LFVN - Earnings call transcript Q4 2022

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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 Quarter and Full Fiscal Year 2022 Results. At this time, all participants are in a listen-only mode.

Following the formal remarks, we will conduct a question-and-answer session. at for provided up. to be will that you time queue Instructions today’s Anderson Reed will ICR. Hosting be with conference

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

Reed Anderson

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

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

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

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

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

Steve Fife

Thank innovation our with Reed our and very including good are is base Financial with environment quarter us results for around line the joining driving engagement and on Thanks, me who million our of FX afternoon, independent with Carl Revenue Q&A. everyone. operating was headwinds. for With initiatives we distributors. expectations we of call prepared across challenging reflecting pleased a you customers key and million $XX guidance before will our in me and within remarks today. early join Officer, Chief $X over progress was Aure, turn were Fourth

currency, impact down quarter the fourth currency. up X% the was revenue negative over year-over-year rose X% of was a Excluding on of foreign X% impact excluding basis, approximately a sequential revenue basis. and approximately On

as impacted dividend basis. debt coming XXX was $XX and while the realized costs delivered invest on as future we travel our into savings continue cost of gross and COVID-related to the margin We back programs. points also These of strength play a model. build business in through primarily growth, balance our now in basis are and a no advance – our normal cash anticipated providing allows improvement shareholders the million couple sequential Profitability events come years revenue a to in repurchase us in savings of new including the back from return revenue of past also sheet in quarter in

our in show fourth solid to momentum in international about more revenues. our quarter. bit the continue Results a So, quarterly markets

over up sequentially compared X% and active currency was Europe negative of aided distributors. increased by impact APAC region in X% the Our independent an the quarter increase XX% revenue excluding to foreign third

from continues distributors more market leader force have increased country. gain Since the an brought in market advancements, Philippines the to for rank we the June, grand the in then, is traction globally, leaders held our we to in long-term encouraging excitement focus stability. seen As opening on which which

by a We in liquid are stress conjunction levels also protect Salt and our caused product, activates helps is a to collagen City. which collagen Activate collagen seeing It replenishes effect production, the of the free distributor June based radicals. strong the body’s that our oxidative response by levels in in breakdown Lake meeting XXXX with reducing This maintains in collagen new launched also depleting product those recent against body. damaging

formulation unique skin has to health Month for shown customer weeks our also have results, for for must for the and exceptionally looks ramp less support for collagen product to deliver collagen X.XX liquid improved XX%. and as revenue purchases growth. new shows clinically Based smoother, every ingredients June and month ratio to proprietary potential acquisitions including eight products. we with in June, strong are Our skin very the visible excited active launch distributor to of on softer two July by every to proving customers new distributor the exceeded hydration and liquid relative In collagen is for this typical that has customer for drive a evidence product of be our distributors. well revenue Liquid early liquid or one been about forecast collagen a follow-through revenue product current distributor. shifting activity, our X.XX was one as July elasticity. leading seen accounts. to to outsold customer customer

is launched business. as was testimonial launch early their in with the XX, their to help across penetration of at of Instagram Thursday was and for TrueScience blended after a Activate increase fueling the and series social one various videos highest strategy also launch The U.S., more XX.X% August all attract gathered more which well of demonstrated clearly propel product product call of and channels the customers making help collagen year-over-year. customers generated and customer a hundred The product XX.X% including the products with attraction to designed with within images product-focused also was launched collagen social collagen our social Liquid tools XX% extremely execution group. create it shareable important the experience through to test differentiators. customer This series significantly XXX performing distributor Also independent our for rate our on X.X% call track was over compelling influential This and new top weeks also engagement the of liquid our unique to in year. received up of distributors our their as liquid engagement discusses engaging amongst efficacy success penetration the our product on performing alike. post distributors content the content. aspects build before of consumers participants to products curiosity images, liquid We metric. through media as As videos. of collagen is where graphics In prior the several saw with we calendar this trial six XXXX a and of and Activate brand lives

opportunity market QX is We for fiscal other markets AXIO are NAD launch this for success for our our strategy will Protandim adding Japan huge in collagen to looking Activate message. product share Successful XXXX also fiscal Title strategy with event of that for The as in their will deepened also and and product to and international and launch and your experience U.S. with differentiator our increased gatherings RSO for provided social at initiatives. activate XXXX. Protandim forward as training many distributor these collagen our focus was to ended organizational areas. sessions, be XXXX the on three Activate product continue experiences of big Night our serve a incentives, later were Match. as promotions the of launches There products. event our activation general to core it your launches, will a new to distributors available markets international template NAD QX launching guides an be Plans well are enhancements. and aligned both an QX progress. demonstrate gave several and Activate engagement year celebrated will intensified confidence that how where and alignment future business, activation in focus your around our used us and launch activate Australia a and key liquid the Annual plan XXXX

strong we MVP to which activity, repeat The gives to provided build set message. in reinforce us opening to being the leading that had message the by XXXX global promotion is builder Activate eminent has through on message. stage program the experiencing the end opportunity enhancements our October. customer company upon MVP while organizations into ceremonies. with Phoenix, have to convention Activate the Our momentum with program based the our to been opportunity building summer our Arizona convention international blueprint distributors MVP carefully us for field convention incentives Wellness focus on increase gatherers. U.S. the with Promotions product also designed and MVP a in helps seller held our to our income in purchases, participating strong this additional bridge the Global for audience qualifiers bolsters recognition continue

on and business our pathways agile, create We inclusive entrepreneurial products to underpin experience. model growth areas focusing transform more three the our growth continue strategy, to be consumer and to people, that success multiple more

updates we are our some digital to share relative additional me initiatives. progress with Let making

customers, our branded discount and allows three LifeVantage and and customers across goals, improving achieve platforms. as with coupon site as Simplified our LifeVantage incentive a quarter, of digital to new distributors’ with content to or track discovery ability reporting and independent the and code experience enrolled share our refocusing team process the their which management as aligning distributors page as code subscription a to distributors. distributors home mobile the navigation users’ independent team enhanced During on share delivered shopping help intensified newly well well products, capabilities enrolling

to subscriptions. management to responsive are for We simplify working easier subscription mobile it online also customized make

call our Now our quarter fourth to financial let me review to Carl, over Chief Officer results. Financial turn the

Carl Aure

Thank afternoon, everyone. you, Steve, and good

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

a sequentially to year-over-year in on was You release reconciliations down additional quarter. non-GAAP to X% million, the third GAAP up press details. quarter Fourth from basis, can revenue X.X% for the and $XX.X today's refer

fluctuations impacted currency in million fourth $X.X revenue negatively the quarter. Foreign by

Pacific fluctuations, X%. region foreign negative approximately by prior the total Excluding in average active a decrease year of million, a fourth compared to accounts XX.X% million to $XX.X per of down in X% the period $X.X $XX.X million was Americas quarter currency or Revenue the XX.X% in revenue impact primarily driven declined account. by revenue active Revenue despite increase increased region X.X% Asia driven in in accounts. total our decrease an year-over-year,

We by This in the due currency. basis, development The Taiwan expenses, year of period. year-over-year. elevated sales expense continue compared we revenue approximately be are along seeing attributable gross increased well X%. encouraged increased geographic decreased margin Commissions the negative mix. which in the in shifts primarily continued shipping by in fourth and positive and a was Thailand, foreign in product the was Japan Gross distributor Japan, to the and million and advancement growth the China. leadership expenses, quarter, results in fourth in to to primarily $X.X continued cost, as prior to obsolescence constant Philippines, material and quarter margin offset XX.X% in incentive impact decrease increased XX.X% revenues was On partially by lower manufacturing-related to currency as raw in due with was inventory the

year increase income basis by percentage driven $XX.X expenses, XXX up which the income primarily incurred severance-related income compared associated fully benefits with quarter. was versus stock-based increased the commissions expense of income incentive in certain prior $X.X year. $X.XX million As the million points incentive cost to Non-GAAP the of share in or $X.X and related in of was in recorded attributable operating million, was and compensation comparable XXX and to to cost adjusted basis XX.X%. recently increase the to $X.X of net fourth event-related million completed net the percentage share in and the levels, the quarter This diluted prior cost, labor qualifiers $X.X as in $XX.X per program. was tax million an SG&A expense fully points versus a revenue million expense adjusted non-GAAP number or We expense, diluted an was a quarter was ago tax expense million on Adjusted higher to of last higher and in period $X.X year primarily compared Adjusted year of increase a with XX.X% period. quarter, compared income per year tax $X.XX in earlier. $XX,XXX before revenue, fourth

discussed non-GAAP non-GAAP debt. XXXX, effective earnings the release year $X.X note afternoon. compared the Please tax. that cash our adjustments $X.X our to in for XX.X% of tax press the million from $XX.X was fiscal today revenues year XX.X% annual income fourth ended position EBITDA of I in For quarter reconciled issued million strong financial a with or no and ago. a GAAP X.X% in all We quarter fourth the on before Adjusted was to are this a period same of million and

XXX,XXX cash approximately in availability common our under of fourth revolving We credit. $X our used to in repurchase $X.X share We shares quarter of line also to repurchase million authorization. the continue under maintain million

XX, expenditures totaled $X.X for authorization. fiscal under million the million. there capital of quarter. June million $XX.X Capital in Total As the XXXX remains $X.X third XXXX, available expenditures was

to anticipate our earnings million million in outlook, Turning the of the XXXX $XX to share $XXX be in fiscal $XX fiscal in $X.XX of range non-GAAP $XXX to share. $X.XX the non-GAAP our million per revenue to adjusted adjusted EBITDA per of million and we with range XXXX range to

expect For turn XX%. annual to tax be Steve. And XXXX, back approximately with we I'll our that, fiscal to the year rate call effective

Steve Fife

environment. to we are starting gain Thanks, and Carl. traction a The despite actions transform challenging reenergize to LifeVantage are growth taking

marketing technology, initiatives. should selling This focused Over strong continue in the the position in making information revenue we will in accelerated put for us future. and next a investments several quarters,

to strong a long-term our call quality, let that, talented sheet the for With global We team driving of high portfolio for experienced a back have balance questions. committed a base value a and by supported operator unique turn innovative the products to over independent me and management large Operator? of shareholders. distributors,

Steve Fife

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

LifeVantage (LFVN) 23 Aug 222022 Q4 Earnings call transcript