LifeVantage Reports Q2 Fiscal 2022 – Revenue Down 11.6% to $52.2 Million

LifeVantage Corporation (Nasdaq: LFVN) recently reported financial results for its second fiscal quarter ended December 31, 2021.

Second Quarter Fiscal 2022 Summary*:

• Revenue of $52.2 million, a decrease of 11.6% from the prior year period and down 1.9% sequentially;
• Total active accounts declined 6.3% to 163,000 as growth of 6.4% in Asia/Pacific & Europe was more than offset by declines of 11.0% in the Americas. On a sequential basis, total active accounts were fractionally lower;
• Earnings per diluted share were $0.01, versus $0.26 a year ago;
• Adjusted earnings per diluted share were $0.05, versus $0.25 a year ago;
• Adjusted EBITDA of $1.9 million, a decrease of 71.6%;
• Repurchased approximately 0.5 million shares; and
• Strong balance sheet with $20.2 million of cash and no debt.

* All comparisons are on a year over year basis and compare the second quarter of fiscal 2022 to the second quarter of fiscal 2021, unless otherwise noted.

“The second quarter proved to be more challenging than we anticipated as COVID factors caused our early momentum to stall by limiting in-person activity.

 

We also encountered unexpected, but related, delays with our recent Philippines launch that pushed the initial revenue ramp into January,”

said Steve Fife, Chief Executive Officer of LifeVantage.

“While we are disappointed that revenue and earnings results did not meet our expectations, we still made meaningful progress on several initiatives to position the Company for its next stage of growth.

 

Most notable was the recent appointment of two new executives, a Chief Marketing Officer and a Chief Digital Officer, effectively completing our senior leadership team and providing LifeVantage with additional depth in the key areas necessary to transform our business and accelerate growth.

 

Despite tempering our fiscal 2022 outlook to reflect recent results, the Company’s financial position remains strong and I’m confident in our ability to drive long-term value for all stakeholders.”

Second Quarter Fiscal 2022 Results

For the second fiscal quarter, the Company reported revenue of $52.2 million, a 11.6% decrease compared to the second quarter of fiscal 2021. Revenue in the Americas decreased 17.1% compared to the prior year period and was partially offset by gains in Asia/Pacific & Europe where revenue increased 2.1%.

Hosting in-person meetings proved more challenging in the second quarter as Delta and Omicron variants led to additional restrictions and unexpected delays across many of our markets.

Gross profit for the second quarter of fiscal 2022 was $42.5 million, or 81.5% of revenue, compared to $48.8 million, or 82.7% of revenue, for the same period in fiscal 2021. The decline in gross profit margin was due to increased inventory obsolescence costs, higher shipping expenses and mix shifts related to product and geography.

Commissions and incentives expense for the second quarter of fiscal 2022 was $25.4 million, or 48.8% of revenue, compared to $27.2 million, or 46.0% of revenue, for the same period in fiscal 2021. The increase in commissions and incentives expense as a percentage of revenue reflects the timing and magnitude of incentive and promotional programs.

Selling, general and administrative (SG&A) expense for the second quarter of fiscal 2022 was $17.4 million, or 33.4% of revenue, compared to $16.2 million, or 27.5% of revenue, for the same period in fiscal 2021. Adjusted for nonrecurring expenses, which are detailed in the GAAP to non-GAAP reconciliation tables included at the end of this press release, adjusted non-GAAP SG&A expenses for the second quarter of fiscal 2022 were $16.7 million, or 32.0% of revenue, compared to adjusted non-GAAP SG&A expenses for the second quarter of fiscal 2021 of $16.6 million, or 28.1% of revenue. .

Operating loss for the second quarter of fiscal 2022 was $0.4 million compared to operating income of $5.4 million for the second quarter of fiscal 2021. Accounting for non-GAAP adjustments noted previously, adjusted non-GAAP operating income for the second quarter of fiscal 2022 was $0.3 million compared to $5.1 million, in the second quarter of fiscal 2021.

Net income for the second quarter of fiscal 2022 was $0.1 million, or $0.01 per diluted share, which compares to net income of $3.8 million, or $0.26 per diluted share for the second quarter of fiscal 2021.

Accounting for non-GAAP adjustments noted previously, net of tax, adjusted non-GAAP net income for the second quarter of fiscal 2022 was $0.6 million, or $0.05 per diluted share, compared to $3.6 million, or $0.25 per diluted share for the second quarter of fiscal 2021.

Adjusted EBITDA was $1.9 million for the second quarter of fiscal 2022, compared to $6.7 million for the comparable period in fiscal 2021.

Balance Sheet & Liquidity

The Company generated $4.5 million of cash from operations during the first six months of fiscal 2022 compared to $4.8 million in the same period in fiscal 2021. Cash and cash equivalents at December 31, 2021 were $20.2 million, compared to $23.2 million at June 30, 2021 and there was no debt outstanding.

During the second quarter of fiscal 2022, the Company repurchased approximately 0.5 million common shares for $3.2 million under its share repurchase program. During the six months ended December 31, 2021, the Company repurchased 0.9 million common shares for $6.6 million under its share repurchase program.

Fiscal Year 2022 Guidance

The Company is reducing its guidance for fiscal 2022, primarily to reflect results in the second quarter. Revenues for fiscal 2022 are now expected to be in the range of $212 million to $220 million compared to previous guidance of $225 million to $235 million. Adjusted EBITDA for fiscal 2022 is now expected to be in the range of $18 million to $20 million compared to previous guidance of $22 million to $24 million.

Adjusted earnings per share are now expected to be in the range of $0.67 to $0.71 compared to previous guidance of $0.83 to $0.87, which assumes a full year tax rate of approximately 22%. This guidance reflects the current trends in the business and the Company’s current view as to the impact of the COVID-19 pandemic on its business.

The Company’s guidance for adjusted non-GAAP EBITDA and adjusted non-GAAP earnings per diluted share excludes any non-operating or non-recurring expenses that may materialize during fiscal 2022.

The Company is not providing guidance for GAAP earnings per diluted share for fiscal 2022 due to the potential occurrence of one or more non-operating, one-time expenses, which the Company does not believe it can reliably predict.

About LifeVantage Corporation

LifeVantage Corporation (Nasdaq: LFVN) is a pioneer in nutrigenomics, the study of how nutrition and naturally occurring compounds affect human genes to support good health. The Company engages in the identification, research, development, formulation and sale of advanced nutrigenomic activators, dietary supplements, nootropics, pre- and pro-biotics, weight management, skin and hair care, bath & body, and targeted relief products. The Company’s line of scientifically-validated dietary supplements includes its flagship Protandim^® family of products, LifeVantage^® Omega+^™, ProBio^™, IC Bright^™, and Daily Wellness^™ dietary supplements, TrueScience^® is the Company’s line of skin, hair, bath & body, and targeted relief products. The Company also markets and sells Petandim^®, its companion pet supplement formulated to combat oxidative stress in dogs, Axio^® its nootropic energy drink mixes, and PhysIQ^™, its smart weight management system. LifeVantage was founded in 2003 and is headquartered in Lehi, Utah. For more information, visit www.lifevantage.com