- Earnings call transcript Q1 2023

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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 First Quarter Fiscal 2023 Results. At this time, all participants are in listen-only mode.

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

As being a recorded. is reminder, today's conference

to would the ahead, And to Mr. over sir. I go Anderson. now, Please like conference turn

Reed Anderson

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

On Fife, Chief Executive Chief Carl Aure, President Financial today Officer; LifeVantage prepared with from call and the remarks Steve Officer. are and

out the now, at this should went access release, By Time. afternoon to X:XX earnings Eastern everyone p.m. approximately which have

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

are like expectations remarks our Risk XX-K would future not Factors them. LifeVantage's risks those may XX-Q. everyone we performance, to the upon in in placed and management company's recently filed and do identified most and therefore, begin, contain should statements, additional uncertainties, on inherent questions. of undue based to These section prepared be forward-looking make statements involve management and the guarantee and your response we including not that remind statements statements forward-looking Forms current These Before of reliance

today's into included Please with non-GAAP including facilitate to period. can a note discuss results ongoing will Management of from underlying release. a period that measures, of these during and reconciliation these operating results when financial metrics comparing more transparency today's non-GAAP on greater basis. financial LifeVantage's call, We've operations, measures we results analysis believes an particularly adjusted complete

made as November update that date LifeVantage information no X, of be projections the in broadcast, to this This call of today's release also call. contains sensitive forward-looking may or obligation is assumes that XXXX. live any accurate time only

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

Steven Fife

us for good everyone. today. Thank and afternoon, you Reed, joining Thanks,

strategic our engagement. continued momentum results quarter initiatives across and around First demonstrated innovation

Revenue FX million down from was the million period, X.X% of prior headwind. $XX.X year $X.X of but included

negative on a year-over-year currency, impact was Excluding up of revenue the foreign basis. approximately X.X%

positive X.X% as While challenging, our up to of from prior the operating in versus year are was U.S. per remains than several decline revenue launches. including the customers where due business, in revenue the results account offset period signs we higher areas, more a was by strong new product number average environment seeing

ago, increase in in also continued independent recent We region number Philippines. results region, increased driven our be currency APAC launch the reflecting this an momentum from fluctuation excluding XX.X% Revenue year in part of our by continue to markets. in over of in the by Europe encouraged recent impact a distributors active versus international the our X% in

initial liquid-based of exceeded launched levels maintains new Sales free against our of we far caused product June production, It collagen those the the This reducing activates radicals. the in oxidative by is a helps protect body. breakdown depleting also in body's collagen and collagen stress the levels collagen damaging that effects by product expectations. replenishes

has in been elasticity. improved and deliver to and visible or health skin ingredients eight clinically proprietary of shown softer has hydration skin formulation including unique Our smoother, look less to that weeks support

with split The costs shipping collagen becomes Backorder queue, are associated in shipped fulfilled order depleted a the inventory the impact which other has inventory was revenue the status to extended as then Any had in XXX%. an due part to periods product in the sales of backorder margins the associated immediately. by products costs. due backorder on is order delays. our available. collagen Quarterly our liquid for places forecast intermittently quarter the exceeded Liquid on the and placed fulfillment

to today, As am say we are backorder. I off pleased of

reached Customer blended August XX, XX.X% QX. in the of XX.X% climb to penetration as XX.X% continue quarter. rate on call. This which distributor of rates reported the up penetration penetration with blended is was a from and we collagen Liquid our penetration for quarter XX.X% fourth

Consumer coming new quarter, the the personal in LTOs of we accounts revenue acquisition also launched from with over quarter. in In just collagen customer products $X reached million several Japan. care as first XX.X%

to We our in with distribution top-performing a Protandim stack launch of expanded in line also NAD Protandim launching allowed Tri-Synergizer Japan This has has which been and markets, the these U.S. also product in Protandim Australia. the product us introduce

coming a NAD results Japan by continued amongst the through encouraged in XX, in of are months. forward launch distributors XX.X% mid-September We rate in to since its look penetration October and

as contributed products that functions also impressions up to stress, Total total to ourselves QX, rose due to there. restore of environmental age, an a in to and increase has buildup diet This views also company, with all key increase compared QX in the social engagement the the across brand and company messaging like across an outstanding and increased video media on from have slowed socials and down launch or QX. channels designed media. social resonated an company purposely product already strong collagen to XX% both where liquid led XX% Differentiating activation processes things XXX%, strong

from XX they where opportunity Being helped and have message States. through the tour the our summer events locations drive has year growth. our also an and earn married these company included energy MVP across our that United to Distributors in is focus activation Activate together the XXXX cash collagen field. and led activation This Activate income. excitement promotions driving continued on excitement the The event

We trends also enrollments. increasing see continued to in distributor

Pro we three rank our to In have X we the new United our as Elite that retreat. for with advancements to nine Elite advancement our a trends tripled in a and rank. strong And this States continue we new in August, We the were finish Pro globally. and Elite rank including Pro XX amongst X rank also movement there States. anticipate September, advancement With in rank upcoming qualification advancement tremendous in Japan distributors United consistent seen activity,

in than the which markets. United promotion, launched drive message MVP a ended a our in behavior Japan rate unified conversion their with an all to adoption month launched the States. a better-than-expected This success first higher with will continue market. of and provides we Globally,

our activation helped around second early October, for one business Health, momentum Achieve The Radiant. In three our benefits globally the launched packs opportunity. and packs, product four convention keep called activation products in message as are More quarter strong Look and representing global in Phoenix our we Optimize the of core our three

Evolve calling are pack business We Possibilities. our

By regime as packs of around. of the defining one our centered paths every product recommended conversation Each them, for and made distributors simpler to that each the with as right the key wants well paths of stories, are build guide global enrollment customer. activation packs. centered needs should at for around are the the customers products activation it for distributor these to pack our represented experience. products that the in LifeVantage launched new are three we've convention, activation product on Activation product the Three enrollment were customer also packs their around

Daily bringing Ginger with Axio Wellness are US We the back Spiced favorites, the Lemon and seasonal along as Axio also second the to Protandim Zealand NAD LTO, the New of United Mexico Daily expected in by Plum end Peppermint launch quarter, the LTOs to and Wellness Australia in is this Japan. and in also in we and quarter, November. in launch States Stick expect

stage our we third announcements the calling January. event virtual quarter, future to for early Looking will be the Rock the are the will as major Rhythm This next event, will with a set event new calendar that exciting our LifeVantage. serve year in kickoff of into many

price mid-single-digit stemming and Finally, transformational inclusive, for experiences improve globally profitability to that becoming our enhancing we are more people, from for as margin traction. serve our In is and poised also the recently dynamic a alleviate distributor. continue entrepreneurial products customers increase factors. summary, more to outcomes driving gain our and implemented consumer opportunities will significantly inflationary emphasizing By we strategy, to better pressures

The committed cash also nearly investing The $XX to balance in returning investments remains will and of in our debt allows value sheet, our strength revenue shareholders. million no company continue our that with while including future, repeatable growth. to drive retention to us

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

Carl Aure

and everyone. Steve, good afternoon, you, Thank

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

release to non-GAAP to in refer GAAP can reconciliations details. press additional the for today's You

quarter sequentially from First X.X% $XX.X revenue fourth the up was million, on a down and basis, year-over-year quarter. X.X%

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

foreign period. the currency or the of first Excluding $X.X impact negative approximately year up prior was compared revenue X.X% million fluctuations, to quarter

to Americas the X.X% a X.X% million region period $XX.X active decrease to in in compared the prior total accounts. primarily declined by driven Revenue year

by a in the revenue result was Liquid Steve mentioned, offset by Collagen product an mix, primarily launch sales the driven account total in the increase per of accounts changes product. of as TrueScience decline recent in average As

of region by total Europe million in currency the currency drove X.X% in Revenue a lower and our On and rate a from impact active in accounts decreased result revenue primarily foreign negative impact to Pacific of foreign $XX.X fluctuations. X.X% The Japan by of as by the XX.X% Despite encouraged launch we leadership, the a fluctuations currency was Japan in which Asia active decrease region driven country. by driven X.X%. currency distributor penetration a constant result this increased and growth currency basis, development from and recent revenues foreign headwinds, the continue advancements. in in be the distributors steady Philippines, to

The quarter compared decrease in shifts sales the gross to geographic margin due XX.X% increased product was and year was first Gross in to in as margin shipping prior period. in primarily XX.X% well as expenses, the mix.

in $X.X expense decreased incentive quarter first and million the Commissions year-over-year.

versus ago incentive and levels, various incentive percentage promotional XX% primarily of of commissions expense programs. the points basis a and by year revenue, and which one magnitude increased As to was XX timing driven

and as travel expense to of was versus and related prior to the to period. product adjusted outside result million was to to COVID-XX legal the pandemic a percentage was XX.X%. revenue and prior as fees, of agreements, year in personnel expenses This to markets, restrictions events the million compared basis expenses $XX.X subside well returning U.S. XXX related expenses Non-GAAP increase testing year $XX.X endorsement begun in increased SG&A with associated up primarily of have points as as a in-person quarter

Adjusted of fully or in the to per $X.X operating comparable or first prior year quarter in income diluted the fully income compared share per million $X.X net the in with million $X.XX was diluted year. period $X.XX last net $X.X compared Adjusted million $X.X share adjusted million income was period.

tax of first income in $X.X of recorded tax income before $X.X year earlier. to a quarter expense million expense compared non-GAAP million tax the on We

in the For our was rate change non-GAAP tax on before primarily income effective The adjustments. rate unfavorable tax. tax due discrete to tax quarter, first XX.X% was

to GAAP or was that today Adjusted revenues press X.X% period in adjustments the XX.X% and first release non-GAAP million our a reconciled all afternoon. discuss of for $X.X Please I quarter EBITDA of issued in earnings $X.X the to the from note, same ago. million compared this year are

We ended financial no a and of in $XX.X the position first with strong quarter million cash debt.

line fiscal to credit. of $X approximately totaled in expenditures quarter. maintain XXXX under million. also the of availability $X continue We our be $X.X We million Capital million anticipate capital total revolving first to expenditures for

fiscal Turning XXXX to our outlook.

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

tax XXXX, our effective XX%. fiscal to For rate expect approximately be annual we

turn that, And the operator let over me Operator? for the call questions. back to with

Operator

conference I'd like session. session. now Instructions] for the over to the to remarks. back Thank [Operator Steve closing question-and-answer begin We’ll This you. the Fife question-and-answer turn any concludes

Steven Fife

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

Operator

conference today's concludes call. This

for You a your participating, pleasant and may Thank day. have you lines. disconnect

LifeVantage (LFVN) 2 Nov 222023 Q1 Earnings call transcript