LifeVantage Announces Second Quarter Fiscal Year 2014 Results
Revenue in Americas Increases 7.2% Compared to Prior Year Period
Company Plans New Product Launch in
Expands Senior Management with Appointments of Chief Sales Officer and Chief Science Officer
Company Reiterates Fiscal 2014 Operating Margin and EPS Guidance; Updates Fiscal 2014
Fiscal 2014 Second Quarter Highlights:
-
Net revenue of
$51.5 million , negatively impacted by$3.6 million of year-over-year foreign currency fluctuation; -
Increased revenue in the
Americas 7.2% compared to prior year; - Hired Chief Sales Officer and Chief Science Officer;
-
Began Real Salt Lake
Major League Soccer marketing sponsorship; -
Achieved operating income of
$5.2 million and net income of$3.3 million ; and - Planned product launch date for April.
Fiscal 2014 Second Quarter Results
For the second fiscal quarter ended
Gross profit for the second fiscal quarter ended
Operating income for the second fiscal quarter of 2014 was
Net income for the second fiscal quarter of 2014 was
Fiscal 2014 First Six Months Results
For the six months ended
Operating income for the first six months of fiscal 2014 was
Net income for the first six months of fiscal 2014 was
Balance Sheet & Liquidity
The Company's cash and cash equivalents at
The Company announced that it entered into a Financing Agreement on
Fiscal Year 2014 Guidance
The Company is updating its annual revenue 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, product launches 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, 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 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 | ||
| (Unaudited) | ||
| (In thousands, except per share data) | As of | |
| ASSETS |
|
|
| Current assets | ||
| Cash and cash equivalents | $ 34,454 | $ 26,299 |
| Accounts receivable | 873 | 1,789 |
| Income tax receivable | 651 | 2,150 |
| Inventory | 9,843 | 10,524 |
| Current deferred income tax asset | 2,885 | 2,885 |
| Prepaid expenses and deposits | 4,161 | 2,294 |
| Total current assets | 52,867 | 45,941 |
| Long-term assets | ||
| Property and equipment, net | 5,279 | 5,692 |
| Intangible assets, net | 1,731 | 1,747 |
| Deferred debt offing costs, net | 1,472 | -- |
| Long-term deferred income tax asset | 730 | 730 |
| Other long-term assets | 1,315 | 1,374 |
| TOTAL ASSETS | $ 63,394 | $ 55,484 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities | ||
| Accounts payable | $ 2,805 | $ 5,171 |
| Commissions payable | 7,183 | 7,564 |
| Other accrued expenses | 7,230 | 7,831 |
| Short-term portion of debt | 4,700 | -- |
| Total current liabilities | 21,918 | 20,566 |
| Long-term debt | ||
| Principal amount | 42,300 | -- |
| Less: unamortized discount | (1,145) | -- |
| Long-term debt, net of unamortized discount | 41,155 | -- |
| Other long-term liabilities | 869 | 973 |
| Total liabilities | 63,942 | 21,539 |
| Commitments and contingencies | ||
| Stockholders' equity | ||
|
Preferred stock - par value |
-- | -- |
|
Common stock - par value |
104 | 121 |
| Additional paid-in capital | 113,014 | 110,413 |
| Accumulated deficit | (113,087) | (76,476) |
| Accumulated other comprehensive loss | (579) | (113) |
| Total stockholders' equity | (548) | 33,945 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 63,394 | $ 55,484 |
| LIFEVANTAGE CORPORATION AND SUBSIDIARIES | ||||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ||||
| (Unaudited) | ||||
|
For the three months ended |
For the six months ended |
|||
| 2013 | 2012 | 2013 | 2012 | |
| (In thousands, except per share data) | ||||
| Sales, net | $ 51,538 | $53,438 | $ 102,866 | $ 106,297 |
| Cost of sales | 7,944 | 8,799 | 15,753 | 16,606 |
| Product recall costs | -- | 5,879 | -- | 5,879 |
| Gross profit | 43,594 | 38,760 | 87,113 | 83,812 |
| Operating expenses: | ||||
| Sales and marketing | 29,785 | 29,593 | 60,027 | 59,133 |
| General and administrative | 7,561 | 7,495 | 14,962 | 15,404 |
| Research and development | 584 | 742 | 891 | 1,257 |
| Depreciation and amortization | 498 | 443 | 997 | 681 |
| Total operating expenses | 38,428 | 38,273 | 76,877 | 76,475 |
| Operating income | 5,166 | 487 | 10,236 | 7,337 |
| Other income (expense), net: | ||||
| Interest and other income (expense), net | (365) | (16) | (327) | (1) |
| Total other income (expense) | (365) | (16) | (327) | (1) |
| Net income before income taxes | 4,801 | 471 | 9,909 | 7,336 |
| Income tax expense | (1,519) | (262) | (3,371) | (2,963) |
| Net income | $ 3,282 | $ 209 | $ 6,538 | $ 4,373 |
| Net income per share: | ||||
| Basic | $ 0.03 | $ 0.00 | $ 0.06 | $ 0.04 |
| Diluted | $ 0.03 | $ 0.00 | $ 0.06 | $ 0.03 |
| Weighted average shares outstanding: | ||||
| Basic | 105,770 | 113,449 | 110,218 | 112,158 |
| Diluted | 112,392 | 127,131 | 117,363 | 126,046 |
| Other comprehensive loss, net of tax: | ||||
| Foreign currency translation adjustment | (192) | 68 | (466) | 63 |
| Other comprehensive loss | $ (192) | $ 68 | $ (466) | $ 63 |
| Comprehensive income | $ 3,090 | $ 277 | $ 6,072 | $ 4,436 |
|
|
||||||||
| Sales by Region | ||||||||
| (Unaudited) | ||||||||
|
Three months ended |
Six months ended |
|||||||
| 2013 | 2012 | 2013 | 2012 | |||||
| (In thousands) | ||||||||
|
|
$ 34,418 | 67% | $ 32,112 | 60% | $ 68,916 | 67% | $ 64,419 | 61% |
|
|
17,120 | 33% | 21,326 | 40% | 33,950 | 33% | 41,878 | 39% |
| Total Net Sales | $ 51,538 | 100% | $ 53,438 | 100% | $ 102,866 | 100% | $ 106,297 | 100% |
|
|
||||||||
| Active Independent Distributors (1) | ||||||||
| (Unaudited) | ||||||||
|
|
||||||||
| 2013 | 2012 | |||||||
|
|
43,000 | 62% | 35,000 | 64% | ||||
|
|
26,000 | 38% | 20,000 | 36% | ||||
| Total | 69,000 | 100% | 55,000 | 100% | ||||
|
|
||||||||
| Active Preferred Customers(2) | ||||||||
| (Unaudited) | ||||||||
|
|
||||||||
| 2013 | 2012 | |||||||
|
|
110,000 | 81% | 116,000 | 82% | ||||
|
|
25,000 | 19% | 25,000 | 18% | ||||
| Total | 135,000 | 100% | 141,000 | 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. | ||||||||
|
|
||||
| Reconciliation of GAAP Gross Profit to Non-GAAP Adjusted Gross Profit: | ||||
| (Unaudited) | ||||
|
For the three months ended |
For the six months ended |
|||
| 2013 | 2012 | 2013 | 2012 | |
| (In thousands) | ||||
| GAAP Gross profit | $ 43,594 | $ 38,760 | $ 87,113 | $ 83,812 |
| Adjustments: | ||||
| Cost of sales associated with product recall | (525) | 5,879 | (525) | 5,879 |
| Total adjustments | (525) | 5,879 | (525) | 5,879 |
| Non-GAAP Adjusted gross profit | $ 43,069 | $ 44,639 | $ 86,588 | $ 89,691 |
| Reconciliation of GAAP Operating Income to Non-GAAP Adjusted Operating Income: | ||||
|
For the three months ended |
For the six months ended |
|||
| 2013 | 2012 | 2013 | 2012 | |
| (In thousands) | ||||
| GAAP Operating income | $ 5,166 | $ 487 | $ 10,236 | $ 7,337 |
| Adjustments: | ||||
| Costs associated with product recall: | ||||
| Cost of sales | (525) | 5,879 | (525) | 5,879 |
| General and administrative | -- | 71 | -- | 71 |
| Total adjustments | (525) | 5,950 | (525) | 5,950 |
| Non-GAAP Adjusted operating income | $ 4,641 | $ 6,437 | $ 9,711 | $ 13,287 |
| 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 |
|||
| 2013 | 2012 | 2013 | 2012 | |
| (In thousands) | ||||
| GAAP Net income | $ 3,282 | $ 209 | $ 6,538 | $ 4,373 |
| Adjustments: | ||||
| Costs associated with product recall: | ||||
| Cost of sales | (525) | 5,879 | (525) | 5,879 |
| General and administrative | -- | 71 | -- | 71 |
| Tax impact of adjustments | 179 | (2,358) | 179 | (2,358) |
| Total adjustments | (347) | 3,592 | (347) | 3,592 |
| Non-GAAP Adjusted net income | $ 2,936 | $ 3,801 | $ 6,192 | $ 7,965 |
| Diluted shares | 112,392 | 127,131 | 117,363 | 126,046 |
| Non-GAAP Adjusted diluted net income per share | $ 0.03 | $ 0.03 | $ 0.05 | $ 0.06 |
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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