Company files Forms 10-K and 10-Q for periods
ended June 30, 2016 and September 30, 2016,
respectively Expects to regain compliance with Nasdaq listing
rules First Quarter of Fiscal 2017 Revenue Increased 21.0%
year-over-year Fourth Quarter of Fiscal Year 2016 Revenue
Increased 17.1% year-over-year Fiscal Year 2016 Revenue
Increased 8.5% to $206.5 million Company Initiates Fiscal 2017
Guidance
LifeVantage Corporation (Nasdaq:LFVN) today reported financial
results for its fourth fiscal quarter and full fiscal year ended
June 30, 2016; and its first fiscal quarter of 2017.
“Today we filed our Form 10-K for fiscal 2016
and our Form 10-Q for the first fiscal quarter of 2017 and are
again current with our SEC filings, which puts us back into
compliance with our loan covenants and is expected to put us back
into compliance with Nasdaq listing rules,” stated LifeVantage
President and Chief Executive Officer Darren Jensen. “This
unanticipated delay in our financial reporting was necessary as we
look to ensure that we have the appropriate internal policies and
procedures in place to support our international growth.”
First Quarter Fiscal 2017 Highlights:
- Revenue increased 21.0% to $54.9 million, compared to $45.4
million in the first fiscal quarter of 2016;
- Revenue in the Americas increased 15.6% and revenue in
Asia/Pacific & Europe increased 38.9%, both when compared to
the comparable period of fiscal 2016;
- Adjusted EBITDA decreased 2.8% to $4.3 million, compared to
$4.5 million in the comparable period of fiscal 2016;
- Earnings per diluted share were $0.08, compared to $0.08 in the
first fiscal quarter of 2016; and
- Adjusted earnings per diluted share were $0.13, compared to
$0.13 in the first fiscal quarter of 2016.
Fourth Quarter Fiscal 2016 Highlights:
- Revenue increased 17.1% to $53.0 million, compared to $45.3
million in the fourth fiscal quarter of 2015;
- Revenue in the Americas increased 17.1% and revenue in
Asia/Pacific & Europe increased 16.9%, both when compared to
the comparable period of fiscal 2015;
- Adjusted EBITDA increased 78.3% to $5.6 million, compared to
$3.1 million in the comparable period of fiscal 2015;
- Earnings per diluted share increased to $0.16, compared to
$0.02 in the fourth fiscal quarter of 2015; and
- Adjusted earnings per diluted share increased to $0.22,
compared to $0.05 in the fourth fiscal quarter of 2015.
Fiscal Year 2016 Highlights:
- Revenue increased 8.5% to $206.5 million, compared to $190.3
million in fiscal 2015;
- Revenue in the Americas increased 14.6% and revenue in
Asia/Pacific & Europe decreased 7.6%, both when compared to
fiscal 2015;
- Adjusted EBITDA increased 12.7% to $19.7 million, compared to
$17.4 million in fiscal 2015;
- Earnings per diluted share decreased 16.1% to $0.41, compared
to $0.49 in fiscal 2015; and
- Adjusted earnings per diluted share increased 31.8% to $0.62,
compared to $0.47 in fiscal 2015.
First Quarter Fiscal 2017
ResultsFor the first fiscal quarter ended September 30,
2016, the Company reported revenue of $54.9 million, a 21.0%
increase compared to $45.4 million for the comparable period in
fiscal 2016. Year-over-year quarterly revenue reflects an increase
of 15.6% in the Americas and a 38.9% increase in the Asia/Pacific
& Europe region. Revenue for the first fiscal quarter of 2017
was positively impacted by $2.1 million, or 4.6%, by foreign
currency fluctuations, primarily associated with revenue in
Japan.
Commissions and incentives expense for the first
fiscal quarter of 2017 was $26.3 million, or 47.9% of revenue,
compared to $22.0 million, or 48.6% of revenue, for the same period
in fiscal 2016. Selling, general and administrative expense
(SG&A) for the fourth fiscal quarter of 2016 was $17.8 million,
or 32.4% of revenue, compared to $13.7 million, or 30.1% of
revenue, in the comparable period of fiscal 2016.
Operating income for the first fiscal quarter of
2017 was $2.0 million, compared to $2.7 million for the first
fiscal quarter of 2016. Operating income during the first quarter
of fiscal 2017 included approximately $1.0 million of costs
associated with the Audit Committee’s independent review. Operating
income during the first fiscal quarter of 2016 included
approximately $1.1 million of executive transition costs. Adjusted
EBITDA was $4.3 million for the first fiscal quarter of 2017,
compared to $4.5 million for the comparable period in fiscal
2016.
Net income for the first fiscal quarter of 2017
was $1.2 million, or $0.08 per diluted share, calculated on 14.5
million fully diluted shares. This compares to net income for
the first fiscal quarter of 2016 of $1.1 million, or $0.08 per
diluted share, calculated on 13.8 million fully diluted shares.
Adjusted for costs associated with the audit committee’s
independent review of $0.7 million, net of tax, adjusted Non-GAAP
net income was $1.9 million for the first fiscal quarter of 2017,
or $0.13 per diluted share; compared to $1.7 million, or $0.13 per
diluted share for the comparable period of fiscal 2016. Non-GAAP
adjustments to net income during the first fiscal quarter of 2016
included $0.7 million of executive team transition costs, net of
tax.
Fourth Quarter Fiscal 2016
ResultsFor the fourth fiscal quarter ended June 30, 2016,
the Company reported revenue of $53.0 million, a 17.1% increase
compared to $45.3 million for the comparable period in fiscal 2015.
Year-over-year quarterly revenue reflects an increase of 17.1% in
the Americas and a 16.9% increase in the Asia/Pacific & Europe
region. Revenue for the fourth fiscal quarter of 2016 was
positively impacted by $0.9 million, or 2.1%, by foreign currency
fluctuations, primarily associated with revenue in Japan.
Commissions and incentives expense for the
fourth fiscal quarter of 2016 was $25.6 million, or 48.3% of
revenue, compared to $21.7 million, or 47.8% of revenue, for the
same period in fiscal 2015. Selling, general and administrative
expense (SG&A) for the fourth fiscal quarter of 2016 was $14.0
million, or 26.3% of revenue, compared to $14.8 million, or 32.6%
of revenue, in the comparable prior year period.
Operating income for the fourth fiscal quarter
of 2016 was $4.1 million, compared to $1.6 million for the fourth
fiscal quarter of 2015. Operating income during the fourth quarter
of fiscal 2015 included approximately $0.7 million of executive
transition expenses. Adjusted EBITDA was $5.6 million for the
fourth fiscal quarter of 2016, compared to $3.1 million for the
comparable period in fiscal 2015.
Net income for the fourth fiscal quarter of 2016
was $2.4 million, or $0.16 per diluted share, calculated on 14.6
million fully diluted shares. This compares to net income for
the fourth fiscal quarter of 2015 of $0.2 million, or $0.02 per
diluted share, calculated on 13.8 million fully diluted shares.
Adjusted primarily for a write-off of capitalized software
development costs of $0.8 million, net of tax, adjusted Non-GAAP
net income was $3.2 million for the fourth fiscal quarter of 2016,
or $0.22 per diluted share; compared to $0.7 million, or $0.05 per
diluted share for the comparable prior year period. Non-GAAP
adjustments to net income during the fourth fiscal quarter of 2015
included $0.5 million of executive team transition costs, net of
tax.
Fiscal 2016 Full Year
ResultsFor the fiscal year ended June 30, 2016, the
Company reported net revenue of $206.5 million, an increase of 8.5%
compared to $190.3 million for fiscal 2015. Revenue in the Americas
increased 14.6%, while revenue in Asia/Pacific & Europe
decreased 7.6% due predominantly to lower sales in Japan that
occurred primarily during the first quarter of fiscal 2016. Revenue
for fiscal year 2016 was negatively impacted $1.8 million, or 1.0%,
by foreign currency fluctuations associated with revenue generated
in several international markets.
Commissions and incentives expense for fiscal
2016 was $103.1 million, or 49.9% of revenue, compared to $91.0
million, or 47.8% of revenue, for fiscal 2015. Selling, general and
administrative expense (SG&A) for fiscal 2016 was $56.1
million, or 27.1% of revenue, compared to $57.4 million, or 30.1%
of revenue, in the prior year.
Operating income for fiscal 2016 was $13.4
million, compared to $13.9 million for fiscal 2015. Operating
income for the fiscal year ended June 30, 2016 includes $1.7
million of the previously announced executive transition expenses
and costs associated with the reverse split during fiscal 2016.
Operating income in fiscal 2015 includes the benefit of
approximately $2.0 million from proceeds recovered and related to
the Company's December 2012 product recall, partially offset by
severance and executive team transition costs of $1.4 million.
Adjusted EBITDA was $19.7 million for the full fiscal year of 2016,
compared to $17.4 million in fiscal 2015.
Net income for fiscal 2016 was $6.0 million, or
$0.41 per diluted share, compared to $7.0 million, or $0.49 per
diluted share for fiscal 2015. On a tax adjusted basis, adjusting
for previously announced executive transition expenses and costs
associated with the reverse split of $1.2 million, collectively,
along with a $0.8 million write-off of capitalized software
development costs and a $1.1 million write-off of deferred debt
transaction costs during fiscal 2016, adjusted Non-GAAP net income
for the fiscal year ended June 30, 2016 was $9.1 million, or $0.62
per diluted share. On a tax adjusted basis, adjusting for the
one-time insurance benefit during fiscal 2015 of $1.3 million,
partially offset by $0.9 million of executive transition costs,
adjusted Non-GAAP net income for the fiscal year ended June 30,
2015 was $6.6 million or $0.47 per diluted share.
Balance Sheet &
LiquidityThe Company generated $6.0 million of cash from
operations during fiscal year 2016 and $2.9 million of cash from
operations during the first quarter of fiscal 2017, compared to
$13.2 million and $2.8 million during the same respective prior
year periods. The year-over-year reduction in cash provided by
operations during fiscal 2016 primarily relates to increased
inventory investments during the fiscal year. The Company's cash
and cash equivalents at September 30, 2016 were $10.2 million
compared to $7.9 million at the end of fiscal year 2016.
“We reported strong year-over-year revenue
growth in both the fourth fiscal quarter of 2016 and the first
fiscal quarter of 2017,” commented LifeVantage President and Chief
Executive Officer Darren Jensen. “However, we anticipate some
revenue disruptions near-term from recent policy changes affecting
some international markets.”
Fiscal Year 2017 Guidance The
Company is introducing fiscal year 2017 annual guidance. The
Company expects to generate revenue in the range of $207 million to
$212 million during fiscal year 2017, and anticipates adjusted
earnings per diluted share in the range of $0.40 to $0.47. The
Company’s earnings per diluted share guidance excludes any
non-operating or non-recurring expenses that may materialize during
fiscal 2017, including estimated costs of $2.5 million to $3.0
million associated with the recently completed review by the Audit
Committee of the Board of Directors.
Second Quarter of Fiscal 2017
OutlookThe company is providing its revenue outlook for
the second fiscal quarter of 2017 ending December 31, 2016. During
the second fiscal quarter of 2017, the Company anticipates revenue
in the range of $48 million to $49 million. It is not the Company’s
practice to provide quarterly revenue guidance, nor is it the
Company’s intention to provide quarterly guidance on an ongoing
basis.
Conference Call InformationThe
Company will hold an investor conference call today at 3:00 p.m.
MST (5:00 p.m. EST). Investors interested in participating in the
live call can dial (888) 820-9408 from the U.S. International
callers can dial (913) 312-0647. A telephone replay will be
available approximately two hours after the call concludes and will
be available through Monday, December 19, 2016, by dialing (877)
870-5176 from the U.S. and entering confirmation code 2517311, or
(858) 384-5517 from international locations, and entering
confirmation code 2517311.
There will also 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 LifeVantage Corporation
LifeVantage Corporation (Nasdaq:LFVN), is a
science-based direct selling company dedicated to visionary science
that looks to transform health, wellness and anti-aging internally
and externally at the cellular level. The company is the maker of
Protandim® Nrf2 and NRF1 Synergizers, its line of
scientifically-validated dietary supplements, the TrueScience®
Anti-Aging Skin Care Regimen, Canine Health®, the AXIO® energy
product line and the PhysIQ™ Smart Weight Management System.
LifeVantage was founded in 2003 and is headquartered in Salt Lake
City, Utah. www.lifevantage.com
Forward Looking StatementsThis
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",
"goal", “may be” "ideal fit", 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 leadership in the global market, new product
launches, the effectiveness of our policies and procedures, future
growth and expected financial performance. 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 Securities and Exchange
Commission. The Company cautions investors not to place undue
reliance on the forward-looking statements contained in this
document. All forward-looking statements are based on information
currently available to the Company on the date hereof, and the
Company undertakes no obligation to revise or update these
forward-looking statements to reflect events or circumstances after
the date of this document, except as required by law.
About Non-GAAP Financial Measures
We define Non-GAAP EBITDA as earnings before
interest expense, income taxes, depreciation and amortization and
Non-GAAP Adjusted EBITDA as earnings before interest expense,
income taxes, depreciation and amortization, stock compensation
expense, other income, net, and certain other adjustments. Non-GAAP
EBITDA and Non-GAAP Adjusted EBITDA may not be comparable to
similarly titled measures reported by other companies. We
define Non-GAAP Net Income and Earnings per Share as GAAP net
income less certain tax adjusted non-recurring one-time expenses
incurred during the period.
We are presenting Non-GAAP EBITDA, Non-GAAP
Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP Earnings Per
Share because management believes that they provide additional ways
to view our operations when considered with both our GAAP results
and the reconciliation to net income, which we believe provides a
more complete understanding of our business than could be obtained
absent this disclosure. Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA,
Non-GAAP Net Income and Non-GAAP Earnings Per Share are presented
solely as supplemental disclosure because: (i) we believe these
measures are a useful tool for investors to assess the operating
performance of the business without the effect of these items; (ii)
we believe that investors will find this data useful in assessing
shareholder value; and (iii) we use Non-GAAP EBITDA, Non-GAAP
Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP Earnings Per
Share internally as benchmarks to evaluate our operating
performance or compare our performance to that of our competitors.
The use of Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Net
Income and Non-GAAP Earnings per Share has limitations and you
should not consider these measures in isolation from or as an
alternative to the relevant GAAP measure of net income prepared in
accordance with GAAP, or as a measure of profitability or
liquidity.
The tables set forth below present Non-GAAP
EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP
Earnings per Share which are non-GAAP financial measures to Net
Income and Earnings per Share, 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 |
September 30, 2016 |
|
June 30, 2016 |
| |
Current assets |
|
|
|
| |
Cash and
cash equivalents |
$ |
10,225 |
|
|
$ |
7,883 |
|
| |
Accounts
receivable |
|
1,434 |
|
|
|
1,552 |
|
| |
Income
tax receivable |
|
133.00 |
|
|
|
- |
|
| |
Inventory, net |
|
23,917 |
|
|
|
25,116 |
|
| |
Current
deferred income tax asset |
|
- |
|
|
|
2,776 |
|
| |
Prepaid
expenses and deposits |
|
3,863 |
|
|
|
5,082 |
|
| |
Total
current assets |
|
39,572 |
|
|
|
42,409 |
|
| |
|
|
|
|
| |
Property
and equipment, net |
|
3,163 |
|
|
|
3,456 |
|
| |
Intangible assets, net |
|
1,731 |
|
|
|
1,744 |
|
| |
Long-term
deferred income tax asset |
|
3,906 |
|
|
|
1,130 |
|
| |
Other
long-term assets |
|
1,424 |
|
|
|
1,520 |
|
| TOTAL
ASSETS |
$ |
49,796 |
|
|
$ |
50,259 |
|
| LIABILITIES
AND STOCKHOLDERS' EQUITY |
|
|
|
| |
Current
liabilities |
|
|
|
| |
Accounts
payable |
$ |
7,730 |
|
|
$ |
8,891 |
|
| |
Commissions payable |
|
7,484 |
|
|
|
7,719 |
|
| |
Income
tax payable |
|
- |
|
|
|
1,206 |
|
| |
Other
accrued expenses |
|
9,494 |
|
|
|
8,734 |
|
| |
Current
portion of long-term debt |
|
2,000 |
|
|
|
2,000 |
|
| |
|
|
|
|
| |
Total
current liabilities |
|
26,708 |
|
|
|
28,550 |
|
| |
|
|
|
|
| Long-term
debt |
|
|
|
| |
Principal
amount |
|
7,000 |
|
|
|
7,500 |
|
| |
Less:
unamortized discount and deferred offering costs |
|
(84 |
) |
|
|
(91 |
) |
| |
Long-term
debt, net of unamortized discount and deferred offering costs |
|
6,916 |
|
|
|
7,409 |
|
| |
Other
long-term liabilities |
|
2,090 |
|
|
|
2,169 |
|
| |
Total
liabilities |
|
35,714 |
|
|
|
38,128 |
|
| Commitments
and contingencies |
|
|
|
|
Stockholders' equity |
|
|
|
| |
Preferred
stock - par value $.001 per share, 50,000 shares authorized;
no shares issued or outstanding |
|
- |
|
|
|
- |
|
| |
Common
stock - par value $.001 per share, 250,000 shares authorized and
14,059 and 14,028 issued and outstanding as of September 30, 2016
and June 30, 2016, respectively |
|
14 |
|
|
|
14 |
|
| |
Additional paid-in capital |
|
120,830 |
|
|
|
120,150 |
|
| |
Accumulated deficit |
|
(106,896 |
) |
|
|
(108,076 |
) |
| |
Accumulated other comprehensive loss |
|
134 |
|
|
|
43 |
|
| |
Total
stockholders’ equity |
|
14,082 |
|
|
|
12,131 |
|
| TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
49,796 |
|
|
$ |
50,259 |
|
| |
|
|
|
|
| LIFEVANTAGE CORPORATION AND
SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME |
| (unaudited) |
|
|
|
|
|
|
|
|
|
For the Three Months Ended September
30, |
|
|
|
|
2016 |
|
|
|
2015 |
|
| (In thousands, except
per share data) |
|
|
|
|
| Revenue, net |
|
$ |
54,894 |
|
|
$ |
45,352 |
|
| Cost of sales |
|
|
8,832 |
|
|
|
6,975 |
|
| Gross
profit |
|
|
46,062 |
|
|
|
38,377 |
|
| |
|
|
|
|
| Operating
expenses: |
|
|
|
|
|
Commissions and incentives |
|
|
26,296 |
|
|
|
22,043 |
|
| Selling,
general and administrative |
|
|
17,780 |
|
|
|
13,663 |
|
| Total
operating expenses |
|
|
44,076 |
|
|
|
35,706 |
|
| Operating income |
|
|
1,986 |
|
|
|
2,671 |
|
| |
|
|
|
|
| Other expense: |
|
|
|
|
| Interest
expense |
|
|
(137 |
) |
|
|
(749 |
) |
| Other
expense, net |
|
|
(171 |
) |
|
|
(216 |
) |
| Total
other expense |
|
|
(308 |
) |
|
|
(965 |
) |
| Income before income
taxes |
|
|
1,678 |
|
|
|
1,706 |
|
| Income
tax expense |
|
|
(498 |
) |
|
|
(640 |
) |
| Net income |
|
$ |
1,180 |
|
|
$ |
1,066 |
|
| Net income per
share: |
|
|
|
|
|
Basic |
|
$ |
0.09 |
|
|
$ |
0.08 |
|
|
Diluted |
|
$ |
0.08 |
|
|
$ |
0.08 |
|
| Weighted average shares
outstanding: |
|
|
|
|
|
Basic |
|
|
13,820 |
|
|
|
13,709 |
|
|
Diluted |
|
|
14,466 |
|
|
|
13,830 |
|
| |
|
|
|
|
| Other
comprehensive income, net of tax: |
|
|
|
|
| Foreign
currency translation adjustment |
|
|
91 |
|
|
|
17 |
|
| Other comprehensive
income, net of tax: |
|
|
91 |
|
|
|
17 |
|
| Comprehensive
income |
|
$ |
1,271 |
|
|
$ |
1,083 |
|
| |
|
|
|
|
| LIFEVANTAGE CORPORATION AND
SUBSIDIARIES |
| Revenue by Region |
| (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended September
30, |
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
| (In thousands) |
|
|
|
|
|
|
|
|
|
| Americas |
|
$ |
40,135 |
|
73 |
% |
|
$ |
34,726 |
|
77 |
% |
|
| Asia/Pacific &
Europe |
|
|
14,759 |
|
27 |
% |
|
|
10,626 |
|
23 |
% |
|
|
Total |
|
$ |
54,894 |
|
100 |
% |
|
$ |
45,352 |
|
100 |
% |
|
| |
|
|
|
|
|
|
|
|
|
| |
|
Active Independent Distributors
(1) |
|
| |
|
(unaudited) |
|
| |
|
|
|
|
|
|
|
|
|
| |
|
September 30 |
|
| |
|
|
2016 |
|
|
|
2015 |
|
|
| Americas |
|
|
48,000 |
|
71 |
% |
|
|
44,000 |
|
69 |
% |
|
| Asia/Pacific &
Europe |
|
|
20,000 |
|
29 |
% |
|
|
20,000 |
|
31 |
% |
|
|
Total |
|
|
68,000 |
|
100 |
% |
|
|
64,000 |
|
100 |
% |
|
| |
|
|
|
|
|
|
|
|
|
| |
|
Active Preferred Customers(2) |
|
| |
|
(unaudited) |
|
| |
|
|
|
|
|
|
|
|
|
| |
|
September 30 |
|
| |
|
|
2016 |
|
|
|
2015 |
|
|
| Americas |
|
|
91,000 |
|
80 |
% |
|
|
93,000 |
|
82 |
% |
|
| Asia/Pacific &
Europe |
|
|
23,000 |
|
20 |
% |
|
|
21,000 |
|
18 |
% |
|
|
Total |
|
|
114,000 |
|
100 |
% |
|
|
114,000 |
|
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 AND
SUBSIDIARIES |
| Reconciliation of GAAP Net Income to Non-GAAP
EBITDA and Non-GAAP Adjusted EBITDA: (Unaudited) |
| |
|
| |
For the Three Months Ended September
30, |
| |
|
2016 |
|
|
2015 |
| (In thousands) |
|
|
|
| GAAP Net income |
$ |
1,180 |
|
$ |
1,066 |
| Interest Expense |
|
137 |
|
|
749 |
| Provision for income
taxes |
|
498 |
|
|
640 |
| Depreciation and
amortization |
|
412 |
|
|
531 |
| Non-GAAP EBITDA: |
|
2,227 |
|
|
2,986 |
| Adjustments: |
|
|
|
| Stock compensation
expense |
|
939 |
|
|
192 |
| Other expense, net |
|
171 |
|
|
216 |
| Other adjustments* |
|
1,011 |
|
|
1,079 |
| Total adjustments |
|
2,121 |
|
|
1,487 |
| Non-GAAP Adjusted
EBITDA |
$ |
4,348 |
|
$ |
4,473 |
| |
|
|
|
| *Other
adjustments for the three months ended September 30, 2016 include
approximately $1.0 million for costs associated with the audit
committee independent review. Other adjustments for the three
months ended September 30, 2015 include approximately $0.7 million
for executive severance expenses and $0.4 million for search firm
and hiring expenses associated with the search for executive
officers. |
| |
|
|
|
| LIFEVANTAGE CORPORATION AND
SUBSIDIARIES |
| Reconciliation of GAAP Net Income to Non-GAAP
Net Income and Non-GAAP Adjusted EPS: (Unaudited) |
|
|
|
|
|
For the Three Months Ended September
30, |
|
|
|
2016 |
|
|
2015 |
| (In thousands) |
|
|
|
| GAAP Net income |
$ |
1,180 |
|
$ |
1,066 |
| Executive team
severance expenses (1) |
|
- |
|
|
423 |
| Executive team
recruiting and transition expenses(2) |
|
- |
|
|
251 |
| Audit committee
indpendent review expenses(3) |
|
711 |
|
|
- |
| Non-GAAP Net
Income: |
|
1,891 |
|
|
1,740 |
| |
|
|
|
| |
|
| |
For the Three Months Ended September
30, |
| |
|
2016 |
|
|
2015 |
| |
|
|
|
| Diluted earnings per
share, as reported |
$ |
0.08 |
|
$ |
0.08 |
| Executive team
severance expenses (1) |
|
- |
|
|
0.03 |
| Executive team
recruiting and transition expenses(2) |
|
- |
|
|
0.02 |
| Audit committee
indpendent review expenses(3) |
|
0.05 |
|
|
- |
| Diluted earnings per
share, as adjusted |
$ |
0.13 |
|
$ |
0.13 |
| |
|
|
|
| (1) Net of
$254,000 in tax expense for the three months ended September 30,
2015 |
| (2) Net of
$151,000 in tax expense for the three months ended September 30,
2015 |
| (3) Net of
$711,000 in tax expense for the three months ended September 30,
2016 |
| |
|
|
|
| LIFEVANTAGE CORPORATION AND
SUBSIDIARIES |
| CONSOLIDATED BALANCE SHEETS |
| |
| |
|
|
|
|
| (In
thousands, except per share data) |
As of |
| ASSETS |
June 30, 2016 |
|
June 30, 2015 |
| |
Current assets |
|
|
|
| |
Cash and
cash equivalents |
$ |
7,883 |
|
|
$ |
13,905 |
|
| |
Accounts
receivable |
|
1,552 |
|
|
|
1,031 |
|
| |
Income
tax receivable |
|
- |
|
|
|
2,179 |
|
| |
Inventory, net |
|
25,116 |
|
|
|
9,248 |
|
| |
Current
deferred income tax asset |
|
2,776 |
|
|
|
1,117 |
|
| |
Prepaid
expenses and deposits |
|
5,082 |
|
|
|
2,995 |
|
| |
Total
current assets |
|
42,409 |
|
|
|
30,475 |
|
| |
|
|
|
|
| |
Property
and equipment, net |
|
3,456 |
|
|
|
5,759 |
|
| |
Intangible assets, net |
|
1,744 |
|
|
|
1,879 |
|
| |
Long-term
deferred income tax asset |
|
1,130 |
|
|
|
235 |
|
| |
Other
long-term assets |
|
1,520 |
|
|
|
1,433 |
|
| TOTAL
ASSETS |
$ |
50,259 |
|
|
$ |
39,781 |
|
| LIABILITIES
AND STOCKHOLDERS' EQUITY |
|
|
|
| |
Current
liabilities |
|
|
|
| |
Accounts
payable |
$ |
8,891 |
|
|
$ |
2,614 |
|
| |
Commissions payable |
|
7,719 |
|
|
|
6,505 |
|
| |
Income
tax payable |
|
1,206 |
|
|
|
- |
|
| |
Other
accrued expenses |
|
8,734 |
|
|
|
5,600 |
|
| |
Current
portion of long-term debt |
|
2,000 |
|
|
|
11,141 |
|
| |
|
|
|
|
| |
Total
current liabilities |
|
28,550 |
|
|
|
25,860 |
|
| |
|
|
|
|
| Long-term
debt |
|
|
|
| |
Principal
amount |
|
7,500 |
|
|
|
10,484 |
|
| |
Less:
unamortized discount and deferred offering costs |
|
(91 |
) |
|
|
(1,951 |
) |
| |
Long-term
debt, net of unamortized discount and deferred offering costs |
|
7,409 |
|
|
|
8,533 |
|
| |
Other
long-term liabilities |
|
2,169 |
|
|
|
2,063 |
|
| |
Total
liabilities |
|
38,128 |
|
|
|
36,456 |
|
| Commitments
and contingencies |
|
|
|
|
Stockholders' equity |
|
|
|
| |
Preferred
stock - par value $.001 per share, 50,000 shares authorized;
no shares issued or outstanding |
|
- |
|
|
|
- |
|
| |
Common
stock - par value $.001 per share, 250,000 shares authorized and
14,028 and 13,958 issued and outstanding as of June 30, 2016 and
2015, respectively |
|
14 |
|
|
|
14 |
|
| |
Additional paid-in capital |
|
120,150 |
|
|
|
117,657 |
|
| |
Accumulated deficit |
|
(108,076 |
) |
|
|
(114,095 |
) |
| |
Accumulated other comprehensive income (loss) |
|
43 |
|
|
|
(251 |
) |
| |
Total
stockholders’ equity |
|
12,131 |
|
|
|
3,325 |
|
| TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
50,259 |
|
|
$ |
39,781 |
|
| |
|
|
|
|
| LIFEVANTAGE CORPORATION AND
SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME |
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended June 30,
(Unaudited) |
|
For the Twelve Months Ended June
30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
| (In thousands, except
per share data) |
|
|
|
|
|
|
|
| Revenue, net |
$ |
53,033 |
|
|
$ |
45,301 |
|
|
$ |
206,540 |
|
|
$ |
190,336 |
|
| Cost of sales |
|
9,401 |
|
|
|
7,293 |
|
|
|
33,932 |
|
|
|
28,010 |
|
| Gross
profit |
|
43,632 |
|
|
|
38,008 |
|
|
|
172,608 |
|
|
|
162,326 |
|
| |
|
|
|
|
|
|
|
| Operating
expenses: |
|
|
|
|
|
|
|
|
Commissions and incentives |
|
25,595 |
|
|
|
21,668 |
|
|
|
103,120 |
|
|
|
91,074 |
|
| Selling,
general and administrative |
|
13,957 |
|
|
|
14,782 |
|
|
|
56,074 |
|
|
|
57,353 |
|
| Total
operating expenses |
|
39,552 |
|
|
|
36,450 |
|
|
|
159,194 |
|
|
|
148,427 |
|
| Operating income |
|
4,080 |
|
|
|
1,558 |
|
|
|
13,414 |
|
|
|
13,899 |
|
| |
|
|
|
|
|
|
|
| Other expense: |
|
|
|
|
|
|
|
| Interest
expense |
|
(145 |
) |
|
|
(746 |
) |
|
|
(3,321 |
) |
|
|
(3,087 |
) |
| Other
expense, net |
|
(1,153 |
) |
|
|
(103 |
) |
|
|
(1,409 |
) |
|
|
(159 |
) |
| Total
other expense |
|
(1,298 |
) |
|
|
(849 |
) |
|
|
(4,730 |
) |
|
|
(3,246 |
) |
| Income before income
taxes |
|
2,782 |
|
|
|
709 |
|
|
|
8,684 |
|
|
|
10,653 |
|
| Income
tax expense |
|
(432 |
) |
|
|
(483 |
) |
|
|
(2,665 |
) |
|
|
(3,666 |
) |
| Net income |
$ |
2,350 |
|
|
$ |
226 |
|
|
$ |
6,019 |
|
|
$ |
6,987 |
|
| Net income per
share: |
|
|
|
|
|
|
|
|
Basic |
$ |
0.17 |
|
|
$ |
0.02 |
|
|
$ |
0.44 |
|
|
$ |
0.50 |
|
|
Diluted |
$ |
0.16 |
|
|
$ |
0.02 |
|
|
$ |
0.41 |
|
|
$ |
0.49 |
|
| Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
13,758 |
|
|
|
13,687 |
|
|
|
13,730 |
|
|
|
13,899 |
|
|
Diluted |
|
14,640 |
|
|
|
13,786 |
|
|
|
14,531 |
|
|
|
14,150 |
|
| |
|
|
|
|
|
|
|
| Other
comprehensive income (loss), net of tax: |
|
|
|
|
|
|
|
| Foreign
currency translation adjustment |
|
167 |
|
|
|
(57 |
) |
|
|
294 |
|
|
|
(135 |
) |
| Other comprehensive
income (loss), net of tax: |
|
167 |
|
|
|
(57 |
) |
|
|
294 |
|
|
|
(135 |
) |
| Comprehensive
income |
$ |
2,517 |
|
|
$ |
169 |
|
|
$ |
6,313 |
|
|
$ |
6,852 |
|
| |
|
|
|
|
|
|
|
| LIFEVANTAGE CORPORATION AND
SUBSIDIARIES |
| Revenue by Region |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended June 30,
(unaudited) |
|
For the Twelve Months Ended June
30, |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
| (In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Americas |
|
$ |
39,498 |
|
74 |
% |
|
$ |
33,723 |
|
74 |
% |
|
$ |
158,291 |
|
77 |
% |
|
$ |
138,118 |
|
73 |
% |
| Asia/Pacific &
Europe |
|
|
13,535 |
|
26 |
% |
|
|
11,578 |
|
26 |
% |
|
|
48,249 |
|
23 |
% |
|
|
52,218 |
|
27 |
% |
|
Total |
|
$ |
53,033 |
|
100 |
% |
|
$ |
45,301 |
|
100 |
% |
|
$ |
206,540 |
|
100 |
% |
|
$ |
190,336 |
|
100 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Active Independent Distributors
(1) |
|
|
|
|
|
|
|
|
| |
|
(unaudited) |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| |
|
June 30 |
|
|
|
|
|
|
|
|
| |
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
| Americas |
|
|
49,000 |
|
71 |
% |
|
|
44,000 |
|
68 |
% |
|
|
|
|
|
|
|
|
| Asia/Pacific &
Europe |
|
|
20,000 |
|
29 |
% |
|
|
21,000 |
|
32 |
% |
|
|
|
|
|
|
|
|
|
Total |
|
|
69,000 |
|
100 |
% |
|
|
65,000 |
|
100 |
% |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Active Preferred Customers(2) |
|
|
|
|
|
|
|
|
| |
|
(unaudited) |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| |
|
June 30 |
|
|
|
|
|
|
|
|
| |
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
| Americas |
|
|
95,000 |
|
81 |
% |
|
|
94,000 |
|
82 |
% |
|
|
|
|
|
|
|
|
| Asia/Pacific &
Europe |
|
|
22,000 |
|
19 |
% |
|
|
21,000 |
|
18 |
% |
|
|
|
|
|
|
|
|
|
Total |
|
|
117,000 |
|
100 |
% |
|
|
115,000 |
|
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 AND
SUBSIDIARIES |
| Reconciliation of GAAP Net Income to Non-GAAP
EBITDA and Non-GAAP Adjusted EBITDA: (Unaudited) |
|
|
|
|
|
|
|
For the Three Months Ended June
30, |
|
For the Twelve Months Ended June
30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
| (In thousands) |
|
|
|
|
|
|
|
| GAAP Net income |
$ |
2,350 |
|
|
$ |
226 |
|
$ |
6,019 |
|
$ |
6,987 |
|
| Interest Expense |
|
145 |
|
|
|
746 |
|
|
3,321 |
|
|
3,087 |
|
| Provision for income
taxes |
|
432 |
|
|
|
483 |
|
|
2,665 |
|
|
3,666 |
|
| Depreciation and
amortization |
|
471 |
|
|
|
547 |
|
|
1,895 |
|
|
2,285 |
|
| Non-GAAP EBITDA: |
|
3,398 |
|
|
|
2,002 |
|
|
13,900 |
|
|
16,025 |
|
| Adjustments: |
|
|
|
|
|
|
|
| Stock compensation
expense |
|
1,045 |
|
|
|
301 |
|
|
2,621 |
|
|
1,806 |
|
| Other expense, net |
|
1,153 |
|
|
|
103 |
|
|
1,409 |
|
|
159 |
|
| Other adjustments* |
|
(7 |
) |
|
|
729 |
|
|
1,720 |
|
|
(554 |
) |
| Total adjustments |
|
2,191 |
|
|
|
1,133 |
|
|
5,750 |
|
|
1,411 |
|
| Non-GAAP Adjusted
EBITDA |
$ |
5,589 |
|
|
$ |
3,135 |
|
$ |
19,650 |
|
$ |
17,436 |
|
| |
|
|
|
|
|
|
|
| *Other
adjustments for the twelve months ended June 30, 2016 include
approximately $0.7 million for executive severance expenses, $0.9
million for search firm and hiring expenses associated with the
search for executive officers, and $0.1 million for expenses
associated with the reverse stock split completed during October
2015. Other adjustments for the twelve months ended June 30,
2015 include a ($2.0) million reduction for a one-time pretax
benefit from settlement proceeds, $0.6 million in CEO severance
expenses and $0.9 million in search firm expenses. Other
adjustments for the three months ended June 30, 2016 include
approximately ($7,000) for net severance, search firm and hiring
expenses. Other adjustments for the three months ended June 30,
2015 include $0.7 million in search firm expenses. |
| |
|
|
|
|
|
|
|
| LIFEVANTAGE CORPORATION AND
SUBSIDIARIES |
| Reconciliation of GAAP Net Income to Non-GAAP
Net Income and Non-GAAP Adjusted EPS: (Unaudited) |
|
|
|
|
|
|
|
For the Three Months Ended June
30, |
|
For the Twelve Months Ended June
30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
| (In thousands) |
|
|
|
|
|
|
|
| GAAP Net income |
$ |
2,350 |
|
|
$ |
226 |
|
$ |
6,019 |
|
$ |
6,987 |
|
| Executive team
severance expenses (1) |
|
(31 |
) |
|
|
- |
|
|
438 |
|
|
371 |
|
| Executive team
recruiting and transition expenses(2) |
|
26 |
|
|
|
478 |
|
|
643 |
|
|
577 |
|
| Reverse split
administrative expenses(3) |
|
- |
|
|
|
- |
|
|
110 |
|
|
- |
|
| Write-off of deferred
debt transaction costs(4) |
|
- |
|
|
|
- |
|
|
1,070 |
|
|
- |
|
| Write-off of
capitalized software development costs(5) |
|
822 |
|
|
|
- |
|
|
822 |
|
|
| Insurance proceeds from
product recall(6) |
|
- |
|
|
|
- |
|
|
- |
|
|
(1,312 |
) |
| Non-GAAP Net
Income: |
|
3,167 |
|
|
|
704 |
|
|
9,102 |
|
|
6,623 |
|
| |
|
|
|
|
|
|
|
| |
|
|
|
| |
For the Three Months Ended June
30, |
|
For the Twelve Months Ended June
30, |
| |
|
2016 |
|
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
| |
|
|
|
|
|
|
|
| Diluted earnings per
share, as reported |
$ |
0.16 |
|
|
$ |
0.02 |
|
$ |
0.41 |
|
$ |
0.49 |
|
| Executive team
severance expenses (1) |
|
- |
|
|
|
- |
|
|
0.03 |
|
|
0.03 |
|
| Executive team
recruiting and transition expenses(2) |
|
- |
|
|
|
0.03 |
|
|
0.04 |
|
|
0.04 |
|
| Reverse split
administrative expenses(3) |
|
- |
|
|
|
- |
|
|
0.01 |
|
|
- |
|
| Write-off of deferred
debt transaction costs(4) |
|
- |
|
|
|
- |
|
|
0.07 |
|
|
- |
|
| Write-off of
capitalized software development costs(5) |
|
0.06 |
|
|
|
- |
|
|
0.06 |
|
|
- |
|
| Insurance proceeds from
product recall(6) |
|
- |
|
|
|
- |
|
|
- |
|
|
(0.09 |
) |
| Diluted earnings per
share, as adjusted |
$ |
0.22 |
|
|
$ |
0.05 |
|
$ |
0.62 |
|
$ |
0.47 |
|
| |
|
|
|
|
|
|
|
| (1) Net of
($14,000) and $194,000 in tax expense (benefit) for the three and
twelve months ended June 30, 2016, and net of $194,000 in tax
expense for the twelve months ended June 30, 2015 |
| (2) Net of
$12,000 and $285,000 tax expense for the three and twelve months
ended June 30, 2016, respectively, and net of $251,000 and $303,000
in tax expense for the three and twelve months ended June 30,
2015 |
| (3) Net of
$49,000 tax expense for the twelve months ended June 30, 2016 |
| (4) Net of
$474,000 tax expense for the twelve months ended June 30, 2016 |
| (5) Net of
$364,000 tax expense for the three and twelve months ended June 30,
2015 |
| (6) Net of
$688,000 tax benefit for the twelve months ended June 30, 2015 |
| |
|
|
|
|
|
|
|
Investor Relations Contacts:
Cindy England
Director of Investor Relations
(801) 432-9036
cengland@lifevantage.com
-or-
Scott Van Winkle
Managing Director, ICR
(617) 956-6736
scott.vanwinkle@icrinc.com
Company Relations Contact:
John Genna
Vice President of Communications and Corporate Partnerships
(801) 432-9172
jgenna@lifevantage.com
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