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"We are pleased with our strong revenue growth and profit performance during the second quarter. We generated over 5% year over year revenue growth, 82% year over year growth of adjusted EBITDA and 138% adjusted EPS growth over the prior year period,” stated LifeVantage President and Chief Executive Officer, Darren Jensen. “The U.S. launch of our newest addition to our flagship Protandim^® product line, Protandim^® NAD Synergizer^™, was a significant success and lifted sales across our entire family of Protandim^® products during the quarter. We continue to see a strong consumer response to our recent launch and are focused on driving subscription orders of both our Protandim^® NAD Synergizer^™ and our newly introduced Protandim^® Tri-Synergizer^™bundle. Additionally, we saw strong sales growth in our Asia Pacific and Europe region, particularly within Japan where sales increased 5%. We also enjoyed a strong launch in New Zealand during the quarter, leveraging our existing business in Australia."

For the second fiscal quarter ended December 31, 2019, the Company reported revenue of $61.2 million, an increase of 5.3% as compared to $58.2 million in the second quarter of fiscal 2019. Revenue in the Americas for the second quarter increased 4.3% compared to the second quarter of fiscal 2019 and revenue in the Asia/Pacific & Europe region increased 7.8% compared to the second quarter of fiscal 2019. Revenue for the second quarter of

Selling, general and administrative expense (SG&A) for the second quarter of fiscal 2020 was $18.1 million, or 29.6% of revenue, compared to $19.6 million, or 33.7% of revenue, for the same period in fiscal 2019. 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 second quarter of fiscal 2020 were $17.9 million, or 29.3% of revenue, compared to adjusted non-GAAP SG&A expenses for the second quarter of fiscal 2019 of $19.1 million, or 32.8% of revenue. The year over year decrease in non-GAAP SG&A primarily was due to decreased event expenses due to our October 2018 Global Convention that was held during the prior year period, as well as decreases in employee compensation related expenses. These decreases were partially offset by increased depreciation expenses associated with our investment in new technology assets that have been placed in service and increased payment processing fees associated with our increased revenue.

Operating income for the second quarter of fiscal 2020 was $3.6 million, or 6.0% of revenue, compared to $0.6 million, or 1.0% of revenue, for the second quarter of fiscal 2019. Accounting for non-GAAP adjustments noted previously, adjusted non-GAAP operating income for the second quarter of fiscal 2020 was $3.9 million, or 6.3% of revenue, compared to $1.1 million, or 1.9% of revenue, for the second quarter of fiscal 2019.

Net income for the second quarter of fiscal 2020 was $4.3 million, or $0.30 per diluted share. This compares to net income for the second quarter of fiscal 2019 of $0.8 million, or $0.06 per diluted share. Accounting for the non-GAAP adjustments noted previously, net of tax, adjusted non-GAAP net income for the second quarter of fiscal 2020 increased 139.0% year over year, to $4.6 million, or $0.31 per diluted share. This compares to adjusted non-GAAP net income for the second quarter of fiscal 2019 of $1.9 million, or $0.13 per diluted share.

For the first six months of fiscal 2020, the Company reported revenue of $117.5 million, an increase of 3.2% as compared to $113.8 million for the first six months of fiscal 2019. Revenue in the Americas for the first six months of fiscal 2020 increased 1.1% compared to the first six months of fiscal 2019 and revenue in the Asia/Pacific & Europe region increased 9.1% compared to the first six months of fiscal 2019. Revenue for the first six months of fiscal 2020 was positively impacted $0.6 million, or 0.5%, by foreign currency fluctuations associated with revenue generated in international markets when compared to the first six months of fiscal 2019.

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 six months of fiscal 2020 were $35.4 million, or 30.1% of revenue, compared to adjusted non-GAAP SG&A expenses for the first six months of fiscal 2019 of $36.2 million, or 31.8% of revenue. The year over year decrease in non-GAAP SG&A primarily was due to decreased event expenses due to our October 2018 Global Convention that was held during the prior year period, as well as decreases in employee compensation related expenses. These decreases were partially offset by increased depreciation expenses associated with our investment in new technology assets that have been placed in service and increased payment processing fees associated with our increased revenue.

Operating income for the first six months of fiscal 2020 was $6.2 million, or 5.3% of revenue, compared to $1.9 million, or 1.7% of revenue, for the same period in fiscal 2019. Accounting for non-GAAP adjustments noted previously, adjusted non-GAAP operating income for the first six months of fiscal 2020 was $6.7 million, or 5.7% of revenue, compared to $2.6 million, or 2.3% of revenue, for the same period in fiscal 2019.

Net income for the first six months of fiscal 2020 was $6.1 million, or $0.42 per diluted share. This compares to net income for the first six months of fiscal 2019 of $1.7 million, or $0.12 per diluted share. Accounting for the non-GAAP adjustments noted previously, net of tax, adjusted non-GAAP net income for the first six months of fiscal 2020 increased 120.3% year over year, to $6.5 million, or $0.45 per diluted share. This compares to adjusted non-GAAP net income for the first six months of fiscal 2019 of $2.9 million, or $0.20 per diluted share.

The Company generated $9.2 million of cash from operations during the second quarter of fiscal 2020 compared to generating $4.6 million in the comparable period of fiscal 2019. The Company's cash and cash equivalents at December 31, 2019 were $14.5 million, compared to $18.8 million at June 30, 2019. Total debt at December 31, 2019 was $0.5 million compared to $1.5 million at June 30, 2019. During the second quarter of fiscal 2020, the Company utilized approximately $2.0 million to repurchase 140,000 common shares under its share repurchase program.

The Company is reiterating its outlook for fiscal 2020 revenue and adjusted EBITDA, which was initially provided when the Company reported fourth fiscal quarter and full fiscal year 2019 results on August 14, 2019. The Company expects to generate revenue in the range of $235 million to $245 million in fiscal year 2020 and adjusted EBITDA of $20 million to $22 million. The Company is raising its adjusted earnings per share to a range of $0.74 to $0.79, up from $0.62 to $0.71 previously, which now reflects a full year tax rate of approximately 17% compared to the prior range of 19% to 22%, as well as a reduction in our estimated annual fully diluted share count. The Company's adjusted non-GAAP EBITDA and adjusted non-GAAP earnings per diluted share guidance excludes any non-operating or non-recurring expenses that may materialize during fiscal 2020. The Company is not providing GAAP earnings per diluted share guidance for fiscal 2020 due to the potential occurrence of one or more non-operating, one-time expenses, which the Company does not believe it can reliably predict.

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) 705-6003 from the U.S. International callers can dial (201) 493-6725. A telephone replay will be available approximately two hours after the call concludes and will be available through Tuesday, February 4, 2020, by dialing (844) 512-2921 from the U.S. and entering confirmation code 13698109, or (412) 317-6671 from international locations, and entering confirmation code 13698109.

LifeVantage Corporation (Nasdaq: LFVN) is a pioneer in Nutrigenomics - a new science dedicated to biohacking the human aging code. The Company engages in the identification, research, development and distribution of advanced nutraceutical dietary supplements and skin and hair care products, including its Protandim^® product line, LifeVantage^® Omega+ and ProBio dietary supplements, the TrueScience^® line of Nrf2 infused skin care and hair care products, Petandim^® for Dogs, Axio^® smart energy drink mixes, and the PhysIQ^™ weight management system. LifeVantage was founded in 2003 and is headquartered in Salt Lake City, Utah. For more information, visit www.lifevantage.com.

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, 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.

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.

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.


LIFEVANTAGE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands, except per share data)	December 31, 2019		June 30, 2019
ASSETS
Current assets
Cash and cash equivalents	$	14,479	$	18,824
Accounts receivable	1,788		2,066
Income tax receivable	1,006		1,236
Inventory, net	14,222		13,753

Prepaid expenses and other	6,117		7,309
Total current assets	37,612		43,188

Property and equipment, net	7,586		7,131
Right-of-use assets	2,136		—
Intangible assets, net	917		983
Deferred income tax asset	3,014		2,693
Equity securities	2,205		—
Other long-term assets	1,548		1,278
TOTAL ASSETS	$	55,018	$	55,273

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	3,900	$	5,180
Commissions payable	8,059		7,916
Income tax payable	170		592
Lease liabilities	2,270		—
Other accrued expenses	10,362		11,053
Current portion of long-term debt, net	484		1,454
Total current liabilities	25,245		26,195





Lease liabilities	288		—
Other long-term liabilities	387		1,879
Total liabilities	25,920		28,074
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 14,293 and 14,114 issued and outstanding as of December 31, 2019 and June 30, 2019, respectively	1		1
Additional paid-in capital	125,858		127,096
Accumulated deficit	(96,793)		(99,960)
Accumulated other comprehensive income	32		62
Total stockholders’ equity	29,098		27,199
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	55,018	$	55,273


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)	2019		2018		2019		2018
Revenue, net	$	61,242	$	58,167	$	117,470	$	113,776
Cost of sales	10,230		9,794		19,421		18,994
Gross profit	51,012		48,373		98,049		94,782

Operating expenses:
Commissions and incentives	29,235		28,176		56,009		55,961
Selling, general and administrative	18,131		19,616		35,817		36,918
Total operating expenses	47,366		47,792		91,826		92,879
Operating income	3,646		581		6,223		1,903

Other expense:
Interest expense, net	(41)		(100)		(89)		(209)
Other expense, net	(148)		(72)		(228)		(120)
Total other expense	(189)		(172)		(317)		(329)
Income before income taxes	3,457		409		5,906		1,574
Income tax benefit	846		420		158		166
Net income	$	4,303	$	829	$	6,064	$	1,740
Net income per share:
Basic	$	0.31	$	0.06	$	0.44	$	0.12
Diluted	$	0.30	$	0.06	$	0.42	$	0.12
Weighted-average shares outstanding:
Basic	13,902		13,944		13,908		13,996
Diluted	14,562		14,963		14,515		14,996


LIFEVANTAGE CORPORATION AND SUBSIDIARIES

	Revenue by Region
	(unaudited)

	Three Months Ended December 31,														Six Months Ended December 31,
(In thousands)	2019						2018						2019				2018
Americas	$	44,284	72	%	$	42,440	73	%	$	84,465	72	%	$	83,519	73	%
Asia/Pacific & Europe	16,958		28	%	15,727		27	%	33,005		28	%	30,257		27	%
Total	$	61,242	100	%	$	58,167	100	%	$	117,470	100	%	$	113,776	100	%

	Active Accounts
	(unaudited)

	As of December 31,
	2019						2018						Change from Prior Year		Percent Change
Active Independent Distributors ⁽¹⁾
Americas	46,000		68	%	45,000		68	%	1,000		2.2	%
Asia/Pacific & Europe	22,000		32	%	21,000		32	%	1,000		4.8	%
Total Active Independent Distributors	68,000		100	%	66,000		100	%	2,000		3.0	%

Active Customers ⁽²⁾
Americas	89,000		78	%	95,000		81	%	(6,000)		(6.3)	%
Asia/Pacific & Europe	25,000		22	%	23,000		19	%	2,000		8.7	%
Total Active Customers	114,000		100	%	118,000		100	%	(4,000)		(3.4)	%

Active Accounts ⁽³⁾
Americas	135,000		74	%	140,000		76	%	(5,000)		(3.6)	%
Asia/Pacific & Europe	47,000		26	%	44,000		24	%	3,000		6.8	%
Total Active Accounts	182,000		100	%	184,000		100	%	(2,000)		(1.1)	%

(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 December 31,						Six Months Ended December 31,
(In thousands)	2019		2018		2019		2018
GAAP Net income	$	4,303	$	829	$	6,064	$	1,740
Interest Expense	41		100		89		209
Provision for income taxes	(846)		(420)		(158)		(166)
Depreciation and amortization⁽¹⁾	709		436		1,245		878
Non-GAAP EBITDA:	4,207		945		7,240		2,661
Adjustments:
Stock compensation expense	1,547		1,721		2,918		3,053
Other expense, net	148		72		228		120
Other adjustments⁽²⁾	55		532		286		693
Total adjustments	1,750		2,325		3,432		3,866
Non-GAAP Adjusted EBITDA	$	5,957	$	3,270	$	10,672	$	6,527

(1) Includes $152,000 of accelerated depreciation related to a change in lease term for the three and six months ended December 31, 2019.

(2) Other adjustments breakout:
Class-action lawsuit expenses	$	55	$	364	$	187	$	367
Executive team severance expenses, net	—		—		—		(79)
Other nonrecurring legal and accounting expenses	—		168		99		405
Total adjustments	$	55	$	532	$	286	$	693


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)	2019		2018		2019		2018
GAAP Net income	$	4,303	$	829	$	6,064	$	1,740
Adjustments:
Executive team severance expenses, net	—		—		—		(79)





Class-action lawsuit expenses	55		364		187		367
Other nonrecurring legal and accounting expenses	—		168		99		405
Accelerated depreciation related to change in lease term	152		—		152		—
Tax impact of adjustments	51		547		(14)		512

Total adjustments, net of tax	258		1,079		424		1,205
Non-GAAP Net Income:	$	4,561	$	1,908	$	6,488	$	2,945

	Three Months Ended December 31,						Six Months Ended December 31,
	2019		2018		2019		2018
Diluted earnings per share, as reported	$	0.30	$	0.06	$	0.42	$	0.12
Total adjustments, net of tax	0.02		0.07		0.03		0.08
Non-GAAP adjusted diluted earnings per share⁽¹⁾	$	0.31	$	0.13	$	0.45	$	0.20

(1) May not add due to rounding.