LFVN - Earnings call transcript Q4 2021

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Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to today's conference call to discuss LifeVantage's Fourth Fiscal Quarter of 2021 Financial Results. At this time, all participants are in a listen-only mode.

Following the formal remarks, we will conduct a question-and-answer session. conference Reed today's with Hosting Instructions] will Anderson be ICR. [Operator

Anderson. being reminder, the now, Mr. sir. today's a recorded. conference go conference to turn As to is And ahead, like I over Please would

Reed Anderson

you. to results XXXX. call Thank Corporation's quarter fourth discuss afternoon, to for and LifeVantage Good conference fiscal the of welcome

By have call the Executive with Chief and to Financial Chief LifeVantage and Officer out release, Justin Sales are which Rose, should Eastern remarks approximately this On prepared from now, Marketing earnings the afternoon Officer. Time. Officer; access X:XX today Chief Steve everyone and went Fife, p.m. at

replay not have be company's the as website you the www.lifevantage.com. available Investor well. it portion website, received If a is at available being on will the release, is This on LifeVantage's of call Relations and webcast,

do we statements, statements Before contain LifeVantage's response live questions. remarks remind we additional to no to in should projection may of and, only forward-looking that information not XXXX. make update statements any placed period. time-sensitive measures on like guarantee measures, measures We've or LifeVantage into begin, Management our of a your upon in results the reconciliation made assumes be everyone facilitate can of contains accurate obligation financial from also prepared complete call that them. particularly therefore, undue would not and This XX, to adjusted period future release. reliance be more may operating performance release management including forward-looking These date this these expectations XX-K are of and note August during in the when section these today's call. financial non-GAAP on today's LifeVantage's Factors we included the current results filed those to inherent as an transparency forward-looking today's ongoing results of uncertainties, believes comparing Please statements operations, analysis greater that These involve basis. Risk company's non-GAAP broadcast, management identified a recently with most underlying will is discuss of and risks and XX-Q. based Forms and including call, that,

will Financial I Officer Steve to over the and LifeVantage. Chief Officer Now, call Chief turn Executive the of Fife,

Steve Fife

good Rose, today Sales call Officer, and remarks me the Chief everyone. with for and With Justin who is Reed, afternoon, before joining Thank we me our will today. Q&A. Marketing us over Thanks, join you prepared for turn

as of $X.XX million, fourth are increased quarter solid revenue results, XX% February back due basis, showed X% earnings the share pleased that on in relative started the in to a year-over-year quarter. build March the to had adjusted fourth an our quarter, generated and X% $XX.X revenue Fourth and of with the reduction earnings in quarter distributors. growth. gradually the which We sequential sequentially fourth year-over-year improvement were year per We momentum number XX% In in QX. representing to decline we a the prior year-over-year up period, from of continued

Importantly, sequential we engagement reflecting to growth retention. distributor in and increased efforts active accounts total drive experienced

over performance a which the the on our the activities more due COVID-XX we are detail. will of early in-person past months of the in negatively to previously, positive interactions discussed indicators, several seeing we've Accordingly, with factor As coincided in return has touch lack several been significant gradual has year. areas, the in-person past impacting over Justin

distributor NrfX, alignment to engagement. especially our which steps you organization, the increase resonating third positively to on refocusing we've I on quarter is shared sales our leading with call also the messaging efforts team our and helping between emphasis distributors taken management Our distributors. and top Protandim around are with The across drive

conversions it tools technology existing and their around distributors and messaging customers, optimizing to expanding easier suite we make service of while for Finally, our our are prospects. marketing improving to our

are engage digital by as we helping as all results been We a the distributor and distributor stay acts are the recruitment The of a our manner. utilization and lead and their by and app to key that network teams, both business designed see adoption customer announcements, with app. on data assistant, corporate to and and up-to-date encouraged and tool a reports, grow promotions, initiatives trackers and has and connect with sales the business and marketers, distributors starting building app with management. prospects simple funnel, their manage their manage activities with for them presenting and new The been in developed has timely teams, existing business with make

via XX% distributors conversion X,XXX orders recommendations the the curated enrollment XX% over rate, app subscription average shared on July, prospects, XX,XXX creation of subscription, During resulted which included their of new exceeds and a June with product which in our month and a orders. orders those

focused the leaders of and launch including advance markets, in the risk with to adding will next app: following XXX what distributor, QX. on sampling features be into trained is media. Academy prevent addition we not, on for and the will held setting higher features insight will fiscal activity, one, tools strategy which international In to the that to the event, is working expect is specific we providing now we distributors at In Axio entire social productivity information out In Philippines, Justin And content customers months, to base. what predictive distributors what distributor the with with we recognition support meeting add latest across app with churning the a the to Elite distributor to new that we Three, a new the simplify will can expectations. roll briefly. our be and leadership continue on key attrition, the the actions alert take touch to will that optimized and four, two, of will should that and are of functionality few sharing and app key to distributor approximately

background many particular to We've the increased progress the making ability indicative years receiving confidence Cooley playing was their we've of and Our a was response growth March, Officer. leverage sharpening Chief In distributors industry in take around Secretary. building accelerate pre-event international His Counsel their level Neufeld corporate prominent on out note appointed operations in roles meetings, partnership May, emphasis and optimization. to Corporate Of our General around been in with these instrumental messaging in business in core In was our been experience roles of a role Matt technology a feedback Alissa's role been to in renewed and strengthening the and experience efforts is our high our of initiatives. leadership key our XX-plus and principles in key complex their also and communicating key appointed Alissa excitement leaders Operating and individual leadership legal was distributors, team. has big growth in story. exhibited businesses. our our

the key issues Matt’s drive addition, resume has globally, our in well-understood. stress us digital and puts areas enhance are engagement focus oxidative core from in been on independent and the that to backed the along efficacy use effects refocus and strong our products believe a adverse addressing products of of over and remains wellness these technology around for We leading most of and and customers. position for improved up the tools growth proven our with fiscal institutions world. consumers messaging of XXXX. by In helpful differentiated studies LifeVantage’s are to research background distributors we as continue experience XX ramping uniquely Health

a I quarter to the Sales Before me Justin Marketing discuss fourth to turn the Rose, turn activities. Chief discussion Officer call let of recent to results, our over and our

Justin Rose

pleased the today. pleasure throughout and it's building speak alignment a and you, with a primary drive The Increasing refocus recent on positive with our momentum our remains accounts everyone we expecting to engagement on results. in to Thank are efforts gradually to quarter total fiscal last and with progress, of distributors we active are XXXX. Steve, core renewed number impact continue goal, our our products to discussed having

current update you in-person key growing and prospective pack. XXX of prospects engagement provide effective purchased driving encouraging second customers. part the proven distributors enrollment action had items In results flagship our the hosting on meeting, quarter, our we at distributor First, attend that a select example XX% I'll latter Preliminary started outlined strategy last of approximately meetings, at that aimed as on the one a an highly are with distributors. has people and top the call, customers and with and

Over tools heightened for NrfX And a on by in in-person reflecting the us. top accelerate, energized is leaders, month intelligent months artificial engagement few meetings started for focus core to capitalize the months, to proven mitigating purchase churn. effective ago second implementing expect next and around several we we our increasing product. sales have identifying a Driving important our opportunities a another tighter sharper initiative on activity message

drive campaign a customers distributors, process our tuning our fine We've shopping and it's an a capability part rolled as we clearly onboarding been of of we started June, incentive significant handful app, to media promote metrics added, tracked and enrollment metrics, LifeVantage a we shared designed of carts which reward Across our link is proven including shared, We behaviors all app distributor and early having While month are also messages call using additive. contacts new our action. activity. engagement. program in surge proprietary also out is using still key shared, have positive. to early In a and algorithms, results sent. this the It's welcome and for saw

our was X.X low times over same were and this in Media in June X X added For was shared the versus watermark times average, month example, carts five period. the prior average greater the and higher in times versus times shared months, June higher. prior shopping month monthly of over the five contacts X

product which our of hosted Academy X.X during around Academy engagement link January momentum the producing our XX, activities. May. as action alignment, repositioning to engagement we've to priced help in sales simplified programs been the QX helped line top our The an foundational priced is retention. well system, and offering and was care launched of at product follow and own and launched X,XXX the level monthly Elite On around their viewing Elite This big from secondary Canada. core top our distributors, of key with flavors offerings can promotions increase areas and renewed with flavor enrollment quarter, premier great beginning to enrollment starter for and designed launch the additional it grape is of of the average well the different of after as launched we the success training added broaden It collectively kit increased clarity from value the through our end our the our are rolled them June I by included we and well enrollments the our July income we wellness upcoming and core which as month, their Axio, to commitments to activities illustrative What's to for two optimize a received process, their distributor as building U.S. building are boost NrfX, message know The their hosting differentiation. in from the parties, try true have as one day seeing and fall. significant to distributors and new $XXX, kit. pack to the this as seen items, distributors products. splash benefits will of seasonal Finally, another pack personal $X,XXX. have flavor which I The selling also addition packs even we've our up and ability strawberry Elite amplifying orders. so new We about up Focus been and The which from March the one. noticed core utilize were sample at flavors higher $XXX our start quickly for shared from times product momentum. pack launched picking The duplicates our CBD that includes and business access are NrfX mind personal of We with in flavor it we immediate. permanent of This results. a NrfX Axio makes it is Axio experience is shortly enhanced week. additional flavors. app Results $XX product well we our event on Axio ramping includes well month unique make includes events, energy. help and throughout it's as at and easier and many lemonade and customers the amplify an daily registrations plans fourth with ITT That distributors, at the point a around out taking along of combination our attended purple we a to the over tools Elite launched than every

virtual a XXXX. product gearing XXXX October, new to in-person year in considerable in up overall beyond. participation This We're well this getting XX,XXX year accommodate cannot as our website with The and indications imaging refresh deployment be attendance. highly for encouraging sharper The activities driving will positioning expected return attendees, and estimate and which in will in LifeVantage’s to Our people Protandim fiscal event be in-person within room over We around NrfX, significance is XX full also different global event for include in-person wellness. year, of as relative messaging the both a hybrid and we is Currently, from of live. refresh, convention virtual XXX% understated along homepage October. refocus other X,XXX are the that core health to growth from with last early versus our had we this and countries. upgrades have

Finally, that targeted I'm fiscal of business energy from during in an also and leadership that It's about our expect well our experience ton we region. develop very our which area the this launch planned quarter. team market. a leverage sets excited up excitement in There's of second to is the our our and model, significant to for Philippines,

Steve, Now, over back me financial turn run quarter call results. let fourth the through the to to

Steve Fife

Thank you, Justin.

non-GAAP I you results. financials. me note, our our discussing Let quarter be walk adjusted through fourth Please will

reflecting GAAP the changes as basis Commission lower in-person to decreased events to product of revenue Adjusted activities. million fewer in Zealand shifts of decrease expenses Adjusted the X.X%, today's million region. in income and benefit reflecting geographic quarter net a and COVID-XX, period. million details. down or per the in million The revenues mix. X.X% to was operating and was in increased share Fourth on earnings quarter release book by year's of reconciliations customer average last or in driven period the prior sales current the down from Revenue declined You and Gross million, in promotional fourth basis. were X.X% impacted $X.X to total decrease XX.X%, our year a press in versus for tax earlier. XXXX non-GAAP primarily and compared effective $XX.X Greater the XX.X% by revenue by compared can and year-over-year in a was in tax year prior Europe, incentive positively up magnitude the which with attributable XX.X% to XXX additional Americas COVID-XX. the revenue year-over-year $X.X fourth active to to total XX.X% per for refer retention the last decreased Australia in to $X.XX million revenue X.X% offset in This and to fiscal rate continued in year in by margin year increases $X.XX reflecting share timing New a both primarily offset in to due in in quarter account, compared and period. of $XX.X year, limited account to The accounts, fee current quarter year-over-year due percentage tax the incentive strong to primarily Results $X.XX. average to In million the for $XXX,XXX the decreases X.X% was year region. to period. XX.X% region. unfavorable rate in restrictions and The active year by of to were revenue approximately decrease the China to Asia share revenues was fully fully revenue were per Adjusted was prior due accounts $X.X X.X% U.S. million Japan or The decreased up per income quarter. new adjusted revenue $X.X of compared due to fourth per quarter modest fourth differences declined stock in was was the in partially Pacific $XX.X margin decrease leadership XX.X% XX.X% tax the expenses gross expense. quarter or to SG&A compensation compared points company's primarily decrease rate diluted diluted XX.X% prior shipping $XX.X versus

I on that $X.X the will fourth GAAP year in we tax approximately our are XXXX quarter strong was EBITDA all fiscal afternoon. debt. from financial position adjustments million million April we of of reconciled XXXX. year We of fiscal repurchase quarter to full million, renewed $X XXXX, For rate continue rate X the cash tax period. used $XX.X credit, $X.X today an XXX,XXX year cash from We of for our expect authorization. share stock in years issued quarter which under fourth million approximately three XXXX of our common versus be repurchase availability Please of Adjusted our XX%. under fourth the press of decrease and with in non-GAAP line XX% note, million earnings ended And of for approximately was $X.X prior maintain a our release of shares a discussed additional this the no revolving to to during the

remains there of the available XX, million June As $XX.X XXXX, authorization. under

year continue repurchase of share development and our efforts with XX, building active Capital new ending primarily expect $X.X expenditures for June our totaled future. digital further We space the in in be to our XXXX, office to out fiscal technologies. million

on quarter, distributors. encouraged We engagement progress active our activity are fiscal view Consumers' the made share increase during and in this should non-GAAP believe and $X.XX. XXXX. XXXX million fourth improvements which EBITDA be summary, revenue quarter million, earnings range in and the with million, supports is initiatives momentum our top fourth building, our during we $XXX in accounts that sequential drive adjusted range by million to at we $XX in all fiscal stages interest of innovative non-GAAP the of health fiscal and recent optimize anticipate per have products performance outlook, high-quality, in and of wellness of strong to improve to health to help ever, $XX revenue to proven in trends by is to $XXX Turning and as XXXX life. a key broad the as portfolio we and In our earnings $X.XX adjusted in

team and aligned. Our corporate leadership distributor are

And driving a Our to we financial profitability. committed for condition solid and position all strong remain with is cash stakeholders. value

Now, facilitate operator back turn call to questions. me to the Operator? the let

Operator

we have Lane now session. question. Lane your from with and [Operator will First gentlemen, question-and-answer our Ladies Please Instructions] comes question with Doug proceed Research.

Doug Lane

Hi, Yes. everybody. good afternoon,

XXXX? at you're XXXX have what term at guidance, to expect the trends the revenue midpoint. along not be weak, Looking really looks do the growth been digits contemplating trends seeing a yet? How out up there because the in revenue to for the distributor somewhat wondering distributor I'm mid-single play distributor with growth, you

Steve Fife

Yeah, with support is growth. of Steve. and drive focus Doug, things started this enrollments to got We've this on really active number an overall increasing distributor primary lined two accounts. goals and We our a up year

first events that. then and enrollments be a the back retention, standpoint, for in-person to second but that order And around from is purchases distributor think going distributor ties really to the The the critical on specifically. is to we goal focused getting second aligned it's

already And to good of not of rooms, portion We've place. those them. distributors, their had medium-sized Our very take but a group necessarily gatherings. dealt started have in in them a meetings traditionally living few

support between reengage office. October rooms. as our team into corporate new We our new well them put as to now up prospects to have convention, both distributors, and lined as have in further groups they several help the we those And, coming

really tell on the And back them business just and the with in two to in NrfX and biggest company Protandim what So, unparalleled product our unique our utilizing and growth back the spurt. core that's our world, led and think that things frankly, it's the things. of that in in one our opportunity is allowing in propelled terms opportunity it's of industry, them kind that I others story are product, engaging by, product, flagship the a of refocusing that's

biggest opportunities of a anticipate supporting from lot in and we I our have. those per reengaging average don't think fiscal along them two lines, account We so are And revenue ‘XX. the growth

focused So, the the is both distributors, know number increasing of we around total is we -- on X% come. growth which to that distributors as customers really that and focus on midpoint, accounts,

Doug Lane

adjusted Okay, the sales looking despite EBITDA And this it's year, fair from enough. just down secondly, outlook. outlook, your positive at

So where in pressure potential going are margin specifically, you this seeing year?

Steve Fife

a increased point Yeah, margins, we anticipate into ‘XX by even primarily that our the doesn't talked And, that for our will continue to down, from to two points, year. chain ‘XX ‘XX, gross costs. supply about driven forecast are

the do support to anticipating our But continued clearly the levels. margins, -- see we're So, see G&A ‘XX investment, modest pressure area our we especially fiscal returning growth. on we also gross to revenue not increased in

affected we back marketing we website, in ‘XX revenue from in again, G&A our Going mentioned, those support not distributors. And, we're that also We to by investing, our those events, from and top-line standpoint. costs. other investment events having know tools live a standpoint our to adversely incur further benefited SG&A fiscal didn't it a Justin

So, is our the G&A revenue in support our to going growth. largely increase

Doug Lane

that makes sense. Thanks, Okay, Steve.

Steve Fife

Great. Thanks, Doug.

Operator

comes investor. Thank private Instructions] next Pleased Our a Galloway, your you. from questions. with [Operator proceed Jim question

Unidentified Analyst

core NrfX are pleased researching still because these there see focusing the my studies of are any back products new on The us? the same. benefit help very the facts anyone But are days Wondering, we're of Thank taking our reaching see that the you Protandim. that outdated? for that most call. may you and to is I'm marketplace, studies

Justin Rose

But back to, even distributors the Yeah, throughout our Hey, is them I see and different fiscal excited notices things give are communications Thanks to of turn you're And a those story but can some little not getting to about of emphasis on utilize, next studies we our reason past get studies that year prevalent a incredible publications our only a big to to this to think bit again. just studies. coming Justin. Jim, some more in up. putting some question. this have for our going we

our it moving part is forward. of So strategy

we're thinking aligned think very I there. much So

Unidentified Analyst

been Thank We've going market's the last well. so stock question, you. not well. been One

the stock stock. improve to the One of that value do people repurchases is reasons of the

help $XX.X marketing you what and spent on way that stock in rather do be to Justin, company the growing than would buyback? to million

Steve Fife

ourselves, a question, one that we Yeah, and for if daily, Jim, not good weekly, it's sure. ask

for the in invest growth. to take prepared and at bit of by fiscal this ability that building further that. strategies business. I We're a cash foundation in just flow the investments We're like in of still We a business to a of consciously future very making be the inorganically. the anticipation this even Doug's doing the to to lot But drive on plan that are generates stronger a on year, looking to for still opportunities we positive, just although, cash, hit we're M&A next business, look The growth after grow of in don't next for continue we'll EBITDA in ‘XX. mentioned, question, dollars to the we mean response business opportunities, active I investing several millions year

that, this terms we feel look year, I the organically. its continue do of we level. stock We'll undervalued as buybacks in activities stock So like is you'll to at current think building at see more

cash. ways to at is continue it an a higher to cash on of return that But we even we that appropriate look generate. So provide use

Unidentified Analyst

going be to market I back there, us. five pretty going or and good remember a it the to pleased was I'm Philippines. when four what, I see were three, Okay. into years thought we for we're ago,

is bit, growing I restarting little affecting was know United but the relationship to there? Is be So business with too Philippines. good supposed not China a our congratulations that the between the now. China States on

Justin Rose

Jim, Yeah, this Justin is again.

and yeah, energy a the of First have definitely of with all, we lot excitement. Philippines,

just not were we there resale model. we that time in for the a first were The as Philippines,

this what difference competitors there are going of now. have have experience past time. model, in fully, than some that big when the first in think opportunity a and yeah, between right in difference bit much an So a so think with our too it our U.S. e-commerce going make direct to to relationship with comes build it while is truly the licenses the China, China. from And we're I distributors going not little the sales even of an time then giving felt And and I is the little different a doing we to

having we the are it's the that momentum pushing now ability seen with have have here engaged really to that a up business Most e-commerce very a really We especially by in run, few that has out the and office last Taiwan, as to of well. as in it there start are When e-commerce model pick they've We tough and currently. the had the encouraged in run toll past COVID have there. our place come do and people office they right model orders bit that taken as through as in situation. not some months, leaders the little to that freely comes definitely

Unidentified Analyst

on my and not selling shares. I'm guys you Well, relying

luck. good So,

Justin Rose

All right, appreciate it, Jim.

Operator

questions like are this remarks. at There the Steve to floor no to Fife, you. I'd Thank for any turn over closing time. back further

Steve Fife

opportunity confident products and all delivering today. model call. customers business our well Thank We as our of the dedication, I and day. on In great want distributors. outstanding for closing, of look are stay the to joining and on their our as team you hope focused depend us Have updating on. in remain you We employees forward for our to safe you work thank healthy, a LifeVantage take all next hard and our to

Operator

webcast. Ladies this today's and concludes gentlemen,

great have you for You may participation, Thank lines your this time. a and disconnect your at day. now

LifeVantage (LFVN) 20 Aug 212021 Q4 Earnings call transcript