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8-K - 8-K - iSatori, Inc.ifit8k041613.htm

Exhibit 99.1



NEWS RELEASE

[exhibit991001.jpg]

 

 



FOR IMMEDIATE RELEASE


ISATORI, INC. REPORTS 2012 OPERATING RESULTS


HIGHLIGHTS OF YEAR INCLUDE COMPLETION OF MERGER, ACQUISITION OF GROWTH CAPITAL, UPGRADE OF INTERNET MARKETING INFRASTRUCTURE, AND PREPARATION FOR MASS MARKET EXPANSION


DENVER, CO (Market Wire – April 16, 2013) -- iSatori, Inc. (OTCQB: IFIT) (“the Company”), an emerging leader in the development and marketing of scientifically engineered nutritional supplements for healthier lifestyles, today announced its fourth quarter and twelve months 2012 financial results, which are summarized in the following table. A complete report of the Company’s (GAAP) financial results will be available via its annual report for the same periods filed with the Securities and Exchange Commission today on Form10-K.  The link to this Form 10-K is http://www.sec.gov/cgi-bin/browse-edgar?company=&match=&CIK=ifit&filenum=&State=&Country=&SIC=&owner=exclude&Find=Find+Companies&action=getcompany



iSatori, Inc.

Summary of Fourth Quarter and Twelve Months Results

for Calendar Years 2011 and 2012 ($000’s)


 

Fourth Quarter: December 31

Twelve Months: December 31

 

2012

2011

2012

2011

Gross Sales

$ 2,643

$ 2,734

$ 10,848

$ 10,968

Operating Profit (Loss)

$ 65

$ 120

<$ 71>

$ 842

After Tax Profit (Loss) per GAAP

<$ 673>

<$ 194>

<$ 1,031>

$ 603

Add: Non-Recurring Expenses1

$ 0

N/A

$562

N/A

Add: Derivatives Valuation2

$ 606

N/A

$ 858

N/A

Non-GAAP After Tax Profit (Loss) 3

<$ 67>

 <$ 194>

           $ 389

$ 603


1)

Full year 2012 non-recurring expenses include $195,988 in operating expenses related to the Company’s April 2012 merger with and into Integrated Security Systems, Inc. (“IZZI”).

2)

Includes non-cash costs of $858,322 for the full year 2012 and $605,661 in the fourth quarter related to the valuation of the Company’s securities derivatives (warrants and options) held by management and selected third parties using the Black-Scholes methodology.

3)

Non-GAAP recomputed Company’s pre-tax profit for the applicable periods, excluding $562,137 of non-recurring operating expenses (see Note 1, above) and derivative valuation costs of $858,322 (see Note 2, above).


Gross sales for the quarter ended December 31, 2012, at $2,643,206, compared with fourth quarter 2011 gross sales of $2,734,467. The Company’s after-tax loss for the 2012 fourth quarter of <$672,903> included non-cash derivative valuation costs of $605,661. A non-GAAP loss of <$67,242> in the fourth quarter of 2012 compared with a non-GAAP loss of <$193,885> in the fourth quarter of 2011.  (Non-GAAP adjusted net income is described in greater detail at the end of this press release).







For the year ended December 31, 2012, the Company’s gross revenues totaled $10,847,741 compared with $10,968,458 in 2011. A pre-tax loss of <$1,030,638> was recorded in 2012, compared with a 2011 pre-tax profit of $603,234. However, when non-recurring operating expenses related to the merger of $562,137 and non-cash derivative valuation costs of $858,322 are excluded, the Company’s 2012 non-GAAP pre-tax profit totaled $389,821, compared with a 2011 non-GAAP profit of $603,234. The Company maintains a $28 million net operating loss carry forward acquired in connection with its April 2012 merger with IZZI and intends to utilize this asset on a going-forward basis.


Commenting on the Company’s financial results, Stephen Adele, CEO of iSatori noted, “2012 was an exciting year for iSatori.  After completing an important merger that allowed us to become a publicly traded company and provided significant growth capital, our balance sheet remains strong. While our 2012 financial results were negatively impacted by non-recurring and mostly non-cash expenses related to the merger with IZZI, we are very excited about the growth opportunities available to the Company in 2013 and beyond.


“Our optimism regarding the future revolves around a number of strategic initiatives that we began implementing during the second half of 2012.  Specifically, we have successfully upgraded our Internet marketing infrastructure in a manner that has increased our customer response rate and is expected to lead to improved customer loyalty in our direct-to-consumer marketing programs. We have also accelerated our research and development activities in order to achieve our goal of introducing at least four new products annually.  During the past nine months, we have launched three successful nutritional supplement products, and six viable new products are currently in the pipeline. And finally, we achieved a major breakthrough in our ‘mass market’ expansion initiative with our entry into Walgreens, which is now carrying our time-released Energize pill product in over 6,486 of its drug stores throughout the United States. Our objective is to establish relationships with two more leading national mass merchandisers during 2013, as we aggressively pursue the mass-market channel, which is responsible for more than 70 percent of all nutritional supplement sales in the U.S.  We believe iSatori can replicate the success it has achieved in specialty retail and direct-to-consumer marketing within the mass market sales channel, thereby opening the door to much greater sales potential in the future.


“Shareholders should expect results from these activities to become more visible as we proceed through 2013 and to be fully evident in our 2014 operating results. Our goal to achieve annualized revenue of $25 to $50 million over the next several years is predicated on the Company’s ability to gain additional mass market distribution and to grow specialty retail and Internet sales through the successful introduction of new products,” concluded Adele.


Non-GAAP Financial Measures


iSatori, Inc. has provided supplemental financial information and other disclosures in and attached to this release that have not been totally presented in accordance with GAAP.  This information includes non-GAAP after tax profit (loss).  iSatori uses such non-GAAP financial measures in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating iSatori’s ongoing core business operational performance.  As noted, the non-GAAP financial measures discussed above include certain expenses/income, including, 1) non-recurring operating expenses related to the merger with IZZI, and 2) non-cash derivative valuation costs. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.


About iSatori, Inc.


iSatori, Inc. is a consumer products firm that develops and sells nutritional products in the performance, weight loss, and energy markets through online marketing, Fortune 500 retailers, and thousands of retail stores around the world. More information about the Company is available at www.iSatori.com.








Forward-Looking Statements


Statements made in this news release relating to the Company’s future sales, expenses, revenue, product developments, and all other statements except statements of historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on assumptions and estimates that management believes are reasonable based on currently available information; however, management’s assumptions and the Company’s future performance are both subject to a wide range of business risks and uncertainties, and there is no assurance that these goals and projections can or will be met. Any number of factors could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to, the timing and extent of changes in demand for the Company’s products, the availability and price of ingredients necessary to manufacture such products, and the outcome of any current or future litigation regarding such products or similar products of competitors. All forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update any such statement.


Contacts:


iSatori, Inc.

R.J. Falkner & Company, Inc.

 

Stephen Adele, 303-215-9174

Jerry Falkner, 800-377-9893

 

PR@isatori.com

info@rjfalkner.com

 








 

 

 

 

 

 

 

December 31,

 

December 31,

 

2012

 

2011

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

1,655,453 

 

$

364,608 

Investments

 

965,886 

 

 

Accounts receivable

 

 

 

 

 

Trade, net of allowance for doubtful accounts

 

1,240,736 

 

 

937,841 

Income tax receivable

 

102,452 

 

 

54,841 

Other receivables - current portion

 

9,850 

 

 

44,722 

Inventories

 

1,292,105 

 

 

757,250 

Assets held for sale

 

29,338 

 

 

168,474 

Deferred tax asset, net

 

119,032 

 

 

35,746 

Prepaid expenses

 

156,431 

 

 

119,147 

Total current assets

 

5,571,283 

 

 

2,482,629 

 

 

 

 

 

 

Property and equipment

 

 

 

 

 

Vehicle

 

 

 

67,135 

Furniture and fixtures

 

56,680 

 

 

50,304 

Office equipment

 

36,600 

 

 

32,131 

Computer equipment

 

323,648 

 

 

262,737 

Dies and cylinders

 

49,422 

 

 

49,422 

Less accumulated depreciation

 

(333,388)

 

 

(324,257)

Total property and equipment

 

132,962 

 

 

137,472 

 

 

 

 

 

 

Note Receivable – net of current portion

 

81,714 

 

 

81,714 

 

 

 

 

 

 

Other assets:

 

 

 

 

 

Deferred tax asset, net

 

97,844 

 

 

216,498 

Deposits and other assets

 

42,956 

 

 

37,257 

Debt Issuance Costs

 

4,375 

 

 

157,242 

Deferred Offering Costs

 

 

 

141,826 

Total other assets

 

145,175 

 

 

552,823 

Total assets

$

5,931,134 

 

$

3,254,638 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Trade accounts payable

$

518,150 

 

$

695,775 

Accrued expenses

 

242,301 

 

 

446,950 

Line of credit, less debt discount

 

1,173,155 

 

 

785,044 

Current portion of vendor payables

 

 

 

1,000 

Current portion of notes payable

 

 

 

489,352 

Total current liabilities

 

1,933,606 

 

 

2,418,121 

 

 

 

 

 

 

Long-term liabilities

 

 

 

 

 

Note payable, less current maturities and debt discounts

 

 

 

478,729 

Other long-term liabilities

 

701,852 

 

 

92,606 

Total long-term liabilities

 

701,852 

 

 

571,335 

 

 

 

 

 

 

Commitments and contingencies (Notes 1,2,5,6 and 14)

 

 

 

 

 








(continued)

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

December 31,

 

2012

 

2011

 

 

 

 

 

 

Stockholders' Equity:

 

 

 

 

 

Convertible preferred stock, $0.01 par value, 750,000 shares authorized; 22,500 shares issued and outstanding ($450,000 of liquidation value)

 

225 

 

 

Common stock, $0.01 par value, 56,250,000 shares authorized; 12,622,756 and 6,680,203 shares issued and outstanding, respectively

 

126,228 

 

 

66,802 

Additional paid-in capital

 

4,343,069 

 

 

(22,819)

Retained earnings (accumulated deficit)

 

(1,173,846)

 

 

221,199 

Total stockholders’ equity

 

3,295,676 

 

 

265,182 

Total liabilities and stockholders' equity

$

5,931,134 

 

$

3,254,638 








 

For the Year Ended

 

December 31

 

2012

 

2011

Revenues:

 

 

 

 

 

Product revenue (Net of returns and discounts)

$

9,130,530 

 

$

9,103,983 

Royalty revenue

 

109,613 

 

 

106,361 

Other revenue

 

148,051 

 

 

247,791 

Total revenue

 

9,388,194 

 

 

9,458,135 

 

 

 

 

 

 

Cost of sales

 

3,477,741 

 

 

3,255,702 

Gross profit

 

5,910,453 

 

 

6,202,433 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

Selling and marketing

 

2,602,566 

 

 

3,071,918 

Salaries and labor related expenses

 

1,918,033 

 

 

1,656,990 

Administration

 

1,381,560 

 

 

549,332 

Depreciation and amortization

 

79,525 

 

 

82,334 

Total operating expenses

 

5,981,684 

 

 

5,360,574 

 

 

 

 

 

 

Income (loss) from operations

 

(71,231)

 

 

841,859 

 

 

 

 

 

 

Gain on sale of product lines

 

499,525 

 

 

Other income (expense)

 

(686,470)

 

 

95,573 

Financing Expense

 

(566,634)

 

 

(394,144)

Interest expense

 

(205,091)

 

 

(165,504)

 

 

 

 

 

 

Income (loss) from continuing operations

 

(1,029,901)

 

 

377,784 

 

 

 

 

 

 

Income tax benefit (expense)

 

(737)

 

 

225,450 

 

 

 

 

 

 

Net income (loss)

$

(1,030,638)

 

$

603,234 

 

 

 

 

 

 

Net income (loss) per common share

 

 

 

 

 

Basic

$

(0.09)

 

$

0.09 

Diluted

$

(0.09)

 

$

0.09 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

Basic

 

11,103,585 

 

 

6,680,203 

Diluted

 

11,103,585 

 

 

6,680,203 




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