LifeVantage Corporation (Nasdaq: LFVN) today reported financial
results for its first fiscal quarter ended September 30, 2021.
First Quarter Fiscal 2022 Summary*:
- Revenue of $53.2 million, a decrease
of 2.9% from the prior year period and down 2.8% sequentially;
- Total active accounts declined 4.7%
to 164,000 as growth of 8.9% in Asia/Pacific & Europe was more
than offset by declines of 9.4% in the Americas. On a sequential
basis, total active accounts were down 3.5%;
- Earnings per diluted share were
$0.25, up 47.1%;
- Adjusted earnings per diluted share
were $0.23, down 8.0%;
- Adjusted EBITDA of $5.8 million, a
decrease of 13.7%;
- Repurchased approximately 0.5
million shares; and
- Strong balance sheet with
$19.9 million of cash and no debt.
* All comparisons are on a year over year basis and compare the
first quarter of fiscal 2022 to the first quarter of fiscal 2021,
unless otherwise noted.
“We continue to make progress on our initiatives around
leveraging the strength of our core products and unique business
model,” said Steve Fife, Chief Executive Officer of LifeVantage.
“Momentum across our distributors is building and we saw an
acceleration in activity in recent weeks, coming out of our annual
convention which had over 1,500 people attend in person and we
estimate over 10,000 people participated virtually. Development of
digital tools and resources remains a key area of focus, which
should fuel future account growth while also driving productivity
gains for distributors. First quarter results were largely in line
with our expectations and our ability to deliver high rates of
profitability despite the persistence of top-line headwinds
stemming from limited in-person activity is a testament to the
Company’s strong financial model. Accordingly, LifeVantage remains
well positioned for significant long-term growth as consumers
globally continue to seek high-quality, proven solutions for
optimizing their health and wellness.”
First Quarter Fiscal 2022 Results
For the first fiscal quarter, the Company reported revenue of
$53.2 million, a 2.9% decrease over the first quarter of fiscal
2021. Revenue in the Americas decreased 5.8% compared to the prior
year period and was partially offset by gains in Asia/Pacific &
Europe where revenue increased 3.9% compared to the first quarter
of fiscal 2021. Revenue growth was negatively impacted by slower
than anticipated re-openings as well as restrictions
internationally that affected the ability to host in-person
meetings.
Gross profit for the first quarter of fiscal 2022 was $43.8
million, or 82.3% of revenue, compared to $45.4 million, or 82.9%
of revenue, for the same period in fiscal 2021. The decline in
gross profit margin was due to increased inventory obsolescence
costs, higher shipping expenses and mix shifts related to product
and geography.
Commissions and incentives expense for the first quarter of
fiscal 2022 was $24.1 million, or 45.3% of revenue, compared to
$25.6 million, or 46.8% of revenue, for the same period in fiscal
2021. The decrease in commissions and incentives expense as a
percentage of revenue reflects the timing and magnitude of
incentive and promotional programs.
Selling, general and administrative (SG&A) expense for the
first quarter of fiscal 2022 was $15.1 million, or 28.3% of
revenue, compared to $16.3 million, or 29.7% of revenue, for the
same period in fiscal 2021. Adjusted for nonrecurring expenses,
which are detailed in the GAAP to non-GAAP reconciliation tables
included at the end of this press release, adjusted non-GAAP
SG&A expenses for the first quarter of fiscal 2022 were $15.3
million, or 28.8% of revenue, compared to adjusted non-GAAP
SG&A expenses for the first quarter of fiscal 2021 of $14.7
million, or 26.8% of revenue. The increase in non-GAAP SG&A was
attributable to increased marketing expenses as well as increased
event and travel expenses as we begin returning to a hybrid meeting
schedule.
Operating income for the first quarter of fiscal 2022 was $4.6
million, or 8.7% of revenue, compared to $3.5 million, or 6.4% of
revenue, for the first quarter of fiscal 2021. Accounting for
non-GAAP adjustments noted previously, adjusted non-GAAP operating
income for the first quarter of fiscal 2022 was $4.4 million, or
8.2% of revenue, compared to $5.1 million, or 9.3% of revenue, for
the first quarter of fiscal 2021.
Net income for the first quarter of fiscal 2022 was $3.3
million, or $0.25 per diluted share, which compares to net income
of $2.5 million, or $0.17 per diluted share for the first quarter
of fiscal 2021. Accounting for non-GAAP adjustments noted
previously, net of tax, adjusted non-GAAP net income for the first
quarter of fiscal 2022 was $3.1 million, or $0.23 per diluted
share, compared to $3.6 million, or $0.25 per diluted share the
first quarter of fiscal 2021.
Adjusted EBITDA decreased 13.7% to $5.8 million for the first
quarter of fiscal 2022, compared to $6.7 million for the comparable
period in fiscal 2021.
Balance Sheet & Liquidity
The Company generated $0.5 million of cash from operations
during the first three months of fiscal 2022 compared to cash used
in operations of $1.1 million in the same period in fiscal 2021.
Cash and cash equivalents at September 30, 2021 were $19.9
million, compared to $23.2 million at June 30, 2021 and there was
no debt outstanding. During the first quarter of fiscal 2022, the
Company repurchased approximately 0.5 million common shares for
$3.5 million under its share repurchase program.
Fiscal Year 2022 Guidance
The Company expects to generate revenue in the range of $225
million to $235 million in fiscal year 2022 and adjusted EBITDA of
$22 million to $24 million, with adjusted earnings per share in the
range of $0.83 to $0.87, which assumes a full year tax rate of
approximately 26%. This guidance reflects the current trends in the
business and the Company’s current view as to the impact of the
COVID-19 pandemic on its business. The Company's guidance for
adjusted non-GAAP EBITDA and adjusted non-GAAP earnings per diluted
share excludes any non-operating or non-recurring expenses that may
materialize during fiscal 2022. The Company is not providing
guidance for GAAP earnings per diluted share for fiscal 2022 due to
the potential occurrence of one or more non-operating, one-time
expenses, which the Company does not believe it can reliably
predict.
Conference Call Information
The Company will hold an investor conference call today at 2:30
p.m. MST (4:30 p.m. EST). Investors interested in participating in
the live call can dial (877) 300-8521 from the U.S. International
callers can dial (412) 317-6026. A telephone replay will be
available approximately two hours after the call concludes and will
be available through Thursday, November 11, 2021, by dialing (844)
512-2921 from the U.S. and entering confirmation code 10160922, or
(412) 317-6671 from international locations, and entering
confirmation code 10160922.
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-and-presentations or
directly at http://public.viavid.com/index.php?id=146901.The
webcast will be archived for approximately 30 days.
About LifeVantage Corporation
LifeVantage Corporation (Nasdaq: LFVN) is a pioneer in
nutrigenomics, the study of how nutrition and naturally occurring
compounds affect human genes to support good health. The Company
engages in the identification, research, development, formulation
and sale of advanced nutrigenomic activators, dietary supplements,
nootropics, pre- and pro-biotics, weight management, skin and hair
care, bath & body, and targeted relief products. The Company’s
line of scientifically-validated dietary supplements includes its
flagship Protandim® family of products, LifeVantage® Omega+,
ProBio, and Daily Wellness dietary supplements, TrueScience® is the
Company's line of skin, hair, bath & body, and targeted relief
products. The Company also markets and sells Petandim®, its
companion pet supplement formulated to combat oxidative stress in
dogs, Axio® its nootropic energy drink mixes, and PhysIQ™, its
smart weight management system. LifeVantage was founded in 2003 and
is headquartered in Lehi, Utah. For more information, visit
www.lifevantage.com.
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," "will," "hopes," "intends," "estimates,"
"expects," "projects," "plans," "anticipates," "look forward to,"
"goal," “may be,” 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 executing
against and the benefits of our key initiatives, future growth,
including geographic and product expansion, 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, further deterioration to
the global economic and operating environments as a result of
future COVID-19 developments, as well as 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
as GAAP net income less certain tax adjusted non-recurring one-time
expenses incurred during the period and Non-GAAP Earnings per Share
as Non-GAAP Net Income divided by weighted-average shares
outstanding.
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 reconciliations of 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.
Investor Relations Contacts:
Reed Anderson, ICR (646)
277-1260reed.anderson@icrinc.com
LIFEVANTAGE CORPORATION AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(unaudited) |
(In thousands, except per
share data) |
September 30, 2021 |
|
June 30, 2021 |
ASSETS |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
$ |
19,929 |
|
|
$ |
23,174 |
|
Accounts receivable |
3,254 |
|
|
2,925 |
|
Income tax receivable |
— |
|
|
1,038 |
|
Inventory, net |
16,079 |
|
|
16,145 |
|
Prepaid expenses and other |
5,641 |
|
|
4,772 |
|
Total current assets |
44,903 |
|
|
48,054 |
|
|
|
|
|
Property and equipment, net |
10,738 |
|
|
11,123 |
|
Right-of-use assets |
13,079 |
|
|
13,700 |
|
Intangible assets, net |
686 |
|
|
719 |
|
Deferred income tax asset |
2,290 |
|
|
1,208 |
|
Equity securities |
2,205 |
|
|
2,205 |
|
Other long-term assets |
1,696 |
|
|
1,723 |
|
TOTAL ASSETS |
$ |
75,597 |
|
|
$ |
78,732 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
Current liabilities |
|
|
|
Accounts payable |
$ |
4,842 |
|
|
$ |
6,744 |
|
Commissions payable |
7,933 |
|
|
8,138 |
|
Income tax payable |
1,470 |
|
|
830 |
|
Lease liabilities |
2,445 |
|
|
2,151 |
|
Other accrued expenses |
5,585 |
|
|
7,336 |
|
Total current liabilities |
22,275 |
|
|
25,199 |
|
|
|
|
|
Long-term lease
liabilities |
15,321 |
|
|
16,032 |
|
Other long-term
liabilities |
691 |
|
|
694 |
|
Total liabilities |
38,287 |
|
|
41,925 |
|
Commitments and
contingencies |
|
|
|
Stockholders' equity |
|
|
|
Preferred stock — par value $0.0001 per share, 5,000 shares
authorized, no shares issued or outstanding |
— |
|
|
— |
|
Common stock — par value $0.0001 per share, 40,000 shares
authorized and 13,236 and 13,609 issued and outstanding as of
September 30, 2021 and June 30, 2021, respectively |
1 |
|
|
1 |
|
Additional paid-in capital |
129,862 |
|
|
129,048 |
|
Accumulated deficit |
(92,522 |
) |
|
(92,346 |
) |
Accumulated other comprehensive (loss) income |
(31 |
) |
|
104 |
|
Total stockholders’ equity |
37,310 |
|
|
36,807 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
$ |
75,597 |
|
|
$ |
78,732 |
|
LIFEVANTAGE CORPORATION AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(unaudited) |
|
|
|
|
|
Three Months Ended September 30, |
(In thousands, except per
share data) |
2021 |
|
2020 |
Revenue, net |
$ |
53,224 |
|
|
$ |
54,827 |
|
Cost of sales |
9,431 |
|
|
9,398 |
|
Gross profit |
43,793 |
|
|
45,429 |
|
|
|
|
|
Operating expenses: |
|
|
|
Commissions and incentives |
24,105 |
|
|
25,633 |
|
Selling, general and administrative |
15,076 |
|
|
16,299 |
|
Total operating expenses |
39,181 |
|
|
41,932 |
|
Operating income |
4,612 |
|
|
3,497 |
|
|
|
|
|
Other expense: |
|
|
|
Interest expense, net |
(3 |
) |
|
(6 |
) |
Other expense, net |
(177 |
) |
|
(141 |
) |
Total other expense |
(180 |
) |
|
(147 |
) |
Income before income
taxes |
4,432 |
|
|
3,350 |
|
Income tax expense |
(1,116 |
) |
|
(899 |
) |
Net income |
$ |
3,316 |
|
|
$ |
2,451 |
|
Net income per share: |
|
|
|
Basic |
$ |
0.25 |
|
|
$ |
0.17 |
|
Diluted |
$ |
0.25 |
|
|
$ |
0.17 |
|
Weighted-average shares
outstanding: |
|
|
|
Basic |
13,394 |
|
|
14,269 |
|
Diluted |
13,469 |
|
|
14,695 |
|
LIFEVANTAGE CORPORATION AND SUBSIDIARIES |
|
|
Revenue by Region |
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
(In thousands) |
2021 |
|
2020 |
|
|
Americas |
$ |
36,449 |
|
|
68 |
% |
|
$ |
38,675 |
|
|
71 |
% |
|
|
|
|
Asia/Pacific & Europe |
16,775 |
|
|
32 |
% |
|
16,152 |
|
|
29 |
% |
|
|
|
|
Total |
$ |
53,224 |
|
|
100 |
% |
|
$ |
54,827 |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active Accounts |
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, |
|
|
|
|
|
2021 |
|
2020 |
|
Change from Prior Year |
|
Percent Change |
Active Independent
Distributors (1) |
|
|
|
|
|
|
|
|
|
|
|
Americas |
40,000 |
|
|
65 |
% |
|
46,000 |
|
|
68 |
% |
|
(6,000 |
) |
|
(13.0 |
)% |
Asia/Pacific & Europe |
22,000 |
|
|
35 |
% |
|
22,000 |
|
|
32 |
% |
|
— |
|
|
— |
% |
Total Active Independent Distributors |
62,000 |
|
|
100 |
% |
|
68,000 |
|
|
100 |
% |
|
(6,000 |
) |
|
(8.8 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
Active Customers (2) |
|
|
|
|
|
|
|
|
|
|
|
Americas |
75,000 |
|
|
74 |
% |
|
81,000 |
|
|
78 |
% |
|
(6,000 |
) |
|
(7.4 |
)% |
Asia/Pacific & Europe |
27,000 |
|
|
26 |
% |
|
23,000 |
|
|
22 |
% |
|
4,000 |
|
|
17.4 |
% |
Total Active Customers |
102,000 |
|
|
100 |
% |
|
104,000 |
|
|
100 |
% |
|
(2,000 |
) |
|
(1.9 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
Active Accounts (3) |
|
|
|
|
|
|
|
|
|
|
|
Americas |
115,000 |
|
|
70 |
% |
|
127,000 |
|
|
74 |
% |
|
(12,000 |
) |
|
(9.4 |
)% |
Asia/Pacific & Europe |
49,000 |
|
|
30 |
% |
|
45,000 |
|
|
26 |
% |
|
4,000 |
|
|
8.9 |
% |
Total Active Accounts |
164,000 |
|
|
100 |
% |
|
172,000 |
|
|
100 |
% |
|
(8,000 |
) |
|
(4.7 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Active
Independent Distributors have purchased product in the prior three
months for retail or personal consumption. |
(2) Active
Customers have purchased product in the prior three months for
personal consumption only. |
(3) Total Active
Accounts is the sum of Active Independent Distributor accounts and
Active Customer accounts. |
LIFEVANTAGE CORPORATION AND SUBSIDIARIES |
Reconciliation of GAAP Net Income to Non-GAAP EBITDA and
Non-GAAP Adjusted EBITDA |
(Unaudited) |
|
|
|
Three Months Ended September 30, |
(In thousands) |
2021 |
|
2020 |
GAAP Net income |
$ |
3,316 |
|
|
$ |
2,451 |
|
Interest Expense |
3 |
|
|
6 |
|
Provision for income
taxes |
1,116 |
|
|
899 |
|
Depreciation and
amortization(1) |
793 |
|
|
1,132 |
|
Non-GAAP EBITDA: |
5,228 |
|
|
4,488 |
|
Adjustments: |
|
|
|
Stock compensation
expense |
645 |
|
|
464 |
|
Other expense, net |
177 |
|
|
141 |
|
Other adjustments(2) |
(249 |
) |
|
1,629 |
|
Total adjustments |
573 |
|
|
2,234 |
|
Non-GAAP Adjusted EBITDA |
$ |
5,801 |
|
|
$ |
6,722 |
|
|
|
|
|
(1) Includes
$101,000 of accelerated depreciation related to a change in lease
term and $335,000 leasehold depreciation for the three months ended
September 30, 2020. |
|
|
|
|
(2) Other adjustments
breakout: |
|
|
|
Class-action lawsuit expenses,
net of recoveries |
$ |
(249 |
) |
|
$ |
609 |
|
Executive team severance
expenses, net |
— |
|
|
504 |
|
Executive team recruiting and
transition expenses |
— |
|
|
21 |
|
Lease abandonment |
— |
|
|
495 |
|
Total adjustments |
$ |
(249 |
) |
|
$ |
1,629 |
|
LIFEVANTAGE CORPORATION AND SUBSIDIARIES |
Reconciliation of GAAP Net Income to Non-GAAP Net Income
and Non-GAAP Adjusted EPS |
(Unaudited) |
|
|
|
Three Months Ended September 30, |
(In thousands) |
2021 |
|
2020 |
GAAP Net income |
$ |
3,316 |
|
|
$ |
2,451 |
|
Adjustments: |
|
|
|
Class-action lawsuit expenses, net of recoveries |
(249 |
) |
|
609 |
|
Executive team severance expenses, net(1) |
— |
|
|
54 |
|
Executive team recruiting and transition expenses |
— |
|
|
21 |
|
Accelerated depreciation related to change in lease term |
— |
|
|
101 |
|
Lease abandonment(2) |
— |
|
|
830 |
|
Tax impact of adjustments |
63 |
|
|
(433 |
) |
Total adjustments, net of
tax |
(186 |
) |
|
1,182 |
|
Non-GAAP Net Income: |
$ |
3,130 |
|
|
$ |
3,633 |
|
|
|
|
|
|
Three Months Ended September 30, |
|
2021 |
|
2020 |
Diluted earnings per share, as
reported |
$ |
0.25 |
|
|
$ |
0.17 |
|
Total adjustments, net of tax |
(0.01 |
) |
|
0.08 |
|
Non-GAAP adjusted diluted
earnings per share(3) |
$ |
0.23 |
|
|
$ |
0.25 |
|
|
|
|
|
(1) Net of $450,000 of compensation expense benefit related to
unvested stock award reversals during the three months ended
September 30, 2020. |
(2) Includes remaining lease rent expense of $495,000 and leasehold
depreciation of $335,000 for the three months ended September 30,
2020. |
(3) May not add due to rounding. |
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