Lifevantage Corp 10-Q, filed Jan 28, 2020

Lifevantage Corp (LFVN)

10-Q 2020-01-28 For: 2019-12-31

Added on April 10, 2026

About this 10-Q

Lifevantage Corp filed this 10-Q on January 28, 2020, covering the quarter ended December 31, 2019.

Headline figures

Quarter ended December 31, 2019, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $61.24M; up 5.3% from $58.17M a year earlier
Net income: $4.3M; up 419.1% from net income of $829K a year earlier
Diluted EPS: $0.30; up 400.0% from $0.06 a year earlier

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Delaware						90-0224471
(State or other jurisdiction of incorporation or organization)						(IRS Employer Identification No.)


Large accelerated filer	¨	Accelerated filer	☒
Non-accelerated filer	¨	Smaller reporting company	☒
Emerging Growth Company	☐



		PAGE
PART I. Financial Information			5
Item 1.	Financial Statements:	5
	Condensed Consolidated Balance Sheets (unaudited)	5
	Condensed Consolidated Statements of Operations and Comprehensive Income (unaudited)	6
	Condensed Consolidated Statement of Stockholders’ Equity (unaudited)	7
	Condensed Consolidated Statements of Cash Flows (unaudited)	8
	Notes to Condensed Consolidated Financial Statements (unaudited)	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	26

PART II. Other Information			27
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5.	Other Information	27
Item 6.	Exhibits	29
Signatures		30


	December 31, 2019		June 30, 2019
(In thousands, except per share data)
ASSETS
Current assets
Cash and cash equivalents	$	14,479	$	18,824
Accounts receivable	1,788		2,066
Income tax receivable	1,006		1,236
Inventory, net	14,222		13,753

Prepaid expenses and other	6,117		7,309
Total current assets	37,612		43,188

Property and equipment, net	7,586		7,131
Right-of-use assets	2,136		—
Intangible assets, net	917		983
Deferred income tax asset	3,014		2,693
Equity securities	2,205		—
Other long-term assets	1,548		1,278
TOTAL ASSETS	$	55,018	$	55,273

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	3,900	$	5,180
Commissions payable	8,059		7,916


Income tax payable	170		592
Lease liabilities	2,270		—
Other accrued expenses	10,362		11,053
Current portion of long-term debt, net	484		1,454
Total current liabilities	25,245		26,195





Lease liabilities	288		—
Other long-term liabilities	387		1,879
Total liabilities	25,920		28,074
Commitments and contingencies - Note 8
Stockholders’ equity
Preferred stock — par value $0.0001 per share, 5,000 shares authorized, no shares issued or outstanding	—		—
Common stock — par value $0.0001 per share, 40,000 shares authorized and 14,293 and 14,114 issued and outstanding as of December 31, 2019 and June 30, 2019, respectively	1		1
Additional paid-in capital	125,858		127,096
Accumulated deficit	(96,793)		(99,960)
Accumulated other comprehensive income	32		62
Total stockholders’ equity	29,098		27,199
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	55,018	$	55,273


	Three Months Ended December 31,						Six Months Ended December 31,
	2019		2018		2019		2018
(In thousands, except per share data)
Revenue, net	$	61,242	$	58,167	$	117,470	$	113,776
Cost of sales	10,230		9,794		19,421		18,994
Gross profit	51,012		48,373		98,049		94,782
Operating expenses:
Commissions and incentives	29,235		28,176		56,009		55,961
Selling, general and administrative	18,131		19,616		35,817		36,918


Total operating expenses	47,366		47,792		91,826		92,879
Operating income	3,646		581		6,223		1,903
Other expense:
Interest expense, net	(41)		(100)		(89)		(209)
Other expense, net	(148)		(72)		(228)		(120)

Total other expense	(189)		(172)		(317)		(329)
Income before income taxes	3,457		409		5,906		1,574
Income tax benefit	846		420		158		166
Net income	$	4,303	$	829	$	6,064	$	1,740
Net income per share:
Basic	$	0.31	$	0.06	$	0.44	$	0.12
Diluted	$	0.30	$	0.06	$	0.42	$	0.12
Weighted-average shares outstanding:
Basic	13,902		13,944		13,908		13,996
Diluted	14,562		14,963		14,515		14,996
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	$	(14)	$	121	$	(30)	$	(4)

Other comprehensive income (loss), net of tax	(14)		121		(30)		(4)
Comprehensive income	$	4,289	$	950	$	6,034	$	1,736


☒			QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Common Stock					Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total
	Shares	Amount
(In thousands)
Balances, June 30, 2019	14,114	$	1	$	127,096	$	(99,960)	$	62	$	27,199
Cumulative effect of adoption of accounting principle	—	—		—		508		—		508
Balances, July 1, 2019	14,114	$	1	$	127,096	$	(99,452)	$	62	$	27,707

Stock-based compensation	—	—		1,276		—		—		1,276
Exercise of options	3	—		11		—		—		11

Common stock issued under employee stock purchase plan	32	—		339		—		—		339
Shares canceled or surrendered as payment of tax withholding	(4)	—		(61)		—		—		(61)
Repurchase of company stock	(111)	—		—		(1,393)		—		(1,393)
Currency translation adjustment	—	—		—		—		(16)		(16)
Net income	—	—		—		1,761		—		1,761
Balances, September 30, 2019	14,034	$	1	$	128,661	$	(99,084)	$	46	$	29,624

Stock-based compensation	—	—		1,503		—		—		1,503
Exercise of options	21	—		54		—		—		54
Common stock issued under equity award plans	659	—		—		—		—		—
Shares canceled or surrendered as payment of tax withholding	(281)	—		(4,360)		—		—		(4,360)
Repurchase of company stock	(140)	—		—		(2,012)		—		(2,012)

Currency translation adjustment	—	—		—		—		(14)		(14)
Net income	—	—		—		4,303		—		4,303
Balances, December 31, 2019	14,293	$	1	$	125,858	$	(96,793)	$	32	$	29,098


	December 31, 2019						June 30, 2019
Finished goods	$	10,738	75.5	%	$	9,903	72.0	%
Raw materials	3,484		24.5	%	3,850		28.0	%
Total inventory	$	14,222	100.0	%	$	13,753	100.0	%


	December 31, 2019		June 30, 2019
United States	$	11,883	$	9,772
Japan	$	1,572	$	955


	Three Months Ended December 31, 2019		Six Months Ended December 31, 2019
Operating cash outflows from operating leases	$	720	$	1,440
Right-of-use assets obtained in exchange for lease obligations	$	—	$	—


Year ended June 30,	Amount
2020 (remaining six months ending June 30, 2020)	$	1,413
2021	1,203




Total	2,616
Less: imputed interest	(58)
Present value of lease liabilities	$	2,558


	As of December 31,
	2019				2018					Change from Prior Year	Percent Change
Active Independent Distributors
Americas	46,000	67.6	%	45,000	68.2	%	1,000	2.2	%
Asia/Pacific & Europe	22,000	32.4	%	21,000	31.8	%	1,000	4.8	%
Total Active Independent Distributors	68,000	100.0	%	66,000	100.0	%	2,000	3.0	%

Active Customers
Americas	89,000	78.1	%	95,000	80.5	%	(6,000)	(6.3)	%
Asia/Pacific & Europe	25,000	21.9	%	23,000	19.5	%	2,000	8.7	%
Total Active Customers	114,000	100.0	%	118,000	100.0	%	(4,000)	(3.4)	%

Active Accounts
Americas	135,000	74.2	%	140,000	76.1	%	(5,000)	(3.6)	%
Asia/Pacific & Europe	47,000	25.8	%	44,000	23.9	%	3,000	6.8	%
Total Active Accounts	182,000	100.0	%	184,000	100.0	%	(2,000)	(1.1)	%


			Payments due by period
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		Thereafter
Long-term debt obligations	$	500	$	500	$	—	$	—	$	—
Interest on long-term debt obligations	7		7		—		—		—
Operating lease obligations ⁽¹⁾	19,850		2,305		2,142		3,133		12,270


Other operating obligations ⁽²⁾	18,557		9,287		6,179		3,091		—
Total	$	38,914	$	12,099	$	8,321	$	6,224	$	12,270


Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
October 1 - October 31	69,995	$	14.24	69,995	$	6,455,377
November 1 - November 30	61,734	$	14.47	61,734	$	5,562,310
December 1 - December 31	8,128	$	14.98	8,128	$	5,440,582
Total	139,857			139,857


	Three Months Ended December 31,								Six Months Ended December 31,
	2019		2018		% Change		2019		2018		% Change
Japan	$	10,497	$	10,028	4.7	%	$	21,555	$	20,085	7.3	%
Australia & New Zealand	2,544		1,431		77.8	%	4,627		2,595		78.3	%
Greater China	1,762		2,294		(23.2)	%	2,749		3,825		(28.1)	%
Other	2,155		1,974		9.2	%	4,074		3,752		8.6	%
Asia/Pacific & Europe Total	$	16,958	$	15,727	7.8	%	$	33,005	$	30,257	9.1	%


Escalation Commencement	Monthly Rent
Commencing the 1st day of the 13th month:	$	125,793.89
Commencing the 1st day of the 25th month:	128,938.74
Commencing the 1st day of the 37th month:	132,162.21
Commencing the 1st day of the 49th month:	135,466.26
Commencing the 1st day of the 61st month:	138,852.92
Commencing the 1st day of the 73rd month:	142,324.24
Commencing the 1st day of the 85th month:	145,882.35
Commencing the 1st day of the 97th month:	149,529.41
Commencing the 1st day of the 109th month:	153,267.64
Commencing the 1st day of the 121st month:	157,099.34



*						This certification is being furnished solely to accompany this report pursuant to 18 U.S.C. 1350, and is not being filed for purposes of Section 18 of the Exchange Act and is not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing


		LIFEVANTAGE CORPORATION

Date:	January 28, 2020	/s/ Darren Jensen
		Darren Jensen Chief Executive Officer (Principal Executive Officer)

Date:	January 28, 2020	/s/ Steven R. Fife
		Steven R. Fife Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)