LifeVantage Announces 4th Quarter Results – Up 8%+ to 56 Million

David Phelps,LifeVantage,CEO

 

 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 its fourth quarter and full fiscal year ended June 30, 2014.

Fourth Quarter Fiscal 2014 Highlights:

Revenue was $56.0 million, an increase of 8.8% over the prior year period;
Revenue increased in the Americas by 12.3% compared to the prior year period;
Operating income was $4.8 million and net income was $2.4 million; and
Successfully launched the TrueScienceTM Skin Care Regimen.

Full Year Fiscal 2014 Highlights:

Revenue was $214.0 million, an increase of 2.8% over the prior year;
Revenue increased in the Americas by 6.1% over the prior year;
Operating income was $19.5 million and net income was $11.4 million;
Cash from operations grew 13.5%; ended the fiscal year with cash of $20.4 million;
Repurchased $46.2 million in shares and reduced long-term debt by $16.2 million; and
Began Real Salt Lake Major League Soccer marketing sponsorship.

Douglas C. Robinson, President and Chief Executive Officer of LifeVantage, stated, We are pleased to report revenue growth for the fourth quarter and full fiscal year. Our sales results reflect reignited growth in North America, partially offset by lower sales in Japan caused by continued distractions. We were successful in leveraging our general and administrative infrastructure while making important investments in sales and marketing, product development and geographic expansion initiatives. Throughout fiscal year 2015, we plan to continue focusing on executing and leveraging these strategies.

Mr. Robinson continued, Following the successful launch of our new skincare regimen in the fourth quarter, we expect to launch our new energy product line at our October Elite Academy. We believe these new products are consistent with our strategy to expand with scientifically-backed, quality products designed to help people feel, look and perform better. Additionally, to enhance our top line growth, we plan to continue investing in additional sales and marketing resources in all our markets, but most particularly in Japan, Hong Kong and the Philippines.

Fourth Quarter Fiscal 2014 Results

For the fourth fiscal quarter ended June 30, 2014, the Company reported revenue of $56.0 million, an increase of 8.8% compared to $51.5 million for the same period in fiscal 2013. Revenue reflects an increase of 12.3% in the Americas, and an increase in the Asia/Pacific region of 1.1%. Revenue for the quarter was negatively impacted $0.6 million, or 1.2%, by foreign currency fluctuation.

Operating income for the fourth fiscal quarter of 2014 was $4.8 million, generating an operating margin of 8.5%, compared to $0.2 million, and an operating margin of 0.5%, in the same period last year. Operating income in the fourth fiscal quarter of 2013 included $3.3 million of one-time expenses explained below.

Commission and incentives for the fourth fiscal quarter of 2014 were $27.0 million, or 48.1% of revenue, compared to $27.6 million, or 53.5% of revenue, in the same period last year. Commission and incentives as a percent of revenue were higher in fiscal 2013 due to $1.6 million of one-time expenses associated with the MyLifeVenture program launch. Selling, general and administrative expenses (SG&A) for the fourth fiscal quarter of 2014 were $15.3 million, or 27.4% of revenue, compared to $16.4 million, or 31.9% of revenue, in the same period last year. Prior year SG&A was impacted $1.7 million by a one-time retirement expense.

Interest and other expense in the fourth fiscal quarter of 2014 was $1.2 million, compared to interest and other expense of $0.5 million in the same period last year. The expense incurred in the current quarter is due to interest on the Company's term loan which did not exist in the prior year.

Net income for the fourth fiscal quarter of 2014 was $2.4 million, or $0.02 per diluted share, calculated on 106 million fully diluted shares. This compares to a net loss in the fourth fiscal quarter of 2013 of $0.2 million, or $0.00 per diluted share, calculated on 112 million fully diluted shares, including the aforementioned after tax impact of one-time expenses.

Fiscal 2014 Full Year Results

For the full year ended June 30, 2014, the Company reported revenue of $214.0 million, compared to $208.2 million in fiscal year 2013. Revenue in theAmericas increased 6.1%, but was partially offset by lower sales in Japan. Revenue for fiscal year 2014 was also negatively impacted $10.4 million, or 5.0%, by foreign currency fluctuation.

Operating income for fiscal year 2014 was $19.5 million, generating an operating margin of 9.1%. This compares to operating income of $12.1 million, for an operating margin of 5.8%, in fiscal year 2013. Fiscal year 2013 operating income included approximately $8.3 million of one-time expenses associated with the Company's product recall, of which $4.8 million impacted costs of sales and $0.2 million effected general and administrative expenses. The remaining $3.3 million of expenses are associated with the aforementioned one-time costs.

Commission and incentives for fiscal year 2014 were $104.5 million, or 48.9% of revenue, compared to $101.7 million, or 48.9% of revenue, in fiscal year 2013. The prior year included $1.6 million of one-time expenses. SG&A expenses for fiscal year 2014 were $56.8 million, or 26.5% of revenue, compared to $57.7 million, or 27.7% of revenue, in fiscal year 2013, inclusive of $1.7 million of one-time expenses.

Interest and other expense in fiscal year 2014 was $2.8 million, compared to interest and other expense of $0.9 million last year. The increased expense incurred in fiscal year 2014 is due to interest on the Company's term loan which did not exist in the prior year.

Net income for fiscal year 2014 was $11.4 million, or $0.10 per diluted share, calculated on 112 million fully diluted shares, compared to $7.6 million, or$0.06 per diluted share for the prior year, including one-time expenses, calculated on 123 million fully diluted shares.

Fiscal Year 2015 Guidance

The Company expects to generate revenue in the range of $225 million to $235 million in fiscal year 2015 representing a 5% to 10% increase over fiscal year 2014. The Company expects its operating margin to be in the range of 11% to 12% and earnings per diluted share in the range of $0.14 to $0.16, based on an estimated 107 million diluted shares and a 34% effective tax rate.

About LifeVantage Corporation

LifeVantage Corporation (Nasdaq:LFVN), a leader in Nrf2 science and the maker of Protandim®, the Nrf2 Synergizer® patented dietary supplement, the TrueScienceTM Anti-Aging Skin Care Regimen 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.

Get more information, facts and figures about LifeVantage, click here for the LifeVantage overview.

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