LAKE FOREST, Calif., Feb. 18, 2016 /PRNewswire/ -- XFit Brands, Inc. (OTC: XFTB), a global supplier of fitness and MMA equipment sold at retail and fitness outlets worldwide whose brands include XFit Brands®, Throwdown®, and Transformations™, today announced earnings for its second fiscal quarter, with Net Revenue increasing 27%, Gross Margin improving 69%.
XFit reported revenues from operations for the six months ended December 31, 2015, of $1,132,518, a 27% increase versus the six months ended December 31, 2014. Gross profit increased by $204,598, or 68.7% over the same period. Gross profit margin increased to 44% for the six months ended December 31, 2015 as compared to 33% in the prior year period. This significant improvement in gross profit margin materialized from both a shift in mix to higher margin recurring functional fitness items and an improvement in manufacturing cost of goods sold and supply chain efficiencies.
Driving the improvement in top-line growth and gross profit was the continued execution of the company's one-stop shop strategy with existing and new major national fitness operators. The firm's broader functional fitness portfolio, supply chain expertise and customer service abilities enabled the Company's strategy to gain further traction and significantly impacted financial performance during the quarter.
For the three months ended December 31, 2015, the company's Operating Income improved 51% to a narrowed loss of ($198,689), an improvement of $208,108 versus the three months ended December 31, 2014. Driving the improved operating income was the improvement in Gross Margin and a decrease in overall operating expenses of 21% in the quarter, driven by warehouse consolidated and zero based budgeting implementation.
On a non-GAAP basis, the Company earned $69,904 in Operating Income in the quarter, when taking out one-time expenses associated with the IPO and other non-cash expenses. Reconciling to reported financials, the one-time and non-cash items included stock based compensation, financing costs, and SEC and IPO costs incurred during the quarter that totaled $268,593.
"We are extremely pleased with another record breaking revenue quarter," commented David Vautrin, Chief Executive of XFit Brands. "We have taken significant complexity out of our business and have strengthened both our sales conversion model and operational efficiencies which are paying dividends at both the top and bottom line. As a result, and after one-time expenses, the Company achieved positive Operating Income for the first time in our public company history."
About XFit Brands®
XFit Brands, Inc. is one of the leading suppliers of functional fitness brands, products, and equipment sold at retail and fitness outlets worldwide. The company provides a full portfolio of products and services spanning MMA, CrossFit, and other High and low impact fitness regimes and owns the trademarks XFIT® for its Functional Fitness line, Throwdown® for its MMA portfolio, and Transformations® in programming. The company's portfolio of brands and products are sold in more than 20 countries around the world and supply many of the leading Gym and Fitness outlets throughout the United States. The Company's websites are www.xfitbrands.com and www.throwdown.com.
Safe Harbor Disclosure
This press release contains forward-looking statements that are made pursuant to the safe harbor provisions within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are any statement reflecting management's current expectations regarding future results of operations, economic performance, financial condition and achievements of XFit, including statements regarding XFit's expectation to see continued growth. The forward-looking statements are based on the assumption that operating performance and results will continue in line with historical results. Management believes these assumptions to be reasonable but there is no assurance that they will prove to be accurate. Forward-looking statements, specifically those concerning future performance are subject to certain risks and uncertainties, and actual results may differ materially. XFit competes in a rapidly growing and transforming industry, and other factors disclosed in the Company's filings with the Securities and Exchange Commission may affect the Company's operations. Unless required by applicable law, XFit undertakes no obligation to update or revise any forward-looking statements.
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SOURCE XFit Brands, Inc.