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)) |
Exhibit No. | Description | ||
10.1 | |||
99.1 |
Date: | February 4, 2019 | By: | LIFEVANTAGE CORPORATION /s/ Steven R. Fife | |
Name: | Steven R. Fife | |||
Title: | Chief Financial Officer |
1. | Amendment to Loan Agreement. The Loan Agreement shall be amended as follows: |
LENDER: Zions Bancorporation, N.A. dba Zions First National Bank By:_________________________________ Its:_________________________________ | |
BORROWER: LifeVantage Corporation, a Delaware corporation By:_________________________________ Its: CFO | |
Lifeline Nutraceuticals Corporation, a Colorado corporation By:_________________________________ Its: President & CEO |
BORROWER: LifeVantage Corporation, a Delaware corporation By:_________________________________ Its: CFO | |
Lifeline Nutraceuticals Corporation, a Colorado corporation By:_________________________________ Its: President & CEO |
• | Revenue increased 17.6% to $58.2 million year over year and 4.6% sequentially; |
• | Revenue in the Americas increased 15.0% year over year and 3.3% sequentially. Revenue in Asia/Pacific & Europe increased 25.0% year over year and 8.2% sequentially; |
• | Active members increased 8.2%, including independent distributor growth of 6.5% and active customer growth of 9.3% year over year; |
• | Adjusted EBITDA was $3.3 million compared to $3.7 million in the prior year period; |
• | Earnings per diluted share were $0.06, up from $0.02 in the prior year period; |
• | Adjusted earnings per diluted share were $0.13, up from $0.11 in the prior year period; and |
• | Raising fiscal 2019 revenue guidance to a range of $222 million to $232 million, while adjusting fiscal 2019 diluted earnings per shares guidance to a range of $0.46 to $0.52 to reflect share price impact on non-cash stock-based compensation expense. |
LIFEVANTAGE CORPORATION AND SUBSIDIARIES | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(unaudited) | |||||||
(In thousands, except per share data) | December 31, 2018 | June 30, 2018 | |||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 18,989 | $ | 16,652 | |||
Accounts receivable | 2,376 | 2,067 | |||||
Income tax receivable | 2,866 | 451 | |||||
Inventory, net | 13,301 | 13,627 | |||||
Prepaid expenses and other | 6,126 | 6,141 | |||||
Total current assets | 43,658 | 38,938 | |||||
Property and equipment, net | 5,848 | 6,587 | |||||
Intangible assets, net | 1,049 | 1,115 | |||||
Long-term deferred income tax asset | 2,283 | 3,255 | |||||
Other long-term assets | 1,255 | 1,247 | |||||
TOTAL ASSETS | $ | 54,093 | $ | 51,142 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities | |||||||
Accounts payable | $ | 4,108 | $ | 3,813 | |||
Commissions payable | 8,071 | 7,546 | |||||
Income tax payable | 162 | 39 | |||||
Other accrued expenses | 14,422 | 10,407 | |||||
Current portion of long-term debt | 2,000 | 2,000 | |||||
Total current liabilities | 28,763 | 23,805 | |||||
Long-term debt | |||||||
Principal amount | 2,500 | 3,500 | |||||
Less: unamortized discount and deferred offering costs | (73 | ) | (88 | ) | |||
Long-term debt, net of unamortized discount and deferred offering costs | 2,427 | 3,412 | |||||
Other long-term liabilities | 1,885 | 1,978 | |||||
Total liabilities | 33,075 | 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 14,267 and 14,073 issued and outstanding as of December 31, 2018 and June 30, 2018, respectively | 1 | 1 | |||||
Additional paid-in capital | 123,501 | 124,663 | |||||
Accumulated deficit | (102,494 | ) | (102,731 | ) | |||
Accumulated other comprehensive income | 10 | 14 | |||||
Total stockholders’ equity | 21,018 | 21,947 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 54,093 | $ | 51,142 |
LIFEVANTAGE CORPORATION AND SUBSIDIARIES | |||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
(unaudited) | |||||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||
(In thousands, except per share data) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Revenue, net | $ | 58,167 | $ | 49,482 | $ | 113,776 | $ | 98,609 | |||||||
Cost of sales | 9,794 | 9,117 | 18,994 | 17,856 | |||||||||||
Gross profit | 48,373 | 40,365 | 94,782 | 80,753 | |||||||||||
Operating expenses: | |||||||||||||||
Commissions and incentives | 28,176 | 23,395 | 55,961 | 46,804 | |||||||||||
Selling, general and administrative | 19,616 | 14,643 | 36,918 | 30,224 | |||||||||||
Total operating expenses | 47,792 | 38,038 | 92,879 | 77,028 | |||||||||||
Operating income | 581 | 2,327 | 1,903 | 3,725 | |||||||||||
Other expense: | |||||||||||||||
Interest expense | (100 | ) | (103 | ) | (209 | ) | (265 | ) | |||||||
Other expense, net | (72 | ) | (169 | ) | (120 | ) | (147 | ) | |||||||
Total other expense | (172 | ) | (272 | ) | (329 | ) | (412 | ) | |||||||
Income before income taxes | 409 | 2,055 | 1,574 | 3,313 | |||||||||||
Income tax benefit (expense) | 420 | (1,738 | ) | 166 | (2,179 | ) | |||||||||
Net income | $ | 829 | $ | 317 | $ | 1,740 | $ | 1,134 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.06 | $ | 0.02 | $ | 0.12 | $ | 0.08 | |||||||
Diluted | $ | 0.06 | $ | 0.02 | $ | 0.12 | $ | 0.08 | |||||||
Weighted-average shares outstanding: | |||||||||||||||
Basic | 13,944 | 13,956 | 13,996 | 13,959 | |||||||||||
Diluted | 14,963 | 14,153 | 14,996 | 14,117 |
LIFEVANTAGE CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||||||
Revenue by Region | |||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||||||||||||||
(In thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||||
Americas | $ | 42,440 | 73 | % | $ | 36,903 | 75 | % | $ | 83,519 | 73 | % | $ | 73,066 | 74 | % | |||||||||||
Asia/Pacific & Europe | 15,727 | 27 | % | 12,579 | 25 | % | 30,257 | 27 | % | 25,543 | 26 | % | |||||||||||||||
Total | $ | 58,167 | 100 | % | $ | 49,482 | 100 | % | $ | 113,776 | 100 | % | $ | 98,609 | 100 | % | |||||||||||
Active Members | |||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||
As of December 31, | |||||||||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||||||||
Active Independent Distributors (1) | |||||||||||||||||||||||||||
Americas | 45,000 | 68 | % | 44,000 | 71 | % | |||||||||||||||||||||
Asia/Pacific & Europe | 21,000 | 32 | % | 18,000 | 29 | % | |||||||||||||||||||||
Total Active Independent Distributors | 66,000 | 100 | % | 62,000 | 100 | % | |||||||||||||||||||||
Active Customers (2) | |||||||||||||||||||||||||||
Americas | 95,000 | 81 | % | 86,000 | 80 | % | |||||||||||||||||||||
Asia/Pacific & Europe | 23,000 | 19 | % | 22,000 | 20 | % | |||||||||||||||||||||
Total Active Customers | 118,000 | 100 | % | 108,000 | 100 | % | |||||||||||||||||||||
Active Members (3) | |||||||||||||||||||||||||||
Americas | 140,000 | 76 | % | 130,000 | 76 | % | |||||||||||||||||||||
Asia/Pacific & Europe | 44,000 | 24 | % | 40,000 | 24 | % | |||||||||||||||||||||
Total Active Members | 184,000 | 100 | % | 170,000 | 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. | |||||||||||||||||||||||||||
(3) Total Active Members is the sum of Active Independent Distributors and Active Customers. |
LIFEVANTAGE CORPORATION AND SUBSIDIARIES | |||||||||||||||
Reconciliation of GAAP Net Income to Non-GAAP EBITDA and Non-GAAP Adjusted EBITDA | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||
(In thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||||
GAAP Net income | $ | 829 | $ | 317 | $ | 1,740 | $ | 1,134 | |||||||
Interest Expense | 100 | 103 | 209 | 265 | |||||||||||
Provision for income taxes | (420 | ) | 1,738 | (166 | ) | 2,179 | |||||||||
Depreciation and amortization | 436 | 322 | 878 | 672 | |||||||||||
Non-GAAP EBITDA: | 945 | 2,480 | 2,661 | 4,250 | |||||||||||
Adjustments: | |||||||||||||||
Stock compensation expense | 1,721 | 830 | 3,053 | 1,453 | |||||||||||
Other expense, net | 72 | 169 | 120 | 147 | |||||||||||
Other adjustments(1) | 532 | 183 | 693 | 474 | |||||||||||
Total adjustments | 2,325 | 1,182 | 3,866 | 2,074 | |||||||||||
Non-GAAP Adjusted EBITDA | $ | 3,270 | $ | 3,662 | $ | 6,527 | $ | 6,324 | |||||||
(1) Other adjustments breakout: | |||||||||||||||
Class-action lawsuit expenses | $ | 364 | $ | 20 | $ | 367 | $ | 216 | |||||||
Executive team severance expenses, net | — | — | (79 | ) | — | ||||||||||
Executive team recruiting and transition expenses | — | 163 | — | 207 | |||||||||||
Other nonrecurring legal expenses | 168 | — | 405 | 51 | |||||||||||
Total adjustments | $ | 532 | $ | 183 | $ | 693 | $ | 474 |
LIFEVANTAGE CORPORATION AND SUBSIDIARIES | |||||||||||||||
Reconciliation of GAAP Net Income to Non-GAAP Net Income and Non-GAAP Adjusted EPS | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||
(In thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||||
GAAP Net income | $ | 829 | $ | 317 | $ | 1,740 | $ | 1,134 | |||||||
Adjustments: | |||||||||||||||
Executive team severance expenses, net | — | — | (79 | ) | — | ||||||||||
Executive team recruiting and transition expenses | — | 163 | — | 207 | |||||||||||
Class-action lawsuit expenses | 364 | 20 | 367 | 216 | |||||||||||
Other nonrecurring legal and accounting expenses | 168 | — | 405 | 51 | |||||||||||
Tax impact of adjustments(1) | 547 | (56 | ) | 512 | (145 | ) | |||||||||
Tax expense impact of revaluation of deferred tax assets(2) | — | 1,166 | — | 1,166 | |||||||||||
Total adjustments, net of tax | 1,079 | 1,293 | 1,205 | 1,495 | |||||||||||
Non-GAAP Net Income: | $ | 1,908 | $ | 1,610 | $ | 2,945 | $ | 2,629 | |||||||
Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Diluted earnings per share, as reported | $ | 0.06 | $ | 0.02 | $ | 0.12 | $ | 0.08 | |||||||
Total adjustments, net of tax | 0.07 | 0.09 | 0.08 | 0.11 | |||||||||||
Diluted earnings per share, as adjusted | $ | 0.13 | $ | 0.11 | $ | 0.20 | $ | 0.19 | |||||||
(1) Tax impact of adjustments excludes the effect of the one-time deferred tax asset adjustment. | |||||||||||||||
(2) Tax impact of the remeasurement of our deferred tax assets, pursuant to the 2017 tax reform legislation. Deferred tax assets were reduced as the reversal of the underlying transactions will be deductible at the lower corporate tax rates included in the 2017 legislation. |
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