iSatori Reports Double-Digit Product Sales Growth in Third Quarter 2013

iSatori Reports Double-Digit Product Sales Growth in Third Quarter 2013 
Company Also Highlights Increased Marketing Investments Foreshadowing
Energize (Pill) Product Nationwide "Mass Market" Rollout 
GOLDEN, CO -- (Marketwired) -- 11/08/13 --  iSatori, Inc. (OTCQB:
IFIT), an emerging leader in the development and marketing of
scientifically engineered nutritional supplements for healthier
lifestyles, today announced its financial results for the third
quarter ended September 30, 2013 ("Q3 2013"), and nine months ended
September 30, 2013, which are available in full detail via its
quarterly report filed with the Securities and Exchange Commission
today on Form 10-Q.  
For Q3 2013, the Company reported growth in net product sales (net of
returns, discounts, and advertising allowances) of $2,724,711, an
increase of 16% as compared with Q3 2012 net product sales of
$2,341,140. For Q3 2013, total operating expenses were $2,266,808,
compared to $1,953,800 for the same period in 2012. As a result,
after an "add-back" of the non-cash equity compensation and
derivative liability expense of $118,681, the Company reported a
non-GAAP adjusted after tax loss of $536,526 in the third quarter of
2013 compared with a non-GAAP adjusted after tax loss of $528,021 for
the third quarter of 2012, after a similar "add-back" of the non-cash
equity compensation and derivative liability income for the period of
$9,254. The Company's profitability has been impacted by recently
induced aggressive marketing and promotion of its Energize brand,
investing $1,441,814 year-to-date in mass media marketing activities,
which will remain commensurate with expanded distribution into mass
market retail. Non-GAAP adjusted operating measures are described in
greater detail later in this press release. 
For the nine months of the year ended September 30, 2013, the Company
saw improved net product sales (net of returns, discounts, and
advertising allowances) of $7,169,142, an increase of 3% as compared
with nine months of the year ended September 30, 2012 of $6,958,331.
For nine months of the year 2013, the Company's operating expenses of
$4,844,853, increased from $4,548,793 in the prior nine months of the
year 2012. As a result, the Company's non-GAAP adjusted after-tax
losses increased to $426,161 fo
r the nine months of 2013 from
$255,852 for the nine months of 2012. Adjustment made to get to the
non-GAAP after-tax losses were the non-cash equity compensation and
derivative liability expense for the nine-month period of $358,943,
and for the nine-month period for 2012 were non-cash equity
compensation and derivative liability expense of $89,101, the removal
of the income from the sale of a dormant product line of $499,525,
and one-time merger-related costs of $512,309. Again, the increase in
after-tax losses were due in large part to the Company's $1,441,814
expenditures in marketing and promotional activities incurred year to
date 2013, compared to $105,743 in the prior year 2012, used as
marketing investments to establish and further develop the mass
market channel for the Company's Energize (pill) product.  
Commenting on the Company's financial results, Stephen Adele, CEO of
iSatori, noted, "After our successful entrance of the Energize [pill]
product into the mass market retail channel with retailers like
Walgreens and Walmart, and the optimism surrounding our recently
launched, category-defining sports nutrition product, Bio-Gro, we
have hit our inflection point and remain very positive about the
growth prospects available to the Company throughout 2014. Our
investment in expanding the Energize product footprint in mass market
distribution nationally has increased so we might be able to
establish our brand and further develop this channel and potentially
lay the groundwork for additional product entrants in the coming
year. Additionally, we have a recently accelerated our research and
development activities in order to introduce multiple new products
throughout 2014 and further take advantage of our brand's popularity
and growth opportunities. Most certainly, these are exciting times at
iSatori for our team and shareholders alike." 
Company highlights in the most recent quarter (Q3 2013) include: 

--  The Company's "mass market" expansion initiative went into effect with
    entry into Walgreens, Duane Reade, Rite-Aid, and Walmart, which now
    carry the sustained-released Energize pill product. This is
    significant as the "mass market" is responsible for more than 70% of
    the $30-billion nutritional supplement sales in the U.S.
--  iSatori bolstered its management team by adding two new members. Their
    new Executive Vice President of Sales, Rick Anderson, joined the
    iSatori management team. Mr. Anderson brought with him over 20 years
    of sales experience, including a long tenure as the General Manager
    and VP of Sales at EAS, Inc. (sold to Abbott Laboratories for
    $320-million in 2004), and Spectrum Brands. He oversees the entire
    sales distribution team. Also added, Mr. Zach Vineyard joined the
    Company as the Director of Operations and to oversee production. Mr.
    Vineyard brings a wealth of experience to iSatori. His previous
    experiences include working in similar capacities at Eaton
    Corporation, Anadarko Petroleum Corporation, and Johns Manville.
--  Bio-Gro(TM), the Company's category-creating bio-active peptides
    product, took over the top selling supplement product on the prominent
    online retailer as well as on over ten other
    websites, where Bio-Gro has secured a "top 10" placement as an overall
    best-selling sports nutrition supplement.
--  In September, iSatori launched its new 600-square-foot booth at the
    nation's most prominent fitness exhibition, the Mr. Olympia
    exposition. The Company hosted a series of education events, which
    were broadcast live and were subsequently viewed by more than
    1.1-million people online via YouTube.
--  The Company launched two new science-based products under the
    BioGenetic Laboratories division. Meratrim(R) Platinum+, which is
    representative of two impressive clinical studies that showed weight
    loss in two weeks; and Fenu Test(TM), a natural testosterone
    booster, another science-based product to address the large number of
    males who seek out naturally elevating their declining hormone levels.
    Both products received national distribution in GNC Holdings, Inc. and
    Europa Sports (, the nation's largest health and
    sports nutrition wholesale distributor.

Non-GAAP Financial Measuring Data 
iSatori, Inc. has provided financial information in this release that
has not been prepared in accordance with Generally Accepted
Accounting Principles ("GAAP"). This information includes non-GAAP
adjusted net income (loss). iSatori uses such non-GAAP financial
measures internally in analyzing its financial results and believes
they are useful to investors, as a supplement to GAAP measures, in
evaluating iSatori's ongoing operational performance. The Company
believes that the use of these non-GAAP financial measures provides
an additional tool for investors to evaluate ongoing operating
results and trends, and in comparing its financial measures with
other companies in iSatori's industry, many of which present similar
non-GAAP financial measures to investors. Non-GAAP financial measures
should not be considered in isolation from, or as a subs
titute for,
financial information prepared in accordance with GAAP. Investors are
encouraged to review the reconciliation of these non-GAAP measures to
their most directly comparable GAAP financial measures as detailed
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.  

                               iSatori, Inc.                                
                   Condensed Consolidated Balance Sheets                    
                                              September 30,   December 31,  
                                                  2013            2012      
                                             --------------  -------------- 
Current assets:                                                             
  Cash and cash equivalents                  $    1,040,139  $    1,655,453 
  Investments                                             -         965,886 
  Accounts receivable                                                       
    Trade, net of allowance for doubtful                                    
     accounts                                     1,958,755       1,240,736 
  Income tax receivable                             102,452         102,452 
  Note receivable - current portion                  10,916           9,850 
  Inventories                                     1,624,918       1,292,105 
  Assets held for sale                              112,210          29,338 
  Deferred tax asset, net                            60,726         119,032 
  Prepaid expenses                                  737,767         156,431 
                                             --------------  -------------- 
    Total current assets                          5,647,883       5,571,283 
Property and equipment:                                                     
  Leasehold improvements                             11,485               - 
  Furniture and fixtures                            115,517          56,680 
  Office equipment                                   65,901          36,600 
  Computer equipment                                341,923         323,648 
  Dies and cylinders                                 49,422          49,422 
  Less accumulated depreciation                    (396,165)       (333,388)
                                             --------------  -------------- 
      Net property and equipment                    188,083         132,962 
Note receivable - net of current portion             81,714          81,714 
Other assets:                                                               
  Deferred tax asset, net                           251,331          97,844 
  Deposits and other assets                          53,212          42,956 
  Debt issuance costs                                     -           4,375 
  Deferred Offering Costs                                                 - 
                                             --------------  -------------- 
    Total other assets                              304,543         145,175 
                                             --------------  -------------- 
      Total assets                           $    6,222,223  $    5,931,134 
                                             ==============  ============== 
    LIABILITIES AND STOCKHOLDERS' EQUITY                                    
Current liabilities:                                                        
  Trade accounts payable                     $    1,109,893  $      518,150 
  Accrued expenses                                  146,926         242,301 
  Deferred revenues                                 266,032               - 
  Line of credit                                  1,123,155       1,173,155 
  Current portion of vendor payables                      -               - 
  Notes payable                                      21,619               - 
                                             --------------  -------------- 
    Total current liabilities                     2,667,625       1,933,606 
Long-term liabilites                                                        
  Note payable, less current maturities and                                 
   debt discounts                                         -               - 
  Derivative liability                              685,495         701,852 
                                             --------------  -------------- 
    Total long-term liabilities                     685,495         701,852 
    Commitments and contingencies (Notes 1,                                 
     2 and 3)                                                               
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; 12,878,947 shares                                     
   issued and outstanding                           128,790         126,228 
  Additional paid-in capital                      4,699,038       4,343,069 
  Accumulated deficit                            (1,958,950)     (1,173,846)
                                             --------------  -------------- 
    Total stockholders' equity                    2,869,103       3,295,676 
                                             --------------  -------------- 
      Total liabilities and stockholders'                                   
       equity                                $    6,222,223  $    5,931,134 
                                             ==============  ============== 
                               iSatori, Inc.                                
              Condensed Consolidated Statements of Operations               
                         Three Months Ended           Nine Months Ended     
                     September 30  September 30  September 30  September 30 
                         2013          2012          2013          2012     
                     ------------  ------------  ------------  ------------ 
  Product revenue                                                           
   (net of returns                                                          
   and discounts)    $  2,724,711  $  2,341,140  $  7,169,142  $  6,958,331 
  Royalty revenue          25,237        22,439        91,761        83,105 
  Other revenue             9,391        93,389        34,732       135,103 
                     ------------  ------------  ------------  ------------ 
    Total revenue       2,759,339     2,456,968     7,295,635     7,176,539 
Cost of sales           1,136,350       931,095     3,138,916     2,763,694 
                     ------------  ------------  ------------  ------------ 
    Gross profit        1,622,989     1,525,873     4,156,719     4,412,845 
Operating expenses:                                                         
  Selling and                                                               
   marketing            1,244,907     1,181,459     1,856,106     2,067,514 
  Salaries and labor                                                        
   related expenses       577,302       393,303     1,622,635     1,420,976 
  Administration          425,683       357,782     1,294,841     1,003,303 
  Depreciation and                                                          
   amortization            18,916        21,256        71,271        57,000 
                     ------------  ------------  ------------  ------------ 
    Total operating                                                         
     expenses           2,266,808     1,953,800     4,844,853     4,548,793 
                     ------------  ------------  ------------  ------------ 
Loss from operations     (643,819)     (427,927)     (688,134)     (135,948)
                     ------------  ------------  ------------  ------------ 
Gain on sale of                                                             
 product lines                  -             -             -       499,525 
Other income                                                                
 (expense)                 80,724         9,615      (121,153)      (21,883)
Financing expense          (7,889)      (91,277)      (63,223)     (379,403)
Interest expense          (10,615)       (6,934)      (23,200)     (205,485)
                     ------------  ------------  ------------  ------------ 
Loss before income                                                          
 taxes                   (581,599)     (516,523)     (895,710)     (243,194)
Income tax                                                                  
 benefit/(expense)        (73,608)       (2,244)      110,606      (114,543)
                     ------------  ------------  ------------  ------------ 
Net loss             $   (655,207) $   (518,767) $   (785,104) $   (357,737)
                     ============  ============  ============  ============ 
Net loss per common                                                         
  Basic              $      (0.05) $      (0.04) $      (0.06) $      (0.03)
  Diluted            $      (0.05) $      (0.04) $      (0.06) $      (0.03)
Weighted average                                                            
 shares outstanding:                                                        
  Basic                12,878,216    12,622,756    12,730,371    10,591,630 
  Diluted              12,878,216    12,622,756    12,730,371    10,591,630 

iSatori, Inc.
Stephen Adele
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