LifeVantage Q4 Sales Up 6.7% To $54.0 Million

LifeVantage Corporation (Nasdaq: LFVN) today reported financial results for its fourth quarter and full fiscal year ended June 30, 2018.

Fourth Quarter Fiscal 2018 Highlights:

• Revenue increased 6.7% to $54.0 million year over year and 6.9% sequentially;
• Revenue in the Americas increased 4.7% year over year and 6.6% sequentially. Revenue in Asia/Pacific & Europe increased 13.3% year over year and 7.8% sequentially;
• Active independent distributors were consistent with the third quarter of 2018 and active customers increased 5.5% sequentially;
• Adjusted EBITDA increased 58.8% year over year to $5.2 million;
• Earnings per diluted share were $0.21, up from $0.01 in the prior year period; and
• Adjusted earnings per diluted share were $0.20, up from $0.04 in the prior year period.

* All year over year growth rates compare the fourth quarter of fiscal 2018 to the fourth quarter of fiscal 2017. All sequential growth rates compare the fourth quarter of fiscal 2018 to the third quarter of fiscal 2018.

Fiscal Year 2018 Highlights:

• Revenue increased 1.9% to $203.2 million;
• Revenue in the Americas increased 0.5% and revenue in Asia/Pacific & Europe increased 6.1%;
• Active independent distributors decreased 1.6% and active customers increased 3.6%;
• Adjusted EBITDA increased 13.9% to $14.9 million;
• Earnings per diluted share were $0.41, compared to $0.11 in fiscal 2017; and
• Adjusted earnings per diluted share were $0.51, compared to $0.27 in fiscal 2017.

*All growth rates compare fiscal 2018 to fiscal 2017.

‘We are very pleased to finish fiscal 2018 on a strong note, exceeding our adjusted earnings per share guidance and reporting accelerated revenue growth both on a year over year and a sequential basis,’

stated LifeVantage President and Chief Executive Officer Darren Jensen.

The initiatives implemented over the last year have driven improved growth and retention of our active members (total active distributors and customers), higher average order sizes, broadened our product portfolio and geographical footprint and put us at the forefront of the technologically-driven evolution of network marketing.’

Jensen continued, As we look toward fiscal 2019, we plan to double-down on the key drivers of our improved growth and continue to enhance the key operating metrics that have contributed to improved revenue and earnings. We look to drive sustainable improvement to our growing global business and shareholder value. I am excited for what lies ahead for LifeVantage.”

Fourth Quarter Fiscal 2018 Results

For the fourth fiscal quarter ended June 30, 2018, the Company reported revenue of $54.0 million, an increase of 6.7% as compared to $50.6 million in the fourth quarter of fiscal 2017. Revenue in the Americas for the fourth quarter increased 4.7% compared to the fourth quarter of fiscal 2017 and revenue in the Asia/Pacific & Europe region increased 13.3% compared to the fourth quarter of fiscal 2017. Revenue for the fourth quarter of fiscal 2018 was positively impacted $0.3 million, or 0.6%, by foreign currency fluctuations associated with revenue generated in several international markets when compared to the fourth quarter of fiscal 2017.

Gross profit for the fourth quarter of fiscal 2018 was $46.0 million, or 85.1% of revenue, compared to $41.8 million, or 82.4% of revenue, for the same period in fiscal 2017. Fourth quarter GAAP gross profit benefited by $0.9 million due to a change in accrued import estimates. Adjusted non-GAAP gross profit for the fourth quarter of fiscal 2018 was $45.1 million, or 83.5%. No non-GAAP adjustments were noted for the comparable prior year period.

Commissions and incentives expense for the fourth quarter of fiscal 2018 was $27.1 million, or 50.1% of revenue, compared to $24.0 million, or 47.4% of revenue, for the same period in fiscal 2017.

Selling, general and administrative expense (SG&A) for the fourth quarter of fiscal 2018 was $14.6 million, or 27.0% of revenue, compared to $16.2 million, or 32.0% of revenue, for the same period in fiscal 2017. Adjusted for class-action lawsuit expenses of $0.3 million, executive severance, recruiting and transition expenses of $0.3 million, and benefits from insurance reimbursements received of $0.4 million, adjusted non-GAAP SG&A expenses for the fourth quarter of fiscal 2018 were $14.4 million or 26.6% of revenue. Adjusted for recruiting and transition expenses of $0.2 million, class-action lawsuit expense of $0.1 million, and other nonrecurring legal expenses of $0.2 million, adjusted non-GAAP SG&A expenses for the fourth quarter of fiscal 2017 were $15.8 million or 31.2% of revenue.

Operating income for the fourth quarter of fiscal 2018 was $4.3 million, compared to $1.5 million for the fourth quarter of fiscal 2017. Accounting for the non-GAAP adjustments noted previously, adjusted non-GAAP operating income for the fourth quarter of fiscal 2018 was $3.7 million compared to $2.0 million for the fourth quarter of fiscal 2017. Adjusted EBITDA was $5.2 million for the fourth quarter of fiscal 2018, compared to $3.3 million for the comparable period in fiscal 2017.

Net income for the fourth quarter of fiscal 2018 was $3.0 million, or $0.21 per diluted share. This compares to net income for the fourth quarter of fiscal 2017 of $0.1 million, or $0.01per diluted share. Accounting for the non-GAAP adjustments noted previously, net of tax impacts of these adjustments of $0.2 million, as well as tax expense of $0.3 millionassociated with the revaluation of deferred tax assets associated with the recently enacted tax reform, adjusted non-GAAP net income for the fourth quarter of fiscal 2018 was $2.8 million, or $0.20 per diluted share, compared to adjusted non-GAAP net income of $0.5 million, or $0.04 per diluted share, for the comparable period of fiscal 2017. Non-GAAP adjustments to net income during the fourth quarter of fiscal 2017 included the SG&A expenses noted previously and a write-off of intangible assets of $0.4 million, all net of $0.4 million of income tax expense associated with the adjustments.

About LifeVantage Corporation

LifeVantage Corporation (Nasdaq:LFVN) is a pioneer in Nutrigenomics – a new science dedicated to biohacking the human aging code. The company is engaged in the identification, research, development and distribution of advanced nutraceutical dietary supplements and skin care products, including Protandim®, a line of scientifically-validated dietary supplements; TrueScience®, a line of Nrf2 infused skin care products; Petandimâ„¢ for Dogs, a companion pet supplement formulated to combat oxidative stress in dogs; Axio® Smart Energy Drink mixes; PhysIQâ„¢, a Smart Weight Management System; and Omega+, a 3-in-1 fish oil supplement. LifeVantage was founded in 2003 and is headquartered in Salt Lake City, Utah. For more information, visit www.lifevantage.com.