LifeVantage Announces Fourth Quarter and Full Fiscal Year 2014 Results
Fourth Quarter Revenue Increased to Record
Fiscal Year 2014 Operating Income was
Company Repurchased
Company Issues Fiscal Year 2015 Guidance; Expects Diluted EPS to Increase 40% to 60%
Fourth Quarter Fiscal 2014 Highlights:
-
Revenue was
$56.0 million , an increase of 8.8% over the prior year period; -
Revenue increased in the
Americas by 12.3% compared to the prior year period; -
Operating income was
$4.8 million and net income was$2.4 million ; and - Successfully launched the TrueScienceTM Skin Care Regimen.
Full Year Fiscal 2014 Highlights:
-
Revenue was
$214.0 million , an increase of 2.8% over the prior year; -
Revenue increased in the
Americas by 6.1% over the prior year; -
Operating income was
$19.5 million and net income was$11.4 million ; -
Cash from operations grew 13.5%; ended the fiscal year with cash of
$20.4 million ; -
Repurchased
$46.2 million in shares and reduced long-term debt by$16.2 million ; and -
Began Real Salt Lake
Major League Soccer marketing sponsorship.
Fourth Quarter Fiscal 2014 Results
For the fourth fiscal quarter ended
Operating income for the fourth fiscal quarter of 2014 was
Commission and incentives for the fourth fiscal quarter of 2014 were
Interest and other expense in the fourth fiscal quarter of 2014 was
Net income for the fourth fiscal quarter of 2014 was
Fiscal 2014 Full Year Results
For the full year ended
Operating income for fiscal year 2014 was
Commission and incentives for fiscal year 2014 were
Interest and other expense in fiscal year 2014 was
Net income for fiscal year 2014 was
Balance Sheet & Liquidity
The Company generated
Fiscal Year 2015 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, new 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 | $ 20,387 | $ 26,299 |
| Accounts receivable | 1,317 | 1,789 |
| Income tax receivable | 4,681 | 2,150 |
| Inventory | 8,826 | 10,524 |
| Current deferred income tax asset | 158 | 2,885 |
| Prepaid expenses and deposits | 4,604 | 2,294 |
| Total current assets | 39,973 | 45,941 |
| Long-term assets | ||
| Property and equipment, net | 6,941 | 5,692 |
| Intangible assets, net | 2,014 | 1,747 |
| Deferred debt offering costs, net | 1,353 | -- |
| Long-term deferred income tax asset | 1,285 | 730 |
| Other long-term assets | 2,433 | 1,374 |
| TOTAL ASSETS | $ 53,999 | $ 55,484 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities | ||
| Accounts payable | $ 2,854 | $ 5,171 |
| Commissions payable | 7,594 | 7,564 |
| Other accrued expenses | 7,554 | 7,831 |
| Current portion of long-term debt | 4,700 | -- |
| Total current liabilities | 22,702 | 20,566 |
| Long-term debt | ||
| Principal amount | 26,125 | -- |
| Less: unamortized discount | (1,052) | -- |
| Long-term debt, net of unamortized discount | 25,073 | -- |
| Other long-term liabilities | 2,234 | 973 |
| Total liabilities | 50,009 | 21,539 |
| Stockholders' equity | ||
|
Preferred stock - par value |
-- | -- |
|
Common stock - par value |
102 | 121 |
| Additional paid-in capital | 115,244 | 110,413 |
| Accumulated deficit | (111,240) | (76,476) |
| Accumulated other comprehensive loss | (116) | (113) |
| Total stockholders' equity | 3,990 | 33,945 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 53,999 | $ 55,484 |
| LIFEVANTAGE CORPORATION AND SUBSIDIARIES | ||||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ||||
| (Unaudited) | ||||
|
For the three months ended |
For the twelve months ended |
|||
| 2014 | 2013 | 2014 | 2013 | |
| (In thousands, except per share data) | ||||
| Revenue, net | $ 56,038 | $ 51,511 | $ 213,968 | $ 208,178 |
| Cost of sales | 8,982 | 7,909 | 33,194 | 31,845 |
| Product recall costs | -- | (620) | -- | 4,798 |
| Gross profit | 47,056 | 44,222 | 180,774 | 171,535 |
| Operating expenses | ||||
| Commission and incentives | 26,968 | 27,568 | 104,525 | 101,737 |
| Selling, general and administrative | 15,343 | 16,411 | 56,801 | 57,730 |
| Total operating expenses | 42,311 | 43,979 | 161,326 | 159,467 |
| Operating income | 4,745 | 243 | 19,448 | 12,068 |
| Other expense, net: | ||||
| Interest expense | (1,181) | (3) | (3,177) | (3) |
| Other income (expense), net | (7) | (486) | 384 | (912) |
| Total other expense, net | (1,188) | (489) | (2,793) | (915) |
| Net income (loss) before income taxes | 3,557 | (246) | 16,655 | 11,153 |
| Income tax expense | (1,206) | 64 | (5,272) | (3,545) |
| Net income (loss) | $ 2,351 | $ (182) | $ 11,383 | $ 7,608 |
| Net income per share: | ||||
| Basic | $ 0.02 | $ -- | $ 0.11 | $ 0.07 |
| Diluted | $ 0.02 | $ -- | $ 0.10 | $ 0.06 |
| Weighted average shares outstanding: | ||||
| Basic | 100,988 | 112,493 | 105,791 | 112,276 |
| Diluted | 105,609 | 112,493 | 111,599 | 122,888 |
| Other comprehensive income (loss), net of tax: | ||||
| Foreign currency translation adjustment | 360 | (68) | (3) | (92) |
| Other comprehensive income (loss), net of tax: | $ 360 | $ (68) | $ (3) | $ (92) |
| Comprehensive income | $ 2,711 | $ (250) | $ 11,380 | $ 7,516 |
|
|
||||||||
| Revenue by Region | ||||||||
| (Unaudited) | ||||||||
|
Three months ended |
Twelve months ended |
|||||||
| 2014 | 2013 | 2014 | 2013 | |||||
| (In thousands) | ||||||||
|
|
$ 39,670 | 71% | $ 35,326 | 69% | $ 141,227 | 66% | $ 133,046 | 64% |
|
|
16,368 | 29% | 16,185 | 31% | 72,741 | 34% | 75,132 | 36% |
| Total | $ 56,038 | 100% | $ 51,511 | 100% | $ 213,968 | 100% | $ 208,178 | 100% |
| LIFEVANTAGE CORPORATION | ||||||||
| Active Independent Distributors (1) | ||||||||
| (Unaudited) | ||||||||
|
|
||||||||
| 2014 | 2013 | |||||||
|
|
44,000 | 65% | 43,000 | 64% | ||||
|
|
24,000 | 35% | 24,000 | 36% | ||||
| Total | 68,000 | 100% | 67,000 | 100% | ||||
| LIFEVANTAGE CORPORATION | ||||||||
| Active Preferred Customers(2) | ||||||||
| (Unaudited) | ||||||||
|
|
||||||||
| 2014 | 2013 | |||||||
|
|
107,000 | 84% | 115,000 | 83% | ||||
|
|
21,000 | 16% | 23,000 | 17% | ||||
| Total | 128,000 | 100% | 138,000 | 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 | ||||
| Reconciliation of GAAP Gross Profit to Non-GAAP Adjusted Gross Profit: | ||||
| (Unaudited) | ||||
|
For the three months ended |
For the twelve months ended |
|||
| 2014 | 2013 | 2014 | 2013 | |
| (In thousands) | ||||
| GAAP Gross profit | $ 47,056 | $ 44,222 | $ 180,774 | $ 171,535 |
| Adjustments: | ||||
| Cost of sales associated with product recall | -- | (620) | -- | 4,798 |
| Total adjustments | -- | (620) | -- | 4,798 |
| Non-GAAP Adjusted gross profit | $ 47,056 | $ 43,602 | $ 180,774 | $ 176,333 |
| Reconciliation of GAAP Operating Income to Non-GAAP Adjusted Operating Income: | ||||
|
For the three months ended |
For the twelve months ended |
|||
| 2014 | 2013 | 2014 | 2013 | |
| (In thousands) | ||||
| GAAP Operating income | $ 4,745 | $ 243 | $ 19,448 | $ 12,068 |
| Adjustments: | ||||
| Costs associated with product recall: | ||||
| Cost of sales | -- | (620) | -- | 4,798 |
| Selling, general and administrative | -- | 41 | -- | 270 |
| Total adjustments | -- | (579) | -- | 5,068 |
| Non-GAAP Adjusted operating income | $ 4,745 | $ (336) | $ 19,448 | $ 17,136 |
| 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 |
|||
| 2014 | 2013 | 2014 | 2013 | |
| (In thousands) | ||||
| GAAP Net income | $ 2,351 | $ (182) | $ 11,383 | $ 7,608 |
| Adjustments: | ||||
| Costs associated with product recall: | ||||
| Cost of sales | -- | (620) | -- | 4,798 |
| Selling, general and administrative | -- | 41 | -- | 270 |
| Tax impact of adjustments | -- | 184 | -- | (1,607) |
| Total adjustments | -- | (395) | -- | 3,461 |
| Non-GAAP Adjusted net income | $ 2,351 | $ (577) | $ 11,383 | $ 11,069 |
| Diluted shares | 105,609 | 112,493 | 111,599 | 122,888 |
| Non-GAAP Adjusted diluted net income per share | $ 0.02 | $ (0.01) | $ 0.10 | $ 0.09 |
CONTACT: Investor Relations Contact:
Cindy England (801) 432-9036
Director of Investor Relations
-or-
John Mills (646) 277-1254
Partner, ICR INC
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