Youngevity International, Inc.

Q2 revenue increased 21.2% to $53.7 million from $44.3 million a year ago. Gross profit rose 2% to $25.9 million, while gross margin was 48.3% versus 57.4% last year. Adjusted EBITDA increased 18.2% to $2.604 million, and net loss improved to $47,000 from a $614,000 net loss in the prior-year quarter. Direct selling revenue fell 12.8% to $32.1 million, commercial coffee revenue jumped 186.5% to $21.2 million, and Khrysos contributed $274,000 in revenue in Q2. On guidance, management said $200 million in 2019 revenue remains in reach; Khrysos was expected to be at partial capacity by the end of August and full capacity by the end of the year, while coffee growth was expected to add 15% to 20% capacity in 2020.

Steve Wallach framed the quarter as a transition toward a broader, more diversified company, with Khrysos now adding a third reporting segment. He emphasized that Youngevity is returning to growth through acquisitions after a pause, and said the company is using its international infrastructure alongside acquisitions to broaden its reach. His tone was upbeat and optimistic, especially around hemp-derived products, the new GMP facility, and the potential to scale the business faster than originally planned.

Dave Briskie highlighted a stronger balance sheet and improving equity base, with cash and cash equivalents of $2.088 million at June 30, 2019, total assets of $76 million, liabilities of $86 million, and stockholder equity of $50.5 million versus $22.9 million at year-end 2018. He walked through the quarter’s operating results, noting gross profit of $25.9 million, gross margin of 48.3%, operating expenses of $25.5 million, and adjusted EBITDA of $2.604 million. He said the business has been able to bootstrap expansion with warrant exercises and about $2.8 million of capital came in recently, while management expects to fund growth in a relatively non-dilutive or small-dilution way and is also working on a senior secured lender.

Analysts focused on coffee seasonality, margin implications, capital allocation, and the ramp in Khrysos. Briskie said green coffee timing has flipped, so the weaker quarter should now be Q3 instead of Q4, while food service and retail coffee margins remain above 50%. On Khrysos, management said a roughly $11 million contract was delayed by power and facility constraints, but shipments were expected to start on Friday, with the new GMP facility bringing the division back on track and enabling a much larger long-term scale.