Lifevantage Corporation

Good day, ladies and gentlemen. Thank you for standing by. Welcome to today's conference call to discuss LifeVantage's fourth 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. 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. I would now 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 fourth quarter of fiscal 2024. On the call today from LifeVantage, with prepared remarks are Steve Fyfe, President and 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, our under-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 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, August 28, 2024. 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 Reid and good afternoon everyone. Thank you for joining us today. Our fourth quarter results again demonstrated strong profitability despite challenging macro conditions that have continued to create top line headwinds. Our adjusted EBITDA margin was 9.8 percent, a 90 basis point improvement versus a year ago, reflecting continued progress on initiatives to optimize performance and drive profitability. Adjusted EBITDA for the quarter was flat versus last year, while total revenues were down nearly 10%. Currency adjusted, revenue was down 8%. For the full fiscal year, adjusted EBITDA of $17 million was up 45% versus fiscal 23, while revenues were down 6%. Currency adjusted, revenue was down 5%. While overall fourth quarter revenue was softer than we anticipated, we were encouraged by results in our largest geographies. In the Americas region, which accounts for over three quarters of our business, revenues were down 4% year over year, but increased sequentially 2.4% over fiscal Q3. In addition, productivity continued to improve as revenue per consultant rose over 2% compared to a year ago. We continue to focus on initiatives to drive consultant engagement, including our recent Global Activate 2024 virtual event held in July. This event was supported by consultant hosted watch parties and local gatherings in all of our markets around the world. It served as the platform to reaffirm our commitment to the direct selling industry, as well as how we have adapted our business into modern direct selling. During the event, we continued to emphasize core behaviors of the RISE era, enrolling, retaining, and advancing, highlighting impressive statistics supporting the positive impacts of these behaviors on consultant performance, including business growth, increased retention rates, and recent leader rank advancements within the organization. Another highlight of the event was the announcement of the 2024 incentive trip destination, an extraordinary eight-day, seven-night cruise to Alaska. Consultants in our U.S., Canada, Mexico, and European markets earned points towards this bucket list trip by following ERA behaviors. Activate 2024 also featured comprehensive sales training sessions led by LifeVantage top leaders. These sessions provided invaluable insights, strategies, and tools to elevate consultants' businesses, emphasizing Rise Era behaviors and equipping consultants with actionable steps to achieve their goals. Events like Activate 2024 reinforce the importance of community for direct sales companies and brands. Activation Nation has rallied around the vision for this company and is excited for what is to come. We continue to make huge strides in programs designed to sustain long-term growth. An example of those efforts is the recently completed optimization of our Reward Circle loyalty program in the US, Australia, and New Zealand markets. The update demonstrates our ongoing commitment to enhancing the experience for both our consultants and customers as well as our commitment to optimizing program design to meet consumer demands. In addition to providing greater value and optimized engagement for customers, Reward Circles now also offers subscription benefits for consultants. On the consultant side, rewards includes free shipping on enrollment orders when a subscription is scheduled for the future, plus business building rewards every time a subscription ships. Customers benefit from the refresh with first subscription perk, including free shipping and a gift with subscriptions when over a price threshold. Customers will continue to earn reward credits with every subscription, but will now enjoy lower redemption thresholds. These simplifying enhancements to reward circles We're driven from customer retention data and come 16 months after launching the program as part of LV360. Recall that our LV360 transformation initiatives enable us to better meet the needs of consumers looking for a better approach to wellness via our incredible activation products, as well as entrepreneurs looking to build and grow successful businesses. LV360 included the launch of the Evolve Compensation Plan, a modern compensation system that offers independent consultants diverse income streams and opportunities to accelerate their paths to success. Evolve caters to the dynamic needs of modern entrepreneurs and affiliates who are driven to share and sell products, as well as those who also want to build robust collaborative teams. Innovation has been another key area of focus over the past several years, and we've been very pleased with the results, including the significant growth we've experienced with liquid collagen, a first-of-its-kind product that not only replenishes lost collagen with 10 types of collagen peptides, but activates the body's own production of the collagen protein. That product continues to deliver for us. especially contributing to an increase in both customer and consultant ARPA. Finally, at Activate 2024, we announced the upcoming launch of a new product system we will be introducing in October that expands the LifeVantage activation story into the rapidly growing category of weight loss. As with our other activating products, you take this new system to make something your body needs for health, something that knows how to make, but as with other things in your body, age, genetics, poor diet, and sedentary lifestyle leads to different levels of this essential hormone. Our innovative solution promises to disrupt the weight management space with two groundbreaking formulas designed to suppress food cravings and balance hunger hormones by activating GLP-1 production. We are incredibly excited about this launch and believe it will be a game changer for our consultants and their businesses. There is no comparable product or product system like it on the market, and we're delivering it in a way that stays true to our brand and approach to health. This new product system will be launched at our upcoming Market Connect event on October 11th and 12th in Kansas City. In summary, we are making meaningful progress on key initiatives, especially around innovation, optimization, and profitability, with adjusted EBITDA margins again around double digits, despite a very challenging revenue environment. In addition, we continue to focus on driving shareholder value with share repurchases and dividend payments. Finally, before turning the call over to Carl, I want to share a few comments on the recent change we announced to our board of directors. After serving as a director for over five years, Erin Brockovich has resigned from the board to make room for a new board member that the board and Erin feel will bring exceptional value to the company. Erin has been an amazing partner and advocate for our brand. and we were thankful for her many years of dedicated service. In her place, we are pleased to welcome Raj Abulangan to the LifeVantage Board. Raj has over 20 years of experience managing and executing large technology and e-commerce programs, and he currently serves as the Chief Information and Product Transformation Officer at Caesars Entertainment. His experience in digital technologies will be invaluable in advancing our strategic growth initiatives. Now let me turn the call over to Carl Oury, our Chief Financial Officer, to review our fourth quarter financial results. Carl? Thank you, Steve, and good afternoon, everyone.