Message #1 From:
NewsBot Date: August 15, 2006 05:00:00 AM
VTLV News Vital Living Inc. Announces Second Quarter Results; Vital Living Inc. Reports Net Income for the Three and Six Months Ended June 30, 2006
PHOENIX--(BUSINESS WIRE)--Aug. 15, 2006--Vital Living Inc. (OTCBB: VTLV) today announced its financial results for the six months ended June 30, 2006.
For the Quarter Ended June 30, 2006 Compared With the Quarter Ended June, 2005:
-- Net income available to common stockholders was $401,000, or $0.00 basic and ($0.01) fully diluted loss per share, compared with a $492,000 loss, or $0.00 basic and fully diluted loss per share;
-- Net income from operations increased to $136,000 from a $107,000 loss;
-- Adjusted earnings before interest, taxes, depreciation and amortization was $700,000 compared with $275,000;
-- A one-time gain of $500,000 on the exchange of debt for equity.
For the Six Months Ended June 30, 2006 Compared With the Six Months Ended June, 2005:
-- Net income available to common stockholders was $214,000, or $0.00 basic and ($0.01) fully diluted loss per share, compared with a $1,275,000 loss, or $(0.01) basic and fully diluted loss per share;
-- Net income from operations increased to $246,000 from a $648,000 loss;
-- Adjusted earnings before interest, taxes, depreciation and amortization was $516,000 compared with $325,000;
-- A one-time gain of $500,000 on the exchange of debt for equity.
"I am very proud to inform our stockholders that for the first time in Vital Living's history we reported both an operating profit and net income in the second quarter of 2006. These results demonstrate that our decision to focus the core operations of Vital Living around our flagship product GreensFIRST(R) along with the development and market introduction of a complementary product line has resulted in our enhanced market position," noted Gregg A. Linn, chief operating officer and chief financial officer of Vital Living.
Vital Living Inc. and Subsidiaries
Consolidated Balance Sheets
June 30, Dec. 31,
2006 2005
--------------------------
(Unaudited) (Audited)
Assets
Current Assets
Cash and cash equivalents $ 66,000 $ 192,000
Accounts receivable, trade; net of
allowance for doubtful accounts of
$53,000, each period 1,001,000 488,000
Inventory, net of reserve of $360,000,
each period 47,000 111,000
Prepaid expenses and other current
assets 68,000 61,000
--------------------------
Total Current Assets $ 1,182,000 $ 852,000
Other Assets
Deferred debt issuance costs, net of
accumulated amortization of $492,000
and $446,000, respectively $ 446,000 539,000
Property and equipment, net 23,000 27,000
Goodwill 3,296,000 3,296,000
Other intangibles, net 13,000 14,000
Other non-current assets 15,000 36,000
--------------------------
Total other assets 3,793,000 3,912,000
--------------------------
Total assets $ 4,975,000 $ 4,764,000
==========================
Liabilities and Stockholders Equity
Current liabilities
Accounts payable, trade $ 1,095,000 $ 1,103,000
Accrued research and development - 750,000
Accrued and other currrent liabilities 216,000 221,000
Current portion of long-term debt 401,000 401,000
--------------------------
Total current liabilities 1,712,000 2,475,000
Long-term debt, net of debt discount of
$1,195,000 and $1,442,000, respectively 3,031,000 2,784,000
--------------------------
Total liabilities $ 4,743,000 $ 5,259,000
Commitments and contingencies;
Stockholders' Equity (Deficit)
Preferred Stock, $0.001 par value,
50,000,000 shares authorized:
Preferred stock, Series C, $0.001 par
value, 3,000,000 shares authorized:
0 and 500,000 shares issued and
outstanding $ - $ -
Preferred stock, Series D, $0.001 par
value, 1,000,000 shares authorized:
1,000,000 shares issued and
outstanding
Preferred stock, Series D, $0.001 par
value, 1,000,000 shares authorized:
1,000,000 shares issued and
outstanding 1,000 1,000
Common stock, $0.001 par value,
150,000,000 shares authorized:
138,639,000 and 112,973,000 shares
issued, respectively
138,215,000 and 112,549,000 shares
outstanding, respectively 138,000 112,000
Additional paid-in capital - common 88,386,000 87,899,000
Stock, options, and warrants -
unamortized (609,000) (609,000)
Treasury stock, 424,000 shares at cost (72,000) (72,000)
Accumulated other comprehensive income (49,000) (49,000)
Retained deficit (87,563,000) (87,777,000)
-------------------------
Total Stockholders' Equity (Deficit) 232,000 (495,000)
-------------------------
Total Liabilities and Stockholders'
Equity $ 4,975,000 $ 4,764,000
=========================
VITAL LIVING INC. AND SUBSIDIARIES
Consolidated Statements of Operations
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
---------------------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenue, net $ 1,349,000 $ 1,509,000 $ 2,681,000 $ 2,770,000
Cost of goods sold 605,000 682,000 1,223,000 1,352,000
---------------------------------------------------
Gross profit 744,000 827,000 1,458,000 1,418,000
Administrative
expenses
Salaries and
benefits 161,000 (88,000) 330,000 42,000
Professional and
consulting fees 130,000 275,000 270,000 377,000
Selling, general
and administrative 235,000 112,000 506,000 368,000
Research and
development 79,000 20,000 101,000 50,000
Depreciation and
amortization 3,000 615,000 5,000 1,229,000
---------------------------------------------------
Total
administrative
expenses 608,000 934,000 1,212,000 2,066,000
---------------------------------------------------
Net income (loss)
from operations 136,000 (107,000) 246,000 (648,000)
Other income
(expense)
Interest expense
(net) (297,000) (322,000) (594,000) (643,000)
Gain on exchange of
common stock for
accrued liability 500,000 - 500,000 -
Gain on settlement
of accounts
payable 62,000 - 62,000 141,000
---------------------------------------------------
Net income (loss) $ 401,000 $ (429,000)$ 214,000 $(1,150,000)
Preferred stock
dividend - (63,000) - (125,000)
---------------------------------------------------
Net income (loss)
available to
common
stockholders $ 401,000 $ (492,000)$ 214,000 $(1,275,000)
===================================================
Basic and fully
diluted earnings
(loss) per share
Basic earnings and
(loss) per share
available to
common
stockholders $ 0.00 $ (0.00)$ 0.00 $ (0.01)
Fully diluted
earnings and
(loss) per share
available to
common
stockholders $ (0.01)$ (0.00)$ (0.01)$ (0.01)
===================================================
Weighted average
basic common stock
outstanding 116,528,000 101,387,000 113,276,000 99,720,000
Weighted average
fully diluted
common stock
outstanding 130,982,000 101,387,000 126,512,000 99,720,000
===================================================
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization
We have calculated our Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization, or Adjusted EBITDA, which also excludes the effects of the re-pricing of the variable rate warrants. The table set forth below presents the Adjusted EBITDA, which we believe to be the most directly comparable generally accepted accounting principle "GAAP" financial measure. We utilize this financial metric to manage and analyze our current operations. This measure gives us a sense of our current operations which excludes all material non-cash charges.
Adjusted EBITDA is not a measure of performance recognized under GAAP. However, it is presented because we believe Adjusted EBITDA is a useful measurement and indicator in evaluating our operating performance, as it represents our combined results excluding the impact of non-cash expenses and items not directly tied to our recurring core operations. Adjusted EBITDA is not a financial measure determined by GAAP and should not be considered as an alternative to net loss from continuing operations as a measure of operating results or to cash flows provided by (used in) operations as a measure of funds available for discretionary or other liquidity purposes. A reconciliation of net loss to Adjusted EBITDA for the three months ended March 31, 2006 and 2005 is presented here:
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- ----------------------
2006 2005 2006 2005
-------------------- ----------------------
Net Gain or Loss $401,000 $(429,000) $214,000 $(1,150,000)
Interest 297,000 322,000 297,000 643,000
Amortization of intangibles - 607,000 1,000 1,215,000
Amortization of stock and
options issued for
services - 67,000 - 101,000
Depreciation 2,000 7,000 4,000 14,000
-------------------- ----------------------
Total non-cash adjustments 299,000 1,003,000 302,000 1,973,000
--------- ---------- --------- ------------
EBITDA 700,000 574,000 516,000 823,000
Option Re-pricing - (299,000) - (498,000)
--------- ---------- --------- ------------
Adjusted EBITDA $700,000 $275,000 $516,000 $325,000
========= ========== ========= ============
About Vital Living Inc.
Headquartered in Phoenix, Vital Living develops or licenses nutraceuticals and markets them for distribution through physicians, medical groups, chiropractic offices and retail outlets. Vital Living develops and tests its nutraceuticals in collaboration with leading medical experts in the nutraceuticals field and has designed them to be incorporated by physicians into a standard physician-patient program in which patients supplement doctor-prescribed pharmaceuticals with its nutraceuticals.
Vital Living is developing unique, safe and naturally derived nutritional products, utilizing advanced drug-delivery technologies, including the Geomatrix(R) technology through its affiliation with SkyePharma PLC. The Geomatrix(R) technology has been provided exclusively for Vital Living's pharmaceutical development in China, and the development of nutraceuticals on a global basis. For more information on the company, please visit www.vitalliving.com.
Except for any historical information, the matters discussed in this press release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements in this press release include improved net cash flow, and the success of the company's cost-cutting efforts, corporate restructuring initiative, the company's positioning for future growth, the strength of the company's products, the ability of the company's management, and the company's future performance. These forward-looking statements involve risks and uncertainties, including activities, events or developments that the company expects, believes or anticipates will or may occur in the future. A number of factors could cause actual results to differ from those indicated in the forward-looking statements, including the ability of the company to manage the development of the three pharmaceutical products, regulatory approval of the pharmaceutical products, and the ultimate success of the products. Such statements are subject to a number of assumptions, risks and uncertainties which are set forth under "risk factors" in our Form 10-KSB for the year ended Dec. 31, 2005. Readers are cautioned that such statements are not guarantees of future performance and those actual results or developments may differ materially from those set forth in the forward-looking statements. The company undertakes no obligation to publicly update or revise forward-looking statements, whether as a result of new information or otherwise.
Additionally, Vital Living has adopted a new disclosure regulation, Regulation G, which requires public companies that disclose or release non-GAAP financial measures to include in that disclosure a presentation of the most directly comparable GAAP financial measure and a reconciliation of the disclosed non-GAAP financial measure to the most directly comparable GAAP financial measure.
EBITDA or Earnings before Interest, Taxes, Depreciation and Amortization, and excluding Equity in Earnings of Affiliate (Adjusted EBITDA) is presented because management believes it is useful in evaluating Vital Living's operating performance, as this calculation eliminates the effect of financing, income taxes and the accounting effects of capital spending as well as warrant re-pricing, which items may vary for reasons unrelated to overall operating performance. Adjusted EBITDA is not a financial measure determined by generally accepted accounting principles and should not be considered as an alternative to net loss as a measure of operating results or to cash flows as a measure of funds available for discretionary or other liquidity purposes.
