Lifevantage Corporation

Good day, ladies and gentlemen. Thank you for standing by. Welcome to today's conference call to discuss LifeVantage's second quarter fiscal 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. Instructions will be provided at that time for you to queue up. Hosting today's conference will be Reed Anderson with ICR. As a reminder, today's conference is being recorded. And now, I would like to turn the conference over to Mr. Anderson. Please go ahead, sir.

Thank you. Good afternoon, and welcome to LifeVantage Corporation's conference call to discuss results for the second quarter of fiscal 2022. On the call today from LifeVantage, with prepared remarks, are Steve Fife, Chief Executive Officer, and Carl Alray, Chief Financial Officer. By now, everyone should have access to the earnings release, which went out this afternoon at approximately 4.05 p.m. Eastern Time. If you have not received the release, it is available on the investor relations portion of LifeVantage's website at www.lifevantage.com. This call is being webcast and a replay will be available on the company's website as well. Before we begin, we would like to remind everyone that our prepared remarks contain forward-looking statements and management may make additional forward-looking statements in response to your questions. These statements do not guarantee future performance and therefore, undue reliance should not be placed upon them. These statements are based on current expectations of the company's management and involve inherent risks and uncertainties, including those identified in the risk factor section of LifeVantage's most recently filed forms 10-K and 10-Q. Please note that during today's call, we will discuss non-GAAP financial measures, including results on an adjusted basis. Management believes these financial measures can facilitate a more complete analysis and greater transparency into LifeVantage's ongoing results of operations particularly when comparing underlying operating results from period to period. We've included a reconciliation of these non-GAAP measures with today's release. This call also contains time-sensitive information that is accurate only as of the date of this live broadcast, February 1st, 2022. LifeVantage assumes no obligation to update any forward-looking projection that may be made in today's release or call. Now I will turn the call over to Steve Fife, the Chief Executive Officer of LifeVantage.

Thanks, Reid, and good afternoon, everyone. Thank you for joining us today. With me is Carl Auri, our Chief Financial Officer, who will join me with prepared remarks before we turn the call over for Q&A. On our last earnings call, we were more optimistic about the expansion of in-person activities, but news about the Omicron variant has significantly and unexpectedly slowed down our activities this past quarter. We expect to see improvements throughout fiscal and calendar 2022 from this point on. However, our initial expectations have been dampened somewhat. Carl will update you on our full year outlook. Second quarter results were lower than our expectations, largely attributable to the extended impact of COVID related factors. Our recent Philippines launch, for example, encountered unexpected delays, which effectively pushed initial revenue into January. While disappointing, we made further progress on several key strategic initiatives, which I'll outline in more detail. Revenues of $52.2 million were down 11.6% year over year and 1.9% on a sequential basis. Despite this decline, we still delivered $1.9 million of adjusted EBITDA and maintained our strong balance sheet with over $20 million of cash. Over the past several quarters, we've been focused on three primary areas to start positioning the company for accelerating growth and significant long-term value creation. People, products, and customer experience. One of my primary focuses since becoming the CEO has been to build an executive team with the skills, passion, and vision to accelerate growth at LifeVantage. We recently hired Julie Boister as chief marketing officer, along with a new chief digital officer. Both individuals bring an incredible depth of expertise that will be instrumental in driving the transformation of our business. and taking it to the next level. Julie is a strategic marketer and brand champion with a passion for growing organizations using innovative products, memorable branding, meaningful customer experiences, and data-driven campaigns. She has a proven background in direct sales, having led the product marketing and digital teams for a large privately held health and weight management company. where she helped grow that organization to over $500 million in annual revenue and championed the company through a period of hyper growth and digital transformation. Julie will oversee the product marketing, research and development, experiential marketing, creative and content teams, ensuring the team is laser focused on developing raving product fans and building loyalty at every interaction. Our new chief digital officer has a history of leading transformational infrastructure application and information security initiatives and global technology integrations that make businesses run better, faster, and safer. He thrives on building and developing teams and creating an ecosystem of vendors and suppliers that come together to drive business value and outcomes through technology. He will oversee digital technology, backend and front end development, quality assurance, business analysis, product management, and IT infrastructure teams. Both these individuals are highly complimentary to the rest of our team, many of which also joined the company in the past year. I'm thrilled to be surrounded by such an incredible group of talented people. At the heart of every successful business are passionate people working together to create a strong, effective management team. Now let me provide you with a products update for the quarter. You've heard us talk about refocusing on our core product, Protandim NRF2, over the past couple of quarters. And at Global Convention in October, we launched product activation stacks designed to address common health concerns such as gut and immune health. At the center of each stack is Protandim NRF2 and the essential health benefit it delivers to anyone wanting to make improvements in their life. At our global convention, we also launched Icy Bright, a supplement packed with antioxidants, nutrients, and carotenoids validated to support eye and brain health. The holidays brought the addition of two new seasonal flavors of Axio, Spiced Plum and Peppermint Stick. These limited-time offers were paired with a number of holiday promotions, giftable packs, and merchandise. Several sales incentives, including our Ring in the New Year promotion, the December Elite Retreat, and launch of our Croatian incentive trip also spurred excitement amongst our distributors. Finally, we continue to focus our efforts on the customer experience across all touch points, including projects to improve the website, along with various digital brand experiences. In October, we launched a redesign of our US e-commerce site to make shopping and enrolling with LifeVantage easier than it's ever been. New Zealand's site has also been updated to match the global changes. Our digital team also rolled out a 120-day post-purchase campaign designed to educate, edify, and encourage continued loyalty with LifeVantage and our products. The evolution of our health and wellness platform is aimed at providing an immersive approach that puts the customer at the center, surrounding them with products, people, tools, and experiences that lead to the premium satisfaction, eliminates friction, and drives high level of repeat engagement. Importantly, we're taking a holistic view that provides customers and distributors, all stakeholders, with the best possible outcomes to drive consistent momentum across our health and wellness platform to keep them engaged and coming back for more. Leaning into ProTandem NRF2 and these key areas this past year has given us a tremendous insight into our future growth. We want to be known worldwide as a brand that delivers wellness through products that activate your body's natural processes and empower a healthy, vibrant life. We have a strong lineup of products that have laid that foundation and will continue to be paramount as we advance innovation around our activation story. We want to be known as having the very best compensation plan that both supports thriving businesses and incentivizes distributors and customers for simply sharing the products they love. We want to impact the lives of consumers around the globe in a much broader way than we've done to date. In addition to broad and deep experience, LifeSantage's leadership team understands the power of our legacy and the tremendous opportunity for using technology and digital tools to amplify our message to reach a much larger addressable market. We all share the future vision of a company whose strong foundation rooted in high quality health and wellness products coupled with a recognizable durable brand can positively impact the lives of consumers around the globe in a much broader way than it does currently. Internally, We've been calling this an evolution towards being the and company, meaning that we want to support growth driven entrepreneurs and incentivize our most loyal customers. From a positioning standpoint, the direct selling business has been evolving to a model that is more agile, more inclusive and creates multiple paths to grow. Our leadership team and board are fully aligned with including this new paradigm, and you will start to see us moving aggressively to improve our brand awareness with new products, go-to-market strategy, and incentive updates that are significantly additive to our distributors' existing businesses and our overall company performance. It's a very exciting time at LifeVantage and over the next couple of quarters, we expect to share additional details on the broader themes and tactics we'll be using to accelerate growth and reach customers worldwide. Our foundation is strong with a large established base of loyal customers and distributors. In addition, we have a solid financial position that will enable us to deploy the appropriate resources to drive for future growth. Now let me turn the call over to Carl Owry, our Chief Financial Officer, to review our second quarter financial results.