LifeVantage Corporation, the leader in Nrf2 science and the maker of Protandim, the Nrf2 Synergizer patented dietary supplement, today reported financial results for the third quarter and nine months ended March 31, 2012.
Fiscal 2012 Third Quarter Highlights Include:
- Net revenue increased 263 percent to $36.2 million compared to same quarter last year
- Operating margin increased to 17.7 percent compared to 7.9 percent in the same quarter last year
- Operating income grew 709 percent compared to the same quarter last year to $6.4 million
- Cash and cash equivalents were $16.9 million with no debt
- Stockholders' Equity increased to $22.5 million compared to a Stockholders' Deficit of $(20.8) million as of June 30, 2011.
Fiscal 2012 third quarter results
For the third fiscal quarter ended March 31, 2012, the Company reported record net revenue of $36.2 million, compared to $10.0 million for the same period in fiscal 2011, an increase of 263 percent. On a sequential quarter basis, net revenue increased 43 percent from the $25.3 million reported for the Company's 2012 second fiscal quarter ended December 31, 2011.
Gross profit for the fiscal quarter ended March 31, 2012 increased to $31.2 million, compared to $8.4 million for the same period last year, delivering a gross margin of 86.2 percent, compared to 84.1 percent for the same period last year.
Operating expenses for the third fiscal quarter decreased as a percent of revenue to 68.5 percent, or $24.8 million, compared to 76.2 percent of revenue, or $7.6 million, for the same period last year. On a sequential quarter basis, operating expenses as a percentage of revenue were relatively flat. The increase in the amount of operating expenses is due primarily to increased sales commissions which are a direct result of the Company's higher sales volume. This increase in the amount of operating expenses also reflects greater investment in personnel and infrastructure to position the Company for future growth.
Operating income improved to $6.4 million for the third fiscal quarter, compared to $0.8 million in the same period last year and $4.3 million in the second fiscal quarter. This was the Company's seventh consecutive quarter of achieving operating income. Operating income margin was 17.7 percent in the third fiscal quarter, compared to 7.9 percent in the same period last year and 16.9 percent in the second fiscal quarter.
Fiscal 2012 first nine months results
For the nine months ended March 31, 2012, the Company reported record net revenue of $81.6 million, compared to $23.9 million for the same period in fiscal 2011, a 242 percent increase. Operating income increased to $14.1 million, compared to $1.7 million in the same period last year.
Douglas C. Robinson, President and Chief Executive Officer of LifeVantage, stated, "We are pleased to report another record quarter for LifeVantage, as we continue to execute on all fronts and achieve tremendous growth for our business. In the third quarter, we significantly increased our top line as well as our operating margins while continuing to invest in our infrastructure by adding headcount, increasing our marketing efforts, and expanding our investment in research."
Mr. Robinson continued, "At the beginning of this fiscal year, we outlined a plan for significant investment in our infrastructure and increasing personnel in corporate administration, finance, marketing, operations, sales and R&D. This investment is providing the necessary platform for us to continue our organic growth and position us to enter new markets. In addition to strong growth in our core United States market, we continue to benefit from international opportunities. Our business in Japan is achieving strong growth and we expect to be shipping product to Australia beginning this month."
Mr. Robinson concluded, "Mid-way through our final quarter of fiscal 2012, we are well-positioned to deliver another record year of revenue growth and operating profits. Our year-to-date results exceeded our expectation, and as a result, we are increasing our annual revenue and operating income guidance. We are excited to build off this positive momentum as we finish fiscal 2012 and look toward fiscal 2013 and beyond."
Balance sheet and liquidity
The Company improved its balance sheet in the third fiscal quarter. The Company's cash balance at March 31, 2012 was $16.9 million, an increase from $6.4 million at year end fiscal 2011, due to strong revenue growth and operating profits. The Company generated $11.7 million of cash flow from operations for the nine months ended March 31, 2012, compared to $2.4 million for the nine months ended March 31, 2011. Stockholders' Equity increased to $22.5 million as of March 31, 2012 compared to a Stockholders' Deficit of $(20.8) million as of June 30, 2011.
As of March 31, 2012, the Company eliminated the balances in both short- and long-term derivative liabilities. With the warrant modification approved on December 29, 2011, and the exercise of certain other warrants in March 2012, the Company has now removed all derivative warrant liabilities from its balance sheet and has recognized the final changes in fair value of these warrants in its income statement.
Carrie McQueen, Chief Financial Officer, commented, "We are pleased with our continued progress in improving our balance sheet and the overall financial position of LifeVantage. Our third quarter balance sheet is now free of both the short- and long-term derivative liabilities, with a significant positive impact to our Shareholders' Equity. While our third quarter income statement was impacted by the final non-cash changes in fair value resulting from these derivative warrant liabilities, we now look forward to our future financial results more accurately reflecting the performance of LifeVantage."
The Company is raising its full year guidance for fiscal 2012. LifeVantage expects to generate revenue for the fiscal year in a range of $120 million to $125 million, compared to the previous range of $105 million to $115 million. Further, the Company expects to generate operating income for the fiscal year in a range of $19.2 million to $21.3 million, and an operating margin of 16 percent to 17 percent. The previous range of operating income was $13.7 million to $17.3 million, and an operating margin of 13 percent to 15 percent.