FitLife Brands Inc (FTLF) 2026 Q1 法說會逐字稿

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.

大家好，歡迎參加 FitLife Brands 2026 年第一季財報電話會議。(接線員指示) 現在我很榮幸將會議交給本次主持人、FitLife Brands 執行長 Dayton Judd。先生，請開始。

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.

各位下午好。歡迎各位參加 FitLife 2026 年第一季財報電話會議。感謝各位今天下午撥冗與會。與我一同參與電話會議的有 FitLife 執行副總裁 Ryan Hansen，以及 FitLife 財務長 Jacob York。我將先就 2026 年第一季提供一些整體性的評論。

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.

2026 年第一季總營收為 2,530 萬美元，較去年同期成長 59%；成長主要由收購 Irwin 所帶動，但部分被 Legacy FitLife 的疲弱所抵銷。批發營收為 1,410 萬美元，占營收 56%，較 2025 年第一季成長 166%。線上營收為 1,120 萬美元，占總營收 44%，較 2025 年第一季成長 6%。毛利率為 37.6%，相較於 2025 年第一季的 43.1%。毛利率下滑主要是因為收購 Irwin；Irwin 歷來的毛利率低於 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.

與 2025 年第四季相比，2026 年第一季 Legacy FitLife 與 Irwin 的毛利率皆呈現季增。我們預期 Irwin 的毛利率將隨時間持續提升，因為我們正在推動多項供應鏈及其他改善措施。貢獻（我們定義為毛利減去廣告與行銷費用）成長 42%，主要由 Irwin 的加入所帶動，但部分被 Legacy FitLife 較低的貢獻所抵銷。2026 年第一季淨利為 170 萬美元，較 2025 年第一季的 200 萬美元下降；下滑主要由與收購 Irwin 相關的較高攤銷費用與利息費用所致。調整後 EBITDA 為 330 萬美元，較 2025 年第一季下降 3%。

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.

就品牌層級表現而言，我先從 Legacy FitLife 開始。2025 年第四季 Legacy FitLife 總營收為 1,250 萬美元，其中 70% 來自線上銷售、30% 來自批發客戶。這代表批發營收年減 28%，線上營收年減 18%，總營收年減 22%。下滑主要歸因於 MRC 的線上營收較低，以及來自 GNC 的批發營收較低。Legacy FitLife 的批發年對年比較特別具挑戰性，因為在 2025 年第一季，先前已揭露的商業爭議解決後，GNC 的配送中心進行補貨；該爭議曾導致公司停止對 GNC 出貨。

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.

Legacy FitLife 的毛利率由 2025 年第一季的 43.1% 降至 2026 年第一季的 41.2%。然而，Legacy FitLife 的毛利率由 2025 年第四季的 40.7% 季增至 2026 年第一季的 41.2%。Legacy FitLife 的貢獻下降 27% 至 430 萬美元，且貢獻占營收比降至 34.1%，相較於 2025 年同季的 36.5%。就季比而言，貢獻自 2025 年第四季至 2026 年第一季大致持平，但貢獻占營收比在同期間由 32.5% 提升至 34.1%。接下來談 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.

Irwin 第一季總營收為 1,280 萬美元，其中 1,030 萬美元（約 80%）來自批發客戶，20% 來自線上銷售。Irwin 第一季毛利率為 34.0%，貢獻占營收比為 31.3%。如先前所提，我們於 10 月中旬開始在 Amazon 上銷售 Irwin 產品，該業務在 2025 年第四季期間良好擴張，並於 2025 年 12 月達到接近 50 萬美元的營收。Amazon 營收在 2026 年第一季持續攀升，於 2026 年 3 月達到約 80 萬美元。

Adjusting for the loss of Costco US 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.

若調整為：排除我們收購 Irwin 前即已流失的 Costco US 與 Rite Aid 客戶影響，並因公司決定退出 CBD 市場而在兩期皆剔除 CBD，則 Irwin 於 2026 年第一季的有機營收約年減 13%。我們估計，約 100 萬至 150 萬美元（或更多），亦即超過一半的下滑，係由我們在上一通財報電話會議中討論的缺貨情況所造成的營收流失。

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.

接下來我再補充幾點高層次評論與一些前瞻性說明，之後我們將進入問答。就資產負債表而言，我們在第一季依計畫支付約 150 萬美元的攤還款，使我們的定期貸款餘額降至 3,760 萬美元。我們也在第一季額外償還循環信用額度約 140 萬美元，使其餘額降至 420 萬美元。

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.

我們打算持續運用多餘的自由現金流進一步降低負債。儘管第一季充滿挑戰，我們仍受到鼓舞，因為月度營收在整個季度呈現逐月季增。此外，我們許多 Amazon 銷售帳戶在季度後段並延續至 4 月呈現季比改善。我們也對 Irwin 的 Amazon 業務持續成長感到鼓舞，4 月營收達到約 90 萬美元。雖然成長速度正在放緩，Irwin 的 Amazon 帳戶在 5 月截至目前期間仍持續呈現季比成長。

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 two MusclePharm SKUs in several hundred Kroger stores nationwide beginning in June.

我們認為，隨著我們持續解決缺貨情況、成功為尚未在 Amazon 上架銷售的其餘產品完成商品頁面設定，並於第二季後段在 Amazon Canada 推出我們的加拿大產品組合，Irwin 在 Amazon 上仍具備進一步成長的有利位置。Irwin 產品在 Amazon 上的訂閱者數量也持續快速擴張，從 2026 年第一季初約 500 人增加至 2026 年第一季末約 3,600 人，並於今日超過 5,700 人。最後，我們很高興宣布，自 6 月起將在全美數百家 Kroger 門市推出兩個 MusclePharm SKU。

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

以上就是我開場的評論，接下來我們可以開放電話會議進入提問環節。

(Operator Instructions)

(接線員指示)

Ryan Meyers, Lake Street Capital Markets.

Ryan Meyers，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?

我這邊第一個問題，Dayton，你提到本季月營收逐月環比改善。你能否稍微談談你在4月看到的情況，以及進入5月前一兩週你目前看到的狀況？

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 three fewer days. So if you kind of look on a revenue per day basis, it was stronger than January.

好的。謝謝你的問題。第一季整體趨勢是這樣：1月有點艱難。2月與1月類似，雖然很明顯少了三天。所以如果以每日營收來看，2月其實比1月更強。

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.

因此1月和2月大概都落在8%出頭的區間。3月就營收而言，我們大概在9%以上。4月高於1月或2月，但略低於或低於3月。4月其實是我們今年以來銷售訂單最高的一個月。只是我們在4月底有大量出貨。而對我們大多數客戶而言，要等到貨物被收貨後我們才會認列營收。

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.

為了讓大家更有概念，我想在3月底，我們有略低於100萬美元的在途貨物，這部分會從3月營收調整到4月。到4月底，我們大約有165萬美元。所以再說一次，4月表現不錯，高於1月、2月。如果你把它標準化、或以出貨來看，其實4月是相當強勁的一個月。

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?

好的。了解。不，這很高興聽到。接著談到Irwin業務，恭喜你們在那邊看到很強的成果。我想請教的是，在你們達到某種穩態的營收水準之前，你覺得這項業務還有多少額外上行空間？也就是說，不再是從幾乎零成長到接近100萬美元，而是趨於穩定。那個數字是多少？你認為大概到什麼程度會開始趨於平穩？

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 two or three 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.

是的。這很難說。我看不出有什麼理由我們不能至少做到每月100萬美元。我提到過兩三件我認為仍然對我們有利的因素。其中之一是，仍有一些產品——大概約20個產品——還沒有完成設定，尚無法在Amazon上銷售。

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.

我想我在上次電話會議提過，當你上架一個新的商品頁時，多數情況下Amazon會標記它。在你能開始銷售之前，必須由他們的第三方之一進行檢測，而且——我的意思是——這個流程可能需要好幾週。

So the good news is when we get some of those SKUs up and we get one or two 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.

好消息是，當我們把其中一些SKU上架後，而且我們大概每週能上架一到兩個，我們在這些SKU上開始獲得一些動能，特別是那些在批發通路本來就有很高能見度的SKU。所以這是我認為會持續幫助我們的一點。

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.

另一點是缺貨對我們造成了影響。它確實對我們的批發端造成了影響。但也讓各位知道，如果某個品項缺貨，我們會優先供貨給Walmart、CVS這類客戶，而不是Amazon。所以我們有一些最暢銷的產品。其中有一個產品，特別是我們在批發領域最大的暢銷品之一，在Amazon上幾乎沒怎麼賣，因為一直缺貨。因此把這些產品補回庫存並恢復銷售，我認為是額外的順風。

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.

另外我想我在事先準備的發言中提到加拿大。我們在加拿大銷售的SKU有一些，大概8到10個產品。加拿大比較棘手，因為你不能直接在那裡銷售。你必須取得所謂的NPN編號。你得走完加拿大衛生部（Health Canada）的整套流程，產品核准可能要花一年。

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 two or three 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.

所以這不會是一個非常大的數字，但我們在加拿大的業務量還不錯，而我們就在過去兩三天把那個帳戶開通了。接下來就是把庫存運進去的問題。所以如果我們至少沒有達到100萬美元，我會感到意外。

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.

另外我想說的是，一開始我們在沒有太多行銷或廣告推動的情況下就快速成長。我們已經為Irwin在Amazon上開啟廣告，也在Amazon以外為Irwin做更多行銷。因此，隨著我們持續增加廣告投入，我們希望能看到其影響——也就是其效益——同樣反映在Amazon上。我想如果你看我們提供的表格，裡面有Irwin廣告支出的拆分。

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.

如果你只看趨勢，第三季——再次說明，那是我們剛收購後的部分季度——我們在Irwin的廣告支出是72,000美元。第四季，也就是我們持有後的第一個完整季度，是182,000美元。第一季是358,000美元，對吧？所以我們正在投資Irwin的廣告與行銷，不僅僅是在Amazon上。事實上，大部分支出不在Amazon上，但我們希望也預期其中一部分效益會轉化到Amazon上。

Sean McGowan, ROTH Capital.

Sean McGowan，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?

我知道你們不像以前那樣詳細拆分MusclePharm，但你能否讓我們大致了解一下它目前的走勢表現，包括營收表現以及那邊實現的毛利率（或實際利潤率）？

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.

是的。所以營收是下滑的，但我要說的是，這是我們的選擇。我想我在上次電話會議提過：如果你放眼整體市場，把一些國際玩家排除掉——他們的產品非常偏重蛋白，而且在毛利上非常、非常激進——如果我想以10%的毛利賣給他們，我是可以的。但我們選擇不這麼做。所以營收下滑了，但如果我賣給他們，或者如果我看我們仍持續供貨的其他客戶，我們在那裡看到不錯的進展。

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.

線上表現不錯。MusclePharm 在 2025 全年線上業績是成長的。它在 25 年底像我們許多客戶一樣開始走弱，並且在今年年初相當早的時候一度出現兩位數下滑，而現在又回到幾乎只是個位數下滑。所以我們在那裡、特別是線上，正在重新獲得一些動能。所以我想我會說，如果我們排除那些對蛋白粉價格非常、非常敏感的國際客戶，整體表現還可以。

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?

好的。也許你已經部分回答了，但如果把你決定不再銷售的那些客戶排除掉，你們看到的毛利率是否達到你們希望的水準？

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.

是的。抱歉，我剛剛漏了那一段。是的，毛利率，我們預期那邊的毛利率會更高，對吧？因為對我們而言，毛利率最大的拖累、也就是那組客戶中最不賺錢的，是那些大型的國際蛋白粉買家。

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.

因此當我不再賣給他們時，例如本季 MusclePharm 的營收有遠超過一半來自線上，而那正是我們毛利率最好的地方。所以是的，往後我們預期 MusclePharm 的毛利率會更好，對吧？除非或直到我們決定對某些大型國際客戶採取更積極的策略。

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?

好的。接著換到一個關於 Amazon 的問題。你們過去談過他們做了一些變更，我們也從其他人那裡聽到類似的說法。在不要求你透露可能反過來傷到你、而我們也不希望那樣的機密前提下，你能談談你們是如何因應並修正的嗎？現在修好了吗？

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.

是的，我會很明確地說我們還沒有修好。我認為我們——我認為這會是一個需要較長時間的修復。我在電話會議中有提到或提及，我們確實看到一些逐季改善，對吧？但如果某個帳戶已經轉為負成長，對吧，例如 MusclePharm 就是很好的例子。它可能是我們表現最好的帳戶之一——它從正成長轉為相當負成長，然後又有不錯的回升。我認為這是一個跨好幾個月的過程。

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.

我們在 Google 廣告、Meta 廣告、TikTok 上做了更多投放。我們為 Dr. Tobias 做 TikTok 已經一段時間了，但我想我們這個月開始為 Irwin 做 TikTok，或正在開始做。我們之前談過，我想我在上一次財報電話會議提到，我們與 Joey Chestnut 有一個代言安排，針對 Dr. Tobias，特別是結腸清潔（colon cleanse）產品。所以接下來幾週你會開始在社群媒體上看到一些內容，包括我們的以及他的。

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.

所以我們的重點是，我們把較少的廣告與行銷預算花在 Amazon 上，而把更多預算花在 Amazon 以外。而根據我們聽到的一切，無論是 Amazon 內部人士或產業同業，都認為這就是在 Amazon 成功的新公式：在 Amazon 以外帶動成效。所以我會說——我們絕對不會宣告勝利。我們還有很多工作要做，但我認為我們看到一些正向趨勢正在浮現。

(Operator Instructions)

（接線員指示）

Samir Patel, Askeladden Capital.

Samir Patel，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?

有幾點。我想第一個是，我們上季談了很多關於瓶身日期標示（dating）計畫。我記得你提到你大概預期損耗（shrink）會在第二季開始改善。能否更新一下目前進展如何，以及你預期今年接下來會如何發展？

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 three-year dating. So we have received several products now with three-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 three-year dating. And then we have a whole number of other formulas that were ready to go with three-year dating right next time we place a PO. So definitely making progress.

是的。好問題。我想我們上次電話會議時，差不多就在我們進行上次電話會議的那段時間，我們剛收到第一批具有三年效期標示的產品。所以我們現在已經收到好幾個具有三年效期標示的產品了。我們大概有 15 到 20 個產品目前正在生產中，接下來幾週收到後，就會是三年效期標示。然後我們還有許多其他配方已經準備好，下次我們下採購單（PO）時就可以採用三年效期標示。所以確實在取得進展。

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 three-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?

我們已經把那個報廢（obsolescence）大幅降低。我認為我們很快會到達一個拐點：我們已經盡可能把在交易當時買進的庫存——我說的買進，是指交易當時——能挽救的都挽救了。而隨著越來越多三年效期標示的產品進來，我認為備抵（reserve）會下降，且因為我們報廢的庫存變少，毛利率應該會上升。這樣有回答你的問題嗎？

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 three-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.

有。我的意思是，如果把問題問得更精準一點，如果我沒記錯，你說大概每年約 200 萬美元是你們基本上在做沖銷（write off）。我想知道你能否提供某種節奏（cadence），例如我們目前是否仍大致在每年 200 萬美元的水準？然後你預期何時會降到 0？而且我想可能還有一些小幅的增量成本相關——你提到為了達到三年效期標示需要的超量（overages）。所以我想問整體節奏：你預期未來一年會是相當緩慢且線性的改善？還是這是一個更長期的過程，或是較短期的過程？任何補充說明都會有幫助。

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.

是的。我想——我沒有任何具體數字可以提供。我會說——大部分都已經在我們身後了。例如我們現在認列的費用遠不到每年 200 萬美元，對吧？所以當我們買下它、當我們收購這家公司時，如果你看我們在 10-Q 裡的存貨備抵（inventory reserve），我手邊沒有，但我可以很快查一下。但備抵裡的金額並不大。大概是十幾萬美元左右。原因是當你收購一家公司時，你必須以可變現淨值（net realizable value）入帳存貨。

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.

因此在我們入帳的當下，等於有大約 240 萬或 270 萬美元的備抵，實質上是從存貨總額中扣除，對吧？所以我們無法回頭把那個再追回來。在我們改善的範圍內，會反映在較高的毛利率上，對吧？我們某種程度上已經把那批存貨沖銷了。而如果我們能夠延長效期標示、或把它賣掉或做其他處理，對吧，那就是你會看到毛利率更高的方式之一，因為那批存貨你已經沖銷過了。

But again, that was -- the transaction was now, what, nine 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.

不過再說一次，那筆交易距離現在，嗯，大概已經是九個月前了，而我們正在逐步消化那批庫存。第一季計入淘汰（obsolescence）費用的金額，同樣地，我手邊沒有確切數字，但應該會非常小，對吧？所以我們算是已經到位了，或是更接近了。因此我認為我們做得更好了，而且我認為隨著時間推移，我們會持續小幅改善。

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?

好的。這很有幫助。然後第二點，我想更了解一下新的 MusclePharm 上架（placement）情況，你能分享一些關於那位客戶的資訊嗎？如果進展順利的話，這是否會——顯然，那位客戶還有更多門市可以擴點。另外也想請你比較一下，我知道去年我們做了 Vitamin Shoppe 的試點（pilot），我猜最後結果不是太理想。所以想請教你從那次學到什麼，因為你們持續嘗試為 MusclePharm 爭取更多批發通路的鋪貨？

Yes. So yes, the two products that are going in there, it's two 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.

是的。所以是的，這次進去的兩個產品，是兩種口味的液態 L-肉鹼（L-Carnitine）。這是一個相對較新的產品。所以這不是我們收購 MusclePharm 時他們就有的產品。這是我們在收購之後自行開發並推出的產品。

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.

我們公司本身在液態 L-肉鹼方面做得很多。在 iSatori（我們的 iSatory 品牌）裡，這對我們來說是一個非常大的 SKU，我們在 Amazon 每週能賣出數千件，而且也在像 Vitamin Shoppe 這樣的通路有鋪貨。我們也在其他一些品牌下銷售液態肉鹼，而那些品牌是在 GNC 販售的。

So it's a product type that we're very familiar with. So it's two 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.

所以這是一種我們非常熟悉的產品類型。因此，這次是兩種口味的液態 L-肉鹼進入 Kroger。我不清楚 Kroger 全美確切的門市數。我想他們在所有旗下招牌（banners）合計有 2,000 多家門市，例如 Fred Meyer、Smith's、Kroger 等等。我們將在全美約 700 到 800 家門市上架。

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.

所以並不是集中在某一個區域。而且我知道也涵蓋多個招牌。所以我們會進入一些 Kroger 門市、一些 Fred Meyer 門市、一些 Smith's 門市。產品應該會上架。我想我們會在這個月稍晚開始出貨，產品應該會在六月上架到貨架。

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.

我們會做一些和 Vitamin Shoppe 上市時相同的事情，但也會做很多其他的事情。我們會做所謂的 CTV。我們在 Vitamin Shoppe 也做過這個，但顯然那次在部分產品被下架（discontinued）方面結果不佳。澄清一下，有些 MusclePharm Pro 產品仍然在 Vitamin Shoppe 販售，但不是全部。CTV 是指你可以在串流服務的開頭投放廣告，而且可以做地理定位（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 three 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.

所以我們知道每一家會上架產品的門市實體地址、街道地址。而任何住在該門市三英里範圍內的人，對吧，我們都可以在串流服務上投放廣告。我們也可能會做一些直郵（direct mail）。他們會以頸掛式（neck band）優惠券的方式上市，對吧？所以像是立刻折 5 美元——就是你購買當天立刻折抵 5 美元——以鼓勵試用。所以這一直是我們新任 CMO 以及我們新整合的行銷團隊的一項重大倡議與重點，我們會盡一切努力讓它成功。

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?

是的。我問完這題就先下線。想確認一下，這是你們自己團隊原本就已經在推進的事情嗎？還是 Irwin 團隊有協助？例如他們有批發通路關係嗎？或者這件事是怎麼來的——你們是怎麼拿下這個客戶的？

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.

是的。所以這個案子有點像混合型，或者其實更——這個案子其實是從一開始就啟動了。我之前談過，這類鋪貨（sell-in）到任何大型實體連鎖通路的銷售流程。如果你運氣好要花好幾個月；而更常見的情況是要花好幾年，對吧？因為他們一年只會做一次或兩次品類重置（reset）。這一個案子其實是在我們收購 Irwin 之前就開始了，也就是我們去跟 Kroger 會面、做簡報並取得一些初步進展。

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.

而剛好 Irwin 團隊那邊，我們在 Kroger（Irwin 這一側）已經有不少產品，對吧？我們也使用同一個經紀商（broker）去接觸 Kroger。所以收購之後有很多協同效應能讓我們受益，但這個案子其實是在我們收購 Irwin 之前的會議就已經開始了。

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.

目前隊列中沒有其他問題。我現在想把時間交回給 Dayton Judd 作結語。

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.

感謝各位加入本次電話會議。我們非常感謝，並期待在八月中旬再次與各位交流。非常感謝。

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.

謝謝。今天的電話會議到此結束。您現在可以掛線，祝您有美好的一天。再次感謝您的參與。