Lifevantage Corp
For the period ended Mar 31, 2024. Filed May 2, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2024 · Filed May 2, 2024
LFVN$5.22+3.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2023-12-31; filed 2024-01-30.
0000849146-24-000016
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-03-31; filed 2024-05-02.
0000849146-24-000047
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 72 previous paragraphs and 77 current paragraphs.
44 unchanged; 25 reworded; 8 added; 3 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
Three and Nine Months Ended March 31, 2024 and 2023
Current report
2024 Credit Facility
Current report
On April 12, 2024, we entered into a Loan Agreement (the “Loan Agreement”) with Bank of America, N.A., as Lender (the “Lender”). In connection with the Loan Agreement and on the same date, we, Lifeline Nutraceuticals Corporation, as Guarantor (the “Guarantor”), and the Lender also entered into a Continuing and Unconditional Guaranty (the “Continuing and Unconditional Guaranty”) and a Security and Pledge Agreement (the “Security and Pledge Agreement”). The Loan Agreement provides for a revolving line of credit in an aggregate principal amount not to exceed $5.0 million (the “Line of Credit”) and collectively with the Loan Agreement, the Continuing and Unconditional Guaranty and the Security and Pledge Agreement, the “2024 Credit Facility.”
Current report
In the event we borrow under the Line of Credit, interest will be payable commencing May 31, 2024, and then on the last day of each month thereafter until payment in full of all principal outstanding under the Line of Credit, with all unpaid principal and interest due on April 12, 2027 (the “Expiration Date”). The Line of Credit will bear interest at a rate per year equal to the sum of (i) the greater of the Term SOFR Daily Floating Rate (as defined in the Loan Agreement) or 0.00%, plus (ii) 2.00%. Amounts under the Line of Credit may be repaid and re-borrowed from time to time until the Expiration Date.
Current report
Our obligations under the Loan Agreement are secured by a security interest in substantially all of the assets of the Company and the Guarantor, as further provided for in the Security and Pledge Agreement. Pursuant to the Continuing and Unconditional Guaranty, the Guarantor guarantees and promises to pay promptly to the Lender all indebtedness of the Company when due.
Current report
The Loan Agreement contains customary covenants, including affirmative and negative covenants that in certain circumstances restrict our ability to incur additional indebtedness, make certain investments, purchase or otherwise acquire all or substantially all the assets or equity interests of other companies, or transfer any part of the business or any assets of the Company or the Guarantor. The Loan Agreement requires us to maintain specified financial ratios and satisfy certain financial condition tests.
Current report
The Loan Agreement contains certain customary events of default, including, among other things, our failure to make required payments under the Loan Agreement, certain breaches of representations made by us or the Guarantor, insolvency or bankruptcy of the Company or the Guarantor, failure to have an enforceable first lien or security interest in any property given as security for the Loan Agreement, or our failure to comply with covenants set forth in the Loan Agreement. If an event of default occurs under the Loan Agreement, the obligation of the Lender to make any additional credit available to us may be terminated and the amounts outstanding may become immediately due and payable in the discretion of the Lender, provided that in the event of insolvency or bankruptcy of the Company or the Guarantor, all debts outstanding under the Loan Agreement will automatically become due and payable. Upon the occurrence of any default or after maturity, all amounts outstanding under the Loan Agreement will at the option of the Lender bear interest at a rate which is 2.00% higher than the rate of interest otherwise provided under the Loan Agreement.
Current report
As of the date of this report, we have not borrowed under the 2024 Credit Facility.
Removed paragraphs (3)
Previous report
Three and Six Months Ended December 31, 2023 and 2022
Previous report
The Credit Facility, as amended, contains customary covenants, including affirmative and negative covenants that, among other things, restrict our ability to create certain types of liens, incur additional indebtedness, declare or pay dividends on or redeem capital stock without prior approval, make other payments to holders of our equity interests, make certain investments, purchase or otherwise acquire all or substantially all the assets or equity interests of other companies, sell assets or enter into consolidations, mergers or transfers of all or any substantial part of our assets.
Previous report
The Credit Facility, as amended, contains cross-default provisions, whereby a default under the terms of certain indebtedness or an uncured default of a payment or other material obligation of ours under a material contract of ours will cause a default on the remaining indebtedness under the 2016 Credit Facility, as amended. Our obligations under the 2016 Credit Facility, as amended, are secured by a security interest in substantially all of our assets.
Reworded paragraphs (25)
Previous wording
Our products are the Protandim® line of scientifically-validated dietary supplements, LifeVantage® Omega+, ProBio, IC Bright®, Rise AM, Reset PM, D3+ and Daily Wellness dietary supplements, TrueScience®, our line of skin, bath & body, target relief, and hair care products, Petandim®, our companion pet supplement formulated to combat oxidative stress in dogs, AXIO®, our nootropic energy drink mixes, and PhysIQ™ our smart weight management system. The Protandim® product line includes Protandim® NRF1 Synergizer®, Protandim® Nrf2 Synergizer®, and Protandim® NAD Synergizer®. The Protandim® NRF1 Synergizer® is formulated to increase cellular energy and performance by boosting mitochondria production to improve cellular repair and slow cellular aging. The Protandim® Nrf2 Synergizer® contains a proprietary blend of ingredients and has been shown to combat oxidative stress and enhance energy production by increasing the body’s natural antioxidant protection at the genetic level, inducing the production of naturally-occurring protective antioxidant enzymes, including superoxide dismutase, catalase, and glutathione synthase. The Protandim® NAD Synergizer® was specifically formulated to target cell signaling pathways involved in the synthesis and recycling of a specific molecule called NAD (nicotinamide adenine dinucleotide), and it has been shown to double sirtuin activity, supporting increased health, focus, energy, mental clarity and mood. Use of the three Protandim® products together, marketed as the Protandim® Tri-Synergizer, has been shown to produce synergistic benefits greater than using the single products on their own. LifeVantage® Omega+ is a dietary supplement that combines DHA and EPA Omega-3 fatty acids, omega-7 fatty acids, and vitamin D3 to support cognitive health, cardiovascular health, skin health, and the immune system. LifeVantage® ProBio is a dietary supplement designed to support optimal digestion and immune system function. LifeVantage® Daily Wellness is a dietary supplement designed to support immune health. IC Bright® is a supplement to help support eye and brain health, reduce eye fatigue and strain, supports cognitive functions and may help support normal sleep patterns. Our Nrf2 enhanced TrueScience® line of anti-aging skin and hair care, bath & body, and targeted relief products includes TrueScience® Facial Cleanser, TrueScience® Perfecting Lotion, TrueScience® Eye Serum, TrueScience® Anti-Aging Cream, TrueScience® Hand Cream, TrueScience® Invigorating Shampoo, TrueScience® Nourishing Conditioner, TrueScience® Scalp Serum, TrueScience® TrueRenew Daily Firming Complex, TrueScience® TruePout Advanced Lip Duo, and TrueScience® Liquid Collagen. TrueScience® Liquid Collagen activates, replenishes, and maintains collagen to support firmness and elasticity from within. Petandim® is a supplement specially formulated to combat oxidative stress in dogs through Nrf2 activation. AXIO® is our line of our nootropic energy drink mixes formulat…
Excerpt shortened here; the source contains the full paragraph.
Current wording
Our products are the Protandim® line of scientifically-validated dietary supplements, LifeVantage® Omega+, ProBio, IC Bright®, Rise AM, Reset PM, D3+ and Daily Wellness dietary supplements, TrueScience®, our line of skin, bath & body, targeted relief, and hair care products, Petandim®, our companion pet supplement formulated to combat oxidative stress in dogs, AXIO®, our nootropic energy drink mixes, and PhysIQ™ our smart weight management system. The Protandim® product line includes Protandim® NRF1 Synergizer®, Protandim® Nrf2 Synergizer®, and Protandim® NAD Synergizer®. The Protandim® NRF1 Synergizer® is formulated to increase cellular energy and performance by boosting mitochondria production to improve cellular repair and slow cellular aging. The Protandim® Nrf2 Synergizer® contains a proprietary blend of ingredients and has been shown to combat oxidative stress and enhance energy production by increasing the body’s natural antioxidant protection at the genetic level, inducing the production of naturally-occurring protective antioxidant enzymes, including superoxide dismutase, catalase, and glutathione synthase. The Protandim® NAD Synergizer® was specifically formulated to target cell signaling pathways involved in the synthesis and recycling of a specific molecule called NAD (nicotinamide adenine dinucleotide), and it has been shown to double sirtuin activity, supporting increased health, focus, energy, mental clarity and mood. Use of the three Protandim® products together, marketed as the Protandim® Tri-Synergizer®, has been shown to produce synergistic benefits greater than using the single products on their own. LifeVantage® Omega+ is a dietary supplement that combines DHA and EPA Omega-3 fatty acids, omega-7 fatty acids, and vitamin D3 to support cognitive health, cardiovascular health, skin health, and the immune system. LifeVantage® ProBio is a dietary supplement designed to support optimal digestion and immune system function. LifeVantage® Daily Wellness is a dietary supplement designed to support immune health. IC Bright® is a dietary supplement to help support eye and brain health, reduce eye fatigue and strain, support cognitive functions and may help support normal sleep patterns. Our Nrf2 enhanced TrueScience® line of anti-aging skin, hair, and bath & body products includes TrueScience® Perfecting Lotion, TrueScience® TrueRenew Daily Firming Complex, TrueScience® TruePout Advanced Lip Duo, TrueScience® TrueClean Refining Cleanser, TrueScience® TrueLift Illuminating Eye Cream, TrueScience® TrueHydrate Brightening Moisturizer, TrueScience® Hand Cream, TrueScience® TrueProtect Daily Mineral Sunstick, TrueScience® Invigorating Shampoo, TrueScience® Nourishing Conditioner, TrueScience® Scalp Serum, and TrueScience® Liquid Collagen. TrueScience® Liquid Collagen activates, replenishes, and maintains collagen to support firmness and elasticity from within. Petandim® is a supplement specially formulated to combat oxidative stress in dogs …
Excerpt shortened here; the source contains the full paragraph.
Previous wording
On March 1, 2023, we launched a new compensation plan for our Independent Consultants in the United States, Japan, Australia, and New Zealand markets. We refer to this compensation plan as our Evolve Compensation Plan.
Current wording
On March 1, 2023, we launched a new compensation plan for our Independent Consultants in the United States, Japan, Australia, and New Zealand markets. We refer to this compensation plan as our Evolve Compensation Plan. On February 1, 2024, we launched the Evolve Compensation Plan in the Canada, Mexico, and Europe markets.
Previous wording
Revenue. We generated net revenue of $51.6 million and $53.7 million during the three months ended December 31, 2023 and 2022, respectively. We generated net revenue of $103.0 million and $105.4 million during thesix months ended December 31, 2023 and 2022, respectively. Foreign currency fluctuations negatively impacted our revenue $0.2 million, or 0.4% and $0.5 million, or 0.4%, during the three and six months ended December 31, 2023, respectively.
Current wording
Revenue. We generated net revenue of $48.2 million and $53.7 million during the three months ended March 31, 2024 and 2023, respectively. We generated net revenue of $151.2 million and $159.2 million during thenine months ended March 31, 2024 and 2023, respectively. Foreign currency fluctuations negatively impacted our revenue $0.8 million, or 1.5% and $1.3 million, or 0.8%, during the three and nine months ended March 31, 2024, respectively.
Previous wording
Americas. The following table sets forth revenue for the three and six months ended December 31, 2023 and 2022 for the Americas region (in thousands):
Current wording
Americas. The following table sets forth revenue for the three and nine months ended March 31, 2024 and 2023 for the Americas region (in thousands):
Previous wording
Revenue in the Americas region for the three and six months ended December 31, 2023 decreased $0.6 million, or 1.6%, and increased $1.5 million, or 2.0%, respectively, from the prior year periods. Total Active Accounts decreased 9.5% in the region compared to the prior year period. The average revenue per account increased due to changes in our product sales mix, driven primarily by our new TrueScience®Liquid Collagen product. Total TrueScience®Liquid Collagen related revenue, including the product when sold as part of a bundle, was approximately $10.5 million and $20.4 million for the three and six months ended December 31, 2023, respectively, compared to approximately $9.3 million and $16.4 million in the prior year periods, respectively.
Current wording
Revenue in the Americas region for the three and nine months ended March 31, 2024 decreased $2.3 million, or 5.9%, and $0.8 million, or 0.7%, respectively, from the prior year periods. Total Active Accounts decreased 13.9% in the region compared to the prior year period. The average revenue per account increased due to changes in our product sales mix, driven primarily by our new TrueScience®Liquid Collagen product. Total TrueScience®Liquid Collagen related revenue, including the product when sold as part of a bundle, was approximately $9.3 million and $29.7 million for the three and nine months ended March 31, 2024, respectively, compared to approximately $9.9 million and $26.3 million in the prior year periods, respectively.
Previous wording
Asia/Pacific & Europe. The following table sets forth revenue for the three and six months ended December 31, 2023 and 2022 for the Asia/Pacific & Europe region and its principal markets (in thousands):
Current wording
Asia/Pacific & Europe. The following table sets forth revenue for the three and nine months ended March 31, 2024 and 2023 for the Asia/Pacific & Europe region and its principal markets (in thousands):
Previous wording
Revenue in the Asia/Pacific & Europe region decreased $1.4 million, or 10.0% and $4.0 million, or 13.5%, for the three and six months ended December 31, 2023, respectively as compared to the prior year periods. Total Active Accounts in the region decreased 18.2% compared to the prior year period. Decreases in total Active Accounts, the closure of our e-commerce business in China, along with negative impacts from foreign currency exchange rate fluctuations, have contributed to the overall decrease in revenue within the Asia/Pacific & Europe region.
Current wording
Revenue in the Asia/Pacific & Europe region decreased $3.2 million, or 22.4% and $7.1 million, or 16.4%, for the three and nine months ended March 31, 2024, respectively, as compared to the prior year periods. Total Active Accounts in the region decreased 17.1% compared to the prior year period. Decreases in total Active Accounts, the closure of our e-commerce business in China, along with negative impacts from foreign currency exchange rate fluctuations, have contributed to the overall decrease in revenue within the Asia/Pacific & Europe region.
Previous wording
Overall, revenue in the Asia/Pacific & Europe region was negatively impacted by foreign currency exchange rate fluctuations in the amount of approximately $0.3 million, or 2.0% and $0.6 million, or 2.1%, during the three and six months ended December 31, 2023, respectively, as compared to the prior year periods, mainly due to currency fluctuations in Japan. Revenue in Japan was negatively impacted by foreign exchange rate fluctuations in the amount of approximately $0.3 million, or 4.5% and $0.7 million, or 4.2%, during the three and six months ended December 31, 2023, respectively, as compared to the prior year periods. On a constant currency basis, revenue in Japan increased 3.9% and decreased 0.3% for the three and six months ended December 31, 2023, respectively, as compared to the prior year periods. The decrease in revenue on a constant currency basis in Japan during the six months ended December 31, 2023 was due to our Active Accounts in that region increasing their purchases in September 2022, ahead of price increases that went into effect on October 1, 2022. The decrease was offset by increases in the average revenue per account, primarily from TrueScience®Liquid Collagen related revenue which started selling in Japan in March 2023. Revenue related to TrueScience®Liquid Collagen was approximately $1.8 million and $2.9 million for the three and six months ended December 31, 2023, respectively.
Current wording
Overall, revenue in the Asia/Pacific & Europe region was negatively impacted by foreign currency exchange rate fluctuations in the amount of approximately $0.9 million, or 6.3% and $1.5 million, or 3.5%, during the three and nine months ended March 31, 2024, respectively, as compared to the prior year periods, mainly due to currency fluctuations in Japan. Revenue in Japan was negatively impacted by foreign exchange rate fluctuations in the amount of approximately $0.8 million, or 9.3% and $1.4 million, or 6.0%, during the three and nine months ended March 31, 2024, respectively, as compared to the prior year periods. On a constant currency basis, revenue in Japan decreased 14.5% and 5.2% for the three and nine months ended March 31, 2024, respectively, as compared to the prior year periods. The decrease in revenue on a constant currency basis in Japan during nine months ended March 31, 2024 was due to our Active Accounts in that region increasing their purchases in September 2022, ahead of price increases that went into effect on October 1, 2022. The decrease was offset by increases in the average revenue per account, primarily from TrueScience®Liquid Collagen related revenue which started selling in Japan in March 2023. Revenue related to TrueScience®Liquid Collagen was approximately $0.8 million and $3.7 million for the three and nine months ended March 31, 2024, respectively.
Previous wording
Globally, our sales and marketing efforts continue to be directed toward strengthening our core business through our fiscal year initiatives and building our worldwide revenue. During fiscal year 2023, we launched our TrueScience®Liquid Collagen to our Japan, Australia, and New Zealand markets along with launching our new LifeVantage® Rise AM, LifeVantage® Reset PM and LifeVantage® D3+ products. Revenue related to these products has offset decreases in our Active Accounts in these regions by increasing our overall average revenue per account. We have seen and continue to expect that these product launches will help drive revenue growth globally through increased average order size and increased ability to attract and retain new independent consultants and customers with a compelling product lineup.
Current wording
Globally, our sales and marketing efforts continue to be directed toward strengthening our core business through our fiscal year initiatives and building our worldwide revenue. In March 2024, we launched our TrueScience® TrueClean Refining Cleanser, TrueLift Illuminating Eye Cream, and TrueHydrate Brightening Moisturizer, which, together with the launch of TrueRenew Daily Firming Complex in October 2023, resulted in the completion of the launch of our new TrueScience® Activated Skin Care Collection. We also launched TrueScience®TrueProtect Daily Mineral Sunstick. During fiscal year 2024, we launched our TrueScience®Liquid Collagen in our Philippines, Canada, Mexico, and Europe markets. Revenue related to these products has offset decreases in our Active Accounts in these regions by increasing our overall average revenue per account. We have seen and continue to expect that these product launches will help drive revenue growth globally through increased average order size and increased ability to attract and retain new independent consultants and customers with a compelling product lineup.
Previous wording
Cost of Sales. Cost of sales were $11.1 million and $11.8 million for the three months ended December 31, 2023 and 2022, respectively, resulting in gross profit percentages of 78.6% and 78.1%, respectively. Cost of sales were $21.2 million and $21.7 million for thesix months ended December 31, 2023 and 2022, respectively, resulting in gross profit percentages of 79.4% and 79.4%, respectively. The decrease in cost of sales as a percentage of revenue is primarily due to price increases and higher shipping revenues, together with a shift in product mix, changes in raw material and manufacturing related costs, shipping to customer expenses, and warehouse fulfillment expenses during the current period.
Current wording
Cost of Sales. Cost of sales were $10.2 million and $10.6 million for the three months ended March 31, 2024 and 2023, respectively, resulting in gross profit percentages of 78.9% and 80.2%, respectively. Cost of sales were $31.4 million and $32.3 million for thenine months ended March 31, 2024 and 2023, respectively, resulting in gross profit percentages of 79.2% and 79.7%, respectively. The increase in cost of sales as a percentage of revenue is primarily due to a shift in product mix, changes in raw material and manufacturing related costs, shipping to customer expenses, and warehouse fulfillment expenses during three and nine months ended March 31, 2024.
Previous wording
Commissions and Incentives. Commissions and incentives expenses during the three months ended December 31, 2023 were $21.8 million or 42.1% of revenue as compared to $23.6 million or 43.9% of revenue for the three months ended December 31, 2022. Commissions and incentives expenses during thesix months ended December 31, 2023 were $44.2 million or 42.9% of revenue as compared to $47.4 million or 44.9% of revenue for thesix months ended December 31, 2022. The decrease in commissions and incentives expenses as a percentage of revenue compared to the prior year periods is due to decreases in commission expenses as a result of the change to our Evolve Compensation Plan in March 2023 in the United States, Australia, New Zealand, and Japan markets. In addition, the timing and magnitude of our various promotional and incentive programs has resulted in decreased promotional and incentives expenses.
Current wording
Commissions and Incentives. Commissions and incentives expenses during the three months ended March 31, 2024 were $19.7 million or 40.9% of revenue as compared to $23.8 million or 44.3% of revenue for the three months ended March 31, 2023. Commissions and incentives expenses during thenine months ended March 31, 2024 were $63.9 million or 42.3% of revenue as compared to $71.2 million or 44.7% of revenue for thenine months ended March 31, 2023. The decrease in commissions and incentives expenses as a percentage of revenue compared to the prior year periods is due to changes in sales mix, timing and magnitude of our various promotional and incentive programs, and decreases in commission expenses as a result of the change to our Evolve Compensation Plan in March 2023 in the United States, Australia, New Zealand, and Japan markets, as well as in Canada, Mexico, and Europe markets in February 2024.
Previous wording
Selling, General and Administrative. Selling, general and administrative expenses during the three months ended December 31, 2023 were $20.1 million or 38.9% of revenue as compared to $19.6 million or 36.5% of revenue for the three months ended December 31, 2022. Selling, general and administrative expenses during the six months ended December 31, 2023 were $38.0 million or 36.9% of revenue as compared to $36.3 million or 34.4% of revenue for the six months ended December 31, 2022. The increase in selling, general and administrative expenses as a percentage of revenue during the three and six months ended December 31, 2023 compared to the prior year periods is primarily due to increased proxy contest related expenses. These increases have been offset by decreases in event, office lease and professional services expenses.
Current wording
Selling, General and Administrative. Selling, general and administrative expenses during the three months ended March 31, 2024 were $16.4 million or 34.0% of revenue as compared to $17.7 million or 33.0% of revenue for the three months ended March 31, 2023. Selling, general and administrative expenses during the nine months ended March 31, 2024 were $54.5 million or 36.0% of revenue as compared to $54.0 million or 33.9% of revenue for the nine months ended March 31, 2023. The increase in selling, general and administrative expenses as a percentage of revenue during the three and nine months ended March 31, 2024 compared to the prior year periods is primarily due to increased proxy contest related expenses. These increases have been partially offset by decreases in event costs, endorsement agreements, employee compensation related expenses, office lease and professional services expenses.
Previous wording
Total Other Income (Expense). During thethree months ended December 31, 2023 we recognized total net other income of $0.1 million as compared to $0.2 million for thethree months ended December 31, 2022. During thesix months ended December 31, 2023 we recognized total net other income of $0.2 million as compared to expense of $0.3 million for thesix months ended December 31, 2022. Total net other income (expense) for the three and six months ended December 31, 2023 and 2022 consisted primarily of interest income, offset by foreign currency gains and losses.
Current wording
Total Other Income (Expense). During thethree months ended March 31, 2024 we recognized total net other expense of $13,000 as compared to income of $0.1 million for thethree months ended March 31, 2023. During thenine months ended March 31, 2024 we recognized total net other income of $0.2 million as compared to expense of $0.2 million for thenine months ended March 31, 2023. Total net other income (expense) for the three and nine months ended March 31, 2024 and 2023 consisted primarily of interest income, offset by foreign currency gains and losses.
Previous wording
Income Tax Expense. We recognized income tax benefit of $0.5 million and $0.3 million for the three and six months ended December 31, 2023, respectively, as compared to income tax benefit of $17,000 and income tax expense of $0.2 million for the three and six months ended December 31, 2022, respectively.
Current wording
Income Tax Expense. We recognized income tax expense of $0.3 million and $7,000 for the three and nine months ended March 31, 2024, respectively, as compared to income tax expense of $0.6 million and $0.9 million for the three and nine months ended March 31, 2023, respectively.
Previous wording
The change in the effective tax rate for the six months ended December 31, 2023 compared to the prior year period was primarily due to changes in taxable income and the impact of discrete items.
Current wording
The change in the effective tax rate for the nine months ended March 31, 2024 compared to the prior year period was primarily due to changes in taxable income and the impact of discrete items.
Previous wording
Our primary liquidity and capital resource requirements are to finance the cost of our planned operating expenses and working capital (principally inventory purchases), fund capital expenditures, and service our debt, which includes any outstanding balances under the Credit Facility. We have generally relied on cash flow from operations to fund operating activities and we have, at times, incurred long-term debt in order to fund stock repurchases and strategic transactions.
Current wording
Our primary liquidity and capital resource requirements are to finance the cost of our planned operating expenses and working capital (principally inventory purchases), fund capital expenditures, and service our debt, which includes any outstanding balances under a credit facility. We have generally relied on cash flow from operations to fund operating activities and we have, at times, incurred long-term debt in order to fund stock repurchases and strategic transactions.
Previous wording
As of December 31, 2023, our available liquidity was $17.3 million, which consisted of available cash and cash equivalents. This represents a decrease of $4.3 million from the $21.6 million in cash and cash equivalents as of June 30, 2023.
Current wording
As of March 31, 2024, our available liquidity was $17.4 million, which consisted of available cash and cash equivalents. This represents a decrease of $4.2 million from the $21.6 million in cash and cash equivalents as of June 30, 2023.
Previous wording
During the six months ended December 31, 2023, our net cash provided by operating activities was $6.5 million as compared to net cash used in operating activities of $0.4 million during the six months ended December 31, 2022.
Current wording
During the nine months ended March 31, 2024, our net cash provided by operating activities was $9.6 million as compared to $3.1 million during the nine months ended March 31, 2023.
Previous wording
During the six months ended December 31, 2023, our net cash used in investing activities was $1.7 million, as a result of the purchase of fixed assets. During the six months ended December 31, 2022, our net cash used in investing activities was $1.6 million, as a result of the purchase of fixed assets.
Current wording
During the nine months ended March 31, 2024, our net cash used in investing activities was $2.0 million, as a result of the purchase of fixed assets. During the nine months ended March 31, 2023, our net cash used in investing activities was $2.6 million, as a result of the purchase of fixed assets.
Previous wording
Cash used in financing activities during the six months ended December 31, 2023 was $9.2 million as a result of our payment of cash dividends, repurchases of common stock, and shares purchased as payment of tax withholding upon vesting of equity awards, partially offset by proceeds from stock issued under our employee stock purchase plan. Cash used in financing activities during the six months ended December 31, 2022 was $0.7 million as a result of our repurchase of common stock, and shares purchased as payment of taxwithholding upon vesting of equity awards, partially offset by proceeds from stock issued under our employee stock purchase plan and stock option exercises.
Current wording
Cash used in financing activities during the nine months ended March 31, 2024 was $11.7 million as a result of our payment of cash dividends, repurchases of common stock, and shares purchased as payment of tax withholding upon vesting of equity awards, partially offset by proceeds from stock issued under our employee stock purchase plan. Cash used in financing activities during the nine months ended March 31, 2023 was $1.0 million as a result of our repurchase of common stock, and shares purchased as payment of taxwithholding upon vesting of equity awards, partially offset by proceeds from stock issued under our employee stock purchase plan and stock option exercises.
Previous wording
At December 31, 2023 and June 30, 2023, the total amount of our foreign subsidiary cashwas $8.2 millionand $6.2 million, respectively. The federal tax reform legislation that was passed into law during December 2017 enacted a 100% dividend deduction for greater than 10% owned foreign corporations. Therefore, in the future, if needed, we expect to be able to repatriate cash from foreign subsidiaries without paying additional U.S. taxes.
Current wording
At March 31, 2024 and June 30, 2023, the total amount of our foreign subsidiary cashwas $7.6 millionand $6.2 million, respectively. The federal tax reform legislation that was passed into law during December 2017 enacted a 100% dividend deduction for greater than 10% owned foreign corporations. Therefore, in the future, if needed, we expect to be able to repatriate cash from foreign subsidiaries without paying additional U.S. taxes.
Previous wording
At December 31, 2023, we had working capital (current assets minus current liabilities) of $15.6 million, compared to working capital of $24.7 million at June 30, 2023. We believe that our cash and cash equivalents balances and our ongoing cash flow from operations will be sufficient to satisfy our cash requirements for at least the next 12 months. The majority of our historical expenses have been variable in nature and as such, a potential reduction in the level of revenue would reduce our cash flow needs. In the event that our current cash balances and future cash flow from operations are not sufficient to meet our obligations or strategic needs, we would consider raising additional funds, which may not be available on terms that are acceptable to us, or at all. Our credit facility, however, contains covenants that restrict our ability to raise additional funds in the debt markets and repurchase our equity securities without prior approval from the lender. Additionally, our credit facility, as amended, provides for a revolving loan facility in an aggregate principal amount up to $5.0 million. We would also consider realigning our strategic plans including a reduction in capital spending and expenses.
Current wording
At March 31, 2024, we had working capital (current assets minus current liabilities) of $15.3 million, compared to working capital of $24.7 million at June 30, 2023. We believe that our cash and cash equivalents balances and our ongoing cash flow from operations will be sufficient to satisfy our cash requirements for at least the next 12 months. The majority of our historical expenses have been variable in nature and as such, a potential reduction in the level of revenue would reduce our cash flow needs. In the event that our current cash balances and future cash flow from operations are not sufficient to meet our obligations or strategic needs, we would consider raising additional funds, which may not be available on terms that are acceptable to us, or at all. Our 2024 Credit Facility (as defined below), provides for a revolving line of credit in an aggregate principal amount not to exceed $5.0 million. We would also consider realigning our strategic plans including a reduction in capital spending and expenses.
Previous wording
We entered into a loan modification agreement ("Amendment No. 4"), effective September 30, 2022, which further amended the Credit Facility. Amendment No. 4 revised the calculation of the minimum fixed charge coverage ratio (as defined in Amendment No. 4) and allows us to declare and pay dividends, up to $500,000 per quarter, through September 30, 2023. There were no other changes to the covenants or revolving loan facility as set forth in Amendment No. 3.
Current wording
We entered into a loan modification agreement ("Amendment No. 4"), effective September 30, 2022, which further amended the Credit Facility. Amendment No. 4 revised the calculation of the minimum fixed charge coverage ratio (as defined in Amendment No. 4) and allowed us to declare and pay dividends, up to $500,000 per quarter, through September 30, 2023. There were no other changes to the covenants or revolving loan facility as set forth in Amendment No. 3.
Previous wording
As of December 31, 2023, we were in compliance with our financial covenants under the Credit Facility other than the minimum fixed charge coverage ratio. We requested, and were granted, a waiver related to this covenant violation as of December 31, 2023. As of December 31, 2023, there was no balance outstanding on this credit facility.
Current wording
On March 31, 2024, the Credit Facility reached the maturity date and no further loan modifications were entered into. As of March 31, 2024, there was no balance outstanding on this Credit Facility.
Previous wording
During thethree and six months ended December 31, 2023 we recognized expenses of approximately $0.1 million and $0.3 million, respectively, related to obsolete and slow-moving inventory. During thethree and six months ended December 31, 2022 we recognized expenses of approximately $0.3 million and $0.5 million, respectively, related to obsolete and slow-moving inventory.
Current wording
During thethree and nine months ended March 31, 2024 we recognized expenses of approximately $0.4 million and $0.7 million, respectively, related to obsolete and slow-moving inventory. During thethree and nine months ended March 31, 2023 we recognized expenses of approximately $0.3 million and $0.7 million, respectively, related to obsolete and slow-moving inventory.