Full Press Release Details
LIFEVANTAGE ANNOUNCES FISCAL THIRD QUARTER 2011
Record Third Quarter Net Revenue Increases to $10.0 Million
Record Third Quarter Operating Income Improves to $792,000
Raises Fiscal Year 2011 Revenue Guidance to Range of $37 $39 Million
Raises Operating Income Guidance to Range of $2.5 $3 Million
San Diego, CA, May 17, 2011, LifeVantage Corporation (OTCBB: LFVN), the maker of science-based
solutions to oxidative stress, today, reported financial results for the third quarter and first
nine months of fiscal 2011 ended March 31, 2011.
Fiscal 2011 Third Quarter Results
For the third quarter of fiscal 2011, the Company reported record net revenue of $10.0 million
compared to $2.7 million for the same period last year, an increase of 270% from the prior year
period. On a sequential basis, net revenue increased 35% from the $7.5 million reported for the
second fiscal quarter ended December 31, 2010.
Gross Profit for the third fiscal quarter ended March 31, 2011 increased to $8.4 million compared
to $2.3 million for the same period last year, delivering a slight improvement in gross margin to
Operating Expenses for the third fiscal quarter of 2011 were $7.6 million compared to $3.6 million
for the same period last year and on a sequential basis increased 33% from $5.7 million in the
second of fiscal quarter 2011. The increase on a sequential basis is due primarily to increased
sales commissions which are a direct result of the Company s increased revenue, and to greater
investment in personnel.
Operating Income improved to $792,000 for the third fiscal quarter of 2011 compared to a loss of
$1.3 million in the same period last year. The third quarter fiscal 2011 operating income of
$792,000 represents the third consecutive quarter of achieving operating income.
We are extremely pleased with our record revenue and operating income for the fiscal third
quarter. Our efforts to enhance our business model and the growing awareness of our patented,
scientifically proven products enabled us to report the third consecutive quarter of increasing
operating income, commented Douglas C. Robinson, Chief Executive Officer of LifeVantage. Our
continued strong financial performance gives us the confidence to remain optimistic about our
outlook for the remainder of fiscal 2011. As a result, we are increasing our full year revenue
guidance. We will continue to focus
on driving our top line growth by expanding awareness of the benefits of our products, managing the
controllable aspects of our business and improving the overall financial health of our company.
Mr. Robinson concluded, We believe the investments we are making into our sales and marketing,
research, development and support personnel will enable us to increase our reach into new and
existing consumer markets as well as introduce new products, leveraging our many years of research
towards our goal of helping people around the world achieve improved health and wellness.
Fiscal 2011 First Nine Months Results
For the nine months ended March 31, 2011, net revenue increased 241% to $23.9 million from $7.0
million for the same nine-month period last fiscal year. Gross profit improved to $20.1 million for
the first nine months of fiscal 2011 compared to $5.9 million for the same period last fiscal year.
Operating Income increased to $1.7 million for the first nine months of fiscal 2011 compared to a
loss of $7.0 million for the same period last year.
The Company ended the third quarter of fiscal 2011 with a stronger balance sheet. Its cash, cash
equivalents and investments available for sale improved to $4.4 million due to strong revenue
growth and leverage in the business as the Company generated $2.4 million of cash flow from
operations for the nine months ended March 31, 2011 compared to a cash use from operations of $4.5
million for the same nine-month period last year.
Due to the Company s rapid revenue growth, improving operating income and strengthening balance
sheet, management believes it is prudent for the Company to elect to redeem all of the approximate
$3.0 million of remaining outstanding convertible debentures. This optional redemption by the
Company is an election to repay the full amount of the outstanding principal and interest of the
convertible debentures. However, the holders have the ability to convert their debentures into
Company shares prior to the date the debentures are to be repaid and management expects that the
holders likely will elect to convert their debentures into an aggregate of approximately 15 million
shares of the Company s common stock in lieu of receiving cash repayment of principal and interest.
The Company expects to deliver the optional redemption notice to the holders of convertible
debentures on or about May 18, 2011 and to complete the redemption or holder conversions before the
end of the fourth fiscal quarter of 2011. This optional redemption, among other things, will
decrease the Company s quarterly interest expense through the remaining term of the convertible
debentures and remove the associated debt from the Company s balance sheet.
The Company is raising its revenue and operating income guidance for the full fiscal year ending
June 30, 2011. The Company now expects to achieve revenue for the full fiscal year ending June 30,
2011 in a range of $37 million to $39 million, operating income in a range of $2.5 $3 million and
operating profit of approximately 8%, compared to the previous estimate of approximately $29
million in revenue, operating income of $1.25 million with 5% operating profit.
Carrie McQueen, Chief Financial Officer commented, We have greatly improved our balance sheet
during the first nine months of fiscal 2011, and based on our developing financial strength, we
plan to redeem or cause the conversion of the approximately $3 million that remains outstanding
under the convertible debentures we issued in 2009 and 2010. This supports our focus on improving
operating income and operating cash flow by reducing our interest expense. Additionally, we are
striving to provide greater transparency in our financial statements, which will be improved by
minimizing the complexity and amount of the non-cash derivative accounting affects on our balance
sheet and income statement. Once the debentures have been repaid or converted, we expect to enter
fiscal 2012 with a strong cash position and no debt.
Conference Call Information
Investors interested in participating in the live call today can dial (877) 795-3613 from the U.S.
International callers can dial (719) 325-4744. A telephone replay will be available approximately
two hours after the call concludes and will be available through Tuesday, May 31, 2011, by dialing
(877) 870-5176 from the U.S., or (858) 384-5517 from international locations, and entering
confirmation code 6523612.
There also will be a simultaneous, live webcast available on the Investor Relations section of the
Company s web site at http://www.lifevantage.com/investor-profile.aspx. The webcast will be
archived for 30 days.
About LifeVantage Corporation
LifeVantage Corporation is a publicly traded (OTCBB: LFVN), science-based, nutraceutical company
dedicated to helping people reach their health and wellness goals while creating business
opportunities. Founded in 2003 and based in San Diego, CA, LifeVantage currently offers two
anti-aging and wellness products: Protandim , a dietary supplement that combats oxidative stress,
and LifeVantage TrueScience Anti-Aging Cream, a scientifically-based skin care product. For more
information, visit www.LifeVantage.com.
Forward Looking Statements
This document contains forward-looking statements made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified
by words such as believes, anticipates, intends, expects, plans, seeks and similar
references to the future.
Examples of forward-looking statements include, but are not limited to, statements we make
regarding our anticipated results of operations, future growth, our intent to redeem our
outstanding convertible debentures and our expectation that the holders thereof will elect to
convert these debentures into shares of our common stock. Such forward-looking statements are not
guarantees of performance and the Company s actual results could differ materially from those