Lifevantage Corporation

Good day, ladies and gentlemen. Thank you for standing by. Welcome to today's conference call to discuss LifeVantage's third 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 third quarter of fiscal 2022. On the call today from LifeVantage with prepared remarks are Steve Feith, 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 a 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 financial measures with today's release. This call also contains time-sensitive information that is accurate only as of the date of this live broadcast, May 3, 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 Feith, the Chief Executive Officer of LifeVantage.

Thanks, Reid, and good afternoon, everyone. Thank you for joining us today. With me is Carl Owry, our Chief Financial Officer, who will join me with prepared remarks before we turn the call over for Q&A. During the third quarter, the operating environment remained challenging, but we continued to take steps to strengthen our business and drive long-term value for shareholders. Our financial position remained strong with almost $18 million of cash, and we are proud to announce the company's first quarterly dividend of three cents per common share. This action underscores our commitment to enhancing shareholder value, as well as confidence in our outlook for the future. Revenue for our third fiscal quarter were $50 million, down 3% year over year, as the duration of COVID restrictions continues to weigh on distributors and customer engagement. Excluding the negative impact of foreign currency fluctuation, third quarter revenue declined less than 1%. Internationally, total active accounts grew by 4.3% and revenue increased 9.3% or 17.3% when adjusted for the negative impact of foreign currency. But this was offset by declines in the Americas region. Despite the challenges, we made progress hosting some distributor events in the quarter. In February, we hosted an Elite Academy in Orlando, which was a kickoff event for many of our leadership groups. We offered both virtual and in-person attendance with strong messages confirming our commitment to being the and company by supporting product sales through both business opportunities and customer growth. At this Elite Academy, we announced our newest event, Activate 2022, which continues our and company commitment and will be held in Salt Lake City in June. The leaders left Elite Academy in Orlando excited for the future. In March, we held a profile summit and welcomed some of our newest leaders to our global headquarters. With two full days of training and inspiration, our profiles left with an energized commitment to their life-santage businesses. The training continues with a 90-day support push with our Pro-10 leaders providing continuous insights and content that supports our Profis as they build to their next rank. In the Philippines, we continue to see consistent growth, which in turn is re-engaging leaders in other markets. We saw a new elite Pro-9 in Australia with a significant percent of growth coming from the Philippines. We're also encouraged by the first meeting of our international general managers since the pandemic to align and create a roadmap for next fiscal year. This event inspired many strong global programs and incentives that we are excited to share with our leaders at Activate 2022. The 120-day post-purchase program we mentioned last quarter produced encouraging results relative to our customer journey campaign, including a 7.8% conversion rate for non-subscribers moving to subscription, a 1.85% conversion rate for test product offers to subscribers, and a 20% improvement in attrition for distributors versus average enrollments. As we discussed last quarter, the direct selling business has been evolving to a model that is more agile, more inclusive, and creates multiple pathways to entrepreneurial success. Accordingly, our business has also been evolving and our leadership team and board are fully aligned with our approach to this new paradigm. We are focused on three primary areas. to position the company for accelerated growth and significant long-term value creation, people, product, and customer experience. On our call in February, I introduced the addition of two new members of our executive team, Julie Boister as our Chief Marketing Officer and Rob Harris as our Chief Digital Officer. Julie, Rob, and the entire leadership team have been hard at work over the past quarter to ensure all cross-functional teams are focused and working together to enhance these three key areas. On the marketing front, Julie and her team have developed and introduced a new product strategy that establishes guardrails for future product line growth and sets a clear path for LifeVantage being known worldwide for products that activate healthy living. The strategy expands the revolutionary activation benefit found in our flagship product, ProTandem NRF2 Synergizer, and will allow us to develop future products and product lines rooted in the science of nutrigenomics. While the science behind our products remains at the forefront, other product elements, like being demonstrable and delightful to consumers, have been added to the strategy to better align with the product experiences consumers are demanding in today's world. As part of the new product strategy, additional investments are being made within the product team. The product and content teams are using a new marketing framework that ensures that consumers' wants and needs are addressed in all messaging and materials in an effort to increase consumer understanding of LifeVantage products while also increasing customer wallet share. This approach also allows for our products to be more easily shared on various digital channels, including social media. A more comprehensive social media strategy has been built to strengthen our digital presence. I'll be sharing more on this in the future quarters. The digital team is also committed to delivering on our three core areas. Rob's recent focus has been on our mobile app and implementing enhancements that improve a distributor's ability to share LifeVantage branded content with their team and customers. We also added improved reporting capabilities to help distributors track and achieve incentive goals. In coming quarters, digital efforts around shopping experience will intensify. refocusing homepage and site navigation on shopping and the discovery of life advantage products, as well as aligning the user experience across mobile platforms. We're also working to simplify mobile responsive subscription management online to make it easier to customize subscriptions. Consumer experience has also been enhanced through our sales organization. and our ongoing distributor sales incentives. You've heard me mention our MVP incentive. This long-term incentive takes the simple approach of finding three distributors and helping them increase product sales. This latest MVP iteration has started to gain a lot of traction and saw a 37% increase after one month. We have doubled our training efforts, enhanced recognition at all levels, and are releasing several enhancements to MVP at our Activate 2022 event. Also on the incentive front, the qualification of our annual incentive trip will wrap up in June with an increased number of people within striking distance of our Trip of a Lifetime event in Croatia. Leaders are currently driving towards the rank of Pro4 to help ensure they get to experience this amazing trip. As we expand on the and company strategy, supporting entrepreneurs, growing businesses in a myriad of ways, we are getting clearer on the key behaviors that predict success in our field. One of those critical activities that we have focused on this year is enrolling distributors that are excited about our products. Our data shows that if we can help a new person enroll a distributor in their first 60 days, we will see greater distributor enrollments and retention into our business. To support this, beginning in May, distributor enrollment packs will contain three shareable codes that new distributors can share with their prospects and consumers. I also want to go a little deeper into our new event, Activate 2022, and how it is contributing to our pillars of people, product, and consumer experience. At this event in June, LifeVantage distributors will meet in Salt Lake City for a weekend of vision alignment, announcements, incentive enhancements, and a new product. The event will consist of three general sessions. Activate your business, activate your confidence, and your activation plan, providing a new template for future gatherings with an increased focus on aligned promotions and incentives social experiences and training enhancements. Activate 2022 sets up fiscal year 2023 for success and is designed to lead the organization to even more exciting alignment and growth at our global convention in October. In summary, energy levels are high and we continue to make steady progress towards transforming our organization to drive accelerating growth in the future. We have a solid foundation with a large established base of loyal customers and distributors, and our strong financial position ensures we have sufficient resources to execute our plan. Now let me turn the call over to Carl to review our third quarter financial results. Carl?