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- Lifevantage Corporation (LFVN) – NASDAQ Monday, September 22, 2014
Business Model
LifeVantage Corporation (LFVN), a leader in Nrf2 science and the maker of Protandim(R), the Nrf2 Synergizer(R) patented dietary
supplement, the TrueScienceTM Anti-Aging Skin Care Regimen and LifeVantage(R) Canine Health, is a science based network marketing
company. LifeVantage is dedicated to visionary science that looks to transform wellness and anti-aging internally and externally with
products that dramatically reduce oxidative stress at the cellular level. LifeVantage was founded in 2003 and is headquartered in Salt Lake
City, Utah.
Recent Accomplishments
Fourth Quarter Fiscal 2014 Highlights:
• Revenue was $56.0 million, an increase of 8.8% over the prior year period;
• Revenue increased in the Americas by 12.3% compared to the prior year period;
• Operating income was $4.8 million and net income was $2.4 million; and
• Successfully launched the TrueScienceTM Skin Care Regimen.
Full Year Fiscal 2014 Highlights:
• Revenue was $214.0 million, an increase of 2.8% over the prior year;
• Revenue increased in the Americas by 6.1% over the prior year;
• Operating income was $19.5 million and net income was $11.4 million;
• Cash from operations grew 13.5%; ended the fiscal year with cash of $20.4 million;
• Repurchased $46.2 million in shares and reduced long-term debt by $16.2 million; and
• Began Real Salt Lake Major League Soccer marketing sponsorship.
For the fourth fiscal quarter ended June 30, 2014, the Company reported revenue of $56.0 million, an increase of 8.8% compared to $51.5
million for the same period in fiscal 2013. Revenue reflects an increase of 12.3% in the Americas, and an increase in the Asia/Pacific
region of 1.1%.
Operating income for the fourth fiscal quarter of 2014 was $4.8 million, generating an operating margin of 8.5%, compared to $0.2 million,
and an operating margin of 0.5%, in the same period last year.
Financial Fitness
The Company generated $12.1 million of cash flow from operations in fiscal year 2014, compared to $10.7 million in fiscal year 2013. The
Company's cash and cash equivalents at June 30, 2014 were $20.4 million, compared to $26.3 million at the end of fiscal year 2013. The
Company repaid $16.2 million of debt during the year and throughout the year returned $46.2 million to shareholders in the form of share
repurchases.
The Company expects to generate revenue in the range of $225 million to $235 million in fiscal year 2015 representing a 5% to 10%
increase over fiscal year 2014. The Company expects its operating margin to be in the range of 11% to 12% and earnings per diluted
share in the range of $0.14 to $0.16, based on an estimated 107 million diluted shares and a 34% effective tax rate.
Risks
Revenue for this company can be negatively impacted by foreign currency fluctuation. Also, the company is in an industry that can be
negatively impacted by lawsuits.
Our Trading Strategy
We believe this is a buy and wait stock, but we do not believe that the wait will be very long to start seeing some major gains. We would
look to accumulate shares in the low $1.00 range on the heals of a slight earnings disappointment recently. We believe the stock is
extremely undervalued and has a fairly low risk profile at this point. We do not believe the stock will dip too far below a dollar and should
this occur, we would not be following. The stock would also be a good candidate for some prudent averaging up, or adding to the position
as it gains strength.