Youngevity International, Inc. (NASDAQ: YGYI), a – Triple A Classified opportunity by Business For Home – a leading omni-direct lifestyle company, today reported financial results for the third quarter and nine months ended September 30, 2017.
Steve Wallach, CEO and Co-Founder of Youngevity, stated,
“I am pleased to see the performance of our international markets contribute to the top line of our direct selling business. We have invested heavily in establishing a global footprint and we believe that we will begin to enjoy returns on these significant investments in the coming quarters.
I am equally pleased to see the revenue growth taking place in our Coffee Division, especially the sales success taking place with our Café La Rica™ Brand.
We expect the strength of this brand has significant potential to bring shareholder value.”
Youngevity President and CFO Dave Briskie stated,
“We invested heavily in creating a platform that is capable of creating top line revenue growth throughout a number of verticals and in various markets across the globe.
We anticipate that we will be able to leverage our platform and drive top line growth. With that said, as we complete 2017 and move through 2018 we will focus on our plans to improve our profitability, expand our liquidity, and strengthen our balance sheet.”
THIRD QUARTER 2017 FINANCIAL RESULTS
For the three months ended September 30, 2017, our revenue increased 1.9% to $44,395,000 as compared to $43,562,000 for the three months ended September 30, 2016. During the three months ended September 30, 2017, we derived approximately 85% of our revenue from our direct sales and approximately 15% of our revenue from our commercial coffee sales.
Direct selling segment revenues decreased by $622,000 or 1.6% to $37,954,000 as compared to $38,576,000 for the three months ended September 30, 2016. Commercial coffee segment revenues increased by $1,455,000 or 29.2% to $6,441,000 in the current quarter as compared to $4,986,000 for the same period last year. This increase was primarily attributed to increased revenues in our green coffee business.
For the three months ended September 30, 2017, gross profit decreased approximately 2.3% to $25,764,000 as compared to $26,368,000 for the three months ended September 30, 2016. Overall gross profit as a percentage of revenues decreased to 58.0%, compared to 60.5% in the same period last year.
For the three months ended September 30, 2017, our operating expenses increased approximately 6.9% to $27,581,000 as compared to $25,792,000 for the three months ended September 30, 2016.
A breakdown of operating expenses is as follows: Distributor compensation decreased 3.9% to $17,391,000 from $18,101,000 for the three months ended September 30, 2016. This decrease was primarily attributable to the decrease in direct selling revenues and lower commissions paid on discounted items.
Sales and marketing expense increased 28.1% to $4,074,000 from $3,181,000 for the three months ended September 30, 2016 primarily due to expenses related to the Company’s twentieth anniversary convention held in Dallas, Texas in August 2017 and increase in wages and related benefits.
General and administrative expense increased 35.6% to $6,116,000 from $4,510,000 for the three months ended September 30, 2016 primarily due to increases in costs related to legal fees, computer and internet related costs, international expansion, investor relations, wages and related benefits, amortization and stock based compensation costs.
For the three months ended September 30, 2017, total other expense decreased by $36,000 to $541,000 as compared to other expense of $577,000 for the three months ended September 30, 2016. Total other expense includes net interest expense, the change in the fair value of warrant derivative and extinguishment loss on debt.
For the three months ended September 30, 2017, the Company reported a net loss of $1,068,000 as compared to net income of $67,000 for the same period last year.
About Youngevity International, Inc.
Youngevity International, Inc. (NASDAQ: YGYI), is a leading omni-direct lifestyle company offering a hybrid of the direct selling business model, that also offers e-commerce and the power of social selling. Assembling a virtual Main Street of products and services under one corporate entity, Youngevity offers products from the six top selling retail categories: health/nutrition, home/family, food/beverage (including coffee), spa/beauty, apparel/jewelry, as well as innovative services.
The Company was formed in the course of the summer 2011 merger of Youngevity Essential Life Sciences with Javalution® Coffee Company (now part of the company’s food and beverage division).
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