2018 First Quarter Highlights:
- Revenues increased 11.0% over the prior year to $43.0 million
- Gross Profit increased 14.4% to $25.0 million compared to the prior year
- Adjusted EBITDA increased to $1.5 million compared to negative $1.2 million in the prior year
- The Coffee Segment posted 39.9% revenue growth over prior year
Steve Wallach, Chairman and CEO of Youngevity stated, We are pleased to see revenue growth for both segments in the first quarter. Our international markets are beginning to contribute more significantly to overall revenue lead by top line growth coming from Asia. We believe this overall growth is sustainable in the coming quarters.’
Dave Briskie, President and CFO of Youngevity said, We have been focused on the fundamentals as we entered 2018. We feel we made significant progress by improving adjusted EBITDA and strengthening our balance sheet as well. The recent financing and debt conversion contributed significantly to the improvement in our Stockholders Equity and will help reduce borrowing costs in the coming quarters.’
FIRST QUARTER 2018 FINANCIAL RESULTS
Revenues increased 11.0% to $42,994,000 in the current period as compared to $38,733,000 for the same period last year. We derived approximately 82% of our revenue from direct selling sales and approximately 18% from commercial coffee sales. Direct selling revenues increased by $2,069,000 or 6.2% to $35,311,000 as compared to $33,242,000 for the same period last year. Commercial coffee revenues increased by $2,192,000 or 39.9% to $7,683,000 as compared to $5,491,000 for the same period last year.
Gross profit increased 14.4% to $25,012,000 in the current period as compared to $21,866,000 for the same period last year. Overall gross profit as a percentage of revenues increased to 58.2%, compared to 56.5% in the same period last year.
Total operating expenses increased 3.0% to $24,988,000 in the current period, compared to $24,266,000 for the same period last year.
A breakdown of operating expenses is as follows:
Distributor compensation in the direct selling segment increased 1.0% to $15,578,000 compared to $15,419,000 for the same period last year.
Sales and marketing expense decreased 4.8% to $3,499,000 from $3,675,000 for the same period last year, primarily due to a reduction in distributor events.
General and administrative expense increased 14.3% to $5,911,000 from $5,172,000 for the same period last year, primarily due to increases in amortization costs, non-cash compensation costs and increased general and administration costs at the commercial coffee segment as well as increased international costs, primarily related to operations in Russia, Mexico, Taiwan and New Zealand.
Total other expense increased by $1,495,000 to $2,082,000 as compared to $587,000 for the same period last year. Total other expense includes net interest expense, the change in the fair value of derivative liabilities and extinguishment loss on debt. Net interest expense increased by $515,000 in the current quarter to $1,712,000, and the change in fair value of derivative liabilities increased by $102,000 in the current quarter to $712,000 which resulted in a reduction to other expense. We also recorded a non-cash extinguishment loss on debt of $1,082,000 in the current period as a result of the triggering of the automatic conversion of our 2017 Notes associated with our July 2017 Private Placement to common stock.
The Company has recognized an income tax expense of $250,000, which is the estimated federal, state and foreign income tax expense for the current quarter, compared to an income tax benefit of $928,000 for the same period in the prior year.
The Company reported a net loss of $2,308,000 in the current period as compared to net loss of $2,059,000 for the same period last year. This increase in net loss was as a result of the increases in other expense, income taxes and operating expense, partially offset by an increase in gross profit.
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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