Fitell Corporation Announces First Half-Year Financial Results

TAREN POINT, Australia, March 05, 2024 (GLOBE NEWSWIRE) -- Fitell Corporation (Nasdaq: FTEL) ("Fitell" or the "Company"), an online retailer of gym and fitness equipment in Australia, today announced its half-year financial results for the six months ended December 31, 2023.

Six-month Period ended December 31, 2023 Financial Highlights

• Revenue was $2.1 million, a decrease of $0.9 million or 30.5% compared to the same period in 2022.
• Gross profit was $0.85 million, a decrease of $745,555 or 46.8% from the same period in 2022.

Revenue by Categories vs. Same Period of Prior Year

• Merchandise revenue decreased by 6.7% or $144,310 to $2,007,562. The decrease was primarily attributable to: (i) a 34.3% increase in sales orders, primarily due to promotional campaigns and new marketing channels; and (ii) a decrease of 30.5% in the average revenue per order, mainly due to consumer spending changes in response to recent economic conditions in Australia. Management believes that the market will gradually recover, and the fitness and wellness industry in Australia is still promising in the long-term.
  
• In the three months ended December 2023, merchandise revenue increased $103,849 or 10.9% compared to the same period in 2022.
  
• Sales of consumable products represents the revenue generated by selling various lifestyle products. There were no sales of consumable products, and management plans to develop this business segment again whenever business opportunity arises.
  
• Revenue from licensing customers represents the services provided to gym studios in overseas markets. Revenue from licensing customers decreased by 61.4% or $181,308 to $115,557. The decrease was due to management suspending overseas expansions recently due to market sentiment from inflation and rising interest rates in the global market, Management plans to expand these services again, especially to the Asia market, when the time is right.
  

Cost of goods sold was $1,275,967, representing a decrease by approximately $185,478, or 12.7% from the same period in 2022.

Gross profit was $847,152, a decrease of $745,555, or 46.8% from the same period in 2022. The decrease was due to the drop in merchandise revenue, sales of consumable products, and licensing income. Gross profit margin was 39.9%, a decrease from 52.1% for the six-month period ended December 31, 2022, due to the decline of the high-margin consumable products and licensing segments.

Consulting fees were $1,272,468 for the six-month period ended December 31, 2023, compared to nil in the same period of 2022. Since the successful listing on Nasdaq, the management has proactively engaged various consulting firms to assist the company in setting long-term business development plans and identifying new business growth opportunities.

General and administrative expenses were $1,268,545, an increase of $1,099,110, or 648.6% from $169,445 for the same period of 2022. The increase was mainly due to (i) research and development expenses on mobile app of $798,684; (ii) an $99,801 increase of insurance expense related to D&O insurance coverage post-Nasdaq listing; and (iii) an $71,945 increase of audit fees due to the Company’s listing.

Net loss was $2,661,707, a decrease of $2,602,382 from the same period in 2022. The net loss was mainly due to the aforesaid decrease in total revenues and the increase in consulting fees and general and administrative expenses.

About Fitell Corporation

Fitell Corporation, through GD Wellness Pty Ltd (“GD”), its wholly owned subsidiary, is an online retailer of gym and fitness equipment both under its proprietary brands and other brand names in Australia. The company’s mission is to build an ecosystem with a whole fitness and wellness experience powered by technology to our customers. GD has served over 100,000 customers with large portions of sales from repeat customers over the years. The Company’s brand portfolio can be categorized into three proprietary brands under its Gym Direct brand: Muscle Motion, Rapid Motion, and FleetX, in over 2,000 stock-keeping units (SKUs). For additional information, please visit the Company’s website at www.fitellcorp.com.

Forward-Looking Statements

This press release contains “forward-looking statements”. Forward-looking statements reflect our current view about future events. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as “may,” “will,” “could,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “propose,” “potential,” “continue” or similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and other filings with the SEC.

For more information, please contact:

Chief Financial Officer
Jamarson Kong
jamarson@gymdirect.com.au

Investor Relations
ir@fitellcorp.com