LifeVantage Announces First Quarter Fiscal Year 2014 Results

LifeVantage Announces First Quarter Fiscal Year 2014 Results

  Successfully Completes $40 Million Common Stock Modified Dutch Auction at

   Expands Branding Reach with Jersey-Front Partnership with Real Salt Lake
                           Professional Soccer Team

  Company Reiterates Fiscal 2014 Revenue, Operating Income and EPS Guidance

SALT LAKE CITY, Nov. 7, 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 2014 first
quarter ended September 30, 2013.

Fiscal 2014 First Quarter Highlights:

  *Net revenue was $51.3 million; negatively impacted 7.4% by year-over-year
    foreign currency fluctuation;
  *Cash and cash equivalents increased $1.7 million to $28.0 million compared
    to year end fiscal year 2013; and
  *The number of active independent distributors increased to 67,000 and
    active preferred customers totaled 139,000.

Douglas C. Robinson, President and Chief Executive Officer of LifeVantage
stated, "As expected, our revenue level during the first quarter was similar
to the same period last year but would have increased over 4% if you exclude
the devaluation of the Yen. Overall, financial results in the first quarter
were in-line with our expectations; therefore, we are reiterating our annual
revenue, operating income and earnings per share guidance. During the quarter,
we also generated strong cash flow and continued to strengthen our balance

Mr. Robinson continued, "During the past few months, we have achieved some
very important goals that have enhanced our platform and which we believe have
strengthened our company. We believe the achievement of these goals will
enable us to deliver improved shareholder value over the long-term. These
accomplishments include the following:

  *In addition to our quarterly sales promotions, in July 2013 we launched a
    major sales promotion program, "MyLifeVenture" for our new and existing
  *In October 2013 we announced that we entered into a sports marketing
    partnership with the Real Salt Lake professional soccer team, which we
    believe will raise domestic and international awareness of our LifeVantage
  *We will begin selling our products for personal consumption in the
    Philippines in December, in-line with our strategy to selectively and
    strategically enter into new international markets; and
  *We entered into a new credit facility and completed a modified Dutch
    auction under which we repurchased over 16 million shares of our common
    stock, which brings the cumulative amount of cash we have paid to
    shareholders for the repurchase of shares to over $50 million in this
    calendar year.

"We believe that these recent initiatives will reinvigorate long-term revenue
growth. The company continues to realize strong cash flow and we are committed
to reducing our total shares outstanding while maintaining ample capital to
invest in the future of our business. These initiatives position our company
to generate positive long-term returns for our shareholders."

Fiscal 2014 First Quarter Results

For the first fiscal quarter ended September 30, 2013, the Company reported
net revenue of $51.3 million, compared to $52.9 million for the same period in
fiscal 2013. Revenue for the quarter was negatively impacted 7.4% by foreign
currency fluctuation.

Gross profit for the first fiscal quarter ended September 30, 2013 was $43.5
million, compared to $45.1 million for the same period last year, delivering a
gross margin of 84.8%, compared to 85.2% in the prior year period.

Operating income for the first fiscal quarter of 2014 was $5.1 million,
compared to $6.9 million in the same period last year. Operating margin in the
first fiscal quarter of 2014 was 9.9%, compared to 13.1% in the prior year
period. The decline in operating margin in the first fiscal quarter of 2014 is
due to lower sales growth in the quarter coupled with planned higher operating
expenses needed to expand the Company's core operational functions. These
investments included costs associated with continued quarterly sales
promotions, the office space the Company opened in fiscal year 2013 in Tokyo,
Japan, consolidation of the Company's office space in Salt Lake City, Utah,
personnel hires required to perform operational functions, and investments in
back-office program support systems such as a robust accounting/ERP system and
commission system capable of supporting an expanding distributor base and
global expansion. The Company anticipates that future operating expenses are
expected to be in line with future revenue growth.

Net income for the first fiscal quarter of 2014 was $3.3 million, or $0.03 per
diluted share. This compares to net income in the first fiscal quarter of 2013
of $4.2 million, or $0.03 per diluted share.

Balance Sheet & Liquidity

The Company's cash and cash equivalents at September 30, 2013 were $28.0
million, compared to $26.3 million as of June 30, 2013. The Company generated
$4.9 million of cash flow from operations in the first fiscal quarter of 2014
compared to $0.9 million in the first fiscal quarter of 2013.

In the first fiscal quarter of 2014, the Company completed its $5 million
stock repurchase program that was implemented in the fourth quarter of fiscal
2013. In the first quarter of fiscal 2014, the Company repurchased 1.1 million
shares for $2.9 million.

Subsequent to the end of the first fiscal quarter, the Company announced that
it entered into a Financing Agreement on October 18, 2013, with a fund managed
by TCW Special Situations, LLC. The Financing Agreement provides for a senior
secured credit facility in an aggregate principal amount of up to $67 million,
of which $47 million was funded at closing (the "Term Loan") and up to $20
million (the "Delayed Draw Term Loan") will be available for borrowing in
specified minimum amounts and subject to certain conditions until October 18,
2014. The Term Loan is a five year loan maturing on October 18, 2018 and the
principal amount is repayable in consecutive quarterly installments beginning
with the calendar quarter ending March 31, 2014.

On October 31, 2013, the Company also announced that it completed a modified
Dutch auction which was funded with proceeds received under the credit
facility. The Company has repurchased an aggregate of 16,326,530 shares of its
common stock at a purchase price of $2.45 per share, for an aggregate cost of
approximately $40 million. The shares repurchased in the modified Dutch
auction represent approximately 13.9% of the Company's total shares
outstanding as of September 13, 2013.

Fiscal Year 2014 Guidance

The Company is reiterating its annual revenue, operating income and annual
earnings per share guidance, which includes the expected impact of the loan
under the recent credit facility agreement and completion of the modified
Dutch auction.The Company continues to expect 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 111 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) 401-4685 from the U.S.International callers can dial
(719) 457-2630.A telephone replay will be available approximately two hours
after the call concludes and will be available through Saturday, November 9,
2013, by dialing (877) 870-5176 from the U.S. and entering confirmation code
5202716, or (858) 384-5517 from international locations, and entering
confirmation code 5202716.

There also will be a simultaneous, live webcast available on the Investor
Relations section of the Company's web site at 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 internally and externally with products that
dramatically reduce oxidative stress at the cellular level. LifeVantage 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, 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.

(In thousands, except per share data)         As of
ASSETS                                        September 30, 2013 June 30, 2013
Current assets                                                  
Cash and cash equivalents                     $27,957          $26,299
Accounts receivable                           923                1,789
Income tax receivable                         298                2,150
Inventory                                     10,625             10,524
Current deferred income tax asset             2,885              2,885
Prepaid expenses and deposits                 2,202              2,294
Total current assets                          44,890             45,941
Long-term assets                                                
Property and equipment, net                   5,490              5,692
Intangible assets, net                        1,765              1,747
Long-term deferred income tax asset           730                730
Other long-term assets                        1,588              1,374
TOTAL ASSETS                                  $54,463          $55,484
LIABILITIES AND STOCKHOLDERS' EQUITY                            
Current liabilities                                             
Accounts payable                              $3,000           $5,171
Commissions payable                           7,648              7,564
Reserve for sales returns                     1,041              648
Other accrued expenses                        6,741              7,183
Total current liabilities                     18,430             20,566
Long-term liabilities                                           
Other long-term liabilities                   950               973
Total liabilities                             19,380             21,539
Commitments and contingencies                                   
Stockholders' equity                                            
Preferred stock - par value $.001,50,000
shares authorized; no shares issued or        --                --
Common stock - par value $.001, 250,000
shares authorized; 117,713 and 117,088 issued 118               121
and outstanding as of September 30, 2013 and
June 30, 2013, respectively
Additional paid-in capital                    111,432           110,413
Accumulated deficit                           (76,080)          (76,476)
Accumulated other comprehensive loss          (387)             (113)
Total stockholders' equity                    35,083            33,945

                                        For the three months ended
                                         September 30,
                                        2013          2012
(In thousands, except per share data)                 
Sales, net                               $51,328     $52,859
Cost of sales                            7,809        7,807
Gross profit                             43,519        45,052
Operating expenses:                                   
Sales and marketing                      30,242        29,540
General and administrative               7,401         7,853
Research and development                 307           514
Depreciation and amortization            499           238
Total operating expenses                 38,449        38,145
Operating income                         5,070        6,907
Other income (expense), net:                          
Interest and other income (expense), net 38           (41)
Total otherincome (expense)             38           (41)
Net income before income taxes           5,108        6,866
Income tax expense                       (1,852)      (2,701)
Net income                               $3,256      $4,165
Net income per share:                                 
Basic                                    $0.03       $0.04
Diluted                                  $0.03       $0.03
Weighted average shares outstanding:                  
Basic                                    114,666       110,867
Diluted                                  123,542       125,781
Other comprehensive loss, net of tax:                 
Foreign currency translation adjustment  (274)        (5)
Other comprehensive loss                 $(274)      $(5)
Comprehensive income                     $2,982      $4,160

                     LIFEVANTAGE CORPORATION
                     Sales by Region
                     Three months ended
                      September 30,
                     2013                         2012
(In thousands)                                                   
Americas              $34,498        67%         $32,306        61%
Asia/Pacific          16,830          33%         20,553          39%
Total Net Sales       $51,328        100%        $52,859        100%
                     LIFEVANTAGE CORPORATION
                     Active Independent Distributors ^(1)
                     September 30,
                     2013                         2012
Americas              42,000           63%         35,000           65%
Asia/Pacific          25,000           37%         19,000           35%
Total                 67,000           100%        54,000           100%
                     LIFEVANTAGE CORPORATION
                     Active Preferred Customers ^(2)
                     September 30,
                     2013                         2012
Americas              115,000          83%         114,000          83%
Asia/Pacific          24,000           17%         23,000           17%
                     139,000          100%        137,000          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
         John Mills (310) 954-1105
         Senior Managing Director, ICR, LLC

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