LifeVantage Announces Second Quarter Fiscal Year 2013 Results
Second Quarter Net Revenue Increased 111% Over Prior Year Period to
Second Quarter Operating Cash Flow Grew 16% Over Prior Year Period to
Company Reiterates Full Year Fiscal 2013 Revenue Guidance
Fiscal 2013 Second Quarter Highlights Compared to the Same Period Last Year Include:
-
Net revenue increased 111% to
$53.4 million ; -
Operating cash flow grew 16% to
$5.4 million ; -
Operating income was
$487 thousand which included$5.9 million of expenses related to the voluntary product recall we announced in December; -
Non-GAAP adjusted operating income was
$6.4 million excluding one-time product recall related costs; and -
As of
December 31, 2012 , cash and cash equivalents grew to$28.5 million .
Fiscal 2013 Second Quarter Results
For the fiscal quarter ended
The year-over-year sales increase was driven by significant increases in the number of both active independent distributors and active preferred customers. On a sequential basis, the increase in the numbers of active distributors and active preferred customers were modest primarily due to soft seasonality through the holiday season, the previously announced transition to "on-the-ground" operations in
Gross profit for the second fiscal quarter ended
Operating expenses for the second quarter of fiscal year 2013 increased to
Operating income was
Income tax for the second quarter of fiscal 2013 was
Net income for the second quarter of fiscal year 2013 was
Fiscal 2013 First Six Months Results
For the six months ended
Balance Sheet & Liquidity
The Company's cash and cash equivalents at
Fiscal Year 2013 Guidance
The Company anticipates continued strong growth in fiscal 2013 and is reiterating its previously issued revenue guidance and revising profitability guidance.
Conference Call Information
The Company will hold an investor conference call today at
There also will 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
The
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" 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 anticipated product expansion, international expansion, our revenue, operating income, operating margins, earnings per share, cash flow from operations and future investment and growth, as well as statements regarding costs associated with our product recall and improvements made
in our manufacturing processes. 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, the Company's inability to successfully expand our operations in existing and other markets and thereafter manage our growth; the Company's ability to strengthen its business in
About Non-GAAP Financial Measures
We define Adjusted Gross Profit as Gross Profit as determined in accordance with GAAP excluding certain costs associated with the product recall included in GAAP cost of sales. We define Adjusted Gross Margin as gross margin as determined in accordance with GAAP (gross profit as a percentage of sales, net) excluding the costs associated with the product recall. We define Adjusted Operating Income as Operating Income excluding certain costs associated with the product recall. We define Adjusted Net Income as Net Income excluding certain costs associated with the product recall and the applicable tax impacts associated with these items. Adjusted EPS is calculated based on Adjusted Net Income and the weighted average number of common and potential common shares outstanding during the period. Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income, Adjusted Net Income and Adjusted EPS may not be comparable to similarly titled measures reported by other companies.
We are presenting Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income, Adjusted Net Income and Adjusted EPS because management believes that excluding the product recall costs from the relevant GAAP measures, when viewed with our results under GAAP and the accompanying reconciliations provides useful information about our period-over-period growth and profitability and provides additional information that is useful for evaluating our operating performance. Each of Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income, Adjusted Net Income and Adjusted EPS is presented solely as a supplemental disclosure because: (i) we believe it is a useful tool for investors to assess the operating performance of the business without the effect of these items; and (ii) we use Adjusted Gross Profit, Adjusted Operating Income, Adjusted Net Income and Adjusted EPS internally as a benchmark to evaluate our operating performance or compare our performance to that of our competitors. The use of Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income, Adjusted Net Income and Adjusted EPS has limitations and you should not consider these measures in isolation from or as an alternative to the relevant GAAP measures, including gross profit, gross margin, operating income, net income or net income per diluted share prepared in accordance with GAAP, or as a measure of profitability or liquidity.
The tables below set forth the reconciliation of Adjusted Gross Profit, Adjusted Operating Income, Adjusted Net Income and Adjusted EPS, all of which are non-GAAP financial measures, to Operating Income, Net Income, and Diluted EPS, our most directly comparable financial measures presented in accordance with GAAP.
| LIFEVANTAGE CORPORATION AND SUBSIDIARIES | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (Unaudited) | ||
| (In thousands, except per share data) | As of, | |
| ASSETS |
|
|
| Current assets | ||
| Cash and cash equivalents | $ 28,466 | $ 24,648 |
| Accounts receivable | 728 | 333 |
| Inventory | 9,552 | 11,353 |
| Current deferred income tax asset | 1,244 | 1,244 |
| Prepaid expenses and deposits | 4,348 | 1,250 |
| Total current assets | 44,338 | 38,828 |
| Long-term assets | ||
| Property and equipment, net | 5,671 | 1,997 |
| Intangible assets, net | 1,814 | 1,882 |
| Long-term deferred income tax asset | 1,480 | 1,479 |
| Deposits | 1,525 | 342 |
| TOTAL ASSETS | $ 54,828 | $ 44,528 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities | ||
| Accounts payable | $ 4,778 | $ 3,615 |
| Commissions payable | 6,235 | 5,631 |
| Reserve for sales returns | 742 | 863 |
| Accrued bonuses | 150 | 2,287 |
| Income tax payable | 534 | 546 |
| Other accrued expenses | 5,723 | 2,932 |
| Customer deposits | 575 | 154 |
| Total current liabilities | 18,737 | 16,028 |
| Long-term liabilities | ||
| Other long-term liabilities | 1,058 | 217 |
| Total liabilities | 19,795 | 16,245 |
| Commitments and contingencies | ||
| Stockholders' equity | ||
|
Preferred stock - par value |
-- | -- |
|
Common stock - par value |
115 | 111 |
| Additional paid-in capital | 107,702 | 105,154 |
| Accumulated deficit | (72,826) | (76,961) |
| Currency translation adjustment | 42 | (21) |
| Total stockholders' equity | 35,033 | 28,283 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 54,828 | $ 44,528 |
| LIFEVANTAGE CORPORATION AND SUBSIDIARIES | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ||||
| (Unaudited) | ||||
|
For the three months ended |
For the six months ended |
|||
| 2012 | 2011 | 2012 | 2011 | |
| (In thousands, except per share data) | ||||
| Sales, net | $ 53,438 |
|
$ 106,297 | $ 45,367 |
| Cost of sales | 8,799 | 3,680 | 16,606 | 6,636 |
| Product recall costs | 5,879 | -- | 5,879 | -- |
| Gross profit | 38,760 | 21,604 | 83,812 | 38,731 |
| Operating expenses: | ||||
| Sales and marketing | 29,593 | 13,878 | 59,133 | 24,420 |
| General and administrative | 7,495 | 3,036 | 15,404 | 5,876 |
| Research and development | 742 | 312 | 1,257 | 546 |
| Depreciation and amortization | 443 | 97 | 681 | 177 |
| Total operating expenses | 38,273 | 17,323 | 76,475 | 31,019 |
| Operating income | 487 | 4,281 | 7,337 | 7,712 |
| Other income (expense): | ||||
| Other expense | (16) | 26 | (1) | (13) |
| Change in fair value of derivative warrant liabilities | -- | 3,142 | -- | 3,947 |
| Total other income (expense) | (16) | 3,168 | (1) | 3,934 |
| Net income before income taxes | 471 | 7,449 | 7,336 | 11,646 |
| Income tax expense | (262) | 1,309 | (2,963) | 837 |
| Net income | $ 209 | $ 8,758 | $ 4,373 | $ 12,483 |
| Net income per share, basic | $ 0.00 | $ 0.09 | $ 0.04 | $ 0.13 |
| Net income per share, diluted | $ 0.00 | $ 0.05 | $ 0.03 | $ 0.07 |
| Weighted average shares, basic | 113,449 | 99,409 | 112,158 | 99,184 |
| Weighted average shares, diluted | 127,131 | 121,231 | 126,046 | 121,003 |
| Other comprehensive income, net of tax: | ||||
| Foreign currency translation adjustment | 68 | 8 | 63 | 92 |
| Other comprehensive income | $ 68 | $ 8 | $ 63 | $ 92 |
| Comprehensive income | $ 277 | $ 8,766 | $ 4,436 | $ 12,575 |
| Reconciliation of GAAP Gross Profit to Non-GAAP Adjusted Gross Profit: | ||||
|
For the three months ended |
For the six months ended |
|||
| 2012 | 2011 | 2012 | 2011 | |
| (In thousands) | ||||
| GAAP Gross Profit | $ 38,760 | $ 21,604 | $ 83,812 | $ 38,731 |
| Adjustments: | ||||
| Cost of sales associated with product recall | 5,879 | -- | 5,879 | -- |
| Total adjustments | 5,879 | -- | 5,879 | -- |
| Non-GAAP Adjusted Gross Profit | $ 44,639 | $ 21,604 | $ 89,691 | $ 38,731 |
| Reconciliation of GAAP Operating Income to Non-GAAP Adjusted Operating Income: | ||||
|
For the three months ended |
For the six months ended |
|||
| 2012 | 2011 | 2012 | 2011 | |
| (In thousands) | ||||
| GAAP Operating Income | $ 487 | $ 4,282 | $ 7,337 | $ 7,712 |
| Adjustments: | ||||
| Costs associated with product recall: | ||||
| Cost of sales | 5,879 | -- | 5,879 | -- |
| General and administrative | 71 | -- | 71 | -- |
| Total adjustments | 5,950 | -- | 5,950 | -- |
| Non-GAAP Adjusted Operating Income | $ 6,437 | $ 4,282 | $ 13,287 | $ 7,712 |
| Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and related Adjusted Earnings Per Share: | ||||
|
For the three months ended |
For the six months ended |
|||
| 2012 | 2011 | 2012 | 2011 | |
| (In thousands) | ||||
| GAAP Net Income | $ 209 | $ 8,759 | $ 4,373 | $ 12,483 |
| Adjustments: | ||||
| Costs associated with product recall: | ||||
| Cost of sales | 5,879 | -- | 5,879 | -- |
| General and administrative | 71 | -- | 71 | -- |
| Tax impact of adjustments | (2,358) | -- | (2,358) | -- |
| Total adjustments | 3,592 | -- | 3,592 | -- |
| Non-GAAP Adjusted Net Income and Adjusted EPS | $ 3,801 | $ 8,759 | $ 7,965 | $ 12,483 |
| Diluted Shares | 127,131 | 121,231 | 126,046 | 121,003 |
| Non-GAAP Adjusted Diluted EPS | $ 0.03 | $ 0.05 | $ 0.06 | $ 0.07 |
CONTACT: Investor Relations Contact:
Cindy England (801) 432-9036
Director of Investor Relations
-or-
John Mills (310) 954-1105
Senior Managing Director, ICR, LLC
News Provided by Acquire Media