LifeVantage(LFVN) - 2026 Q2 - Quarterly Report

Financial Performance - For the three months ended December 31, 2025, net revenue was $48.931 million, a decrease of 28% compared to $67.762 million for the same period in 2024[18] - Gross profit for the six months ended December 31, 2025, was $74.026 million, down from $92.290 million in 2024, reflecting a gross margin decline[18] - Operating income for the three months ended December 31, 2025, was $487 thousand, significantly lower than $3.428 million in the same period of 2024[18] - Net income for the three months ended December 31, 2025, was $276 thousand, compared to $2.550 million for the same period in 2024, indicating a substantial decline[18] - The company reported a net income per share of $0.02 for the three months ended December 31, 2025, down from $0.21 in the same period of 2024[18] - As of December 31, 2025, LifeVantage reported a net income of $2,431,000, a decrease of 44.5% compared to $4,376,000 for the same period in 2024[26] - The company experienced a net cash provided by operating activities of $486,000 for the six months ended December 31, 2025, significantly lower than $8,616,000 for the same period in 2024[26] - For the three months ended December 31, 2025, net income was $276,000, compared to $2.55 million for the same period in 2024[60] - Basic net income per share for the three months ended December 31, 2025, was $0.02, down from $0.21 in 2024[60] - The net income for the three months ended December 31, 2025, was $276,000, down from $2,550,000 in the prior year, reflecting a decline of approximately 89%[95] Assets and Liabilities - Total current assets decreased to $38.557 million as of December 31, 2025, down from $50.894 million as of June 30, 2025[17] - Total liabilities decreased to $28.182 million as of December 31, 2025, compared to $37.317 million as of June 30, 2025[17] - The total stockholders' equity as of December 31, 2025, was $32.987 million, a decrease from $34.641 million as of June 30, 2025[17] - Total long-lived assets as of December 31, 2025, were reported at $21,895,000, an increase from $20,819,000 as of June 30, 2025[96] Inventory and Cash Management - Total inventory as of December 31, 2025, was $18,978,000, down from $20,669,000 as of June 30, 2025, reflecting a reduction in inventory values of $2.9 million related to obsolete and slow-moving inventory[40] - Cash and cash equivalents at the end of the period were $10,181,000, a decrease from $21,595,000 at the end of December 2024[26] - The company repurchased $577,000 worth of its stock during the six months ended December 31, 2025, compared to $1,114,000 in the same period of 2024[26] - The company experienced a foreign currency translation adjustment loss of $259 thousand for the three months ended December 31, 2025[18] - The company reported a foreign currency effect on cash of $(205,000) for the six months ended December 31, 2025[26] Operational Challenges and Future Outlook - The company anticipates ongoing challenges in managing supply chain pressures and attracting new customers, which may impact future performance[11] Acquisition and Related Costs - The Company completed the acquisition of LoveBiome on October 1, 2025, for a total purchase price of $4,243,000, which includes $3,743,000 in cash consideration[101][104] - The acquisition of LoveBiome is expected to enhance the Company's offerings in microbiome care and wellness solutions, with goodwill from the acquisition estimated at $522,000[105] - The Company incurred acquisition-related costs of approximately $34,000 during the three months ended December 31, 2025, related to the LoveBiome transaction[108] - The estimated earnout related to the LoveBiome acquisition was adjusted to $200,000 as of December 31, 2025, reflecting lower than forecasted revenue performance[107] - Total revenue and net income of LoveBiome from the date of acquisition to December 31, 2025, were not material to the Company's consolidated financial statements[110] Stock and Compensation - During the three months ended December 31, 2025, the Company issued 0.1 million shares of common stock under stock plans, consistent with the same period in 2024[76] - Cash dividends for the three months ended December 31, 2025, totaled $0.6 million, compared to $0.5 million in the same period of 2024, representing a 20% increase[83] - The Company has reserved a total of 0.8 million shares for issuance under the 2019 Employee Stock Purchase Plan, with 0.4 million shares available as of December 31, 2025[88] - Stock-based compensation for the three months ended December 31, 2025, was $0.6 million, a decrease of 64.7% from $1.7 million in the same period of 2024[91] - LifeVantage's stock-based compensation expense was $1,379,000 for the six months ended December 31, 2025, down from $2,639,000 in the same period of 2024[26] Lease and Operating Expenses - Operating lease expense for the three months ended December 31, 2025, was $0.5 million, the same as in 2024[66] - Total lease expense for the three months ended December 31, 2025, was $469,000, a decrease of 7.1% from $505,000 in the same period of 2024[67] - Operating cash outflows from operating leases for the six months ended December 31, 2025, were $1,088,000, down from $1,129,000 in 2024, reflecting a decrease of 3.6%[67] - The weighted average remaining lease term for operating leases was 5.63 years as of December 31, 2025[65] Tax and Accounting Changes - The company recognized income tax expense of $0.2 million for the three months ended December 31, 2025, down from $0.5 million in 2024[57] - The company has early adopted ASU 2025-06 for the current fiscal year, impacting the accounting for internal-use software[63] - The company recorded an increase of $33,000 in contract liabilities impact to revenue for the three months ended December 31, 2025[46] - Deferred revenue related to contract liabilities was $0.7 million as of December 31, 2025, unchanged from June 30, 2025[46] - The returns liability reserve, net, was $0.2 million as of December 31, 2025, consistent with the previous period[47] Revenue Breakdown - The United States accounted for $36,738,000 of total revenue for the three months ended December 31, 2025, representing 75% of total revenue, while Japan contributed $6,278,000[96] - Major product lines, including Protandim, TrueScience, and LifeVantage, accounted for approximately 78.1% of total net revenue for the three months ended December 31, 2025[97] - The Company has identified two major markets, the United States and Japan, which each exceed 10% of consolidated total revenue[96]