LifeVantage Corporation (LFVN) has reported a 93.92 percent plunge in profit for the quarter ended Mar. 31, 2017. The company has earned $0.06 million in the quarter, compared with $1 million for the same period last year. On the other hand, adjusted net income for the quarter stood at $0.43 million, or $0.02 a share compared with $2.03 million or $0.14 a share, a year ago.
Revenue during the quarter dropped 19.86 percent to $45.01 million from $56.16 million in the previous year period. Gross margin for the quarter contracted 100 basis points over the previous year period to 81.71 percent. Total expenses were 99.50 percent of quarterly revenues, up from 93.53 percent for the same period last year. That has resulted in a contraction of 597 basis points in operating margin to 0.50 percent.
Operating income for the quarter was $0.22 million, compared with $3.63 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $1.62 million compared with $5.12 million in the prior year period. At the same time, adjusted EBITDA margin contracted 551 basis points in the quarter to 3.61 percent from 9.12 percent in the last year period.
"We began to see the turn in sequential sales momentum as the third quarter progressed," stated LifeVantage president and chief executive officer Darren Jensen. "While sales were negatively impacted early in the quarter, we finished the third quarter with reaccelerating sales growth as we were finalizing the implementation of remedies relating to a recent review of international policies and procedures. We enter the fourth quarter with renewed business momentum and completed a successful global convention in April that included our rebranding of several key product lines, the introduction of product bundles that deliver greater value for customers and distributors, and integrated applications and technology solutions that were well received by distributors. Finally, we are progressing with plans to broaden our geographical footprint, and look forward to discussing specific activities to support this growth as the plan progresses."
For the fourth-quarter 2017, LifeVantage Corporation expects revenue to be in the range of $51 million to $54 million. On an adjusted basis, the company projects diluted earnings per share to be in the range of $0.05 to $0.08.
Working capital increases
LifeVantage Corporation has recorded an increase in the working capital over the last year. It stood at $12.94 million as at Mar. 31, 2017, up 24.28 percent or $2.53 million from $10.41 million on Mar. 31, 2016. Current ratio was at 1.52 as on Mar. 31, 2017, up from 1.41 on Mar. 31, 2016.
Cash conversion cycle (CCC) has decreased to 45 days for the quarter from 81 days for the last year period. Days sales outstanding went up to 8 days for the quarter compared with 7 days for the same period last year.
Days inventory outstanding has decreased to 105 days for the quarter compared with 129 days for the previous year period. At the same time, days payable outstanding went up to 68 days for the quarter from 55 for the same period last year.
Debt comes down
LifeVantage Corporation has recorded a decline in total debt over the last one year. It stood at $7.93 million as on Mar. 31, 2017, down 19.89 percent or $1.97 million from $9.90 million on Mar. 31, 2016. Total debt was 16.97 percent of total assets as on Mar. 31, 2017, compared with 22.44 percent on Mar. 31, 2016. Debt to equity ratio was at 0.57 as on Mar. 31, 2017, down from 1.12 as on Mar. 31, 2016. Interest coverage ratio deteriorated to 1.70 for the quarter from 2.01 for the same period last year.
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