LIFEVANTAGE CORPORATION (Exact name of registrant as specified in its charter) |
Delaware | 001-35647 | 90-0224471 | ||
(State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
9785 S. Monroe Street, Suite 400, Sandy, UT 84070 | ||||
(Address of Principal Executive Offices and Zip Code) | ||||
Registrant’s telephone number, including area code: (801) 432-9000 |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Date: | November 1, 2018 | By: | LIFEVANTAGE CORPORATION /s/ Steven R. Fife |
Name: | Steven R. Fife | ||
Title: | Chief Financial Officer |
• | Revenue increased 13.2% to $55.6 million year over year and 2.9% sequentially; |
• | Revenue in the Americas increased 13.6% year over year and 1.4% sequentially. Revenue in Asia/Pacific & Europe increased 12.1% year over year and 7.5% sequentially; |
• | Active independent distributors increased 4.8% and active customers increased 9.2% year over year; |
• | Adjusted EBITDA increased 22.5% year over year to $3.3 million; |
• | Earnings per diluted share were $0.06, consistent with the prior year period; |
• | Adjusted earnings per diluted share were $0.07, consistent with the prior year period; and |
• | Raising fiscal 2019 revenue guidance to a range of $215 million to $225 million. |
LIFEVANTAGE CORPORATION AND SUBSIDIARIES | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(unaudited) | |||||||
(In thousands, except per share data) | September 30, 2018 | June 30, 2018 | |||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 17,123 | $ | 16,652 | |||
Accounts receivable | 2,367 | 2,067 | |||||
Income tax receivable | 1,360 | 451 | |||||
Inventory, net | 13,281 | 13,627 | |||||
Prepaid expenses and other | 6,400 | 6,141 | |||||
Total current assets | 40,531 | 38,938 | |||||
Property and equipment, net | 6,063 | 6,587 | |||||
Intangible assets, net | 1,082 | 1,115 | |||||
Long-term deferred income tax asset | 3,023 | 3,255 | |||||
Other long-term assets | 1,222 | 1,247 | |||||
TOTAL ASSETS | $ | 51,921 | $ | 51,142 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities | |||||||
Accounts payable | $ | 3,930 | $ | 3,813 | |||
Commissions payable | 7,867 | 7,546 | |||||
Income tax payable | 10 | 39 | |||||
Other accrued expenses | 9,786 | 10,407 | |||||
Current portion of long-term debt | 2,000 | 2,000 | |||||
Total current liabilities | 23,593 | 23,805 | |||||
Long-term debt | |||||||
Principal amount | 3,000 | 3,500 | |||||
Less: unamortized discount and deferred offering costs | (79 | ) | (88 | ) | |||
Long-term debt, net of unamortized discount and deferred offering costs | 2,921 | 3,412 | |||||
Other long-term liabilities | 1,876 | 1,978 | |||||
Total liabilities | 28,390 | 29,195 | |||||
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 14,103 and 14,073 issued and outstanding as of September 30, 2018 and June 30, 2018, respectively | 1 | 1 | |||||
Additional paid-in capital | 125,464 | 124,663 | |||||
Accumulated deficit | (101,823 | ) | (102,731 | ) | |||
Accumulated other comprehensive income (loss) | (111 | ) | 14 | ||||
Total stockholders’ equity | 23,531 | 21,947 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 51,921 | $ | 51,142 |
LIFEVANTAGE CORPORATION AND SUBSIDIARIES | |||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
(unaudited) | |||||||
Three Months Ended September 30, | |||||||
(In thousands, except per share data) | 2018 | 2017 | |||||
Revenue, net | $ | 55,609 | $ | 49,127 | |||
Cost of sales | 9,199 | 8,739 | |||||
Gross profit | 46,410 | 40,388 | |||||
Operating expenses: | |||||||
Commissions and incentives | 27,785 | 23,409 | |||||
Selling, general and administrative | 17,301 | 15,581 | |||||
Total operating expenses | 45,086 | 38,990 | |||||
Operating income | 1,324 | 1,398 | |||||
Other expense: | |||||||
Interest expense | (110 | ) | (162 | ) | |||
Other income (expense), net | (49 | ) | 22 | ||||
Total other expense | (159 | ) | (140 | ) | |||
Income before income taxes | 1,165 | 1,258 | |||||
Income tax expense | (254 | ) | (441 | ) | |||
Net income | $ | 911 | $ | 817 | |||
Net income per share: | |||||||
Basic | $ | 0.07 | $ | 0.06 | |||
Diluted | $ | 0.06 | $ | 0.06 | |||
Weighted-average shares outstanding: | |||||||
Basic | 13,987 | 13,963 | |||||
Diluted | 15,126 | 14,080 |
LIFEVANTAGE CORPORATION AND SUBSIDIARIES | |||||||||||||
Revenue by Region | |||||||||||||
(unaudited) | |||||||||||||
Three Months Ended September 30, | |||||||||||||
(In thousands) | 2018 | 2017 | |||||||||||
Americas | $ | 41,079 | 74 | % | $ | 36,163 | 74 | % | |||||
Asia/Pacific & Europe | 14,530 | 26 | % | 12,964 | 26 | % | |||||||
Total | $ | 55,609 | 100 | % | $ | 49,127 | 100 | % | |||||
Active Independent Distributors (1) | |||||||||||||
(unaudited) | |||||||||||||
As of September 30, | |||||||||||||
2018 | 2017 | ||||||||||||
Americas | 46,000 | 70 | % | 45,000 | 71 | % | |||||||
Asia/Pacific & Europe | 20,000 | 30 | % | 18,000 | 29 | % | |||||||
Total | 66,000 | 100 | % | 63,000 | 100 | % | |||||||
Active Customers (2) | |||||||||||||
(unaudited) | |||||||||||||
As of September 30, | |||||||||||||
2018 | 2017 | ||||||||||||
Americas | 96,000 | 81 | % | 87,000 | 80 | % | |||||||
Asia/Pacific & Europe | 23,000 | 19 | % | 22,000 | 20 | % | |||||||
Total | 119,000 | 100 | % | 109,000 | 100 | % | |||||||
(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. |
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) | 2018 | 2017 | |||||
GAAP Net income | $ | 911 | $ | 817 | |||
Interest Expense | 110 | 162 | |||||
Provision for income taxes | 254 | 441 | |||||
Depreciation and amortization | 441 | 350 | |||||
Non-GAAP EBITDA: | 1,716 | 1,770 | |||||
Adjustments: | |||||||
Stock compensation expense | 1,333 | 623 | |||||
Other (income) expense, net | 49 | (22 | ) | ||||
Other adjustments(1) | 162 | 291 | |||||
Total adjustments | 1,544 | 892 | |||||
Non-GAAP Adjusted EBITDA | $ | 3,260 | $ | 2,662 | |||
(1) Other adjustments breakout: | |||||||
Class-action lawsuit expenses | $ | 3 | $ | 196 | |||
Executive team severance expenses, net | (79 | ) | — | ||||
Executive team recruiting and transition expenses | — | 44 | |||||
Other nonrecurring legal expenses | 238 | 51 | |||||
Total adjustments | $ | 162 | $ | 291 |
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) | 2018 | 2017 | |||||
GAAP Net income | $ | 911 | $ | 817 | |||
Adjustments: | |||||||
Executive team severance expenses, net | (79 | ) | — | ||||
Executive team recruiting and transition expenses | — | 44 | |||||
Class-action lawsuit expenses | 3 | 196 | |||||
Other nonrecurring legal and accounting expenses | 238 | 51 | |||||
Tax impact of adjustments(1) | (35 | ) | (102 | ) | |||
Total adjustments, net of tax | 127 | 189 | |||||
Non-GAAP Net Income: | $ | 1,038 | $ | 1,006 | |||
Three Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Diluted earnings per share, as reported | $ | 0.06 | $ | 0.06 | |||
Total adjustments, net of tax | 0.01 | 0.01 | |||||
Diluted earnings per share, as adjusted | $ | 0.07 | $ | 0.07 | |||
(1) Tax impact of adjustments excludes the effect of the one-time deferred tax asset adjustment. |
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