was $1,045,000 -- and I think it was about 390-something thousand, if I recall, that came through during the third quarter and the balance is about $650,000 and that will all flow through in the fourth quarter. So basically, we'll have one more quarter with that step-up and the amortization of the step-up. And after that, the numbers will be clean.

Okay. And you'll call that out, right? So…

Yes, we'll call that out. We include that in the add-back in the EBITDA table. It's noncash, right? It's just -- again, it's an accounting convention under GAAP.

Yes. So that -- how much pressure would you expect to see beyond what we've seen already in MusclePharm gross margin in the fourth quarter due to the we issue or any other issues? Like is this the level we'll see? Or could it get worse?

So I think it might get a bit worse. And the reason is, again, the protein costs have continued to go up, and we have not -- like what you're seeing in the reported numbers is for July, August and September. And protein costs were increasing in the background. So the inventory that we're selling now is at a slightly higher cost and the inventory that we'll be selling in early 2026 is at even a higher cost.

I don't have the numbers in front of me, but whey protein, we're happy if it's between $3 and $4 a pound. It's been below $3 a pound. Just to give you all a sense for the market, you cannot buy whey protein in the spot market today. You can't even buy whey protein for delivery during the first quarter, right? It's all been snatched up.

Our most recent purchases, so we have forward bought. Just to be clear, we were fine through the first quarter. We've locked in the supply that we need. But at prices going up to $6.30 a pound, we're working on locking in supply for the second quarter of 2026 and pricing is basically starting with the $7 now. So it's a really strange dynamic, something that we've never seen.

Happy to talk more about it if people want. But I think at a high level, what's going on is there is a huge protein trend in the U.S., right? You go into Starbucks, right? People are putting protein in everything, whether it's coffee or chips or even desserts. So I think the food companies are buying a lot of that, and you've got a lot higher demand and supply hasn't adjusted.

So to answer your question, Sean, I would be surprised to see margins up for sure. I would not be surprised to see them a bit lower. But like I mentioned in my prepared remarks, we've already started communicating kind of a January 1 price increase, at least for big accounts. And so we're hoping to mitigate the effect of that going forward. We could have done it previously.

We -- like this isn't something that caught us by surprise. This is an intentional decision we made, right, knowing that we're trying to grow the brand, like you all have seen starting with the fourth quarter of last year, first quarter of this year, right, the intentional investment in promotions and advertising, right? We're trying to grow this brand. So the good news is that happened, and we're finding success, and now we're trying to find the balance between growth and fiscal responsibility. So...

Yes. We talked about this earlier in the year and maybe just the prices wind up or costs wind up being higher. So it's a little bit more of an impact. That doesn't mean you would have gone and raised prices if you had known exactly where the cost would be because you'd make the same strategic decision, right?

Yes. Yes. I mean we know what our costs are going to be months in advance, right? Because like I mentioned, we've locked in our protein for Q1. So protein -- MusclePharm products that we are making and have ordered and are going to be delivered in Q1, we know exactly what the price is going to be.

And so we have pretty good visibility into that, right? The decision we always have to make is at what point do we try and ratchet the price up. It's something we talk about every week, so.

Okay. A couple more questions. Can you remind us what the issue ongoing is with Dr. Tobias?

Yes. The main issue, and I wish I could explain the root cause, but I can't. The main issue is that for reasons unknown to us, traffic to these -- to our Dr. Tobias listings on Amazon fell. And when I say fell, fell dramatically. Again, we can't tell you why. Our gut instinct is it's something internal to -- Amazon is a black box.

We -- if they change their algorithm or they do something like that, it can be to your detriment. And I will also add, it can be to our benefit, right? You see strong online growth under Legacy FitLife, excluding MRC. We have some products that are up 50% year-over-year and have been for the whole year. So there are areas where you win, where we want to pat ourselves on the back when that happens and say, didn't we do a great job.

But the reality is with Amazon, there is a very significant amount of, call it, luck, call it, black box, whatever, right, that is going to determine the outcome. So something happened that resulted in much lower traffic to the Dr. Tobias listings.

We can pull the data and we can see the traffic, we can pull the data and we can see the conversion. When people get to the listings, they convert at the same or actually higher rate than they were doing before. So the issue isn't once they are on the page, they find something they don't like and they leave. It's actually a very high conversion, what we experienced on Amazon relative to, say, the average listing.

The issue is the top of funnel, right, getting people to the listing. And again, we didn't do anything different. It just started happening. And so look, we blame Amazon or we say it's a black box, but that's really the issue. So we have tried, you can see in the numbers. I think we spent more on advertising during the third quarter, I think, across all of our brands.

For Dr. Tobias, that was largely on Amazon. We spend more money advertising on Amazon and then we do the numbers, and it doesn't -- like this is not something we can spend our way out of in terms of spending on Amazon. We're continuing to try that, but we're also spending time and effort trying to grow off Amazon.

Just to give you an example, if you bring a customer to the Amazon ecosystem, right, like through a website or through an ad, like we could run ads on Meta or Google. And if we're driving people to new traffic to Amazon, their algorithms prioritize it. They like that. So if they see you doing that, then they try and -- then the belief is or our understanding is that they will bolster your listings.

So those are the types of things that we're doing. But I wish I could point to something we did or even something specific they did. But the reality is it started happening. not quite a year ago, and we've been suffering the consequences since.

Okay. Last question, a little knit and did here on taxes. So is the reason that the effective tax rate is so much higher that some of these expenses are not tax deductible?

No. No, so that's not it. The reason is -- and this is all kind of new to me, I'm not a tax expert. But as you go through the course of a year, you estimate, you calculate a provision for income taxes. And just so you know, we don't do this ourselves, right? We use a very, very reputable firm, we use Grant Thornton.

And at the end of the day -- or when I say at the end of the day, really at the end of the year and then several months after that, when you actually do your tax return and you figure out how much you owe to the extent there were discrepancies between what you what you ran through the P&L for your taxes and what you actually owed, there has to be a true-up.

So we filed our tax return for 2024 during the third quarter of 2023. We were -- our provision did not -- had not expensed enough income tax. And so it's kind of a catch-up that's flowing through Q3, but it's not an ongoing thing.

Okay. So the rate we see then through the 9 months is not indicative of what you expect the full year rate to be. It's just a true-up in the quarter that makes the quarter look weird and the 9 months look weird.

Yes, it might be higher for the full year than, say, a typical 24%, 25% rate again because some of it is really attributed or because of 2024. But yes, on a long-term steady-state basis, we would expect something closer to 24%, 25%...

Your next question is coming from Samir Patel from Askeladden Capital.

The first one, I'll start with Irwin, and congrats on the momentum there with the online sales. So you mentioned the $3.6 million and I think about half of SKUs, and you also mentioned that you're still competing with inventory overhang from other sellers. As you roll out those remain listings and you become the primary seller, do you have some sort of vision for where you think the revenue might get to?

Like, for example, I'm not sure if you did the high-volume SKUs first, so if we can kind of extrapolate based on that figure of it being half. And then you also can kind of quantify how much inventory might still be out there in the channel that you'd sold wholesale previously. So any thoughts there would be helpful.

Yes. So I'll give you some additional detail. So to your question of did we start with the highest volume SKUs first? No, not necessarily. What we do, this company ironically was the same company that was the primary seller of MusclePharm products, the exclusive seller of MusclePharm products on Amazon when we bought MusclePharm.

So we know them. We have a working relationship with them. I'm not saying they like us because every time we show up, we take their business, but they cooperate with us. So they share with us their inventory. We know which SKUs they're going to run out of first. And so we have prioritized our inventory and what we're shipping in on based on when they're going to run out of a particular SKU. So it's not like we picked the 112 or 116 highest volume, and that's where we went first. So it's actually a mix of higher volume and lower volume.

It's more a function of not wanting to run out. We want the customers to be able to buy the products on Amazon. In terms of how big it could be, I think -- I don't have the exact number in front of me, but we have some software tools that allow us to size on the total volume of sales that are happening for listing on Amazon. If you add those up across the Irwin portfolio, it was somewhere in the range of, I think, $7 million to $8 million. Again, I could be off plus or minus $1 million on that number.

So the value of the inventory being sold by that $30 million plus that third party, plus there's a lot of other smaller sellers that are buying the product through regular distribution that are showing up out there. Like if we just took it over from them, it would be, again, let's just say, high single-digit millions. right?

Incremental to that would be, right, are we able to grow more quickly? Are we able to launch new products? Are we able to gain more revenue through subscribers? So all those levers we will pull. But I think what you'll probably see is a ramp-up to the high single-digit millions, and then we'll kind of see how things grow from there.

Okay. That's super helpful. And that's actually better than I was expecting. There's a couple of areas I want to walk through. So one is just very, very simply, other than the $0.5 million quarterly, $2 million annualized that you talked about from getting rid of the wholesale partner.

I mean, is there any other trade-off to those online sales? I mean, obviously, indirectly, like if someone walks into a health store and they've already bought it online. I'm not talking about that. I'm talking about just like, if you're just trying to model where the business was and where it's going to be, is it reasonable to kind of take that, add 7 and then subtract 2? Or am I missing a piece of the math there?

No, I think that's very reasonable. Like we're assuming that we don't -- that these changes don't affect our direct-to-consumer business, right? So that was about, I think, $0.3 million, right, $300,000 during the 7.5 weeks that we owned it. So -- but that business has been coexisting with the other sellers on Amazon for years. So we don't think that would change either. So no, I think it's the delta between the $7 million, $8 million, $9 million and the $2 million we're giving up in wholesale sales.

Okay. That's really impressive, actually. And then -- can you go a little bit more in depth? It sounds like there's people. Did I hear it right, that there's people who are basically buying this product in a store and then reselling it on Amazon?

No, no, not buying it in the store. So we sell these products through like tens of thousands of doors in the U.S. So like Walmart, every single Walgreens, every single CVS. But in addition to that, it's in hundreds and hundreds of independent health food stores. So there may be a business owner. They may have 1 health food store, they may have 10, right? But they are able to buy the product through our fulfillment partners through our distributors that sell to these smaller health food stores. They're buying the product.

They're putting it on the shelf in their store, right? Some of them are kind of opportunistic and say, well, I'm just going to box some up and send it into Amazon and also sell on Amazon. So really, what we see is one really big third-party seller, which is the one I talked about, the $2 million. And then a lot of these are a handful of these smaller, let's just say, independent health food retailers, some of them may be dedicated online retailers, some of them may have physical stores who are buying primarily through distribution and then in addition to selling in their stores, they're selling online.

So that's a dimension of sellers that we didn't have. For example, when we bought MusclePharm, it really was just this one big third party. But with Irwin, we do have a handful of smaller sellers that are also out there.

Okay. Okay. And then the final question on Irwin is, you talked about expecting those margins to go up over time. I mean you've outlined numerous times kind of the contribution margin delta for the GNC business between someone buying that product online and buying it through the wholesale channel.

I mean, do you have math that you want to share around if you sell one unit of an Irwin product through the wholesale channel versus through Amazon, what the kind of margin delta is? And then as a related issue, kind of both margin and operational, any progress on the glass issue that I know you're dealing with Amazon?

Yes. Sorry, did you say glass bottle, is that what you said?

Yes. Them wanting the bottles bubble wrapped in your 3PL and all that.

So thanks for bringing that up. On your first question, I don't have the numbers in front of me. I know you and I and many others, we've talked through the economics selling the brands that are exclusive to GNC on Amazon, that's very compelling financially.

But pretty much every other part of our business, it's not as that compelling, right, where it's such a big trade-off between a unit in store and a unit online. The reason for that is that we don't advertise those brands, like we spend literally $0 and ever advertising any of those brands, right?

Those are retail brands, and we're just -- we're putting them online. We're putting them online at a premium price to where they're sold in the store and whatever we pick up, we pick up. So obviously, those economics are very compelling because, A, there's no advertising; and B, it's a premium price. That's not the case, right, with Irwin or with iSatori or with Mimi’s Rock, Dr. Tobias, where we're having to spend money to advertise and get the product in front of customers.

That said, right, every -- we've seen this movie multiple times. That's why we deploy this strategy. We know when we sell online, we make, A, the revenue is higher, right? Instead of selling a unit for $10 wholesale, let's say, you're selling it for $20 or $25 at retail, right? So the revenue number to the company is higher and the margins that we generate are higher. So I don't have a unit-to-unit trade-off I could give you on that, but it's not as compelling as some of the GNC items. But again, we're not even pushing those.

To your second question, just to maybe bring everyone up to speed, there's just a lot of nuances and complexity about Irwin and how they have -- the packaging that they use and the challenges that, that presents as far as selling on Amazon. Very specifically, Amazon doesn't like glass, glass bottles. So you cannot sell anything on Amazon that's packaged in glass unless it's first bubble wrapped. So we get product from our manufacturer. It's almost all in glass bottles.

If we want to ship it into Amazon and sell it on Amazon, we have to have a third party open every single box, take out every single unit, wrap it in bubble wrap, label it with what it is, repack it and then ship it into Amazon. And there's a not immaterial cost of doing that. And so right now, we're just dealing with it.

And by the way, that's the same thing the other sellers on Amazon are having to do as well. But it may make sense over time to -- at least for maybe some of our higher-volume SKUs that maybe we do production runs in a plastic bottle. And that would save us, again, a very real kind of cost per unit that we wouldn't have to incur to package and prep for Amazon. So we're doing nothing on that yet, right?

Everything right now is just managing through the transition, and we've had transitions in team and people, but we're kind of working on higher priority items right now. But over time, we think there's a ton of opportunity to further optimize this business from supply chain to packaging like you talked about to how products are fulfilled to selling more on Amazon, et cetera. So lots of opportunity to come.

Perfect. And then I'll just ask a couple on MusclePharm that and let other people ask. But the -- on the whey protein, basically, 2 questions. I mean the first is, I was trying to look around at some data sources this morning. I found like a USDA index for, I think, 34% whey protein. But from the numbers you quoted per pound, it sounds like you're using a different one. So just question one is like is there kind of a good public data source or benchmark that you would have us look at to keep track of that?

And then the second is just on the pricing and obviously, understanding what you're doing to try and grow that brand, but just maybe how you're seeing other competitors out there dealing with this issue if they're pushing through price increases as well. So that's all for me.

So yes. So first of all, on protein, I don't know if I could point you to a data source specifically. I will ask kind of our operations team because I know they have data and they pulled together charts that we've reviewed and I've shared with the Board and whatnot. So -- so we get it from somewhere.

The other thing I will point out, though, is protein, there's all -- it's not like protein. There's tons and tons of different kind of protein from whey protein, milk protein, casein, gelatin. There's all kinds of different protein. And even within whey, which is what I'm talking about, there's what's called WPC 80, which is whey protein concentrate with a minimum of 80% protein content.

So that's like -- that's what we tend to watch because that's what we use. MusclePharm's biggest selling product is our 5-pound chocolate, 100% whey. So we're buying that WPC 80, and that's the reference protein that I'm talking about. So it may be I'm looking at a different protein than you are, but there are sources out there, but I just couldn't tell you off the top of my head kind of what we use or if we get it from our manufacturers or straight from the protein suppliers.

I think your second question was about what we're seeing other people doing. Look, we gained share during the third quarter because we didn't raise price. right? It's very apparent to us, right? Going back to the question of how much of it was incremental volume from existing customers versus selling into new, like the bulk of what we gained was gaining share, and we attribute that to not raising price. So we think, right, that others are choosing to pass it along, and we have chosen at least for a period of time not to.

So that said, the protein is the least profitable and most competitive part of the supplement market. It's one of those things where everybody's got one, right? It's expensive. Again, the protein is expensive. They're big, they're bulky, they're expensive to ship. So if you get 30% protein -- 30% gross margins in a protein business, you're killing it. You're doing well. And so those are just the considerations here.

But if you want to be in sports nutrition, you have to have a protein, right? There's not too many companies that are targeting the athletes and the body builders and they don't have a protein. So it's kind of if you want to be in the space, you got to have a protein, and it's just not a super attractive product to sell. So those are some of the dynamics that we're dealing with. But yes, it was -- I think it was share gain driven by the fact that we did not -- at least partially because we did not increase our price.

Thank you. That concludes our Q&A session. I will now hand the conference back to management for closing remarks. Please go ahead.

Thank you all very much for participating in the call. If you have other questions, feel free to reach out to us. Otherwise, we will speak to you all again towards the end of March. Thank you.

Thank you. Everyone, this concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.