Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 ______________________________

 FORM 8-K
 ______________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 8, 2017
 ______________________________

LIFEVANTAGE CORPORATION
(Exact name of registrant as specified in its charter)
______________________________

Colorado
 
001-35647
 
90-0224471
(State or other Jurisdiction
of Incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
 
9785 S. Monroe Street, Suite 300, Sandy, UT, 84070
(Address of Principal Executive Offices and Zip Code)

Registrant’s telephone number, including area code: (801) 432-9000
______________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))







Item 2.02    Results of Operations and Financial Condition.

On February 8, 2017, LifeVantage Corporation (the “Company”) issued a press release announcing its financial results for the second fiscal quarter ended December 31, 2016. A copy of the Company’s press release is attached as Exhibit 99.1 to this report and incorporated by reference.
The information furnished in this Item 2.02 and the exhibit hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

Item 9.01.        Financial Statements and Exhibits.

(d) Exhibits.
Exhibit No.
 
Description
99.1
 
Press release issued by the Company on February 8, 2017 announcing its financial results for the second fiscal quarter ended December 31, 2016.
 
 
 

    
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: February 8, 2017
LIFEVANTAGE CORPORATION

By: /s/ Beatryx Washington
Name: Beatryx Washington
Title: Senior Vice President, Legal Affairs

                    



Exhibit
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=11372523&doc=3


LifeVantage Announces Financial Results for the
Second Quarter of Fiscal 2017
Second Quarter Revenue of $48.9 million
Revenue in the First Six Months of Fiscal 2017 Increased 6.7% year-over-year
Company Reiterates Fiscal 2017 Guidance

Salt Lake City, UT, February 8, 2017, LifeVantage Corporation (Nasdaq: LFVN) today reported financial results for its second quarter ended December 31, 2016.
Second Quarter Fiscal 2017 Highlights:
Revenue decreased 5.9% to $48.9 million, compared to $52.0 million in the second quarter of fiscal 2016;
Revenue in the Americas decreased 6.1% and revenue in Asia/Pacific & Europe decreased 5.1%, both when compared to the comparable period of fiscal 2016;
Adjusted EBITDA decreased 13.7% to $3.9 million, compared to $4.5 million in the comparable period of fiscal 2016;
Earnings per diluted share were $0.02, compared to $0.11 in the second quarter of fiscal 2016; and
Adjusted earnings per diluted share were $0.11, compared to $0.14 in the second quarter of fiscal 2016.
“The second quarter results were consistent with our expectations,” stated LifeVantage President and Chief Executive Officer Darren Jensen. “Our recent implementation of new international policies and procedures disrupted second quarter sales as anticipated. As the implementation nears completion, we are focused on rebuilding our sales momentum while continuing to focus on additional international opportunities. We recently hired a new Hong Kong based executive responsible for both Hong Kong and Asia Market Development, focusing on expanding our business into additional Chinese markets, including Taiwan and Mainland China.”

Second Quarter Fiscal 2017 Results
For the second fiscal quarter ended December 31, 2016, the Company reported revenue at the top end of previously announced guidance of $48.9 million, a 5.9% decrease compared to $52.0 million for the comparable period in fiscal 2016. Year-over-year quarterly revenue reflects a decrease of 6.1% in the Americas and a 5.1% decrease in the Asia/Pacific & Europe region. Revenues in the Company’s United States and Hong Kong markets decreased for the second quarter of fiscal 2017 as the Company began to takes steps, following the completion of the independent review conducted by the Audit Committee of the Board of Directors, to help ensure



http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=11372523&doc=3

that the Company’s products are not distributed or sold into countries without complying with applicable customs, tax and other regulatory requirements and to appropriately verify the residency of individuals who want to become independent distributors of the Company. Consistent with these regulatory requirements, in the future independent distributors may be able to purchase a limited quantity of such products for personal consumption in one or more of these countries.
Commissions and incentives expense for the second quarter of fiscal 2017 was $23.5 million, or 48.1% of revenue, compared to $27.3 million, or 52.5% of revenue, for the same period in fiscal 2016. Selling, general and administrative expense (SG&A) for the second quarter of fiscal 2017 was $17.2 million, or 35.2% of revenue, compared to $13.8 million, or 26.6% of revenue, in the comparable period of fiscal 2016.
Operating income for the second quarter of fiscal 2017 was $0.7 million, compared to $3.0 million for the second quarter of fiscal 2016. Operating income during the second quarter of fiscal 2017 included approximately $1.7 million of costs associated with the Audit Committee’s independent review and $0.1 million of net executive team severance, recruiting and transition expenses. Operating income during the second quarter of fiscal 2016 included approximately $0.4 million of costs associated with executive team recruiting and transition expenses and $0.1 million of administrative costs associated with the reverse stock split. Adjusted EBITDA was $3.9 million for the second quarter of fiscal 2017, compared to $4.5 million for the comparable period in fiscal 2016.
Net income for the second quarter of fiscal 2017 was $0.3 million, or $0.02 per diluted share, calculated on 14.1 million fully diluted shares. This compares to net income for the second quarter of fiscal 2016 of $1.6 million, or $0.11 per diluted share, calculated on 14.0 million fully diluted shares. Adjusted for costs associated with the audit committee’s independent review of $1.2 million and net executive severance, recruiting and transition expenses of $0.1 million, all net of tax, adjusted Non-GAAP net income was $1.6 million for the second quarter of fiscal 2017, or $0.11 per diluted share; compared to $1.9 million, or $0.14 per diluted share for the comparable period of fiscal 2016. Non-GAAP adjustments to net income during the second quarter of fiscal 2016 included $0.3 million of executive team transition costs and reverse split administrative expenses, net of tax.

Fiscal 2017 First Six Months Results
For the six months ended December 31, 2016, the Company reported net revenue of $103.8 million, an increase of 6.7% compared to $97.3 million for the first six months of fiscal 2016. In the first half of fiscal 2017, revenue in the Americas increased 4.0%, while revenue in Asia/Pacific & Europe increased 15.6%. Revenue for the first half of fiscal year 2017 was positively impacted $3.4 million, or 3.5%, by foreign currency fluctuations associated with revenue generated in several international markets.
Commissions and incentives expense for the first half of fiscal 2017 was $49.8 million, or 48.0% of revenue, compared to $49.3 million, or 50.7% of revenue, for the first half of fiscal 2016. SG&A



http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=11372523&doc=3

for the first six months of fiscal 2017 was $35.0 million, or 33.7% of revenue, compared to $27.5 million, or 28.2% of revenue, in the prior year period.
Operating income for the first six months of fiscal 2017 was $2.7 million, compared to $5.7 million for the first six months of fiscal 2016. Operating income for the six months ended December 31, 2016 includes $2.7 million for expenses associated with the Audit Committee independent review and $0.1 million for net executive severance, recruiting and transition expenses. Operating income in the first six months of fiscal 2016 includes $1.3 million of net executive severance, recruiting and transition costs as well as $0.1 million for expenses associated with the reverse stock split completed during October 2015. Adjusted EBITDA was $8.2 million for the first six months of fiscal 2017, compared to $8.9 million for the same period in fiscal 2016.
Net income for the first half of fiscal 2017 was $1.5 million, or $0.10 per diluted share, compared to $2.7 million, or $0.19 per diluted share for the first half of fiscal 2016. On a tax adjusted basis, adjusting for previously announced expenses associated with the audit committee independent review of $1.9 million, along with a $0.1 million of costs for net executive severance, recruiting and transition expenses, adjusted Non-GAAP net income for the six months ended December 31, 2016 was $3.5 million, or $0.24 per diluted share. On a tax adjusted basis, adjusting for executive severance, recruiting and transition costs of $0.8 million, along with the $0.1 million for expenses associated with the reserve stock split in October 2015, adjusted Non-GAAP net income for the first six months of fiscal year 2016 was $3.6 million or $0.26 per diluted share.

Balance Sheet & Liquidity
The Company generated $5.1 million of cash from operations during the first six months of fiscal year 2017 and $8.5 million in the same period last year. The year-over-year reduction in cash provided by operations during the first half of fiscal 2017 primarily relates to the lower level of net income relative to the prior year period and cash used to reduce payables. The Company's cash and cash equivalents at December 31, 2016 were $11.7 million compared to $7.9 million at June 30, 2016.

Fiscal Year 2017 Guidance
The Company is reiterating fiscal year 2017 annual guidance. The Company expects to generate revenue in the range of $207 million to $212 million during fiscal year 2017, and anticipates adjusted earnings per diluted share in the range of $0.40 to $0.47 and GAAP earnings per diluted share in the range of $0.26 to $0.33. The Company's earnings per diluted share guidance excludes any non-operating or non-recurring expenses that may materialize during fiscal 2017, including estimated costs of $2.5 million to $3.0 million associated with the recently completed review by the Audit Committee of the Board of Directors.
Conference Call Information
The Company will hold an investor conference call today at 2:30 p.m. MST (4:30 p.m. EST). Investors interested in participating in the live call can dial (888) 215-7030 from the U.S. International callers can dial (913) 312-1276. A telephone replay will be available



http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=11372523&doc=3

approximately two hours after the call concludes and will be available through Wednesday, February 15, 2017, by dialing (844) 512-2921 from the U.S. and entering confirmation code 1969252, or (412) 317-6671 from international locations, and entering confirmation code 1969252.
There will also be a simultaneous, live webcast available on the Investor Relations section of the Company's web site at http://investor.lifevantage.com/events.cfm. The webcast will be archived for approximately 30 days.

About LifeVantage Corporation
LifeVantage Corporation (Nasdaq:LFVN), is a science-based direct selling company dedicated to visionary science that looks to transform health, wellness and anti-aging internally and externally at the cellular level. The company is the maker of Protandim® Nrf2 and NRF1 Synergizers, its line of scientifically-validated dietary supplements, the TrueScience® Anti-Aging Skin Care Regimen, Canine Health®, the AXIO® energy product line and the PhysIQ™ Smart Weight Management System. LifeVantage was founded in 2003 and is headquartered in Salt Lake City, Utah. 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", "look forward to", "goal", “may be” , and variations thereof, identify forward-looking statements, but their absence does not mean that a statement is not forward-looking. Examples of forward-looking statements include, but are not limited to, statements we make regarding our leadership in the global market, new product launches, the effectiveness of our policies and procedures, future growth and expected financial performance. 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, those discussed in greater detail in the Company's Annual Report on Form 10-K and the Company's 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.

About Non-GAAP Financial Measures
We define Non-GAAP EBITDA as earnings before interest expense, income taxes, depreciation and amortization and Non-GAAP Adjusted EBITDA as earnings before interest expense, income taxes, depreciation and amortization, stock compensation expense, other income, net, and certain other adjustments. Non-GAAP EBITDA and Non-GAAP Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. We define Non-GAAP Net Income and Non-GAAP Earnings per Share as GAAP net income less certain tax adjusted non-recurring one-time expenses incurred during the period.
We are presenting Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP Earnings Per Share because management believes that they provide additional ways to view our operations when considered with both our GAAP results and the reconciliation to net income, which we believe provides a more complete understanding of our business than could be obtained absent this disclosure. Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP Earnings Per Share are presented solely as supplemental disclosure because: (i) we believe these measures are a useful tool for investors to assess the operating performance of the business without the effect of these items; (ii) we believe that investors will



http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=11372523&doc=3

find this data useful in assessing shareholder value; and (iii) we use Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP Earnings Per Share internally as benchmarks to evaluate our operating performance or compare our performance to that of our competitors. The use of Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP Earnings per Share has limitations and you should not consider these measures in isolation from or as an alternative to the relevant GAAP measure of net income prepared in accordance with GAAP, or as a measure of profitability or liquidity.
The tables set forth below present Non-GAAP EBITDA, Non-GAAP Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP Earnings per Share which are non-GAAP financial measures to Net Income and Earnings per Share, our most directly comparable financial measures presented in accordance with GAAP.

Investor Relations Contacts:
Cindy England
Director of Investor Relations
(801) 432-9036
cengland@lifevantage.com

-or-
Scott Van Winkle
Managing Director, ICR
(617) 956-6736
scott.vanwinkle@icrinc.com






http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=11372523&doc=3

LIFEVANTAGE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands, except per share data)
As of
ASSETS
December 31, 2016
 
June 30, 2016
  Current assets
 
 
 
 
Cash and cash equivalents
$
11,731

 
$
7,883

 
Accounts receivable
717

 
1,552

 
Income tax receivable
903

 

 
Inventory, net
21,377

 
25,116

 
Current deferred income tax asset

 
2,776

 
Prepaid expenses and deposits
1,993

 
5,082

 
     Total current assets
36,721

 
42,409

 
 
 
 
 
 
Property and equipment, net
2,885

 
3,456

 
Intangible assets, net
1,698

 
1,744

 
Long-term deferred income tax asset
3,906

 
1,130

 
Other long-term assets
1,305

 
1,520

TOTAL ASSETS
$
46,515

 
$
50,259

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
  Current liabilities
 
 
 
 
Accounts payable
$
5,037

 
$
8,891

 
Commissions payable
6,722

 
7,719

 
Income tax payable

 
1,206

 
Other accrued expenses
9,780

 
8,734

 
Current portion of long-term debt
2,000

 
2,000

 
     Total current liabilities
23,539

 
28,550

 
 
 
 
 
Long-term debt
 
 
 
 
Principal amount
6,500

 
7,500

 
Less: unamortized discount and deferred offering costs
(76
)
 
(91
)
 
Long-term debt, net of unamortized discount and deferred offering costs
6,424

 
7,409

 
     Other long-term liabilities
2,041

 
2,169

 
     Total liabilities
32,004

 
38,128

Commitments and contingencies
 
 
 
Stockholders' equity
 
 
 
 
Preferred stock - par value $.001 per share, 50,000 shares authorized; no shares issued or outstanding

 

 
Common stock - par value $.001 per share, 250,000 shares authorized and 14,054 and 14,028 issued and outstanding as of December 31, 2016 and June 30, 2016, respectively
14

 
14

 
Additional paid-in capital
121,165

 
120,150

 
Accumulated deficit
(106,613
)
 
(108,076
)
 
Accumulated other comprehensive income (loss)
(55
)
 
43

 
     Total stockholders’ equity
14,511

 
12,131

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
46,515

 
$
50,259





http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=11372523&doc=3

LIFEVANTAGE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(unaudited)
 
 
 
 
 
 
 
 
 
For the Three Months Ended December 31,
 
For the Six Months Ended December 31,
 
2016
 
2015
 
2016
 
2015
(In thousands, except per share data)
 
 
 
 
 
 
 
Revenue, net
$
48,947

 
$
51,995

 
$
103,841

 
$
97,347

Cost of sales
7,500

 
7,842

 
16,332

 
14,817

   Gross profit
41,447

 
44,153

 
87,509

 
82,530

 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
    Commissions and incentives
23,540

 
27,297

 
49,836

 
49,340

    Selling, general and administrative
17,207

 
13,824

 
34,987

 
27,487

         Total operating expenses
40,747

 
41,121

 
84,823

 
76,827

Operating income
700

 
3,032

 
2,686

 
5,703

 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
    Interest expense
(138
)
 
(619
)
 
(275
)
 
(1,368
)
    Other income (expense), net
(150
)
 
6

 
(321
)
 
(210
)
         Total other income (expense)
(288
)
 
(613
)
 
(596
)
 
(1,578
)
Income before income taxes
412

 
2,419

 
2,090

 
4,125

  Income tax expense
(129
)
 
(819
)
 
(627
)
 
(1,459
)
Net income
$
283

 
$
1,600

 
$
1,463

 
$
2,666

Net income per share:
 
 
 
 
 
 
 
       Basic
$
0.02

 
$
0.12

 
$
0.11

 
$
0.19

       Diluted
$
0.02

 
$
0.11

 
$
0.10

 
$
0.19

Weighted average shares outstanding:
 
 
 
 
 
 
 
       Basic
13,840

 
13,718

 
13,830

 
13,714

       Diluted
14,132

 
14,016

 
14,176

 
13,952

 
 
 
 
 
 
 
 
Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
      Foreign currency translation adjustment
(189
)
 
9

 
(98
)
 
26

Other comprehensive income (loss), net of tax:
(189
)
 
9

 
(98
)
 
26

Comprehensive income
$
94

 
$
1,609

 
$
1,365

 
$
2,692

 
 
 
 
 
 
 
 





http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=11372523&doc=3

LIFEVANTAGE CORPORATION AND SUBSIDIARIES
 
 
 
Revenue by Region
 
 
 
 
 
 
 
 
 
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Three Months Ended
December 31,
 
For the Six Months Ended
December 31,
 
2016
 
2015
 
2016
 
2015
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Americas
$
37,613

 
77
%
 
$
40,055

 
77
%
 
$
77,748

 
75
%
 
$
74,781

 
77
%
Asia/Pacific & Europe
11,334

 
23
%
 
11,940

 
23
%
 
26,093

 
25
%
 
22,566

 
23
%
Total
$
48,947

 
100
%
 
$
51,995

 
100
%
 
$
103,841

 
100
%
 
$
97,347

 
100
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Active Independent Distributors (1)
 
 
 
 
 
 
 
 
 
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31,
 
 
 
 
 
 
 
 
 
2016
 
2015
 
 
 
 
 
 
 
 
Americas
46,000

 
73
%
 
46,000

 
69
%
 
 
 
 
 
 
 
 
Asia/Pacific & Europe
17,000

 
27
%
 
21,000

 
31
%
 
 
 
 
 
 
 
 
Total
63,000

 
100
%
 
67,000

 
100
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Active Preferred Customers (2)
 
 
 
 
 
 
 
 
 
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31,
 
 
 
 
 
 
 
 
 
2016
 
2015
 
 
 
 
 
 
 
 
Americas
89,000

 
80
%
 
96,000

 
82
%
 
 
 
 
 
 
 
 
Asia/Pacific & Europe
22,000

 
20
%
 
21,000

 
18
%
 
 
 
 
 
 
 
 
Total
111,000

 
100
%
 
117,000

 
100
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Active Independent Distributors have purchased product in the prior three months for retail or personal consumption.
(2) Active Preferred Customers have purchased product in the prior three months for personal consumption only.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=11372523&doc=3

LIFEVANTAGE CORPORATION AND SUBSIDIARIES
Reconciliation of GAAP Net Income to Non-GAAP EBITDA and Non-GAAP Adjusted EBITDA:
(Unaudited)
 
 
 
 
 
For the Three Months Ended December 31,
 
For the Six Months Ended December 31,
 
2016
 
2015
 
2016
 
2015
(In thousands)
 
 
 
 
 
 
 
GAAP Net income
$
283

 
$
1,600

 
$
1,463

 
$
2,666

Interest Expense
138

 
619

 
275

 
1,368

Provision for income taxes
129

 
819

 
627

 
1,459

Depreciation and amortization
414

 
452

 
826

 
983

Non-GAAP EBITDA:
964

 
3,490

 
3,191

 
6,476

Adjustments:
 
 
 
 
 
 
 
Stock compensation expense
576

 
450

 
1,515

 
642

Other (income) expense, net
150

 
(6
)
 
321

 
210

Other adjustments*
2,165

 
535

 
3,176

 
1,614

Total adjustments
2,891

 
979

 
5,012

 
2,466

Non-GAAP Adjusted EBITDA
$
3,855

 
$
4,469

 
$
8,203

 
$
8,942

 
 
 
 
 
 
 
 
*Other adjustments for the three months ended December 31, 2016 include approximately $1.7 million for expenses associated with the audit committee independent review and $0.5 million for executive severance and search firm expenses. Other adjustments for the three months ended December 31, 2015 include approximately $0.4 million for search firm and hiring expenses associated with the search for executive officers and $0.1 million for expenses associated with the reverse stock split completed during October 2015. Other adjustments for the six months ended December 31, 2016 include approximately $2.7 million for expenses associated with the audit committee independent review and $0.5 million for executive severance and search firm expenses. Other adjustments for the six months ended December 31, 2015 include approximately $0.7 million for executive severance expenses, $0.8 million for search firm and hiring expenses associated with the search for executive officers and $0.1 million for expenses associated with the reverse stock split completed during October 2015.




http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=11372523&doc=3

LIFEVANTAGE CORPORATION AND SUBSIDIARIES
Reconciliation of GAAP Net Income to Non-GAAP Net Income and Non-GAAP Adjusted EPS:
(Unaudited)
 
 
 
 
 
For the Three Months Ended December 31,
 
For the Six Months Ended December 31,
 
2016
 
2015
 
2016
 
2015*
(In thousands)
 
 
 
 
 
 
 
GAAP Net income
$
283

 
$
1,600

 
$
1,463

 
$
2,666

Executive team severance expenses (1)
55

 

 
55

 
314

Executive team recruiting and transition expenses (2)
45

 
243

 
45

 
503

Reverse stock split administrative expenses (3)

 
103

 

 
103

Audit committee independent review expenses (4)
1,211

 

 
1,919

 

Non-GAAP Net Income:
$
1,594

 
$
1,946

 
$
3,482

 
$
3,586

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Three Months Ended December 31,
 
For the Six Months Ended December 31,
 
2016
 
2015
 
2016
 
2015*
 
 
 
 
 
 
 
 
Diluted earnings per share, as reported
$
0.02

 
$
0.11

 
$
0.10

 
$
0.19

Executive team severance expenses (1)

 

 

 
0.02

Executive team recruiting and transition expenses (2)

 
0.02

 

 
0.04

Reverse stock split administrative expenses (3)

 
0.01

 

 
0.01

Audit committee independent review expenses (4)
0.09

 

 
0.14

 

Diluted earnings per share, as adjusted
$
0.11

 
$
0.14

 
$
0.24

 
$
0.26

 
 
 
 
 
 
 
 
*Executive team severance expenses for the prior period non-GAAP adjustments have been restated from previously reported results to display these expenses net of unvested stock award reversals for comparability purposes
 
 
 
 
 
 
 
 
(1) Net of $204,000 of after tax compensation expense benefit related to unvested stock award reversals and net of $24,000 tax expense for the three and six months ended December 31, 2016, respectively, and net of $124,000 of after tax compensation expense benefit related to unvested stock award reversals and net of $172,000 tax expense for the six months ended December 31, 2015
(2) Net of $19,000 tax expense for the three and six months ended December 31, 2016 and net of $133,000 and $275,000 tax expense for the three and six months ended December 31, 2015, respectively
(3) Net of $56,000 tax expense for the three and six months ended December 31, 2015
(4) Net of $519,000 and $823,000 tax expense for the three and six months ended December 31, 2016, respectively