Lifevantage Corporation

Good day, ladies and gentlemen. Thank you for standing by. Welcome to today's conference call to discuss LifeVantage first quarter of fiscal 2024 results. At this time, all participants are in a listen-only mode. Following the formal remarks, we will conduct a question and answer session, and 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 first quarter of fiscal 2024. On the call today from LifeVantage, with prepared remarks, are Steve Fyfe, President and Chief Executive Officer, and Carl Aure, 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 factors 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 and is accurate only as of the date of this live broadcast, November 9, 2023. 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 President and Chief Executive Officer of LifeVantage.

Thanks, Reed, and good afternoon, everyone. Thank you for joining us today. Our latest results, once again, demonstrate the effectiveness of LV360 coupled with our robust innovation portfolio to drive growth and improve profitability. Across the entire LifeVantage organization, from consultants to customers, from corporate employees to board members, energy levels remain incredibly high as our key initiatives continue gaining traction. We delivered a 6.5% revenue increase in the US while overall revenues were down fractionally year over year on a constant currency basis. TrueScience Liquid Collagen continues to be the key driver as demand has remained very strong. This product was introduced in the US in June 2022 and only recently began launching in international markets. which should set the stage for growth in those markets as fiscal 2024 unfolds. Profitability also continues to show solid improvement, with adjusted EBITDA increasing over 41% to $4 million in the first quarter and adjusted EBITDA margin up 230 basis points to 7.8%. Approximately $12 million, or 23.5%, of Q1 revenue was attributable to liquid collagen plus the healthy glow essential stack, which bundles liquid collagen with protendant NRF2 synergizer. In the U.S., customer penetration was 28.1% versus 26.9% in Q4 fiscal 23, and compared to 24% at the end of calendar 2022. Reorder rates provide another strong indicator of the health of the product and strong demand as second month reorders were up recently at 77.8% versus 77% at the end of Q4 23. Liquid collagen sales are still predominantly driven by activity in the US, but we are seeing our recent expansion of liquid collagen into the international markets ramp up steadily. As you may recall, Liquid Collagen entered Australia, New Zealand, and Japan in March 2023, and the results to date have exceeded our internal expectations. At the end of September, we launched Liquid Collagen into Mexico, and we are commencing sales in the Philippines in November, followed by our Canadian launch in December of 2023. In addition to expanding into new geographic markets, we continue to advance our innovation agenda by introducing new products that broaden our unique health and wellness offering. For example, in early October, we relaunched a new product, TrueScience TrueRenew Daily Firming Complex, to all U.S. consultants and those in attendance at our global convention. TrueRenew is a cleaner, kinder, cosmetic retinol alternative that is proven to tackle 11 visible signs of aging. It is a perfect complement to the inner activation power of ProTandem NRF2 Synergizer and TruScience Liquid Collagen and ushers in a new era for the brand's TruScience activated skincare line. The product pre-launched to all consultants in international markets on October 20th and then to all consumers globally on November 2nd. We also announced further enhancements to LV360 in early October, including the new fast track reset incentive that launched in all markets currently operating with the new Evolve compensation plan. This incentive invites all consultants to focus on the next 90 days with bonuses that are typically only available to new consultants. For markets not yet on the Evolve compensation plan, a similar rank advancement incentive was launched. Both True Renew and the Fast Track Reset Incentive and the Rank Advancement Incentive were announced October 6th and 7th at our global convention where over 2,000 consultants joined us in San Antonio, Texas. The theme for this event was All In, and it serves as not only a celebration for our LV360 transformation and the milestone achieved thus far, In addition to the True Renew and the product promotion surrounding that product launch, convention attendees also received first access to our new limited-time flavors of Axio, Green Apple and Orchard Pear Decaf, as well as the new True Science True Pout Advanced Lip Duo, which is an exfoliating lip scrub and hydrating lip oil packaged together in a great giftable set. These limited time products also went live to consumers in the U.S. on November 2nd. At Global Convention, we also announced our next phases of LV360 in Canada, Europe, and Mexico, which will be transitioning to our new evolved compensation plan in early 2024, with our remaining markets transitioning by the end of our fiscal year 2024. Convention attendees also received new consultant training as well as recognition for their recent achievements. LifeVantage events serve as an excellent community builder, and the global convention was no different. Consultants were able to join together with their teams and plan for the coming months while also celebrating each other's success. Consultants' feedback on the event was overwhelmingly positive, and the excitement for the future of LifeVantage was palpable. We are looking forward to our next events. which include our virtual Global Kickoff 2024 in January and our in-person Momentum Academy in March in Nashville for our U.S. market. During the first quarter, we also continued to execute against our capital allocation priorities, returning value to shareholders through dividends and stock buybacks. We paid a total of $5.5 million, or 43.5 cents per share, in cash dividends during the quarter, including a 40-cent special dividend, and utilized approximately $800,000 to repurchase 145,000 shares. As many of you are aware, we held our fiscal year 2024 annual meeting of stockholders on Monday, November 6. Based on the preliminary results provided by the Independent Inspector of Elections Shareholders have re-elected all seven LifeVantage incumbent directors and approved all proposals, including the proposal to ratify the Stockholder Rights Plan. The Radoff Sudbury Group has exercised its right to review and challenge the independent inspector's preliminary voting tabulation. We expect that process to take place over the coming days. We will report the preliminary results on a Form 8K as required, and we will also disclose the final certified results once the review and challenge period has concluded. In the meantime, we would like to thank our shareholders for their constructive feedback, engagement, and attention to the Annual Meeting. We have learned from our dialogue with our shareholders and appreciate their continued support as we remain focused on executing our LV360 initiatives to drive sustainable, profitable growth and value creation. We do not intend to answer any questions on this topic during the call today. In summary, we are very pleased with the early progress on the key LB360 initiatives to drive consultant engagement and expect the positive trends to continue in the U.S. while broadening to international markets over the next several quarters. Strong demand for new products also continues to drive our optimism about the future as we build on the momentum of liquid collagen through expansion to new geographic areas and complementary offerings. Organizationally, we are firmly aligned with the future vision of LifeVantage, and our strong balance sheet ensures we are well positioned to deliver significant growth and value to shareholders. Now let me turn the call over to Carl Albrey, our Chief Financial Officer, to review our first quarter financial results. Carl?