LifeVantage(US:LFVN)2022-11-02 20:06Financial Performance - Net revenue for the three months ended September 30, 2022, was $51.774 million, a decrease of 2.6% compared to $53.224 million for the same period in 2021[17]. - Gross profit for the same period was $41.832 million, down from $43.793 million, reflecting a gross margin of approximately 80.7%[17]. - Operating income decreased to $1.290 million from $4.612 million, indicating a significant decline in operational performance[17]. - Net income for the quarter was $610,000, a decrease of 81.7% compared to $3.316 million in the prior year[17]. - Total revenue for the three months ended September 30, 2022, was $51.77 million, down 2.7% from $53.22 million in the same period of 2021[62]. - Revenue from the Americas region was $36.37 million, slightly down from $36.45 million in 2021, while revenue from the Asia/Pacific & Europe region decreased to $15.41 million from $16.78 million[62]. - Basic and diluted income per share for the three months ended September 30, 2022, was $0.05, compared to $0.25 in the same period of 2021[60]. Assets and Liabilities - Total current assets as of September 30, 2022, were $42.923 million, down from $46.957 million as of June 30, 2022[16]. - Total liabilities decreased to $35.710 million from $39.190 million, indicating improved financial leverage[16]. - Cash and cash equivalents decreased to $17.619 million from $20.190 million, reflecting a cash outflow during the quarter[16]. - Total stockholders' equity increased to $31.890 million from $31.516 million, showing a slight improvement in the company's net worth[16]. - Cash and cash equivalents at the end of the period were $17,619,000, a decrease of 11.6% from $19,929,000 at the end of Q3 2021[25]. - The company had $12.2 million in cash accounts at one financial institution as of September 30, 2022[39]. Cash Flow and Expenses - Cash flows from operating activities resulted in a net cash used of $1,345,000 for Q3 2022, compared to a net cash provided of $465,000 in Q3 2021[25]. - The company’s cash paid for income taxes was $439,000 for the three months ended September 30, 2022, compared to $468,000 in the same period of 2021[25]. - Operating lease expense for the three months ended September 30, 2022, was $0.7 million, a decrease from $0.8 million in the same period of 2021[67]. - Research and development expenses for the three months ended September 30, 2022, were $100,000, down from $200,000 in the same period of 2021[48]. Inventory - Total inventory as of September 30, 2022, was $18,636,000, an increase of 13.1% from $16,472,000 as of June 30, 2022[41]. - The company’s inventory included $14,571,000 in finished goods, representing 78.2% of total inventory as of September 30, 2022[41]. Legal and Regulatory Matters - The company is involved in a class action lawsuit alleging operation of a pyramid scheme, with the case currently in the Federal District Court for Utah[95]. - The court dismissed three of the plaintiff's four claims, including antitrust and unjust enrichment claims, but allowed a securities fraud claim to proceed[95]. - The plaintiffs filed a second amended complaint including a 10(b)(5) securities fraud claim, which the company responded to on December 23, 2020[95]. - The court denied the plaintiff's motion for class certification on April 19, 2022, and the case has been stayed until November 25, 2022[95]. - The company has not established a loss contingency accrual for the lawsuit, believing liability is not probable or estimable[95]. - The company may face other litigation and regulatory matters, including product liability claims and commercial disputes, but does not expect these to materially affect its business[96]. Future Outlook - The company anticipates ongoing challenges related to market expansion and product acceptance, which may impact future performance[11]. Shareholder Actions - During the three months ended September 30, 2022, the Company declared a quarterly cash dividend of $0.03 per share, totaling $0.4 million[82]. - The Company has a remaining authorization of $27.7 million under its share repurchase program as of September 30, 2022[80]. - For the three months ended September 30, 2022, the Company issued approximately 36,000 shares under the Employee Stock Purchase Plan (ESPP)[90]. - The Company reported stock-based compensation of $0.6 million for both the three months ended September 30, 2022 and 2021[91]. - As of September 30, 2022, there were stock option awards outstanding for an aggregate of approximately 14,000 shares under the 2010 Long-Term Incentive Plan[85]. - The maximum number of shares available for issuance under the 2017 Long-Term Incentive Plan is 2.9 million as of September 30, 2022[86]. - The Company has reserved 0.4 million shares of its common stock for issuance under the ESPP, with 0.2 million shares available as of September 30, 2022[88]. - The Company has not issued any preferred stock as of September 30, 2022[81]. Market Risks - There were no substantial changes to market risks during the quarter ended September 30, 2022, compared to the previous annual report[146].