LifeVantage Announces Fourth Quarter and Full Fiscal Year 2013 Results

LifeVantage Announces Fourth Quarter and Full Fiscal Year 2013 Results

  Full Fiscal Year Net Revenue Increased 65% Over Fiscal Year 2012 to $208.2
                                   Million

  Fourth Quarter Net Revenue Increased 15.5% Over Prior Year Period to $51.5
                                   Million

  Independent Distributor Count Grew 6% in Fourth Quarter, 2013 Compared to
                             Third Quarter, 2013

                  Company Issues Fiscal 2014 Annual Guidance

SALT LAKE CITY, Utah, Sept. 12, 2013 (GLOBE NEWSWIRE) -- LifeVantage
Corporation (Nasdaq:LFVN), a company dedicated to helping people achieve
healthy living through a combination of a compelling business opportunity and
scientifically validated products, today reported financial results for the
fiscal 2013 fourth quarter and the full year ended June 30, 2013.

Fiscal 2013 Fourth Quarter Highlights:

  oNet revenue increased 15.5% over the prior year period to $51.5 million;
  oGross profit increased to $44.2 million compared to $38.2 million in same
    period last year; and
  oThe number of active independent distributors increased 45% year-over-year
    and 6% on a sequential quarterly basis.

Fiscal 2013 Full Year Highlights:

  *Net revenue increased 65% over the prior year to $208.2 million;
  *Gross profit increased to $171.5 compared to $108.1 million in the prior
    year;
  *Generated full year GAAP net income of $7.6 million;
  *Ended year with improved cash balance of $26.3 million; and
  *Repurchased approximately 3 million shares of common stock in fiscal 2013.

Douglas C. Robinson, President and Chief Executive Officer of LifeVantage,
stated, "In the fourth quarter, we focused on taking the necessary steps to
position our business for future revenue growth and improved profitability.
For the full year fiscal 2013, we delivered solid revenue growth of 65% over
the prior year and increased our total number of active independent
distributors and preferred customers as compared to the prior fiscal year."

Mr. Robinson continued, "In fiscal 2013 we achieved our goal of strengthening
our infrastructure and resources to support our expanding business with
necessary investments. While we faced challenges in fiscal year 2013, we
believe we are now well positioned to leverage our many operational
investments as we enter fiscal 2014. We are confident in the long-term
potential for LifeVantage and expect to generate revenue, operating margin,
and net income growth in fiscal 2014."

Fiscal 2013 Fourth Quarter Results

For the fourth fiscal quarter ended June 30, 2013, the Company reported net
revenue of $51.5 million, compared to $44.6 million for the same period in
fiscal 2012, an increase of 15.5%. Revenue for the quarter was negatively
impacted 7.3% by foreign currency fluctuation.

Gross profit for the fourth fiscal quarter ended June 30, 2013 increased to
$44.2 million, compared to $38.2 million for the same period last year,
delivering a gross margin of 85.8%, compared to 85.6% in the prior year
period. The current quarter gross margin includes a benefit of approximately
$0.6 million due to a reduction in estimated expenses associated with the
product recall announced earlier this fiscal year.

Operating income for the fourth fiscal quarter of 2013 was $0.2 million,
compared to $7.3 million in the same period last year. Operating income for
the fourth fiscal quarter of 2013 includes a $1.7 million expense associated
with the retirement of Dr. Joe McCord, the Company's former Chief Science
Officer, and a $1.6 million expense associated with the launch of the
Company's MyLifeVenture program. Operating margin in the fourth fiscal quarter
of 2013 was 0.5%, compared to 16.5% in the prior year period. The decline in
operating margin in the fourth quarter of 2013 is primarily due to lower sales
growth in the quarter, the aforementioned fourth quarter expenses and higher
operating expenses that included investments in internal resources throughout
fiscal year 2013 in accordance with the Company's previously stated strategy.

Net loss for the fourth quarter of fiscal year 2013 was $0.2 million, or
($0.00) per diluted share. This compares to net income in the fourth quarter
of fiscal year 2012 of $4.8 million, or $0.04 per diluted share.

Fiscal 2013 Full Year Results

For the full year ended June 30, 2013, the Company reported net revenue of
$208.2 million, compared to $126.2 million in fiscal year 2012, a 65.0%
increase. Revenue for the full year was negatively impacted 5.0% by foreign
currency fluctuation. 

Operating income in fiscal year 2013 was $12.1 million, which includes the
impact of $5.0 million of net product recall related costs as well as the
aforementioned expenses related to the retirement of the Company's Chief
Science Officer and the launch of MyLifeVenture. This compares to operating
income of $21.5 million in the prior year. 

Net income for fiscal year 2013 was $7.6 million, or $0.06 per diluted share,
which includes the impact of net recall related costs and the aforementioned
operating expenses incurred in the fourth quarter, compared to $12.5 million,
or $0.11 per diluted share in fiscal year 2012. 

Excluding product recall costs, non-GAAP gross profit, operating income, net
income and diluted earnings per share for the full fiscal year ended June 30,
2013 were $176.3 million or 84.7%, $17.1 million or 8.2%, $11.0 million and
$0.09, respectively.

Balance Sheet & Liquidity

The Company's cash and cash equivalents at June 30, 2013 were $26.3 million,
compared to $24.6 million at the end of fiscal year 2012. The Company
generated $10.7 million of cash flow from operations in the full fiscal year
2013.

During fiscal year 2013, the Company authorized two separate $5 million stock
repurchase programs pursuant to which the Company repurchased a total of
approximately 3 million shares for $7.1 million. The remaining $2.9 million of
authorized share repurchases, or approximately 1.1 million shares, were
completed during the first quarter of fiscal 2014.

Fiscal Year 2014 Guidance

The Company expects to generate revenue in the range of $225 to $235 million
in fiscal year 2014. The Company expects to generate GAAP operating income in
the range of $20.5 to $23.5 million, and an operating margin of 9% to 10%.The
Company expects to generate earnings per diluted share in the range of $0.09
to $0.11, based on estimated weighted average diluted shares outstanding of
127 million.

Conference Call Information

The Company will hold an investor conference call today at 2:30 p.m. Mountain
time (4:30 p.m. Eastern time). Investors interested in participating in the
live call can dial (888) 334-3020 from the U.S.International callers can dial
(719) 325-2493.A telephone replay will be available approximately two hours
after the call concludes and will be available through Saturday, September 14,
2013, by dialing (877) 870-5176 from the U.S. and entering confirmation code
8608693, or (858) 384-5517 from international locations, and entering
confirmation code 8608693.

There also will be a simultaneous, live webcast available on the Investor
Relations section of the Company's web site at
http://investor.lifevantage.com/events.cfm. The webcast will be archived for
approximately 30 days.

About LifeVantage Corporation

LifeVantage Corporation (Nasdaq:LFVN), a leader in Nrf2 science and the maker
of Protandim^®, the Nrf2 Synergizer^® patented dietary supplement,
TrueScience^® Anti-Aging Cream and LifeVantage^® Canine Health, is a
science-based network marketing company.LifeVantage is dedicated to visionary
science that looks to transform wellness and anti-aging with products that
dramatically reduce oxidative stress at the cellular level. The Company was
founded in 2003 and is headquartered in Salt Lake City, Utah.

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," "hopes," "intends,"
"estimates," "expects," "projects," "plans," "anticipates," "look forward to"
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 our future revenue, operating income, operating margins, earnings
per share, cash flow from operations and future investment and growth,.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, the Company's inability to successfully expand its operations; the
Company's inability to conform to government regulations in existing markets;
the Company may not succeed in growing existing markets or opening new
international markets; the Company may be unable to effectively manage its
growth; the Company may experience disruptions in its information technology
systems; the Company may become subject to claims as a result of its
independent distributors failing to comply with its policies and procedures;
if the Company introduces new products, those new products may not gain
distributor or market acceptance; the Company may be adversely affected by
international trade or foreign exchange restrictions, increased tariffs,
foreign currency exchange; global economic conditions could deteriorate and
affect the Company; the Company's significant dependence on a single product
may adversely affect the Company; the Company may be unable to obtain high
quality raw materials for its products; the Company may be unable to retain
independent distributors or to attract new independent distributors on an
ongoing basis; the Company may become subject to a product recall; the
Company's dependence on third party manufacturers; the Company's network
marketing activities are heavily regulated and may become the subject of
actions from third parties and governmental agencies; the Company's direct
selling program could be found to not be in compliance with current or newly
adopted laws or regulations; the Company may become subject to unfavorable
publicity; the Company may become involved in expensive and time consuming
legal proceedings; the Company may become subject to an investigation or
enforcement action by the federal trade commission; the Company may lose key
personnel; and the Company's inability to protect its intellectual
property.These and other risk factors are discussed in greater detail in the
Company's Annual Report on Form 10-K 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 Adjusted Gross Profit as Gross Profit as determined in accordance
with GAAP excluding certain costs associated with the product recall included
in GAAP cost of sales.We define Adjusted Gross Margin as gross margin as
determined in accordance with GAAP (gross profit as a percentage of sales,
net) excluding the costs associated with the product recall.We define
Adjusted Operating Income as Operating Income excluding certain costs
associated with the product recall.We define Adjusted Net Income as Net
Income excluding certain costs associated with the product recall and the
applicable tax impacts associated with these items.Adjusted EPS is calculated
based on Adjusted Net Income and the weighted average number of common and
potential common shares outstanding during the period.Adjusted Gross Profit,
Adjusted Gross Margin, Adjusted Operating Income, Adjusted Net Income and
Adjusted EPS may not be comparable to similarly titled measures reported by
other companies.

We are presenting Adjusted Gross Profit, Adjusted Gross Margin, Adjusted
Operating Income, Adjusted Net Income and Adjusted EPS because management
believes that excluding the product recall costs from the relevant GAAP
measures, when viewed with our results under GAAP and the accompanying
reconciliations provides useful information about our period-over-period
growth and profitability and provides additional information that is useful
for evaluating our operating performance.Each ofAdjusted Gross Profit,
Adjusted Gross Margin, Adjusted Operating Income, Adjusted Net Income and
Adjusted EPS is presented solely as a supplemental disclosure because: (i) we
believe it is a useful tool for investors to assess the operating performance
of the business without the effect of these items; and (ii) we use Adjusted
Gross Profit, Adjusted Operating Income, Adjusted Net Income and Adjusted EPS
internally as a benchmark to evaluate our operating performance or compare our
performance to that of our competitors.The use of Adjusted Gross Profit,
Adjusted Gross Margin, Adjusted Operating Income, Adjusted Net Income and
Adjusted EPS has limitations and you should not consider these measures in
isolation from or as an alternative to the relevant GAAP measures, including
gross profit, gross margin, operating income, net income or net income per
diluted share prepared in accordance with GAAP, or as a measure of
profitability or liquidity.

The tables set forth below present a reconciliation of Adjusted Gross Profit,
Adjusted Operating Income, Adjusted Net Income and Adjusted EPS, all of which
are non-GAAP financial measures, to Gross Profit, Operating Income, Net
Income, and Diluted EPS, our most directly comparable financial measures
presented in accordance with GAAP.

LIFEVANTAGE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
                                                                   
(In thousands, except per share data)                      June 30,
ASSETS                                                     2013      2012
Current assets                                                     
Cash and cash equivalents                                  $26,299 $24,648
Accounts receivable, net                                   1,789     333
Income tax receivable                                      2,150     
Inventory                                                  10,524    11,353
Current deferred income tax asset                          2,885     1,244
Prepaid expenses and deposits                              2,294     1,250
Total current assets                                       45,941    38,828
                                                                   
Long-term assets                                                   
Property and equipment, net                                5,692     1,997
Intangible assets, net                                     1,747     1,882
Long-term deferred income tax asset                        730       1,479
Deposits                                                   1,374     342
TOTAL ASSETS                                               $55,484 $44,528
LIABILITIES AND STOCKHOLDERS' EQUITY                               
Current liabilities                                                
Accounts payable                                           $5,171  $3,615
Commissions payable                                        7,564     5,631
Reserve for sales returns                                  648       863
Accrued bonuses                                            50        2,287
Income tax payable                                         --      546
Other accrued expenses                                     7,009     2,932
Customer deposits                                          124       154
Total current liabilities                                  20,566    16,028
                                                                   
Long-term liabilities                                              
Other long-term liabilities                                973      217
Total liabilities                                          21,539    16,245
                                                                   
Commitments and contingencies                                       
Stockholders' equity                                               
Preferred stock - par value $.001,50,000 shares           --      --
authorized; no shares issued or outstanding
Common stock - par value $.001, 250,000 shares authorized;
117,088 and 110,174 issued and outstanding as of June 30,  121      111
2013 and 2012, respectively
Additional paid-in capital                                 110,413  105,154
Accumulated deficit                                        (76,476) (76,961)
Accumulated other comprehensive loss                       (113)    (21)
Total stockholders' equity                                33,945   28,283
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                 $55,484 $44,528
                                                                   

LIFEVANTAGE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
                                                                
                             For the three months ended For the year ended
                             June 30,                  June 30,
                             2013          2012         2013       2012
(In thousands, except per     (Unaudited)   (Unaudited)            
share data)
Sales, net                    $51,511     $44,604    $208,178 $126,183
Cost of sales                 7,909        6,427        31,845     18,052
Product recall costs          (620)         --         4,798      --
Gross profit                 44,222        38,177       171,535    108,131
                                                                
Operating expenses:                                              
Sales and marketing          33,413        24,300       122,389    68,397
General and administrative   9,244         5,905        32,471     16,397
Research and development     843           435          2,948      1,359
Depreciation and             479           199          1,659      521
amortization
Total operating expenses     43,979        30,839       159,467    86,674
Operating income             243          7,338       12,068    21,457
                                                                
Other expense, net:                                              
Interest and other expense,  (489)        (53)        (915)     (44)
net
Change in fair value of      --          --         --       (6,741)
derivative liabilities
Total other expense          (489)        (53)        (915)     (6,785)
Net income (loss) before      (246)        7,285       11,153    14,672
income taxes
Income tax (expense) benefit 64           (2,453)     (3,545)   (2,203)
Net income (loss)             $(182)      $4,832     $7,608   $12,469
Net income (loss) per share:                                     
Basic                        $--        $0.04      $0.07    $0.12
Diluted                      $--        $0.04      $0.06    $0.11
Weighted average shares                                          
outstanding:
Basic                        112,493       109,480      112,276    102,696
Diluted                      112,493       126,731      122,888    118,331
                                                                
Other comprehensive income                                       
(loss), net of tax:
Foreign currency translation (68)         26          (92)      38
adjustment
Other comprehensive income    $(68)       $26        $(92)    $38
(loss)
Comprehensive income (loss)   $(250)      $4,858     $7,516   $12,507
                                                                

LIFEVANTAGE CORPORATION
Reconciliation of GAAP Gross Profit to Non-GAAP Adjusted Gross Profit:
(Unaudited)
                       For the three months ended For the twelve months ended
                        June 30,                   June 30
                       2013          2012         2013          2012
(In thousands)                                                
GAAP Gross profit       $44,222     $38,177    $171,535    $108,131
                                                             
Adjustments:                                                  
Cost of sales
associated with product (620)        --         4,798        --
recall
Total adjustments       (620)        --         4,798        --
Non-GAAP Adjusted gross $43,602     $38,177    $176,333    $108,131
profit
                                                             
Reconciliation of GAAP Operating Income to Non-GAAP Adjusted Operating Income:
                                                             
                       For the three months ended For the twelve months ended
                        June 30,                   June 30,
                       2013          2012         2013          2012
(In thousands)                                                
GAAP Operating income   $243        $7,338     $12,068     $21,457
                                                             
Adjustments:                                                  
Costs associated with                                         
product recall:
Cost of sales           (620)        --         4,798        --
General and             41           --         270          --
administrative
Total adjustments       (579)        --         5,068        --
Non-GAAP Adjusted       $(336)      $7,338     $17,136     $21,457
operating income
                                                             
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income and related
Adjusted Earnings Per Share:
                                                             
                       For the three months ended For the twelve months ended
                        June 30,                   June 30,
                       2013          2012         2013          2012
(In thousands)                                                
GAAP Net income (loss)  $(182)      $4,832     $7,608      $12,469
                                                             
Adjustments:                                                  
Costs associated with                                         
product recall:
Cost of sales           (620)        --         4,798        --
General and             41           --         270          --
administrative
Tax impact of           184          --         (1,607)      --
adjustments
Total adjustments       (395)        --         3,461        --
Non-GAAP Adjusted net   $(577)      $4,832     $11,069     $12,469
income (loss)
                                                             
Diluted shares          112,493       126,731      122,888       118,331
                                                             
Non-GAAP Adjusted
diluted net income      $(0.01)     $0.04      $0.09       $0.11
(loss) per share
                                                             

LIFEVANTAGE CORPORATION
Sales by Region
                                                                  
            For the three months ended June   For the year endedJune 30,
             30,
            2013             2012             2013            2012
(In          (Unaudited)     (Unaudited)                             
thousands)
Americas     $35,326   69%  $30,511   68%  $133,046 64%  $90,122  71%
Asia/Pacific 16,185     31%  14,093     32%  75,132    36%  36,061     29%
Total Net    $51,511   100% $44,604   100% $208,178 100% $126,183 100%
Sales
                                                                  
                                                                  
LIFEVANTAGE CORPORATION                                               
Active Independent Distributors ^(1)                                   
(Unaudited)                                                            
            For the year endedJune 30,                               
            2013             2012                                     
Americas     43,000      64%  32,000      70%                          
Asia/Pacific 24,000      36%  14,000      30%                          
Total        67,000      100% 46,000      100%                         
                                                                  
LIFEVANTAGE CORPORATION                                               
Active Preferred Customers^(2)                                         
(Unaudited)                                                            
            For the year endedJune 30,                               
            2013            2012                                    
Americas     115,000     83%  101,000     85%                          
Asia/Pacific 23,000      17%  18,000      15%                          
            138,000     100% 119,000     100%                         
                                                                  

(1)Active Independent Distributors have purchased product in the prior three
months for retail or personal consumption.
(2) Active Preferred Customers have purchased product in the prior three
months for personal consumption only.

CONTACT: Investor Relations Contact:
         Cindy England (801) 432-9036
         Director of Investor Relations
         -or-
         John Mills (310) 954-1105
         Senior Managing Director, ICR, LLC

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