LifeVantage Announces Fourth Quarter and Full Fiscal Year 2013 Results
Full Fiscal Year Net Revenue Increased 65% Over Fiscal Year 2012 to
Fourth Quarter Net Revenue Increased 15.5% Over Prior Year Period to
Independent Distributor Count Grew 6% in Fourth Quarter, 2013 Compared to Third Quarter, 2013
Company Issues Fiscal 2014 Annual Guidance
Fiscal 2013 Fourth Quarter Highlights:
-
Net revenue increased 15.5% over the prior year period to
$51.5 million ; -
Gross profit increased to
$44.2 million compared to$38.2 million in same period last year; and - The number of active independent distributors increased 45% year-over-year and 6% on a sequential quarterly basis.
Fiscal 2013 Full Year Highlights:
-
Net revenue increased 65% over the prior year to
$208.2 million ; -
Gross profit increased to
$171.5 compared to$108.1 million in the prior year; -
Generated full year GAAP net income of
$7.6 million ; -
Ended year with improved cash balance of
$26.3 million ; and - Repurchased approximately 3 million shares of common stock in fiscal 2013.
Fiscal 2013 Fourth Quarter Results
For the fourth fiscal quarter ended
Gross profit for the fourth fiscal quarter ended
Operating income for the fourth fiscal quarter of 2013 was
Net loss for the fourth quarter of fiscal year 2013 was
Fiscal 2013 Full Year Results
For the full year ended
Operating income in fiscal year 2013 was
Net income for fiscal year 2013 was
Excluding product recall costs, non-GAAP gross profit, operating income, net income and diluted earnings per share for the full fiscal year ended
Balance Sheet & Liquidity
The Company's cash and cash equivalents at
During fiscal year 2013, the Company authorized two separate
Fiscal Year 2014 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 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,. 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 its operations; the Company's inability to conform to government regulations in existing markets; the Company may not succeed in growing existing markets or opening new international markets; the Company may be unable to effectively manage its growth; the Company may experience disruptions in its information technology systems; the Company may become subject to claims as a result of its independent distributors failing to comply with its policies and
procedures; if the Company introduces new products, those new products may not gain distributor or market acceptance; the Company may be adversely affected by international trade or foreign exchange restrictions, increased tariffs, foreign currency exchange; global economic conditions could deteriorate and affect the Company; the Company's significant dependence on a single product may adversely affect the Company; the Company may be unable to obtain high quality raw materials for its products; the Company may be unable to retain independent distributors or to attract new independent distributors on an ongoing basis; the Company may become subject to a product recall; the Company's dependence on third party manufacturers; the Company's network marketing activities are heavily regulated and may become the subject of actions from third parties and governmental agencies; the Company's
direct selling program could be found to not be in compliance with current or newly adopted laws or regulations; the Company may become subject to unfavorable publicity; the Company may become involved in expensive and time consuming legal proceedings; the Company may become subject to an investigation or enforcement action by the federal trade commission; the Company may lose key personnel; and the Company's inability to protect its intellectual property. These and other risk factors are discussed in greater detail in the Company's Annual Report on Form 10-K 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 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 set forth below present a 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 | ||
| CONSOLIDATED BALANCE SHEETS | ||
| (In thousands, except per share data) |
|
|
| ASSETS | 2013 | 2012 |
| Current assets | ||
| Cash and cash equivalents | $ 26,299 | $ 24,648 |
| Accounts receivable, net | 1,789 | 333 |
| Income tax receivable | 2,150 | |
| Inventory | 10,524 | 11,353 |
| Current deferred income tax asset | 2,885 | 1,244 |
| Prepaid expenses and deposits | 2,294 | 1,250 |
| Total current assets | 45,941 | 38,828 |
| Long-term assets | ||
| Property and equipment, net | 5,692 | 1,997 |
| Intangible assets, net | 1,747 | 1,882 |
| Long-term deferred income tax asset | 730 | 1,479 |
| Deposits | 1,374 | 342 |
| TOTAL ASSETS | $ 55,484 | $ 44,528 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities | ||
| Accounts payable | $ 5,171 | $ 3,615 |
| Commissions payable | 7,564 | 5,631 |
| Reserve for sales returns | 648 | 863 |
| Accrued bonuses | 50 | 2,287 |
| Income tax payable | -- | 546 |
| Other accrued expenses | 7,009 | 2,932 |
| Customer deposits | 124 | 154 |
| Total current liabilities | 20,566 | 16,028 |
| Long-term liabilities | ||
| Other long-term liabilities | 973 | 217 |
| Total liabilities | 21,539 | 16,245 |
| Commitments and contingencies | ||
| Stockholders' equity | ||
|
Preferred stock - par value |
-- | -- |
|
Common stock - par value |
121 | 111 |
| Additional paid-in capital | 110,413 | 105,154 |
| Accumulated deficit | (76,476) | (76,961) |
| Accumulated other comprehensive loss | (113) | (21) |
| Total stockholders' equity | 33,945 | 28,283 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 55,484 | $ 44,528 |
| LIFEVANTAGE CORPORATION AND SUBSIDIARIES | ||||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ||||
| For the three months ended | For the year ended | |||
| June 30, |
|
|||
| 2013 | 2012 | 2013 | 2012 | |
| (In thousands, except per share data) | (Unaudited) | (Unaudited) | ||
| Sales, net | $ 51,511 | $ 44,604 | $ 208,178 | $ 126,183 |
| Cost of sales | 7,909 | 6,427 | 31,845 | 18,052 |
| Product recall costs | (620) | -- | 4,798 | -- |
| Gross profit | 44,222 | 38,177 | 171,535 | 108,131 |
| Operating expenses: | ||||
| Sales and marketing | 33,413 | 24,300 | 122,389 | 68,397 |
| General and administrative | 9,244 | 5,905 | 32,471 | 16,397 |
| Research and development | 843 | 435 | 2,948 | 1,359 |
| Depreciation and amortization | 479 | 199 | 1,659 | 521 |
| Total operating expenses | 43,979 | 30,839 | 159,467 | 86,674 |
| Operating income | 243 | 7,338 | 12,068 | 21,457 |
| Other expense, net: | ||||
| Interest and other expense, net | (489) | (53) | (915) | (44) |
| Change in fair value of derivative liabilities | -- | -- | -- | (6,741) |
| Total other expense | (489) | (53) | (915) | (6,785) |
| Net income (loss) before income taxes | (246) | 7,285 | 11,153 | 14,672 |
| Income tax (expense) benefit | 64 | (2,453) | (3,545) | (2,203) |
| Net income (loss) | $ (182) | $ 4,832 | $ 7,608 | $ 12,469 |
| Net income (loss) per share: | ||||
| Basic | $ -- | $ 0.04 | $ 0.07 | $ 0.12 |
| Diluted | $ -- | $ 0.04 | $ 0.06 | $ 0.11 |
| Weighted average shares outstanding: | ||||
| Basic | 112,493 | 109,480 | 112,276 | 102,696 |
| Diluted | 112,493 | 126,731 | 122,888 | 118,331 |
| Other comprehensive income (loss), net of tax: | ||||
| Foreign currency translation adjustment | (68) | 26 | (92) | 38 |
| Other comprehensive income (loss) | $ (68) | $ 26 | $ (92) | $ 38 |
| Comprehensive income (loss) | $ (250) | $ 4,858 | $ 7,516 | $ 12,507 |
| LIFEVANTAGE CORPORATION | ||||
| Reconciliation of GAAP Gross Profit to Non-GAAP Adjusted Gross Profit: | ||||
| (Unaudited) | ||||
|
For the three months ended |
For the twelve months ended |
|||
| 2013 | 2012 | 2013 | 2012 | |
| (In thousands) | ||||
| GAAP Gross profit | $ 44,222 | $ 38,177 | $ 171,535 | $ 108,131 |
| Adjustments: | ||||
| Cost of sales associated with product recall | (620) | -- | 4,798 | -- |
| Total adjustments | (620) | -- | 4,798 | -- |
| Non-GAAP Adjusted gross profit | $ 43,602 | $ 38,177 | $ 176,333 | $ 108,131 |
| Reconciliation of GAAP Operating Income to Non-GAAP Adjusted Operating Income: | ||||
|
For the three months ended |
For the twelve months ended |
|||
| 2013 | 2012 | 2013 | 2012 | |
| (In thousands) | ||||
| GAAP Operating income | $ 243 | $ 7,338 | $ 12,068 | $ 21,457 |
| Adjustments: | ||||
| Costs associated with product recall: | ||||
| Cost of sales | (620) | -- | 4,798 | -- |
| General and administrative | 41 | -- | 270 | -- |
| Total adjustments | (579) | -- | 5,068 | -- |
| Non-GAAP Adjusted operating income | $ (336) | $ 7,338 | $ 17,136 | $ 21,457 |
| Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and related Adjusted Earnings Per Share: | ||||
|
For the three months ended |
For the twelve months ended |
|||
| 2013 | 2012 | 2013 | 2012 | |
| (In thousands) | ||||
| GAAP Net income (loss) | $ (182) | $ 4,832 | $ 7,608 | $ 12,469 |
| Adjustments: | ||||
| Costs associated with product recall: | ||||
| Cost of sales | (620) | -- | 4,798 | -- |
| General and administrative | 41 | -- | 270 | -- |
| Tax impact of adjustments | 184 | -- | (1,607) | -- |
| Total adjustments | (395) | -- | 3,461 | -- |
| Non-GAAP Adjusted net income (loss) | $ (577) | $ 4,832 | $ 11,069 | $ 12,469 |
| Diluted shares | 112,493 | 126,731 | 122,888 | 118,331 |
| Non-GAAP Adjusted diluted net income (loss) per share | $ (0.01) | $ 0.04 | $ 0.09 | $ 0.11 |
| LIFEVANTAGE CORPORATION | ||||||||
| Sales by Region | ||||||||
|
For the three months ended |
For the year ended June 30, | |||||||
| 2013 | 2012 | 2013 | 2012 | |||||
| (In thousands) | (Unaudited) | (Unaudited) | ||||||
|
|
$ 35,326 | 69% | $ 30,511 | 68% | $ 133,046 | 64% | $ 90,122 | 71% |
|
|
16,185 | 31% | 14,093 | 32% | 75,132 | 36% | 36,061 | 29% |
| Total Net Sales | $ 51,511 | 100% | $ 44,604 | 100% | $ 208,178 | 100% | $ 126,183 | 100% |
| LIFEVANTAGE CORPORATION | ||||||||
| Active Independent Distributors (1) | ||||||||
| (Unaudited) | ||||||||
| For the year ended June 30, | ||||||||
| 2013 | 2012 | |||||||
|
|
43,000 | 64% | 32,000 | 70% | ||||
|
|
24,000 | 36% | 14,000 | 30% | ||||
| Total | 67,000 | 100% | 46,000 | 100% | ||||
| LIFEVANTAGE CORPORATION | ||||||||
| Active Preferred Customers(2) | ||||||||
| (Unaudited) | ||||||||
| For the year ended June 30, | ||||||||
| 2013 | 2012 | |||||||
|
|
115,000 | 83% | 101,000 | 85% | ||||
|
|
23,000 | 17% | 18,000 | 15% | ||||
| 138,000 | 100% | 119,000 | 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. |
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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