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Youngevity 2018 Revenue Down 2 % To $162 Million

Youngevity 2018 Revenue Down 2 % To $162 Million

Youngevity International, Inc. (NASDAQ: YGYI), a leading multi-channel lifestyle company, today reported financial results for the fourth quarter and full year ended December 31, 2018.

  • Full year Revenues were $162.4 million compared to $165.7 million in the prior year, a decrease of 2.0%
  • Full year Operating Loss improved by 55% to a loss of $2.6 million from a loss of $5.9 million in the prior year
  • Full year Adjusted EBITDA improved to $7.0 million from negative $549,000 in the prior year

Steve Wallach, Chairman and CEO of Youngevity International stated,

“We are encouraged by the improvement in our gross margins and the significant turnaround in Adjusted EBITDA over 2017.  We are seeing revenue stabilization in the direct selling segment and we anticipate a return to revenue growth in 2019. This is expected to be primarily driven by our commercial coffee segment and our new commercial hemp reporting segment. 

We are providing annual revenue guidance for 2019 in the range of $220 million and $240 million which represents a projected annual growth rate between 35% and 48% over 2018.  This revenue guidance includes estimated annual revenue contribution from our new reporting commercial hemp segment between $45 Million and $50 Million for 2019.”

Dave Briskie, President and CFO of Youngevity International stated,

“We cut our operating losses by over 50% for the year ended 2018 and closed out the year by achieving significant improvements to our balance sheet. 

As we closed out 2018 total assets increased by over $3.5 million while total liabilities decreased by approximately $12 million improving stockholders’ equity by over $15.5 million.  Returning to profitability remains a key focus of the business for 2019.”

Fourth Quarter 2018 Results

Revenues for the fourth quarter ended December 31, 2018 decreased 12.0% to $36,114,000 as compared to $41,041,000 for the fourth quarter ended December 31, 2017. We derived approximately 90% of our revenue from our direct sales and approximately 10% of our revenue from our commercial coffee sales during the quarter. Direct selling segment revenues decreased 9.2% to $32,418,000 in the current quarter as compared to $35,716,000 for the quarter ended December 31, 2017. Commercial coffee segment revenues decreased 30.6% to $3,696,000 in the current quarter as compared to $5,325,000 for the quarter ended December 31, 2017. This decrease was primarily attributed to timing of shipments in our green coffee business.

Gross profit for the fourth quarter ended December 31, 2018 decreased 12.2% to $20,926,000 as compared to $23,833,000 for the fourth quarter ended December 31, 2017. Gross profit in the direct selling segment decreased 10% to $21,466,000 as compared to $23,857,000 for the fourth quarter ended December 31, 2017. Gross Profit in the commercial coffee segment was a loss of $504,000 in the current quarter, compared to a loss of $24,000 for the fourth quarter ended December 31, 2017. Overall gross profit as a percentage of revenues decreased to 57.9% in the current quarter compared to 58.1% in the same period last year.

Operating loss for the fourth quarter ended December 31, 2018 increased $919,000 to $1,908,000 as compared to $989,000 for the fourth quarter ended December 31, 2017. This increase was primarily due to the lower gross profit and the loss of $975,000 on impairment of intangible assets in the current quarter, offset by decreases in distributor compensation expense, sales and marketing expenses and general and administrative expenses.

Other expense for the fourth quarter ended December 31, 2018 increased to $6,633,000 as compared to other expense of $341,000 for the fourth quarter ended December 31, 2017. This increase was primarily due to the loss in debt exchange of $4,706,000, the change in the fair value of warrant derivative of negative $11,000 in the current quarter, compared to a gain of $1,237,000 for the same period in the prior year and the increase in interest expense by $338,000 in the current quarter.

Income tax provision for the fourth quarter ended December 31, 2018 was $197,000 as compared to an income tax provision of $5,490,000 for the fourth quarter ended December 31, 2017. The income tax provision in the fourth quarter ended December 31, 2017 included an increase of $3,550,000 in the deferred tax valuation allowance.

Net loss for the fourth quarter ended December 31, 2018 was $8,738,000 as compared to a net loss of $6,820,000 for the fourth quarter ended December 31, 2017. The increase in net loss is primarily due to the increases in operating loss and other expense discussed above, partially offset by the decrease in income tax provision expense discussed above.

Adjusted EBITDA for the fourth quarter ended December 31, 2018 increased to $620,000 as compared to $302,000 for the fourth quarter ended December 31, 2017.

Full Year 2018 Results

Revenues for the year ended December 31, 2018 decreased 2.0% to $162,445,000 as compared to $165,696,000 for the year ended December 31, 2017. During the year ended December 31, 2018, 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 $3,595,000 or 2.5% to $138,855,000 as compared to $142,450,000 for the year ended December 31, 2017.

This decrease was primarily attributed to a decrease of $11,002,000 in revenues from existing business, offset by revenues from new acquisitions of $7,457,000. We attribute the decrease from existing business primarily to a general decline in net sales in North America in the direct selling business as well as a decline in new distributors.

The Company also changed its promotion strategy by targeting products with higher gross margins and utilized incentives that had less costly impact on profitability. For the year ended December 31, 2018, commercial coffee segment revenues increased by $344,000 or 1.5% to $23,590,000 as compared to $23,246,000 for the year ended December 31, 2017. This increase was primarily attributed to an increase of $1,048,000 revenues from the Company’s roasted coffee business, offset by a decrease of $704,000 in green coffee business.

BALANCE SHEET HIGHLIGHTS:

Cash & cash equivalents were $2,879,000 at December 31, 2018 verses $673,000 at December 31, 2017

Total assets were $75,973,000 at December 31, 2018 verses $72,389,000 at December 31, 2017

Total liabilities were $52,998,000 at December 31, 2018 verses $64,938,000 at December 31, 2017

Total stockholders’ equity was $22,975,000 at December 31, 2018 verses $7,451,000 at December 31, 2017

About Youngevity International, Inc.

YGYI, 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 YGYI offers products from the eight top-selling retail categories: health/nutrition, home/family, food/beverage (including coffee), spa/beauty, fashion, essential oils, photo, 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). The resulting company became Youngevity International, Inc. in July 2013. For investor information, please visit YGYI.com. Be sure to like us on Facebook and follow us on Twitter.

 

Get more information, fact and figures about Youngevity, click here for the Youngevity overview.

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