LifeVantage Announces Record Fiscal Year
For the fourth fiscal quarter ended June 30, 2011, the Company reported record net revenue of $15.0 million compared to $4.4 million for the same period in fiscal 2010, an increase of 241% from the prior year period. On a sequential basis, net revenue increased 50% from the $10.0 million reported for the third fiscal quarter ended March 31, 2011.
Gross profit for the fourth quarter of fiscal 2011 increased to $12.9 million compared to $3.7 million for the same period last year, delivering an improved gross margin of approximately 86%, compared to 83% for the same period last year.
Operating expenses for the fourth fiscal quarter of 2011 were $11.0 million compared to $4.0 million for the same period last year, and on a sequential basis increased 45% from $7.6 million in the third fiscal quarter of 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. The increase also reflects greater investment in personnel and infrastructure to position the Company for future growth.
Operating income improved to $2.0 million for the fourth fiscal quarter of 2011 compared to a loss of $290 thousand in the same period last year. The fourth quarter of fiscal 2011 is the Company's fourth consecutive quarter of achieving operating income. Operating income margin improved to 13% in the fourth quarter compared to a negative margin in the same period last year.
Douglas C. Robinson, Chief Executive Officer of LifeVantage, stated, "We are extremely pleased to report a record year for LifeVantage, as our strong financial performance underscores the expanding awareness of Protandim® and the successful execution of our business model. On an annual basis, our revenue more than tripled compared to last year, and we increased our operating income in each quarter of fiscal 2011. We also made significant improvements to our balance sheet and ended the year in a very healthy financial position, which provides us the financial flexibility to make the appropriate strategic investments in fiscal 2012 to support our long-term growth opportunities."
Mr. Robinson continued, "As the scientific support of Protandim® grows and more people seek our products to improve their overall health and wellness, it is important for us to have the appropriate infrastructure to support the continued growth that we believe our business is capable of delivering. Looking toward fiscal 2012, we anticipate that our total net revenue will more than double compared to fiscal 2011 and our operating income will also increase by over 100%. To ensure that we are positioned to sustain rapid growth for years to come, we are committed to making the appropriate investments in our sales and marketing departments, research and development efforts, and within our corporate infrastructure. We are very focused on improving the efficiency of our organization and continuing to increase our operating income while we make these investments."
For the full year ended June 30, 2011, net revenue increased 238% to $38.9 million from $11.5 million in fiscal 2010. Gross profit improved to $33.0 million in fiscal 2011 compared to $9.6 million in fiscal 2010. Operating income increased to $3.7 million in fiscal 2011, compared to an operating loss of $7.3 million in fiscal 2010. Operating income margin improved to 9.5% for the year compared to a loss for the prior fiscal year.
The Company ended fiscal 2011 with a much stronger balance sheet than when the year began. Its cash balance improved to $6.4 million due to strong revenue growth and operating profits generated by the business. The Company generated $4.7 million of cash flow from operations for the full year fiscal 2011 compared to a cash use from operations of $4.5 million in fiscal 2010. During fiscal 2011, an aggregate face value of $5.6 million in debt was converted into shares of the Company's common stock, eliminating all convertible debt.
Due to the improvements made to its balance sheet in fiscal 2011 as well as the Company's outlook for strong operating cash flow in fiscal 2012, the Company recently announced a share repurchase program that authorizes it to utilize up to $5 million to purchase common stock over the course of the twelve months beginning October 1, 2011. Any such repurchases will be made only out of free cash flow from continuing operations and, on a quarterly basis, will not exceed 50% of free cash flow for such quarter.
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