Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Sep. 30, 2013 | Nov. 04, 2013 | |
Document and Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Trading Symbol | 'LFVN | ' |
Entity Registrant Name | 'LIFEVANTAGE CORPORATION | ' |
Entity Central Index Key | '0000849146 | ' |
Current Fiscal Year End Date | '--09-30 | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 102,479,601 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Current assets | ' | ' |
Cash and cash equivalents | $27,957 | $26,299 |
Accounts receivable | 923 | 1,789 |
Income tax receivable | 298 | 2,150 |
Inventory | 10,625 | 10,524 |
Current deferred income tax asset | 2,885 | 2,885 |
Prepaid expenses and deposits | 2,202 | 2,294 |
Total current assets | 44,890 | 45,941 |
Long-term assets | ' | ' |
Property and equipment, net | 5,490 | 5,692 |
Intangible assets, net | 1,765 | 1,747 |
Long-term deferred income tax asset | 730 | 730 |
Other long-term assets | 1,588 | 1,374 |
TOTAL ASSETS | 54,463 | 55,484 |
Current liabilities | ' | ' |
Accounts payable | 3,000 | 5,171 |
Commissions payable | 7,648 | 7,564 |
Reserve for sales returns | 1,041 | 648 |
Other accrued expenses | 6,741 | 7,183 |
Total current liabilities | 18,430 | 20,566 |
Long-term liabilities | ' | ' |
Other long-term liabilities | 950 | 973 |
Total liabilities | 19,380 | 21,539 |
Commitments and contingencies | ' | ' |
Stockholders’ equity | ' | ' |
Preferred stock — par value $0.001 per share, 50,000 shares authorized, no shares issued or outstanding | 0 | 0 |
Common stock — par value $0.001 per share, 250,000 shares authorized and 117,713 and 117,088 issued and outstanding as of September 30, 2013 and June 30, 2013, respectively | 118 | 121 |
Additional paid-in capital | 111,432 | 110,413 |
Accumulated deficit | -76,080 | -76,476 |
Accumulated other comprehensive loss | -387 | -113 |
Total stockholders’ equity | 35,083 | 33,945 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $54,463 | $55,484 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 117,713,000 | 117,088,000 |
Common stock, shares outstanding (in shares) | 117,713,000 | 117,088,000 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations and Other Comprehensive Income (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Income Statement [Abstract] | ' | ' |
Sales, net | $51,328 | $52,859 |
Cost of sales | 7,809 | 7,807 |
Gross profit | 43,519 | 45,052 |
Operating expenses: | ' | ' |
Sales and marketing | 30,242 | 29,540 |
General and administrative | 7,401 | 7,853 |
Research and development | 307 | 514 |
Depreciation and amortization | 499 | 238 |
Total operating expenses | 38,449 | 38,145 |
Operating income | 5,070 | 6,907 |
Other income (expense), net: | ' | ' |
Interest and other income (expense), net | 38 | -41 |
Total other income (expense) | 38 | -41 |
Net income before income taxes | 5,108 | 6,866 |
Income tax expense | -1,852 | -2,701 |
Net income | 3,256 | 4,165 |
Net income per share: | ' | ' |
Basic | $0.03 | $0.04 |
Diluted | $0.03 | $0.03 |
Weighted average shares outstanding: | ' | ' |
Basic | 114,666 | 110,867 |
Diluted | 123,542 | 125,781 |
Other comprehensive loss, net of tax: | ' | ' |
Currency translation adjustment | -274 | -5 |
Other comprehensive loss, net of tax: | -274 | -5 |
Comprehensive income | $2,982 | $4,160 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (USD $) | Total | Common stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive loss |
In Thousands, except Share data, unless otherwise specified | |||||
Beginning Balance (in dollars) at Jun. 30, 2013 | $33,945 | $121 | $110,413 | ($76,476) | ($113) |
Beginning Balance (in shares) at Jun. 30, 2013 | ' | 117,088,000 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' |
Stock-based compensation | 768 | ' | 768 | ' | ' |
Exercise of options and warrants (in shares) | ' | 1,842,000 | ' | ' | ' |
Exercise of options and warrants | 253 | 2 | 251 | ' | ' |
Shares surrendered as payment of tax withholding (in shares) | ' | -54,000 | ' | ' | ' |
Shares surrendered as payment of tax withholding | ' | 0 | ' | ' | ' |
Repurchase of company stock (in shares) | ' | -1,163,000 | ' | ' | ' |
Repurchase of company stock | -2,865 | -5 | ' | -2,860 | ' |
Currency translation adjustment | -274 | ' | ' | ' | -274 |
Net income | 3,256 | ' | ' | 3,256 | ' |
Ending Balance (in dollars) at Sep. 30, 2013 | $35,083 | $118 | $111,432 | ($76,080) | ($387) |
Ending Balance (in shares) at Sep. 30, 2013 | ' | 117,713,000 | ' | ' | ' |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash Flows from Operating Activities: | ' | ' |
Net income | $3,256,000 | $4,165,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 499,000 | 238,000 |
Stock-based compensation | 768,000 | 489,000 |
Changes in operating assets and liabilities: | ' | ' |
Decrease in accounts receivable | 2,725,000 | 103,000 |
Increase in inventory | -77,000 | -1,713,000 |
(Increase)/decrease in prepaid expenses and deposits | 91,000 | -779,000 |
Increase in other long-term assets | -205,000 | -1,245,000 |
Decrease in accounts payable | -2,174,000 | -1,191,000 |
Increase in accrued expenses | 3,000 | 660,000 |
Increase/(decrease) in other long-term liabilities | -33,000 | 188,000 |
Net Cash Provided by Operating Activities | 4,853,000 | 915,000 |
Cash Flows from Investing Activities: | ' | ' |
Purchase of equipment | -295,000 | -1,567,000 |
Net Cash Used in Investing Activities | -295,000 | -1,567,000 |
Cash Flows from Financing Activities: | ' | ' |
Repurchase of company stock | -2,865,000 | 0 |
Issuance of company stock | 253,000 | 1,187,000 |
Net Cash (Used in) Provided by Financing Activities | -2,612,000 | 1,187,000 |
Foreign Currency Effect on Cash | -288,000 | -5,000 |
Increase in Cash and Cash Equivalents: | 1,658,000 | 530,000 |
Cash and Cash Equivalents - beginning of period | 26,299,000 | 24,648,000 |
Cash and Cash Equivalents - end of period | 27,957,000 | 25,178,000 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ' | ' |
Cash paid for interest expense | 3,000 | 0 |
Cash paid for income taxes | $85,000 | $2,430,000 |
Organization_and_Basis_of_Pres
Organization and Basis of Presentation (Notes) | 3 Months Ended |
Sep. 30, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Organization and Basis of Presentation | ' |
Organization and Basis of Presentation: | |
The condensed consolidated financial statements included herein have been prepared by the Company’s management, without audit, pursuant to the rules and regulations of the SEC. In the opinion of the Company’s management, these interim Financial Statements include all adjustments, consisting of normal recurring adjustments, that are considered necessary for a fair presentation of its financial position as of September 30, 2013, and the results of operations for the three months ended September 30, 2013 and 2012 and the cash flows for the three months ended September 30, 2013 and 2012. Interim results are not necessarily indicative of results for a full year or for any future period. | |
The condensed consolidated financial statements and notes included herein are presented as required by Form 10-Q, and do not contain certain information included in the Company’s audited financial statements and notes for the fiscal year ended June 30, 2013 pursuant to the rules and regulations of the SEC. For further information, refer to the financial statements and notes thereto as of and for the year ended June 30, 2013, and included in the Annual Report on Form 10-K on file with the SEC. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies (Notes) | 3 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
Summary of Significant Accounting Policies | ' | ||||||||
Summary of Significant Accounting Policies: | |||||||||
Consolidation | |||||||||
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. | |||||||||
Use of Estimates | |||||||||
Management has made a number of estimates and assumptions relating to the reporting of revenues, expenses, assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements. Actual results could differ from those estimates. | |||||||||
Translation of Foreign Currency Statements | |||||||||
A portion of the Company’s business operations occurs outside the United States. The local currency of each of the Company’s subsidiaries is considered its functional currency. All assets and liabilities are translated into U.S. dollars at exchange rates existing at the balance sheet dates, revenue and expenses are translated at weighted-average exchange rates and stockholders’ equity is recorded at historical exchange rates. The resulting foreign currency translation adjustments are recorded as a separate component of stockholders’ equity in the consolidated balance sheets and transaction gains and losses are included in interest and other income (expense), net in the consolidated financial statements. | |||||||||
Currency translation gains and losses on intercompany balances denominated in a foreign currency are recorded as other income (expense), net. A net foreign currency loss of $147,000 is recorded in other income (expense), net for the three months ended September 30, 2013. A net foreign currency loss of $55,000 is recorded for the three months ended September 30, 2012. | |||||||||
Derivative Instruments and Hedging Activities | |||||||||
The Company's subsidiaries enter into transactions with each other which may not be denominated in the respective subsidiaries' functional currencies. The Company seeks to reduce its exposure to fluctuations in foreign exchange rates through the use of derivatives. The Company does not use such derivative financial instruments for trading or speculative purposes. | |||||||||
To hedge risks associated with the foreign-currency-denominated intercompany transactions the Company entered into a forward foreign exchange contract which was settled in September 2013 and was not designated for hedge accounting. For the three months ended September 30, 2013, a realized loss of $149,000, related to the forward contract, is recorded in other income (expense), net. The Company did not hold any derivative instruments at September 30, 2013. | |||||||||
Cash and Cash Equivalents | |||||||||
The Company considers only its monetary liquid assets with original maturities of three months or less as cash and cash equivalents. | |||||||||
Concentration of Credit Risk | |||||||||
The Company discloses significant concentrations of credit risk regardless of the degree of such risk. Financial instruments with significant credit risk include cash and investments. At September 30, 2013, the Company had $15.4 million in cash accounts that were held primarily at one financial institution and $12.5 million in accounts at other financial institutions. As of September 30, 2013 and June 30, 2013 the Company’s cash balances exceeded federally insured limits. | |||||||||
Accounts Receivable | |||||||||
The Company’s accounts receivable for the periods ended September 30, 2013 and June 30, 2013 consist primarily of credit card receivables. Based on the Company’s verification process for customer credit cards and historical information available, management has determined that an allowance for doubtful accounts on credit card sales related to its direct and independent distributor sales as of September 30, 2013 is not necessary. No bad debt expense has been recorded for the periods ended September 30, 2013 and September 30, 2012. | |||||||||
Inventory | |||||||||
Inventory is stated at the lower of cost or market value. Cost is determined using the first-in, first-out method. The Company has capitalized payments to its contract product manufacturer for the acquisition of raw materials and commencement of the manufacturing, bottling and labeling of its product. As of September 30, 2013 and June 30, 2013, inventory consisted of (in thousands): | |||||||||
September 30, | June 30, | ||||||||
2013 | 2013 | ||||||||
Finished goods | $ | 6,192 | $ | 5,273 | |||||
Raw materials | 4,433 | 5,251 | |||||||
Total inventory | $ | 10,625 | $ | 10,524 | |||||
Revenue Recognition | |||||||||
The Company ships the majority of its product directly to the consumer and receives substantially all payment for these sales in the form of credit card receipts. Revenue from direct product sales to customers is recognized upon passage of title and risk of loss. Estimated returns are recorded when product is shipped. The Company’s return policy is to provide a full refund for product returned within 30 days if the returned product is unopened or defective. After 30 days, the Company generally does not issue refunds to direct sales customers for returned product. The Company allows terminating distributors to return unopened, unexpired product that they have purchased within the prior twelve months, subject to certain consumption limitations, for a full refund, less a 10% restocking fee. The Company establishes the returns reserve based on historical experience. The returns reserve is evaluated on a quarterly basis. As of September 30, 2013 and June 30, 2013, the Company’s reserve balance for returns and allowances was approximately $1.0 million and $0.6 million, respectively. | |||||||||
Shipping and Handling | |||||||||
Shipping and handling costs associated with inbound freight and freight out to customers, including independent distributors, are included in cost of sales. Shipping and handling fees charged to all customers are included in sales. | |||||||||
Research and Development Costs | |||||||||
The Company expenses all costs related to research and development activities as incurred. Research and development expenses for the three months ended September 30, 2013 and 2012 were approximately $0.3 million and $0.5 million, respectively. | |||||||||
Stock-Based Compensation | |||||||||
The Company recognizes stock-based compensation by measuring the cost of services to be rendered based on the grant date fair value of the equity award. The Company recognizes stock-based compensation, net of any estimated forfeitures, over the period an employee is required to provide service in exchange for the award, generally referred to as the requisite service period. | |||||||||
The Black-Scholes option pricing model is used to estimate the fair value of stock options. The determination of the fair value of stock options is affected by the Company's stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. The Company uses historical volatility as the expected volatility assumption required in the Black-Scholes model. The Company utilizes a simplified method for estimating the expected life of the options. The Company uses this method because it believes that it provides a better estimate than the Company’s historical data as post vesting exercises have been limited. The risk-free interest rate assumption is based on observed interest rates appropriate for the expected terms of the stock options. The fair value of restricted stock grants is based on the closing market price of the Company's stock on the date of grant less the Company's expected dividend yield. | |||||||||
Income Taxes | |||||||||
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using statutory tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period that includes the effective date of the change. | |||||||||
For the three months ended September 30, 2013 and 2012 the Company has recognized income tax expense of $1.9 million and $2.7 million, respectively, which is the Company’s estimated federal, state and foreign income tax liability. Realization of deferred tax assets is dependent upon future earnings in specific tax jurisdictions, the timing and amount of which are uncertain. The Company continues to evaluate the realizability of the deferred tax asset based upon achieved and estimated future results. The difference between the three months ended September 30, 2013 effective rate of 35.60% and the Federal statutory rate of 35.00% is due to state income taxes (net of federal benefit), and certain permanent differences between taxable and book income. | |||||||||
Income Per Share | |||||||||
Basic income per common share is computed by dividing the net income or loss by the weighted average number of common shares outstanding during the period. Diluted income per common share is computed by dividing net income by the weighted average number of common shares and potentially dilutive common share equivalents. For the three months ended September 30, 2013 the effects of approximately 0.7 million common shares issuable upon exercise of options granted pursuant to the Company’s 2007 and 2010 Long-Term Incentive Plans are not included in computations because their effect was anti-dilutive. For the three months ended September 30, 2012 the effects of approximately 0.5 million common shares issuable upon exercise of options granted pursuant to the Company’s 2007 and 2010 Long-Term Incentive Plans are not included in computations because their effect was anti-dilutive. | |||||||||
The following is a reconciliation of earnings per share and the weighted-average common shares outstanding for purposes of computing basic and diluted net income per share (in thousands except per share amounts): | |||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
2013 | 2012 | ||||||||
Numerator: | |||||||||
Net income | $ | 3,256 | $ | 4,165 | |||||
Denominator: | |||||||||
Basic weighted-average common shares outstanding | 114,666 | 110,867 | |||||||
Effect of dilutive securities: | |||||||||
Stock awards and options | 3,649 | 5,652 | |||||||
Warrants | 5,227 | 9,262 | |||||||
Diluted weighted-average common shares outstanding | 123,542 | 125,781 | |||||||
Net income per share, basic | $ | 0.03 | $ | 0.04 | |||||
Net income per share, diluted | $ | 0.03 | $ | 0.03 | |||||
Segment Information | |||||||||
The Company operates in a single operating segment by selling products to a global network of independent distributors that operates in an integrated manner from market to market. Selling expenses are the Company’s largest expense comprised of the commissions paid to its worldwide independent distributors. The Company manages its business primarily by managing its global network of independent distributors. The Company reports revenue in two geographic regions: Americas and Asia/Pacific. Revenues by geographic area are as follows (in thousands): | |||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
2013 | 2012 | ||||||||
Americas | $ | 34,498 | $ | 32,306 | |||||
Asia/Pacific | 16,830 | 20,553 | |||||||
Total revenues | $ | 51,328 | $ | 52,859 | |||||
Additional information as to the Company’s revenue from operations in the most significant geographical areas is set forth below (in thousands): | |||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
2013 | 2012 | ||||||||
United States | $ | 33,479 | $ | 32,066 | |||||
Japan | $ | 14,581 | $ | 19,532 | |||||
As of September 30, 2013 long-lived assets were $5.0 million in the U.S. and $2.9 million in Japan. As of June 30, 2013 long-lived assets were $4.8 million in the U.S. and $3.0 million in Japan. | |||||||||
Effect of New Accounting Pronouncements | |||||||||
The Company has reviewed recently issued, but not yet effective, accounting pronouncements and does not believe any such pronouncements will have a material impact on its financial statements. |
Stockholders_Equity_Notes
Stockholders' Equity (Notes) | 3 Months Ended |
Sep. 30, 2013 | |
Equity [Abstract] | ' |
Stockholders' Equity | ' |
Stockholders’ Equity | |
During the three months ended September 30, 2013 the Company issued 1.8 million shares of common stock, as a result of the exercise of warrants and options and 0.1 million shares of restricted stock were surrendered as payment of tax withholding upon vesting. | |
On March 22, 2013 the Company announced a share repurchase program authorizing it to repurchase up to $5 million of shares of the Company's common stock. As part of that repurchase program, the Company entered into a pre-arranged stock repurchase plan that operated in accordance with guidelines specified under Rule 10b5-1 of the Securities Exchange. During the three months ended September 30, 2013 the Company repurchased 1.2 million shares. As of September 30, 2013, the Company had purchased the full $5 million in shares authorized under this repurchase program. | |
The Company’s Articles of Incorporation authorize the issuance of preferred shares. However, as of September 30, 2013, none have been issued nor have any rights or preferences been assigned to the preferred shares by the Company’s Board of Directors. |
Sharebased_Compensation_Notes
Share-based Compensation (Notes) | 3 Months Ended | ||||
Sep. 30, 2013 | |||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||
Share-based Compensation | ' | ||||
Share-based Compensation | |||||
Equity Incentive Plans | |||||
The Company adopted and the shareholders approved the 2007 Long-Term Incentive Plan (the “2007 Plan”), effective November 21, 2006, to provide incentives to certain eligible employees, directors and consultants. A maximum of 10.0 million shares of the Company's common stock can be issued under the 2007 Plan in connection with the grant of awards. Awards to purchase common stock have been granted pursuant to the 2007 Plan and are outstanding to various employees, officers, directors, Scientific Advisory Board members and independent distributors at prices between $0.21 and $1.50 per share, with initial vesting periods of one to three years. Awards expire in accordance with the terms of each award and the shares subject to the award are added back to the 2007 Plan upon expiration of the award. The contractual term of stock options granted is generally ten years. As of September 30, 2013 there were awards outstanding, net of awards expired, for the purchase in aggregate of 3.6 million shares of the Company's common stock. As of September 30, 2013 there were 27,000 shares available for issuance under the 2007 Plan. | |||||
The Company adopted and the shareholders approved the 2010 Long-Term Incentive Plan (the “2010 Plan”), effective September 27, 2010, as amended on January 10, 2012, to provide incentives to eligible employees, directors and consultants who contribute to the strategic and long-term performance objectives and growth of the Company. A maximum of 6.9 million shares of the Company’s common stock can be issued under the 2010 Plan in connection with the grant of awards. Awards to purchase common stock have been granted pursuant to the 2010 Plan and are outstanding to various employees, officers and directors. Outstanding stock options awarded under the 2010 Plan have exercise prices between $0.63 and $3.53 per share, and vest over one to four year vesting periods. Awards expire in accordance with the terms of each award and the shares subject to the award are added back to the 2010 Plan upon expiration of the award. The contractual term of stock options granted is generally ten years. As of September 30, 2013 there were awards outstanding, net of awards expired, for an aggregate of 3.0 million shares of the Company’s common stock. As of September 30, 2013 there were 449,000 shares available for issuance under the 2010 Plan. | |||||
Stock-Based Compensation | |||||
In accordance with accounting guidance for stock based compensation, payments in equity instruments for goods or services are accounted for under the fair value method. For the three months ended September 30, 2013, stock based compensation of $0.8 million was reflected as an increase to additional paid in capital, all of which was employee related. For the three months ended September 30, 2012, stock based compensation of $0.5 million, was reflected as an increase to additional paid in capital, all of which was employee related. | |||||
For the three months ended September 30, 2013, no stock options were awarded. For the three months ended September 30, 2012, the fair value of stock option awards was estimated using the Black-Scholes option-pricing model with the following assumptions and weighted-average fair values: | |||||
Three Months Ended | |||||
September 30, | |||||
2013 | 2012 | ||||
Risk-free interest rate | N/A | 0.82% and 0.88% | |||
Dividend yield | N/A | — | % | ||
Expected life in years | N/A | 4.0 - 6.0 | |||
Expected volatility | N/A | 126 | % |
Contingencies_Notes
Contingencies (Notes) | 3 Months Ended |
Sep. 30, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Contingencies | ' |
Contingencies | |
The company is occasionally involved in lawsuits and disputes arising in the normal course of business. In the opinion of management, based upon advice of counsel, the likelihood of an adverse outcome against the Company is remote. As such, management currently believes that the ultimate outcome of these lawsuits will not have a material impact on the Company's financial position or results of operations. |
Subsequent_Events_Notes
Subsequent Events (Notes) | 3 Months Ended |
Sep. 30, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Subsequent Events | |
On November 1, 2013, the Company accepted for payment an aggregate of 16,326,530 shares of its common stock at an aggregate purchase price of $40 million as a result of its modified Dutch auction tender offer (the "Offer"). In connection with the Offer, on October 18, 2013 the Company entered into a Financing Agreement providing for a term loan facility in an aggregate principal amount of up to $47 million (the “Term Loan”) and a delayed draw term loan facility in an aggregate principal amount not to exceed $20 million (the “Delayed Draw Term Loan” and collectively with the Term Loan, the "Credit Facility"). The Delayed Draw Term Loan will be available for borrowing in specified minimum amounts from time to time beginning after the effective date (as defined in the Financing Agreement) until October 18, 2014 or until the Delayed Draw Term Loan is reduced to zero, if earlier. | |
The principal amount of the Term Loan is repayable in consecutive quarterly installments beginning with the calendar quarter ending March 31, 2014 and matures on the earlier of October 18, 2018 or such date as the outstanding loans become payable in accordance with the terms of the Financing Agreement (the “Final Maturity Date”). In the event the Company borrows under the Delayed Draw Term Loan, the outstanding principal will be repayable in consecutive quarterly installments beginning with the calendar quarter ending December 31, 2014 through the Final Maturity Date. Each of the loans will bear interest at a rate equal to 7.5% per annum plus the greater of (i) 1.25% or (ii) LIBOR, or at the Company’s option, a reference rate (as defined in the Financing Agreement) plus 6.5% per annum, with such interest payable monthly. | |
The Company’s obligations under the Credit Facility are secured by a security interest in substantially all of the Company’s assets. The Company’s existing and future domestic subsidiaries have guaranteed the borrowings. Loans outstanding under the Credit Facility (1) must be prepaid based on certain cash flow metrics and with any net proceeds of certain permitted asset sales and (2) may be prepaid in whole or in part at any time, with any prepayments made prior to the first anniversary of the effective date subject to a prepayment premium. Any principal amount of the loans which is prepaid or repaid may not be re-borrowed. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
Consolidation | ' |
Consolidation | |
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. | |
Use of Estimates | ' |
Use of Estimates | |
Management has made a number of estimates and assumptions relating to the reporting of revenues, expenses, assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements. Actual results could differ from those estimates. | |
Translation of Foreign Currency Statements | ' |
Translation of Foreign Currency Statements | |
A portion of the Company’s business operations occurs outside the United States. The local currency of each of the Company’s subsidiaries is considered its functional currency. All assets and liabilities are translated into U.S. dollars at exchange rates existing at the balance sheet dates, revenue and expenses are translated at weighted-average exchange rates and stockholders’ equity is recorded at historical exchange rates. The resulting foreign currency translation adjustments are recorded as a separate component of stockholders’ equity in the consolidated balance sheets and transaction gains and losses are included in interest and other income (expense), net in the consolidated financial statements. | |
Derivative Instruments and Hedging Activities | ' |
Derivative Instruments and Hedging Activities | |
The Company's subsidiaries enter into transactions with each other which may not be denominated in the respective subsidiaries' functional currencies. The Company seeks to reduce its exposure to fluctuations in foreign exchange rates through the use of derivatives. The Company does not use such derivative financial instruments for trading or speculative purposes. | |
Cash and Cash Equivalents | ' |
Cash and Cash Equivalents | |
The Company considers only its monetary liquid assets with original maturities of three months or less as cash and cash equivalents. | |
Concentration of Credit Risk | ' |
Concentration of Credit Risk | |
The Company discloses significant concentrations of credit risk regardless of the degree of such risk. Financial instruments with significant credit risk include cash and investments. At September 30, 2013, the Company had $15.4 million in cash accounts that were held primarily at one financial institution and $12.5 million in accounts at other financial institutions. | |
Accounts Receivable | ' |
Accounts Receivable | |
The Company’s accounts receivable for the periods ended September 30, 2013 and June 30, 2013 consist primarily of credit card receivables. Based on the Company’s verification process for customer credit cards and historical information available, management has determined that an allowance for doubtful accounts on credit card sales related to its direct and independent distributor sales as of September 30, 2013 is not necessary. | |
Inventory | ' |
Inventory | |
Inventory is stated at the lower of cost or market value. Cost is determined using the first-in, first-out method. The Company has capitalized payments to its contract product manufacturer for the acquisition of raw materials and commencement of the manufacturing, bottling and labeling of its product. | |
Revenue Recognition | ' |
Revenue Recognition | |
The Company ships the majority of its product directly to the consumer and receives substantially all payment for these sales in the form of credit card receipts. Revenue from direct product sales to customers is recognized upon passage of title and risk of loss. Estimated returns are recorded when product is shipped. The Company’s return policy is to provide a full refund for product returned within 30 days if the returned product is unopened or defective. After 30 days, the Company generally does not issue refunds to direct sales customers for returned product. The Company allows terminating distributors to return unopened, unexpired product that they have purchased within the prior twelve months, subject to certain consumption limitations, for a full refund, less a 10% restocking fee. The Company establishes the returns reserve based on historical experience. The returns reserve is evaluated on a quarterly basis. | |
Shipping and Handling | ' |
Shipping and Handling | |
Shipping and handling costs associated with inbound freight and freight out to customers, including independent distributors, are included in cost of sales. Shipping and handling fees charged to all customers are included in sales. | |
Research and Development Costs | ' |
Research and Development Costs | |
The Company expenses all costs related to research and development activities as incurred. | |
Stock-Based Compensation | ' |
Stock-Based Compensation | |
The Company recognizes stock-based compensation by measuring the cost of services to be rendered based on the grant date fair value of the equity award. The Company recognizes stock-based compensation, net of any estimated forfeitures, over the period an employee is required to provide service in exchange for the award, generally referred to as the requisite service period. | |
The Black-Scholes option pricing model is used to estimate the fair value of stock options. The determination of the fair value of stock options is affected by the Company's stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. The Company uses historical volatility as the expected volatility assumption required in the Black-Scholes model. The Company utilizes a simplified method for estimating the expected life of the options. The Company uses this method because it believes that it provides a better estimate than the Company’s historical data as post vesting exercises have been limited. The risk-free interest rate assumption is based on observed interest rates appropriate for the expected terms of the stock options. The fair value of restricted stock grants is based on the closing market price of the Company's stock on the date of grant less the Company's expected dividend yield. | |
Income Taxes | ' |
Income Taxes | |
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using statutory tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period that includes the effective date of the change. | |
Income per share | ' |
Income Per Share | |
Basic income per common share is computed by dividing the net income or loss by the weighted average number of common shares outstanding during the period. Diluted income per common share is computed by dividing net income by the weighted average number of common shares and potentially dilutive common share equivalents. For the three months ended September 30, 2013 the effects of approximately 0.7 million common shares issuable upon exercise of options granted pursuant to the Company’s 2007 and 2010 Long-Term Incentive Plans are not included in computations because their effect was anti-dilutive. For the three months ended September 30, 2012 the effects of approximately 0.5 million common shares issuable upon exercise of options granted pursuant to the Company’s 2007 and 2010 Long-Term Incentive Plans are not included in computations because their effect was anti-dilutive. | |
Segment Information | ' |
Segment Information | |
The Company operates in a single operating segment by selling products to a global network of independent distributors that operates in an integrated manner from market to market. Selling expenses are the Company’s largest expense comprised of the commissions paid to its worldwide independent distributors. The Company manages its business primarily by managing its global network of independent distributors. The Company reports revenue in two geographic regions: Americas and Asia/Pacific. | |
Effect of New Accounting Pronouncements | ' |
Effect of New Accounting Pronouncements | |
The Company has reviewed recently issued, but not yet effective, accounting pronouncements and does not believe any such pronouncements will have a material impact on its financial statements |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
Components of Inventory | ' | ||||||||
As of September 30, 2013 and June 30, 2013, inventory consisted of (in thousands): | |||||||||
September 30, | June 30, | ||||||||
2013 | 2013 | ||||||||
Finished goods | $ | 6,192 | $ | 5,273 | |||||
Raw materials | 4,433 | 5,251 | |||||||
Total inventory | $ | 10,625 | $ | 10,524 | |||||
Summary of Computation of Net Income Per Share | ' | ||||||||
The following is a reconciliation of earnings per share and the weighted-average common shares outstanding for purposes of computing basic and diluted net income per share (in thousands except per share amounts): | |||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
2013 | 2012 | ||||||||
Numerator: | |||||||||
Net income | $ | 3,256 | $ | 4,165 | |||||
Denominator: | |||||||||
Basic weighted-average common shares outstanding | 114,666 | 110,867 | |||||||
Effect of dilutive securities: | |||||||||
Stock awards and options | 3,649 | 5,652 | |||||||
Warrants | 5,227 | 9,262 | |||||||
Diluted weighted-average common shares outstanding | 123,542 | 125,781 | |||||||
Net income per share, basic | $ | 0.03 | $ | 0.04 | |||||
Net income per share, diluted | $ | 0.03 | $ | 0.03 | |||||
Revenues from Unaffiliated Customers by Geographic Regions and Significant Geographic Area | ' | ||||||||
Revenues by geographic area are as follows (in thousands): | |||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
2013 | 2012 | ||||||||
Americas | $ | 34,498 | $ | 32,306 | |||||
Asia/Pacific | 16,830 | 20,553 | |||||||
Total revenues | $ | 51,328 | $ | 52,859 | |||||
Additional Information as to Company's Revenue from Operations in most Significant Geographical Areas | ' | ||||||||
Additional information as to the Company’s revenue from operations in the most significant geographical areas is set forth below (in thousands): | |||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
2013 | 2012 | ||||||||
United States | $ | 33,479 | $ | 32,066 | |||||
Japan | $ | 14,581 | $ | 19,532 | |||||
Sharebased_Compensation_Tables
Share-based Compensation (Tables) | 3 Months Ended | ||||
Sep. 30, 2013 | |||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||
Assumptions for Fair Value Measurement of Stock Options | ' | ||||
For the three months ended September 30, 2012, the fair value of stock option awards was estimated using the Black-Scholes option-pricing model with the following assumptions and weighted-average fair values: | |||||
Three Months Ended | |||||
September 30, | |||||
2013 | 2012 | ||||
Risk-free interest rate | N/A | 0.82% and 0.88% | |||
Dividend yield | N/A | — | % | ||
Expected life in years | N/A | 4.0 - 6.0 | |||
Expected volatility | N/A | 126 | % |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies Components of Inventory (Details) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ' | ' |
Finished goods | $6,192 | $5,273 |
Raw materials | 4,433 | 5,251 |
Total inventory | $10,625 | $10,524 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies Summary of Computation of Net Income Per Share (Details) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Numerator: | ' | ' |
Net income | $3,256 | $4,165 |
Denominator: | ' | ' |
Basic weighted-average common shares outstanding (in shares) | 114,666 | 110,867 |
Effect of dilutive securities: | ' | ' |
Stock awards and options (in shares) | 3,649 | 5,652 |
Warrants (in shares) | 5,227 | 9,262 |
Diluted weighted-average common shares outstanding (in shares) | 123,542 | 125,781 |
Basic (in dollars per share) | $0.03 | $0.04 |
Diluted (in dollars per share) | $0.03 | $0.03 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies Revenue from Unaffiliated Customers by Geographic Regions and Significant Geographic Area (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Segment Reporting Information | ' | ' |
Total revenues | $51,328 | $52,859 |
Americas | ' | ' |
Segment Reporting Information | ' | ' |
Total revenues | 34,498 | 32,306 |
Asia Pacific | ' | ' |
Segment Reporting Information | ' | ' |
Total revenues | 16,830 | 20,553 |
UNITED STATES | ' | ' |
Segment Reporting Information | ' | ' |
Total revenues | 33,479 | 32,066 |
JAPAN | ' | ' |
Segment Reporting Information | ' | ' |
Total revenues | $14,581 | $19,532 |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | ||
Share data in Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2013 |
Segment | |||
Summary Of Significant Accounting Policies | ' | ' | ' |
Foreign currency transaction gain (loss), realized | ($147,000) | ($55,000) | ' |
Derivative instruments, gain (loss) realized in income, net | -149,000 | ' | ' |
Money back guarantee period | '30 days | ' | ' |
Percent of restocking fee | 10.00% | ' | ' |
Reserve for sales returns | 1,041,000 | ' | 648,000 |
Research and development | 307,000 | 514,000 | ' |
Income tax expenses | 1,852,000 | 2,701,000 | ' |
Effective tax rate | 35.60% | ' | ' |
Statutory tax rate | 35.00% | ' | ' |
Common shares issuable upon exercise of warrants or rights | 0.7 | 0.5 | ' |
Number of geographic segments | 2 | ' | ' |
JAPAN | ' | ' | ' |
Summary Of Significant Accounting Policies | ' | ' | ' |
Long-lived assets | 2,900,000 | ' | 3,000,000 |
UNITED STATES | ' | ' | ' |
Summary Of Significant Accounting Policies | ' | ' | ' |
Long-lived assets | 5,000,000 | ' | 4,800,000 |
Cash Accounts Held Primarily At Financial Institution | ' | ' | ' |
Summary Of Significant Accounting Policies | ' | ' | ' |
Concentration of credit risk | 15,400,000 | ' | ' |
Investment Management Account At Another Financial Institution | ' | ' | ' |
Summary Of Significant Accounting Policies | ' | ' | ' |
Concentration of credit risk | $12,500,000 | ' | ' |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |
Mar. 22, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | |
Class of Stock [Line Items] | ' | ' | ' | ' |
Stock issued upon exercise of warrants | ' | 1,800,000 | ' | ' |
Stock repurchased amount | $5,000,000 | ' | ' | ' |
Payment to purchased the full shares authorized | ' | $2,865,000 | $0 | $5,000,000 |
Common stock | ' | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' | ' |
Shares surrendered as payment of tax withholding (in shares) | ' | -54,000 | ' | ' |
Repurchase of Company stock (in shares) | ' | 1,163,000 | ' | ' |
Sharebased_Compensation_Detail
Share-based Compensation (Details) (USD $) | 3 Months Ended | 3 Months Ended | 3 Months Ended | ||||||||
In Millions, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Nov. 21, 2006 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
Employee Stock Option | 2007 Long-Term Incentive Plan | 2007 Long-Term Incentive Plan | 2007 Long-Term Incentive Plan | 2007 Long-Term Incentive Plan | 2010 Long-Term Incentive Plan | 2010 Long-Term Incentive Plan | 2010 Long-Term Incentive Plan | ||||
Minimum | Maximum | Minimum | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | 6,900,000 | ' | ' |
Right to purchase common stock, minimum price | ' | ' | ' | ' | $0.21 | ' | ' | ' | $0.63 | ' | ' |
Right to purchase common stock, maximum price | ' | ' | ' | ' | $1.50 | ' | ' | ' | $3.53 | ' | ' |
Aggregate number of shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 3,000,000 | ' | ' |
Common stock shares outstanding | 117,713,000 | ' | 117,088,000 | ' | 3,600,000 | ' | ' | ' | ' | ' | ' |
Number of shares available for issuance | ' | ' | ' | ' | 27,000 | ' | ' | ' | 449,000 | ' | ' |
Share based payment award, vesting period | ' | ' | ' | ' | ' | ' | '1 year | '3 years | ' | '1 year | '4 years |
Contractual term of stock options granted | ' | ' | ' | ' | ' | ' | ' | ' | '10 years | ' | ' |
Stock based compensation reflect in additional paid in capital | $0.80 | $0.50 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options awarded during period | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' |
Sharebased_Compensation_Fair_V
Share-based Compensation Fair Value Assumptions (Details) (Employee Stock Option) | 3 Months Ended |
Sep. 30, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Expected dividend rate | 0.00% |
Expected volatility rate | 126.00% |
Minimum | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Risk-free interest rate | 0.82% |
Expected term (in years) | '4 years |
Maximum | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Risk-free interest rate | 0.88% |
Expected term (in years) | '6 years |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 3 Months Ended | 6 Months Ended | 0 Months Ended | 1 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Nov. 01, 2013 | Oct. 18, 2013 | Oct. 18, 2013 | Oct. 18, 2013 | Oct. 18, 2013 | |
Subsequent Event | October 2013 Term Loan | October 2013 Delayed Draw Term Loan | LIBOR | Reference Rate at the Company's Option | ||||
Secured Debt | Secured Debt | Secured Debt | Secured Debt | |||||
Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | |||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate shares of common stock (in shares) | ' | ' | ' | 16,326,530 | ' | ' | ' | ' |
Aggregate purchase price | $2,865,000 | $0 | $5,000,000 | $40,000,000 | ' | ' | ' | ' |
Maximum capacity on draw | ' | ' | ' | ' | $47,000,000 | $20,000,000 | ' | ' |
Interest rate per annum over the variable basis | ' | ' | ' | ' | ' | ' | 7.50% | 6.50% |
Minimum rate or LIBOR added to stated interest rate | ' | ' | ' | ' | ' | ' | 1.25% | ' |
Variable rate basis | ' | ' | ' | ' | ' | ' | 'LIBOR | ' |