LifeVantage Announces Third Quarter Fiscal Year 2013 Results
Third Quarter Net Revenue Increased 39% Over Prior Year Period to
Independent Distributors Grew 19% in Third Quarter, 2013 Compared to Second Quarter, 2013
Company Generated Net Income of
Company Announces Intent to Pursue
Company Updates Full Year Fiscal 2013 Guidance
Fiscal 2013 Third Quarter Highlights:
-
Net revenue increased 39% to
$50.4 million compared to same period last year; -
Gross profit increased to
$43.5 million compared to$31.2 million in same period last year; -
The number of active independent distributors increased to approximately 63,000 as of
March 31, 2013 , compared to 55,000 as ofDecember 31, 2012 and 37,000 as ofMarch 31, 2012 ; and -
The Company completed
$5 million stock repurchase program announced onDecember 15, 2012 .
"Based on our projected revenue growth and our expected improvements in operating cash flow, we are pleased to announce that we have engaged
Fiscal 2013 Third Quarter Results
For the fiscal quarter ended
The year-over-year sales increase was driven by increases in the number of both active independent distributors and active preferred customers. The number of active independent distributors, people who purchased product in the prior three months for retail and personal consumption, increased to approximately 63,000 as of
Gross profit for the third fiscal quarter ended
Operating income for the third fiscal quarter of 2013 was
Net income for the third quarter of fiscal year 2013 was
Fiscal 2013 First Nine Months Results
For the nine months ended
Operating income for the first nine months of fiscal year 2013 was
Net income for the nine months ended
Excluding one-time product recall costs, adjusted gross profit, adjusted operating income, adjusted net income and adjusted diluted EPS for the nine months ended
Balance Sheet & Liquidity
The Company's cash and cash equivalents at
During the third quarter of fiscal year 2013, the Company completed its previously authorized
Fiscal Year 2013 Guidance
Due to events that affected revenue late in the second fiscal quarter and continuing into the third quarter, the Company is revising its GAAP 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
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 our future revenue, operating income, operating margins, earnings per share, cash flow from operations and future investment and growth, as well as statements regarding recovery of costs associated with our product recall, improvements made in our manufacturing processes and our
ability to obtain a credit facility and repurchase shares of our stock. 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 Gross Profit, 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 | $ 27,239 | $ 24,648 |
| Accounts receivable | 1,381 | 333 |
| Inventory | 8,025 | 11,353 |
| Current deferred income tax asset | 1,244 | 1,244 |
| Prepaid expenses and deposits | 5,985 | 1,250 |
| Total current assets | 43,874 | 38,828 |
| Long-term assets | ||
| Property and equipment, net | 5,926 | 1,997 |
| Intangible assets, net | 1,781 | 1,882 |
| Long-term deferred income tax asset | 1,479 | 1,479 |
| Deposits | 1,419 | 342 |
| TOTAL ASSETS | $ 54,479 | $ 44,528 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities | ||
| Accounts payable | $ 4,608 | $ 3,615 |
| Commissions payable | 7,201 | 5,631 |
| Reserve for sales returns | 821 | 863 |
| Accrued bonuses | 100 | 2,287 |
| Income tax payable | 70 | 546 |
| Other accrued expenses | 5,552 | 2,932 |
| Customer deposits | 228 | 154 |
| Total current liabilities | 18,580 | 16,028 |
| Long-term liabilities | ||
| Other long-term liabilities | 1,042 | 217 |
| Total liabilities | 19,622 | 16,245 |
| Commitments and contingencies | ||
| Stockholders' equity | ||
|
Preferred stock - par value |
-- | -- |
|
Common stock - par value |
116 | 111 |
| Additional paid-in capital | 108,850 | 105,154 |
| Accumulated deficit | (74,064) | (76,961) |
| Currency translation adjustment | (45) | (21) |
| Total stockholders' equity | 34,857 | 28,283 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 54,479 | $ 44,528 |
| LIFEVANTAGE CORPORATION AND SUBSIDIARIES | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ||||
| (Unaudited) | ||||
|
For the three months ended |
For the nine months ended |
|||
| 2013 | 2012 | 2013 | 2012 | |
| (In thousands, except per share data) | ||||
| Sales, net | $ 50,370 | $ 36,212 | $ 156,667 | $ 81,579 |
| Cost of sales | 7,330 | 4,989 | 23,936 | 11,625 |
| Product recall costs | (461) | -- | 5,418 | -- |
| Gross profit | 43,501 | 31,223 | 127,313 | 69,954 |
| Operating expenses: | ||||
| Sales and marketing | 29,844 | 19,676 | 88,976 | 44,097 |
| General and administrative | 8,370 | 4,616 | 23,227 | 10,492 |
| Research and development | 848 | 378 | 2,105 | 924 |
| Depreciation and amortization | 499 | 146 | 1,180 | 323 |
| Total operating expenses | 39,561 | 24,816 | 115,488 | 55,836 |
| Operating income | 3,940 | 6,407 | 11,825 | 14,118 |
| Other income (expense): | ||||
| Other income (expense), net | 122 | 21 | (426) | 9 |
| Change in fair value of derivative warrant liabilities | -- | (10,687) | -- | (6,741) |
| Total other income (expense) | 122 | (10,666) | (426) | (6,732) |
| Net income before income taxes | 4,062 | (4,259) | 11,399 | 7,386 |
| Income tax (expense) benefit | (646) | (587) | (3,609) | 251 |
| Net income (loss) | $ 3,416 | $ (4,846) | $ 7,790 | $ 7,637 |
| Net income (loss) per share, basic | $ 0.03 | $ (0.05) | $ 0.07 | $ 0.08 |
| Net income (loss) per share, diluted | $ 0.03 | $ (0.05) | $ 0.06 | $ 0.07 |
| Weighted average shares, basic | 112,806 | 103,016 | 112,203 | 100,451 |
| Weighted average shares, diluted | 124,985 | 103,016 | 125,371 | 115,232 |
| Other comprehensive income, net of tax: | ||||
| Foreign currency translation adjustment | (87) | (80) | (24) | 12 |
| Other comprehensive income | $ (87) | $ (80) | $ (24) | $ 12 |
| Comprehensive income | $ 3,329 | $ (4,926) | $ 7,766 | $ 7,649 |
| Reconciliation of GAAP Gross Profit to Non-GAAP Adjusted Gross Profit: | ||||
|
For the three months ended |
For the nine months ended |
|||
| 2013 | 2012 | 2013 | 2012 | |
| (In thousands) | ||||
| GAAP Gross profit | $ 43,501 | $ 31,223 | $ 127,313 | $ 69,954 |
| Adjustments: | ||||
| Cost of sales associated with product recall | (461) | -- | 5,418 | -- |
| Total adjustments | (461) | -- | 5,418 | -- |
| Non-GAAP Adjusted gross profit | $ 43,040 | $ 31,223 | $ 132,731 | $ 69,954 |
| Reconciliation of GAAP Operating Income to Non-GAAP Adjusted Operating Income: | ||||
|
For the three months ended |
For the nine months ended |
|||
| 2013 | 2012 | 2013 | 2012 | |
| (In thousands) | ||||
| GAAP Operating income | $ 3,940 | $ 6,407 | $ 11,825 | $ 14,118 |
| Adjustments: | ||||
| Costs associated with product recall: | ||||
| Cost of sales | (461) | -- | 5,418 | -- |
| General and administrative | 158 | -- | 229 | -- |
| Total adjustments | (303) | -- | 5,647 | -- |
| Non-GAAP Adjusted operating income | $ 3,637 | $ 6,407 | $ 17,472 | $ 14,118 |
| Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and related Adjusted Earnings Per Share: | ||||
|
For the three months ended |
For the nine months ended |
|||
| 2013 | 2012 | 2013 | 2012 | |
| (In thousands) | ||||
| GAAP Net income (loss) | $ 3,416 | $ (4,846) | $ 7,790 | $ 7,637 |
| Adjustments: | ||||
| Costs associated with product recall: | ||||
| Cost of sales | (461) | -- | 5,418 | -- |
| General and administrative | 158 | -- | 229 | -- |
| Tax impact of adjustments | 107 | -- | (1,997) | -- |
| Total adjustments | (196) | -- | 3,650 | -- |
| Non-GAAP Adjusted net income (loss) | $ 3,220 | $ (4,846) | $ 11,440 | $ 7,637 |
| Diluted shares | 124,985 | 103,016 | 125,371 | 115,232 |
| Non-GAAP Adjusted diluted net income (loss) per share | $ 0.03 | $ (0.05) | $ 0.09 | $ 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
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