LifeVantage Announces Financial Results for the Second Quarter of Fiscal 2024
- Adjusted EBITDA increased 289% to $3.1 million
- Sales of TrueScience® Liquid Collagen product grew over 30% in the second quarter
- The company generated $6.5 million of cash from operations during the first six months of fiscal 2024
- Revenue decreased 3.8% from the prior year period
- Net loss per diluted share was $0.05
Insights
The reported decrease in revenue for LifeVantage Corporation, amounting to a 3.8% year-over-year decline, is a critical metric for investors as it indicates a contraction in the company's business activities. However, the improvement in adjusted EBITDA by 289% to $3.1 million and adjusted earnings per diluted share, which turned from a loss to a gain, suggests that the company is experiencing operational efficiencies and cost management success, despite the top-line pressure. This could imply a stronger financial discipline being enforced by the management. Furthermore, the gross profit margin improvement, albeit slight, is indicative of effective pricing strategies and cost control measures in production and logistics.
From a liquidity perspective, the increase in cash generated from operations to $6.5 million and the lack of outstanding debt reflect a robust liquidity position, which is reassuring for investors concerned about the company's ability to fund its operations and invest in growth. The announcement of a cash dividend, although modest, demonstrates confidence in the company's cash flow and may be seen as a positive signal to investors seeking income in addition to capital growth. The share repurchase activity also suggests a management belief that the stock is undervalued and a commitment to returning value to shareholders.
However, the revised downward revenue guidance for fiscal year 2024 could signal underlying challenges in market expansion or competitive pressures and warrants close monitoring. The increase in the adjusted EBITDA and earnings per share guidance does provide a counterbalance, indicating management's focus on profitability over revenue growth. The expected tax rate of 22% to 24% is within the norm for U.S. corporations, which should not surprise investors.
The sales performance of LifeVantage's TrueScience® Liquid Collagen product, with over 30% growth, showcases a successful product line that resonates with consumers, particularly in the Americas. This product strength could be leveraged for future growth opportunities, especially given the global wellness industry's trajectory. The decline in the Asia/Pacific & Europe regions, however, raises concerns about market penetration and the effectiveness of international strategies, which may need to be reassessed.
The introduction of the Evolve compensation plan and Rewards Circle loyalty program in international markets like Mexico, Canada and Europe is a strategic move to potentially boost consultant productivity and customer loyalty. These initiatives may help mitigate revenue declines by enhancing sales force effectiveness and customer retention. The focus on the 'Rise ERA' theme—Enrolling, Retaining and (Rank) Advancing—at the Global Kickoff meeting indicates a strategic emphasis on growth through consultant engagement and performance, which is a common direct selling strategy.
The stock market typically reacts to both the present financial health and future outlook of a company. While the improved profitability metrics could be seen as a positive indicator, the lowered revenue forecast may temper investor enthusiasm. Market sentiment will also likely be influenced by the company's ability to execute on its LV360 transformation plan and the reception of its new compensation and loyalty programs.
The company's forward-looking statements, particularly regarding fiscal year 2024 guidance, must be carefully crafted to comply with securities regulations concerning disclosure. The distinction between GAAP and non-GAAP financial measures is significant, as it allows investors to understand the core operating results of the company without the noise of non-recurring expenses. The exclusion of potential non-operating, one-time expenses from the guidance suggests a degree of uncertainty that investors should consider.
LifeVantage's share repurchase program, with $24.2 million remaining under the current authorization, is a capital allocation decision that should be executed in compliance with SEC Rule 10b-18 to avoid any market manipulation implications. The share repurchase activity, along with the dividend announcement, needs to adhere to corporate governance principles and fiduciary duties to ensure that these actions are in the best interest of shareholders.
The disclosure of nonrecurring expenses in the SG&A category and their impact on adjusted operating income is also an area where transparency is paramount. This provides a clearer picture of the company's recurring operational efficiency and should be monitored for consistency and compliance with financial reporting standards.
SALT LAKE CITY, Jan. 30, 2024 (GLOBE NEWSWIRE) -- LifeVantage Corporation (Nasdaq: LFVN), a leading health and wellness company with products designed to activate optimal health processes at the cellular level, today reported financial results for its second fiscal quarter ended December 31, 2023.
Second Quarter Fiscal 2024 Summary*:
- Revenue of
$51.6 million , a decrease of3.8% from the prior year period. Excluding the negative impact of foreign currency fluctuations, second quarter revenue was down approximately3.4% ; - Revenue in the Americas decreased
1.6% , and revenue in Asia/Pacific & Europe decreased10.0% . Excluding the negative impact of foreign currency fluctuations, second quarter revenue in Asia/Pacific & Europe decreased approximately8.0% ; - Net loss per diluted share was
$0.05 , versus net loss of$0.08 per diluted share a year ago; - Adjusted earnings per diluted share was
$0.10 , compared to adjusted loss per share of$0.07 a year ago; and - Adjusted EBITDA increased
289.0% to$3.1 million .
* All comparisons are on a year over year basis and compare the second quarter of fiscal 2024 to the second quarter of fiscal 2023, unless otherwise noted.
“We delivered significant year-over-year improvement in profitability during the second quarter as our LV360 initiatives continued to gain traction,” said Steve Fife, President and Chief Executive Officer of Life Vantage. “Adjusted EBITDA increased
Second Quarter Fiscal 2024 Results
For the second quarter ended December 31, 2023, the Company reported revenue of
Gross profit for the second quarter of fiscal 2024 was
Commissions and incentives expense for the second quarter of fiscal 2024 was
Selling, general and administrative (SG&A) expense for the second quarter of fiscal 2024 was
Operating loss for the second quarter of fiscal 2024 was
Net loss for the second quarter of fiscal 2024 was
Adjusted EBITDA was
Balance Sheet & Liquidity
The Company generated
Share Repurchase
During the second quarter, the Company repurchased 0.3 million shares of its common stock for an aggregate purchase price of
Dividend Announcement
Today the Company announced the declaration of a cash dividend of
Fiscal Year 2024 Guidance
The Company expects to generate revenue in the range of
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) 704-4453 from the U.S. International callers can dial (201) 389-0920. A telephone replay will be available approximately two hours after the call concludes and will be available through Tuesday, February 6, 2024, by dialing (844) 512-2921 from the U.S. and entering confirmation code 13743425, or (412) 317-6671 from international locations, and entering confirmation code 13743425.
There will also be a simultaneous, live webcast available on the Investor Relations section of the Company's web site at https://lifevantage.gcs-web.com/events-and-presentations or directly at https://viavid.webcasts.com/starthere.jsp?ei=1650314&tp_key=bd3485db5e. The webcast will be archived for approximately 30 days.
About LifeVantage Corporation
LifeVantage Corporation (Nasdaq: LFVN), the activation company, 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, IC Bright®, Daily Wellness, Rise AM, Reset PM, and D3+ dietary supplements, the TrueScience® 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.
Cautionary Note Regarding 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. The declaration and/or payment of a dividend during any quarter provides no assurance as to future dividends, and the timing and amount of future dividends, if any, could vary significantly in comparison both to past dividends and to current expectations. 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, the impact of COVID-19 on our business, expected financial performance, and expected dividend payments in future quarters. 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 “SEC”). 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) 277-1260
reed.anderson@icrinc.com
| LIFEVANTAGE CORPORATION AND SUBSIDIARIES | |||||||
| CONSOLIDATED BALANCE SHEETS | |||||||
| (Unaudited) | |||||||
| (In thousands, except per share data) | December 31, 2023 | June 30, 2023 | |||||
| ASSETS | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 17,331 | $ | 21,605 | |||
| Accounts receivable | 2,335 | 1,612 | |||||
| Income tax receivable | 234 | 241 | |||||
| Inventory, net | 14,972 | 16,073 | |||||
| Prepaid expenses and other | 3,789 | 4,753 | |||||
| Total current assets | 38,661 | 44,284 | |||||
| Property and equipment, net | 8,970 | 9,086 | |||||
| Right-of-use assets | 9,526 | 8,738 | |||||
| Intangible assets, net | 389 | 455 | |||||
| Deferred income tax asset | 4,618 | 2,991 | |||||
| Other long-term assets | 518 | 569 | |||||
| TOTAL ASSETS | $ | 62,682 | $ | 66,123 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Current liabilities | |||||||
| Accounts payable | $ | 6,237 | $ | 3,505 | |||
| Commissions payable | 6,798 | 6,651 | |||||
| Income tax payable | 825 | — | |||||
| Lease liabilities | 1,646 | 1,521 | |||||
| Other accrued expenses | 7,511 | 7,932 | |||||
| Total current liabilities | 23,017 | 19,609 | |||||
| Long-term lease liabilities | 12,133 | 11,566 | |||||
| Other long-term liabilities | 225 | 299 | |||||
| Total liabilities | 35,375 | 31,474 | |||||
| Commitments and contingencies | |||||||
| Stockholders' equity | |||||||
| Preferred stock — par value | — | — | |||||
| Common stock — par value | 1 | 1 | |||||
| Additional paid-in capital | 135,490 | 134,314 | |||||
| Accumulated deficit | (106,992 | ) | (98,305 | ) | |||
| Accumulated other comprehensive loss | (1,192 | ) | (1,361 | ) | |||
| Total stockholders’ equity | 27,307 | 34,649 | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 62,682 | $ | 66,123 | |||
| 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) | 2023 | 2022 | 2023 | 2022 | |||||||||||
| Revenue, net | $ | 51,624 | $ | 53,662 | $ | 102,988 | $ | 105,436 | |||||||
| Cost of sales | 11,066 | 11,758 | 21,246 | 21,700 | |||||||||||
| Gross profit | 40,558 | 41,904 | 81,742 | 83,736 | |||||||||||
| Operating expenses: | |||||||||||||||
| Commissions and incentives | 21,754 | 23,556 | 44,227 | 47,369 | |||||||||||
| Selling, general and administrative | 20,065 | 19,580 | 38,027 | 36,310 | |||||||||||
| Total operating expenses | 41,819 | 43,136 | 82,254 | 83,679 | |||||||||||
| Operating (loss) income | (1,261 | ) | (1,232 | ) | (512 | ) | 57 | ||||||||
| Other income (expense): | |||||||||||||||
| Interest income, net | 108 | 32 | 276 | 32 | |||||||||||
| Other income (expense), net | 41 | 125 | (47 | ) | (312 | ) | |||||||||
| Total other income (expense) | 149 | 157 | 229 | (280 | ) | ||||||||||
| Loss before income taxes | (1,112 | ) | (1,075 | ) | (283 | ) | (223 | ) | |||||||
| Income tax benefit (expense) | 456 | 17 | 256 | (225 | ) | ||||||||||
| Net loss | $ | (656 | ) | $ | (1,058 | ) | $ | (27 | ) | $ | (448 | ) | |||
| Net loss per share: | |||||||||||||||
| Basic | $ | (0.05 | ) | $ | (0.08 | ) | $ | — | $ | (0.04 | ) | ||||
| Diluted | $ | (0.05 | ) | $ | (0.08 | ) | $ | — | $ | (0.04 | ) | ||||
| Weighted-average shares outstanding: | |||||||||||||||
| Basic | 12,612 | 12,543 | 12,574 | 12,500 | |||||||||||
| Diluted | 12,612 | 12,543 | 12,574 | 12,500 | |||||||||||
| LIFEVANTAGE CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||||
| Revenue by Region | ||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||||||||||
| (In thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Americas | $ | 39,065 | 76 | % | $ | 39,705 | 74 | % | $ | 77,580 | 75 | % | $ | 76,074 | 72 | % | ||||||||
| Asia/Pacific & Europe | 12,559 | 24 | % | 13,957 | 26 | % | 25,408 | 25 | % | 29,362 | 28 | % | ||||||||||||
| Total | $ | 51,624 | 100 | % | $ | 53,662 | 100 | % | $ | 102,988 | 100 | % | $ | 105,436 | 100 | % | ||||||||
| Active Accounts | ||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| As of December 31, | ||||||||||||||||||||||||
| 2023 | 2022 | Change from Prior Year | Percent Change | |||||||||||||||||||||
| Active Independent Consultants(1) | ||||||||||||||||||||||||
| Americas | 32,000 | 63 | % | 36,000 | 60 | % | (4,000 | ) | (11.1 | )% | ||||||||||||||
| Asia/Pacific & Europe | 19,000 | 37 | % | 24,000 | 40 | % | (5,000 | ) | (21 | )% | ||||||||||||||
| Total Active Independent Consultants | 51,000 | 100 | % | 60,000 | 100 | % | (9,000 | ) | (15.0 | )% | ||||||||||||||
| Active Customers(2) | ||||||||||||||||||||||||
| Americas | 63,000 | 79 | % | 69,000 | 78 | % | (6,000 | ) | (8.7 | )% | ||||||||||||||
| Asia/Pacific & Europe | 17,000 | 21 | % | 20,000 | 22 | % | (3,000 | ) | (15.0 | )% | ||||||||||||||
| Total Active Customers | 80,000 | 100 | % | 89,000 | 100 | % | (9,000 | ) | (10.1 | )% | ||||||||||||||
| Active Accounts(3) | ||||||||||||||||||||||||
| Americas | 95,000 | 73 | % | 105,000 | 70 | % | (10,000 | ) | (9.5 | )% | ||||||||||||||
| Asia/Pacific & Europe | 36,000 | 27 | % | 44,000 | 30 | % | (8,000 | ) | (18.2 | )% | ||||||||||||||
| Total Active Accounts | 131,000 | 100 | % | 149,000 | 100 | % | (18,000 | ) | (12.1 | )% | ||||||||||||||
| (1) Active Independent Consultants 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 Consultant 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) | 2023 | 2022 | 2023 | 2022 | |||||||||||
| GAAP Net income | $ | (656 | ) | $ | (1,058 | ) | $ | (27 | ) | $ | (448 | ) | |||
| Interest income, net | (108 | ) | (32 | ) | (276 | ) | (32 | ) | |||||||
| Provision for income taxes | (456 | ) | (17 | ) | (256 | ) | 225 | ||||||||
| Depreciation and amortization(1) | 960 | 968 | 1,880 | 1,809 | |||||||||||
| Non-GAAP EBITDA: | (260 | ) | (139 | ) | 1,321 | 1,554 | |||||||||
| Adjustments: | |||||||||||||||
| Stock compensation expense | 750 | 824 | 1,728 | 1,425 | |||||||||||
| Other expense, net | (41 | ) | (125 | ) | 47 | 312 | |||||||||
| Other adjustments(2) | 2,640 | 234 | 3,986 | 322 | |||||||||||
| Total adjustments | 3,349 | 933 | 5,761 | 2,059 | |||||||||||
| Non-GAAP Adjusted EBITDA | $ | 3,089 | $ | 794 | $ | 7,082 | $ | 3,613 | |||||||
| (1) Includes | |||||||||||||||
| (2) Other adjustments breakout: | |||||||||||||||
| Class-action lawsuit expenses, net of recoveries | — | (84 | ) | $ | — | $ | 4 | ||||||||
| Key management severance expenses | — | — | 100 | — | |||||||||||
| Lease abandonment | — | 318 | — | 318 | |||||||||||
| Nonrecurring proxy contest related expenses | 2,640 | — | 3,886 | — | |||||||||||
| Total adjustments | $ | 2,640 | $ | 234 | $ | 3,986 | $ | 322 | |||||||
| 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) | 2023 | 2022 | 2023 | 2022 | |||||||||||
| GAAP Net income (loss) | $ | (656 | ) | $ | (1,058 | ) | $ | (27 | ) | $ | (448 | ) | |||
| Adjustments: | |||||||||||||||
| Class-action lawsuit expenses, net of recoveries | — | (84 | ) | — | 4 | ||||||||||
| Key management severance expenses | — | — | 100 | — | |||||||||||
| Nonrecurring proxy contest related expenses | 2,640 | — | 3,886 | — | |||||||||||
| Accelerated depreciation related to change in lease term | — | 116 | — | 116 | |||||||||||
| Lease abandonment(1) | — | 318 | — | 318 | |||||||||||
| Tax impact of adjustments(2) | (614 | ) | (115 | ) | (917 | ) | (117 | ) | |||||||
| Total adjustments, net of tax | 2,026 | 235 | 3,069 | 321 | |||||||||||
| Non-GAAP Net income (loss): | $ | 1,370 | $ | (823 | ) | $ | 3,042 | $ | (127 | ) | |||||
| Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Diluted earnings per share, as reported | $ | (0.05 | ) | $ | (0.08 | ) | $ | — | $ | (0.04 | ) | ||||
| Total adjustments, net of tax(3) | 0.15 | 0.02 | 0.23 | 0.03 | |||||||||||
| Non-GAAP adjusted diluted earnings per share(3)(4) | $ | 0.10 | $ | (0.07 | ) | $ | 0.23 | $ | (0.01 | ) | |||||
| (1) Includes remaining lease payments and other termination costs associated with lease abandonments | |||||||||||||||
| (2) Tax impact is based on the estimated annual tax rate for the years ended June 30, 2024 and 2023, respectively | |||||||||||||||
| (3) Non-GAAP Net income for the three and six months ended December 31, 2023 resulted in weighted average diluted shares outstanding of 13,221 and 13,082, respectively. | |||||||||||||||
| (4) May not add due to rounding. | |||||||||||||||
FAQ
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