LifeVantage Announces Financial Results for the Second Quarter of Fiscal 2017
Second Quarter Revenue of
Revenue in the First Six Months of Fiscal 2017 Increased 6.7% year-over-year
Company Reiterates Fiscal 2017 Guidance
Second Quarter Fiscal 2017 Highlights:
- Revenue decreased 5.9% to
$48.9 million , compared to$52.0 million in the second quarter of fiscal 2016; - Revenue in the
Americas decreased 6.1% and revenue inAsia/Pacific &Europe decreased 5.1%, both when compared to the comparable period of fiscal 2016; -
Adjusted EBITDA decreased 13.7% to
$3.9 million , compared to$4.5 million in the comparable period of fiscal 2016; - Earnings per diluted share were
$0.02 , compared to$0.11 in the second quarter of fiscal 2016; and - Adjusted earnings per diluted share were
$0.11 , compared to$0.14 in the second quarter of fiscal 2016.
"The second quarter results were consistent with our expectations," stated
Second Quarter Fiscal 2017 Results
For the second fiscal quarter ended
Commissions and incentives expense for the second quarter of fiscal 2017 was
Operating income for the second quarter of fiscal 2017 was
Net income for the second quarter of fiscal 2017 was
Fiscal 2017 First Six Months
Results
For the six months ended
Commissions and incentives expense for the first half of fiscal 2017 was
Operating income for the first six months of fiscal 2017 was
Net income for the first half of fiscal 2017 was
Balance Sheet & Liquidity
The Company generated
Fiscal Year 2017 Guidance
The Company is reiterating fiscal year 2017 annual guidance. The Company expects to generate revenue in the range of
Conference Call Information
The Company will hold an investor conference call today at
There will also be a simultaneous, live webcast available on the Investor Relations section of the Company's web site at http://investor.lifevantage.com/events.cfm. The webcast will be archived for approximately 30 days.
About
Forward Looking Statements
This document contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Words and expressions reflecting optimism, satisfaction or disappointment with current prospects, as well as words such as "believe", "hopes", "intends", "estimates", "expects", "projects", "plans", "anticipates", "look forward to", "goal", "may be" , and variations thereof, identify forward-looking statements, but their absence does not mean that a statement is not forward-looking. Examples of forward-looking statements include, but are not limited to, statements we make regarding our leadership in the global market, new product launches, the effectiveness of our policies and procedures, future growth and expected financial performance. Such forward-looking statements are not guarantees of performance and the Company's actual results could differ materially from those contained in such statements. These forward-looking statements are based on the Company's
current expectations and beliefs concerning future events affecting the Company and involve known and unknown risks and uncertainties that may cause the Company's actual results or outcomes to be materially different from those anticipated and discussed herein. These risks and uncertainties include, among others, those discussed in greater detail in the Company's Annual Report on Form 10-K and the Company's Quarterly Report on Form 10-Q under the caption "Risk Factors," and in other documents filed by the Company from time to time with the
About Non-GAAP Financial Measures
We define Non-GAAP EBITDA as earnings before interest expense, income taxes, depreciation and amortization and Non-GAAP Adjusted EBITDA as earnings before interest expense, income taxes, depreciation and amortization, stock compensation expense, other income, net, and certain other adjustments. Non-GAAP EBITDA and Non-GAAP Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. We define Non-GAAP Net Income and Non-GAAP Earnings per Share as GAAP net income less certain tax adjusted non-recurring one-time expenses incurred during the period.
We are presenting Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP Earnings Per Share because management believes that they provide additional ways to view our operations when considered with both our GAAP results and the reconciliation to net income, which we believe provides a more complete understanding of our business than could be obtained absent this disclosure. Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP Earnings Per Share are presented solely as supplemental disclosure because: (i) we believe these measures are a useful tool for investors to assess the operating performance of the business without the effect of these items; (ii) we believe that investors will find this data useful in assessing shareholder value; and (iii) we use Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP Earnings Per Share internally as benchmarks to evaluate our operating performance or compare our performance to that of our competitors. The use of Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP Earnings per Share has limitations and you should not consider these measures in isolation from or as an alternative to the relevant GAAP measure of net income prepared in accordance with GAAP, or as a measure of profitability or liquidity.
The tables set forth below present Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP Earnings per Share which are non-GAAP financial measures to Net Income and Earnings per Share, our most directly comparable financial measures presented in accordance with GAAP.
| LIFEVANTAGE CORPORATION AND SUBSIDIARIES | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (unaudited) | ||||||||
| (In thousands, except per share data) | As of | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 11,731 | $ | 7,883 | ||||
| Accounts receivable | 717 | 1,552 | ||||||
| Income tax receivable | 903 | - | ||||||
| Inventory, net | 21,377 | 25,116 | ||||||
| Current deferred income tax asset | - | 2,776 | ||||||
| Prepaid expenses and deposits | 1,993 | 5,082 | ||||||
| Total current assets | 36,721 | 42,409 | ||||||
| Property and equipment, net | 2,885 | 3,456 | ||||||
| Intangible assets, net | 1,698 | 1,744 | ||||||
| Long-term deferred income tax asset | 3,906 | 1,130 | ||||||
| Other long-term assets | 1,305 | 1,520 | ||||||
| TOTAL ASSETS | $ | 46,515 | $ | 50,259 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 5,037 | $ | 8,891 | ||||
| Commissions payable | 6,722 | 7,719 | ||||||
| Income tax payable | - | 1,206 | ||||||
| Other accrued expenses | 9,780 | 8,734 | ||||||
| Current portion of long-term debt | 2,000 | 2,000 | ||||||
| Total current liabilities | 23,539 | 28,550 | ||||||
| Long-term debt | ||||||||
| Principal amount | 6,500 | 7,500 | ||||||
| Less: unamortized discount and deferred offering costs | (76 | ) | (91 | ) | ||||
| Long-term debt, net of unamortized discount and deferred offering costs | 6,424 | 7,409 | ||||||
| Other long-term liabilities | 2,041 | 2,169 | ||||||
| Total liabilities | 32,004 | 38,128 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity | ||||||||
| Preferred stock - par value | - | - | ||||||
| Common stock - par value | 14 | 14 | ||||||
| Additional paid-in capital | 121,165 | 120,150 | ||||||
| Accumulated deficit | (106,613 | ) | (108,076 | ) | ||||
| Accumulated other comprehensive income (loss) | (55 | ) | 43 | |||||
| Total stockholders' equity | 14,511 | 12,131 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 46,515 | $ | 50,259 | ||||
| LIFEVANTAGE CORPORATION AND SUBSIDIARIES | |||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | |||||||||||||||||
| (unaudited) | |||||||||||||||||
| For the Three Months Ended December 31, | For the Six Months Ended | ||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||
| Revenue, net | $ | 48,947 | $ | 51,995 | $ | 103,841 | $ | 97,347 | |||||||||
| Cost of sales | 7,500 | 7,842 | 16,332 | 14,817 | |||||||||||||
| Gross profit | 41,447 | 44,153 | 87,509 | 82,530 | |||||||||||||
| Operating expenses: | |||||||||||||||||
| Commissions and incentives | 23,540 | 27,297 | 49,836 | 49,340 | |||||||||||||
| Selling, general and administrative | 17,207 | 13,824 | 34,987 | 27,487 | |||||||||||||
| Total operating expenses | 40,747 | 41,121 | 84,823 | 76,827 | |||||||||||||
| Operating income | 700 | 3,032 | 2,686 | 5,703 | |||||||||||||
| Other income (expense): | |||||||||||||||||
| Interest expense | (138 | ) | (619 | ) | (275 | ) | (1,368 | ) | |||||||||
| Other income (expense), net | (150 | ) | 6 | (321 | ) | (210 | ) | ||||||||||
| Total other income (expense) | (288 | ) | (613 | ) | (596 | ) | (1,578 | ) | |||||||||
| Income before income taxes | 412 | 2,419 | 2,090 | 4,125 | |||||||||||||
| Income tax expense | (129 | ) | (819 | ) | (627 | ) | (1,459 | ) | |||||||||
| Net income | $ | 283 | $ | 1,600 | $ | 1,463 | $ | 2,666 | |||||||||
| Net income per share: | |||||||||||||||||
| Basic | $ | 0.02 | $ | 0.12 | $ | 0.11 | $ | 0.19 | |||||||||
| Diluted | $ | 0.02 | $ | 0.11 | $ | 0.10 | $ | 0.19 | |||||||||
| Weighted average shares outstanding: | |||||||||||||||||
| Basic | 13,840 | 13,718 | 13,830 | 13,714 | |||||||||||||
| Diluted | 14,132 | 14,016 | 14,176 | 13,952 | |||||||||||||
| Other comprehensive income (loss), net of tax: | |||||||||||||||||
| Foreign currency translation adjustment | (189 | ) | 9 | (98 | ) | 26 | |||||||||||
| Other comprehensive income (loss), net of tax: | (189 | ) | 9 | (98 | ) | 26 | |||||||||||
| Comprehensive income | $ | 94 | $ | 1,609 | $ | 1,365 | $ | 2,692 | |||||||||
| LIFEVANTAGE CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||||||
| Revenue by Region | ||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||
| $ | 37,613 | 77 | % | $ | 40,055 | 77 | % | $ | 77,748 | 75 | % | $ | 74,781 | 77 | % | |||||||||||
| 11,334 | 23 | % | 11,940 | 23 | % | 26,093 | 25 | % | 22,566 | 23 | % | |||||||||||||||
| Total | $ | 48,947 | 100 | % | $ | 51,995 | 100 | % | $ | 103,841 | 100 | % | $ | 97,347 | 100 | % | ||||||||||
| Active Independent Distributors (1) | ||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||
| 2016 | 2015 | |||||||||||||||||||||||||
| 46,000 | 73 | % | 46,000 | 69 | % | |||||||||||||||||||||
| 17,000 | 27 | % | 21,000 | 31 | % | |||||||||||||||||||||
| Total | 63,000 | 100 | % | 67,000 | 100 | % | ||||||||||||||||||||
| Active Preferred Customers(2) | ||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||
| 2016 | 2015 | |||||||||||||||||||||||||
| 89,000 | 80 | % | 96,000 | 82 | % | |||||||||||||||||||||
| 22,000 | 20 | % | 21,000 | 18 | % | |||||||||||||||||||||
| Total | 111,000 | 100 | % | 117,000 | 100 | % | ||||||||||||||||||||
| (1) Active Independent Distributors have purchased product in the prior three months for retail or personal consumption. | ||||||||||||||||||||||||||
| (2) Active Preferred Customers have purchased product in the prior three months for personal consumption only. | ||||||||||||||||||||||||||
| LIFEVANTAGE CORPORATION AND SUBSIDIARIES | |||||||||||||
| Reconciliation of GAAP Net Income to Non-GAAP EBITDA and Non-GAAP Adjusted EBITDA: (Unaudited) | |||||||||||||
| For the Three Months Ended | For the Six Months Ended | ||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||
| (In thousands) | |||||||||||||
| GAAP Net income | $ | 283 | $ | 1,600 | $ | 1,463 | $ | 2,666 | |||||
| Interest Expense | 138 | 619 | 275 | 1,368 | |||||||||
| Provision for income taxes | 129 | 819 | 627 | 1,459 | |||||||||
| Depreciation and amortization | 414 | 452 | 826 | 983 | |||||||||
| Non-GAAP EBITDA: | 964 | 3,490 | 3,191 | 6,476 | |||||||||
| Adjustments: | |||||||||||||
| Stock compensation expense | 576 | 450 | 1,515 | 642 | |||||||||
| Other (income) expense, net | 150 | (6 | ) | 321 | 210 | ||||||||
| Other adjustments* | 2,165 | 535 | 3,176 | 1,614 | |||||||||
| Total adjustments | 2,891 | 979 | 5,012 | 2,466 | |||||||||
| Non-GAAP Adjusted EBITDA | $ | 3,855 | $ | 4,469 | $ | 8,203 | $ | 8,942 | |||||
| *Other adjustments for the three months ended | |||||||||||||
| LIFEVANTAGE CORPORATION AND SUBSIDIARIES | |||||||||||
| Reconciliation of GAAP Net Income to Non-GAAP Net Income and Non-GAAP Adjusted EPS: (Unaudited) | |||||||||||
| For the Three Months Ended | For the Six Months Ended | ||||||||||
| 2016 | 2015 | 2016 | 2015* | ||||||||
| (In thousands) | |||||||||||
| GAAP Net income | $ | 283 | $ | 1,600 | $ | 1,463 | $ | 2,666 | |||
| Executive team severance expenses, net (1) | 55 | - | 55 | 314 | |||||||
| Executive team recruiting and transition expenses(2) | 45 | 243 | 45 | 503 | |||||||
| Reverse stock split administrative expenses(3) | - | 103 | - | 103 | |||||||
| Audit committee independent review expenses(4) | 1,211 | - | 1,919 | - | |||||||
| Non-GAAP Net Income: | 1,594 | 1,946 | 3,482 | 3,586 | |||||||
| For the Three Months Ended | For the Six Months Ended | ||||||||||
| 2016 | 2015 | 2016 | 2015* | ||||||||
| Diluted earnings per share, as reported | $ | 0.02 | $ | 0.11 | $ | 0.10 | $ | 0.19 | |||
| Executive team severance expenses (1) | - | - | - | 0.02 | |||||||
| Executive team recruiting and transition expenses(2) | - | 0.02 | - | 0.04 | |||||||
| Reverse stock split administrative expenses(3) | - | 0.01 | - | 0.01 | |||||||
| Audit committee independent review expenses(4) | 0.09 | - | 0.14 | - | |||||||
| Diluted earnings per share, as adjusted | $ | 0.11 | $ | 0.14 | $ | 0.24 | $ | 0.26 | |||
| *Executive team severance expenses for the prior period non-GAAP adjustments have been restated from previously reported results to display these expenses net of unvested stock award reversals for comparability purposes | |||||||||||
| (1) Net of | |||||||||||
| (2) Net of | |||||||||||
| (3) Net of | |||||||||||
| (4) Net of | |||||||||||
Investor Relations Contacts:Cindy England Director of Investor Relations (801) 432-9036 cengland@lifevantage.com -or-Scott Van Winkle Managing Director, ICR (617) 956-6736 scott.vanwinkle@icrinc.com
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