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SALT LAKE CITY, May 9, 2018 (GLOBE NEWSWIRE) LifeVantage Corporation (Nasdaq:LFVN) today reported financial results for its third quarter ended March 31, 2018.

LifeVantage just revealed its latest financial report. Today’s post is taken from the report and remarks from LifeVantage CEO Darren Jensen.

“We are happy to report stronger third-quarter sales growth on both a sequential and year over year basis. We are beginning to see the effects of our 2018 key initiatives, which are driving sales growth and improvements in our key metrics.”

“March was the best recruitment month in three years and retention of both distributors and preferred customers increased during the third quarter. Our Stacks product strategy is performing ahead of plan and drove a 23% increase in average order size.”

“Our sales growth is offering increased earnings and we are increasing the midpoint of our adjusted earnings per share guidance as a result. We will continue to magnify the recent success by driving each of our initiatives focused on geographical expansion, distributor and customer acquisition and increasing average order size.”

Third Quarter Fiscal 2018 Summary

Revenue increased 12.3% to $50.6 million year over year and 2.2% sequentially; revenue in the Americas increased 10.6% and revenue in Asia/Pacific & Europe increased 18.0% including a 10.1% increase in Japan, both on a year over year basis.

On a sequential basis, all geographical regions generated growth, with the exception of Japan, which followed its typical seasonal pattern from the second to third quarter; Active independent distributors stayed consistent and active preferred customers decreased 0.9% year over year and increased on a sequential basis 1.6% and 1.9%, respectively; Adjusted EBITDA increased 109.8% year over year to $3.4 million; Earnings per diluted share were $0.12, up from $0.00 in the foregoing year period; and Adjusted earnings per diluted share were $0.12, up from $0.03 in the foregoing year period.

Third Quarter Fiscal 2018 Results

For the third fiscal quarter ended March 31, 2018, the Company reported revenue of $50.6 million, an increase of 12.3% as compared to $45.0 million in the third quarter of fiscal 2017. Revenue in the Americas for the third quarter increased 10.6% compared to the corresponding duration of fiscal 2017 and revenue in the Asia/Pacific & Europe region increased 18.0% compared to the third quarter of fiscal 2017.

Revenue in Japan increased 10.1% compared to the analogous period of fiscal 2017. Revenue for the third quarter of fiscal 2018 was positively impacted $0.8 million, or 1.8%, by foreign currency fluctuations associated with revenue generated in several international markets when compared to the corresponding duration of fiscal 2017.

Gross profit for the third quarter of fiscal 2018 was $41.6 million, or 82.4% of revenue, compared to $36.8 million, or 81.7% of revenue, for the comparable period of fiscal 2017. Commissions and incentives expense for the third quarter of fiscal 2018 were $24.3 million, or 48.1% of revenue, compared to $22.8 million, or 50.8% of revenue, for the comparable period of fiscal 2017. Selling, general and administrative expense (SG&A) for the third quarter of fiscal 2018 was $15.0 million, or 29.7% of revenue, compared to $13.7 million, or 30.5% of revenue, for the analogous period of fiscal 2017.

Operating income for the third quarter of fiscal 2018 was $2.3 million, compared to $0.2 million for the corresponding duration of fiscal 2017. Operating income during the third quarter of fiscal 2018 included approximately $0.1 million for expenses associated with executive severance, recruiting and transition and approximately $0.1 million for expenses linked to class-action lawsuits. Adjusted EBITDA was $3.4 million for the third quarter of fiscal 2018, compared to $1.6 million for the comparable period of fiscal 2017.

Net income for the third quarter of fiscal 2018 was $1.6 million, or $0.12 per diluted share. This compares to net income for the third quarter of fiscal 2017 of $0.1 million, or $0.00 per diluted share. Adjusted for class-action lawsuit expense of $0.1 million and executive severance, recruiting and transition expenses of $0.1 million, net of $0.1 million of tax impacts of these adjustments, adjusted Non-GAAP net income was $1.8 million for the third quarter of fiscal 2018, or $0.12 per diluted share, compared to $0.4 million, or $0.03 per diluted share for the corresponding duration of fiscal 2017.

Non-GAAP adjustments to net income during the third quarter of fiscal 2017 included executive severance, recruiting and transition expenses of $0.4 million and class-action lawsuit expense of $0.1 million, net of $0.2 million of tax impacts for these adjustments.

Fiscal 2018 First Nine Months Results

For the first nine months of fiscal 2018, the Company gained net revenue of $149.2 million, an increase of 0.2% compared to $148.8 million for the first nine months of fiscal 2017. In the first nine months of fiscal 2018, revenue in the Americas decreased 0.9%, while revenue in Asia/Pacific & Europe increased 3.7%. Revenue for the first nine months of fiscal 2018 was negatively impacted $0.1 million, or 0.1%, by foreign currency fluctuations associated with revenue generated in several international markets.

Gross profit for the first nine months of fiscal 2018 was $122.4 million, or 82.0% of revenue, compared to $124.3 million, or 83.5% of revenue, for the corresponding duration of fiscal 2017. Commissions and incentives expense for the first nine months of fiscal 2018 were $71.1 million, or 47.7% of revenue, compared to $72.7 million, or 48.8% of revenue, for the corresponding duration of fiscal 2017. SG&A for the first nine months of fiscal 2018 was $45.2 million, or 30.3% of revenue, compared to $48.7 million, or 32.7% of revenue, for the first nine months of fiscal 2017.

Operating income for the first nine months of fiscal 2018 was $6.0 million, compared to $2.9 million for the comparable period of fiscal 2017. Operating income for the first nine months of fiscal 2018 includes approximately $0.3 million for expenses relating to class-action lawsuits, approximately $0.3 million associated with executive severance, recruiting and transition expenses and approximately $0.1 million associated with non-recurring legal and accounting expenses.

Operating income in the first nine months of fiscal 2017 included approximately $2.7 million for expenses associated with the audit committee review, approximately $0.6 million associated with executive severance, recruiting and transition costs and $0.1 million associated with class-action lawsuits.

Adjusted EBITDA was $9.7 million for the first nine months of fiscal 2018, compared to $9.8 million for the same period in fiscal 2017. Net income for the first nine months of fiscal 2018 was $2.8 million, or $0.20 per diluted share, compared to $1.5 million, or $0.11 per diluted share for the first nine months of fiscal 2017.

Adjusted for class-action lawsuit expenses of $0.3 million, severance, recruiting and transition expenses of $0.3 million, and non-recurring legal and accounting expenses of $0.1 million, net of $0.2 million of tax impacts of these adjustments, and $1.2 million of one-time, non-cash tax expenses associated with the re-valuation of deferred tax assets to the new federal corporate tax rate, adjusted Non-GAAP net income for the first nine months of fiscal 2018 was $4.4 million, or $0.31 per diluted share.

Adjusted for expenses associated with the audit committee review of $2.7 million, $0.6 million of costs for executive severance, recruiting and transition expenses and class-action lawsuit expenses of $0.1 million, net of $1.0 million of tax impacts of these adjustments, adjusted Non-GAAP net income for the first nine months of fiscal year 2017 was $3.9 million, or $0.28 per diluted share.

Balance Sheet & Liquidity

The Company generated $7.8 million of cash from operations during the first nine months of fiscal 2018 compared to $4.6 million in fiscal 2017. The year-over-year increase in cash provided by operations during fiscal 2018 primarily relates to increases in net income and favorable changes in net working capital.

The Company’s cash and cash equivalents at March 31, 2018 were $14.0 million, an increase of $2.5 million when compared to $11.5 million at June 30, 2017. Total debt at March 31, 2018 was $6.0 million compared to $7.4 million at June 30, 2017.

Fiscal Year 2018 Guidance:

The Company is narrowing its non-GAAP adjusted earnings per diluted share guidance to a range of $0.45 to $0.50 from $0.40 to $0.50 previously disclosed. For the fourth quarter, the Company projects non-GAAP adjusted earnings per diluted share of $0.14 to $0.19 and projects that fourth-quarter revenue will rise both on a sequential and year over year basis.

The Company’s adjusted non-GAAP earnings per diluted share guidance excludes any non-operating or non-recurring expenses that may materialize during fiscal 2018. The Company is not providing GAAP earnings per diluted share guidance for fiscal 2018 due to the potential occurrence of one or more non-operating, one-time costs, which the Company does not believe it can accurately anticipate.

About LifeVantage Corporation

LifeVantage Corporation is a science-based health, wellness and anti-aging business dedicated to helping men and women transform themselves internally and externally at a cellular level. LifeVantages anti-aging products include Protandim® Nrf2 and NRF1 Synergizers, TrueScience® Anti-Aging Skin Care Regimen, Petandim® for Dogs, AXIO® Smart Energy and the PhysIQ™ Smart Weight Management System. LifeVantage was formed in 2003 and is Salt Lake City, Utah.

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