With their financial results for the second quarter ended December 31, 2011 set for release following the market close on February 14, 2012 LifeVantage Corporation (OTCBB: LFVN) has seen investors bet big on the news as shares have climbed as high as 1.92 on Wednesday after closing the previous trading session at 1.64. Shares are currently trading around the 1.84 mark, well above the 50-day moving average of 1.41 and 200-day moving average of 1.46 while volume has topped the 1.5 million mark, substantially higher than their average of 217,000.
Of course there is every reason to be excited about LFVN as they have continued to grow revenue while controlling operating costs and by all indications the positive trends in their business will remain in place.
As pointed out in their corporate update back in December the company’s first quarter 2012 revenue increased to $20.1 million, a 214% improvement compared to the prior year period, while their operating income improved to $3.4 million. They ended that quarter with $9.4 million in cash, an increase of $3 million from year-end fiscal 2011, and had no debt.
The strong first quarter 2012 figures support LFVN’s guidance for fiscal 2012 in which they expect to generate revenue in the range of $95 million to $105 million, significantly higher than the $38.9 million in revenue generated in fiscal 2011. Additionally they expect to generate operating income in a range of $11.4 million to $14.7 million with an operating margin of 12% to 14%.
LFVN’s success has come largely from their patented anti-aging and wellness product Protandim, a dietary supplement that combats oxidative stress and has shown a number of positive attributes related to the prevention of the proliferation of cells that can cause re-blockage of vessels following coronary artery bypass surgery, stenting, and carotid enarterectomy. In addition to Protandim the company sells their LifeVantage TrueScience Anti-Aging Cream, or LifeVantage TrueScience, which incorporates ingredients in Protandim and other proprietary ingredient.
Without question Protandim is the driving force behind LFVN and the fact that it has been shown to provide actual health benefits separates it from the host of anti-aging and wellness products that are currently on the market. Protandim, which is comprised of five highly synergistic herbal ingredients, was the subject of a peer-reviewed study conducted by researchers at The Ohio State University, a study sponsored by the American Heart Association and the National Institutes of Health and according to the results of that study the dietary supplement was able to increase the body’s Nrf2-regulated protective genes, commonly referred to as “survival genes”, which include most of the antioxidant enzymes.
Because that study examined Protandim’s ability to suppress intimal hyperplasia, a common adverse event that limits the effectiveness of several types of vascular surgery, and found the results positive the dietary supplement could play a significant role in reducing or even eliminating the blockage of saphenous vein grafts used during multiple bypasses, a process that may result from intimal hyperplasia. Protandim was shown to increase antioxidant enzyme activity in veins cultured at high oxygen, while reducing free radical levels, lipid peroxidation, as well as reduce intimal proliferation to the level seen in a normal healthy saphenous vein.
If future studies can support evidence that Protandim is able to reduce intimal hyperplasia then it could be a serious player in procedures like coronary artery bypass graft (CABG) surgery, angioplasty with stent insertion, and carotid endarterectomy; these three procedures combined affect more than 1.5 million Americans every year. In such a case there could be even greater revenue potential for LFVN.
Aside from the promise that exists with their products LFVN is also taking steps to increase shareholder value as they announced in December that they had 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. While that doesn’t guarantee that they will repurchase $5 million in shares of its common stock the fact that they have displayed growth and remained true to their shareholders up to this point would lead many to believe they will be aggressive with this stock repurchase plan.
With all elements of their business falling into place LFVN continues to discuss the possible move onto a national stock exchange listing, something they believe would be a significant enhancement to shareholder value.
Right now LFVN appears to be doing a solid job providing that shareholder value as they stated in their corporate update “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.”
