Monday, December 19, 2011
- - Announces Adoption of Rule 10b5-1 Stock Repurchase
Plan
- - Anticipates Approval of Warrant Amendment to Remove
Price-Based Anti-dilution Provisions
- - Outlines Operational & Strategic Accomplishments and
Guidance for 2012
SALT LAKE CITY, Dec. 19, 2011 (GLOBE NEWSWIRE) -- LifeVantage
Corporation (OTCBB:LFVN), makers of Protandim®, the Nrf2
Synergizer™ patented dietary supplement, announced today that the
Company has entered into a pre-arranged stock repurchase plan under
which it may repurchase shares of its common stock as part of its
previously announced authorization to repurchase up to $5 million
in shares of its common stock. LifeVantage further announced that
it anticipates receiving approval to amend certain warrants to
remove the price-based anti-dilution provisions contained therein,
reiterated fiscal 2012 revenue and operating income guidance and
outlined expectations for continued operational and strategic
progress into 2012.
The Company's stock repurchase plan will operate in accordance
with guidelines specified under Rule 10b5-1 of the Securities
Exchange Act of 1934. Accordingly, transactions, if any, will be
effected in accordance with the terms of the stock repurchase plan,
including specified price, volume and timing conditions. The shares
that may be purchased under the stock repurchase plan will be
applied against and subject to the conditions of the repurchase
authorization previously announced by LifeVantage on September 6,
2011.
Douglas C. Robinson, the Company's Chief Executive Officer,
stated, "We are pleased to announce that LifeVantage has entered
into a Rule 10b5-1 share repurchase plan, under which we may
repurchase shares under our previously announced Board-approved
repurchase authorization of up to $5 million in shares. In
addition, as we look toward the end of calendar year 2011, we are
proud to reflect on the significant improvements and
accomplishments LifeVantage has made over the past 12 months. We
will enter the new calendar year a much stronger company with
significantly greater financial stability and operational maturity
as compared to a year ago."
Offer To Modify Warrants
LifeVantage recently filed a tender offer document with the SEC
and initiated a tender offer for the purpose of amending certain of
its warrants to remove the price-based anti-dilution provision
contained in those warrants and to extend the period during which
those warrants may be exercised by 30 days. The Company expects
that as of 9:00 p.m., Eastern time, on December 29, 2011, which is
the time the tender offer expires, it will have received the
requisite approvals such that all of the warrants covered by the
tender offer will be amended. If these warrants are amended as
expected, the Company will no longer be required to account for
these warrants as a derivative liability as currently required
under U.S. GAAP.
With this expected effectiveness of these warrant modifications,
paired with the expiration of certain other warrants in March and
April 2012, the Company will be removing all derivative warrant
liabilities from its balance sheet and eliminating the quarterly
changes in fair value of these warrants from its income statement.
With these changes, the Company believes that its financial
statements will more closely reflect its operating
performance.
Operational and Strategic Accomplishments
These expected improvements to the transparency of LifeVantage's
financial statements will be the most recent step in two years of
concerted efforts to improve the Company's financial performance
and stability and to position the Company to support continued
growth. In early fiscal 2011, the Company achieved positive cash
flow from operations. Since that point, LifeVantage has announced
sequential growth in both revenue and operating profit in every
quarter.
In addition, during the quarter ended June 30, 2011, the Company
elected to redeem all of its outstanding convertible debentures,
which resulted in holders of such convertible debentures
voluntarily converting their debt into shares of common stock. This
eliminated recurring interest expense and removed all long- and
short-term debt from the Company's balance sheet.
During the recent first quarter fiscal 2012, the Company's revenue
increased to $20.1 million, a 214% improvement compared to the
prior year period, and its operating income improved to $3.4
million. LifeVantage also ended the first quarter fiscal 2012 with
$9.4 million in cash, an increase of $3 million from year-end
fiscal 2011, and no debt, demonstrating its ability to maintain
strong quarterly revenue growth while increasing its operating
margin and building its cash position.
Concurrent with this growth, LifeVantage has been making
significant, strategic additions to its management team over the
course of the past several months, including the appointments of
Douglas C. Robinson as Chief Executive Officer in March 2011 and
Dr. Joe M. McCord as Chief Science Officer. The Company expects to
continue to add experienced and strategically important members to
its team, with a goal of driving continued and well managed
growth.
Douglas C. Robinson, the Company's Chief Executive Officer, added,
"Calendar year 2011 has been a tremendous year for LifeVantage, and
we are excited to continue that positive momentum into calendar
2012. Making the necessary improvements to our financial position
by reducing non-cash, non-operational expenses is a key hurdle we
need to cross in order to take our company to the next level. We
believe that the strong performance of our business was not fully
reflected in our financial statements, and we recognize this masked
our operational results. We appreciate the loyal support of our
shareholders throughout our continued efforts to improve our
performance and results."
Fiscal 2012 Outlook
In support of its strategic and tactical business plan and
progress to-date, the Company reiterated its previous guidance for
fiscal 2012. LifeVantage expects to generate revenue in a range of
$95 million to $105 million, a significant increase from $38.9
million in revenue in fiscal 2011. Further, the Company expects to
generate operating income in a range of $11.4 million to $14.7
million, and an operating margin of 12% to 14%, which represents a
250 to 450 basis point improvement from operating margin of 9.5% in
fiscal 2011.
For the remaining two quarters of fiscal year 2012, the Company's
financial and operational goals include significant investment in
its infrastructure and increasing personnel in corporate
administration, finance, marketing, operations, sales and R&D.
This will provide the necessary platform for the Company to
continue its organic growth and to position it for entering new
markets. Additionally, LifeVantage is looking forward to continued
scientific publications, and to introducing complementary products
to its markets.
In its dedication to continue to expand and move the Company
forward, the Board of Directors recently nominated four new
director candidates for election by the Company's stockholders. If
elected, these directors would add diverse and deep leadership
experience to the Board. The Company believes
that the changes made and underway will position it as an
up-and-coming company to watch in its industry and a credible
leader with a reputation for strong operational and financial
performance.
And finally, this outlook for fiscal 2012 underscores the
maturation of the Company and its improved position as it considers
a move onto a national stock exchange listing. Against the backdrop
of measured operational performance, an improving balance sheet,
enhanced corporate governance and investor communication, the
Company believes that listing on a national exchange would be a
significant enhancement to shareholder value. The Company expects
that once all derivative warrant liabilities have been eliminated
from its balance sheet, its stockholder's equity would meet the
minimum requirements for initial listing on a national stock
exchange. In that case, the remaining initial listing requirement
to be satisfied would be to meet the minimum share price
requirements. As the Company evaluates the benefits and optimal
timing of listing on a national exchange, its management team is
considering various alternatives, including the possibility of
seeking approval for a reverse stock split, which would
significantly accelerate the Company's ability to meet the minimum
initial listing requirements and achieve the benefits of listing on
a national exchange.
Mr. Robinson concluded, "We are very excited about our outlook for
fiscal 2012 and beyond. While we have grown rapidly in the last
couple years, the opportunities ahead continue to be robust. We
look forward to achieving strong growth and profitability while
continuing to help many people improve their health and wellness
through the science of Protandim®."
THIS PRESS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT
CONSTITUTE AN OFFER OR SOLICITATION TO MODIFY ANY OF THE
OUTSTANDING WARRANTS OF LIFEVANTAGE CORPORATION. THE TENDER OFFER
DESCRIBED IN THIS PRESS RELEASE IS BEING MADE ONLY PURSUANT TO THE
OFFER TO MODIFY AND CONSENT SOLICITATION STATEMENT IN RESPECT OF
WARRANTS DATED NOVEMBER 29, 2011 (THE "OFFER TO MODIFY"), AND
RELATED MATERIALS THAT LIFEVANTAGE CORPORATION HAS DISTRIBUTED TO
THE HOLDERS OF SUCH WARRANTS AND FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION. HOLDERS OF SUCH WARRANTS SHOULD READ
CAREFULLY THE OFFER TO MODIFY AND RELATED MATERIALS BECAUSE THEY
CONTAIN IMPORTANT INFORMATION, INCLUDING THE VARIOUS TERMS OF, AND
CONDITIONS TO, THE OFFER. HOLDERS OF SUCH WARRANTS ARE URGED TO
CAREFULLY READ THESE MATERIALS PRIOR TO MAKING ANY DECISION WITH
RESPECT TO THE OFFER.
About LifeVantage Corporation
LifeVantage, (OTCBB:LFVN), makers of Protandim®, the Nrf2
Synergizer™ patented dietary supplement, is a science based
nutraceutical company. LifeVantage is dedicated to visionary
science that promises to transform wellness and anti-aging
internally and externally with products that reduce oxidative
stress at the cellular level. The Company was founded in 2003 and
currently has operations in both Salt Lake City, Utah and San
Diego, CA. For more information, visit www.LifeVantage.com.
Forward Looking Statements
This document contains forward-looking statements made pursuant to
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Words and expressions reflecting optimism,
satisfaction or disappointment with current prospects, as well as
words such as "believe," "hopes," "intends," "estimates,"
"expects," "projects," "plans," "anticipates" and variations
thereof, identify forward-looking statements, but their absence
does not mean that a statement is not forward-looking. Such
forward-looking statements are not guarantees of performance and
the Company's actual results could differ materially from those
contained in such statements. These forward-looking statements are
based on the Company's current expectations and beliefs concerning
future events affecting the Company and involve known and unknown
risks and uncertainties that may cause the Company's actual results
or outcomes to be materially different from those anticipated and
discussed herein. These risks and uncertainties include, among
others, the potential failure or unintended negative consequences
of the implementation of the Company's network marketing sales
channel; the Company's ability to retain independent distributors
or to attract new independent distributors on an ongoing basis; the
potential for third party and governmental actions involving the
Company's network marketing sales channel; the potential for
product liability claims against the Company; the risk that
government regulators and regulations could adversely affect the
Company's business; future laws or regulations may hinder or
prohibit the production or sale of the Company's existing product
and any future products; unfavorable publicity could materially
hurt the Company's business; and the Company's ability to protect
its intellectual property rights and the value of its product.
These and other risk factors are discussed in greater detail in the
Company's Annual Report on Form 10-K and its Quarterly Report on
Form 10-Q under the caption "Risk Factors", and in other documents
filed by the Company from time to time with the Securities and
Exchange Commission. The Company cautions investors not to place
undue reliance on the forward-looking statements contained in this
document. All forward-looking statements are based on information
currently available to the Company on the date hereof, and the
Company undertakes no obligation to revise or update these
forward-looking statements to reflect events or circumstances after
the date of this document, except as required by law.
CONTACT: Investor Relations Contact:
Cindy England
(801) 432-9036
Director of
Investor Relations
-or-
John Mills (310)
954-1105
Senior Managing
Director, ICR, LLC
Source: LifeVantage Corporation