Q4 2024 LifeVantage Corp Earnings Call
Speaker Change: [inaudible]
Unknown Executive: 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.
Speaker Change: Good day ladies and gentlemen, thank you for standing by. Welcome to today's conference call to discuss life advantages 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.
Unknown Executive: At this time, all participants are going to 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.
Speaker Change: Instructions will be provided at that time for you to cue up. Hosting today's conference will be Reed Anderson with ICR.
Reed Anderson: I would now like to turn the conference over to Mr. Anderson. Please go ahead, sir.
Speaker Change: 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.
Reed Anderson: 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 Fife, 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 PM 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.
Speaker Change: Thank you.
Speaker Change: Good afternoon and welcome to Life-Bandage Corporation's Conference Call. To discuss results for the fourth quarter of fiscal 2024.
Speaker Change: On the call today from Life Anage with Prepare remarks or Steve Fife, President and Chief Executive Officer, and Carl Aurei, Chief Financial Officer. By now, everyone should have access to the earnings release, which we're now at this afternoon approximately 405 p.m. Eastern Time.
Speaker Change: If you have not received a release and is available on the Investor Relations portion of LifeFanage's website at www.lifeanage.com This call is being webcast and a replay will be available on the company's website as well.
Reed Anderson: Before we begin, we would like to remind everyone that their 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 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.
Speaker Change: Before we begin, we would like to remind everyone that her fair remarks contained fallen looking statements and management may make additional fallen looking statements in response to your questions.
Speaker Change: These statements do not guarantee future performance and therefore under reliance should not be placed upon them.
Speaker Change: The 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 life energy is most recently filed forms 10K and 10Q.
Reed Anderson: 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 with comparing underlying operating results from period to period. We included a reconciliation of these non-GAAP measures with today's release.
Speaker Change: Please note that during today's call, we will discuss non-gap financial measures, including result on a justed basis.
Speaker Change: Management believes these financial measures can facilitate a more complete analysis, and greater transparency into life-fanages ongoing results of operations, particularly with comparing underlying operating results from period to period.
Reed Anderson: 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.
Speaker Change: We included a reconciliation of these non-gap measures with today's release. This call also contains time-sensitive information that is accurate only as of the date of this live broadcast on August 28, 2024.
Speaker Change: Like Fantage 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 Steve Fife, the president and chief executive officer of Like Fantage.
Steven Fife: Now, I will turn the call over to Steve Fight, the President and Chief Executive Officer of LifeVantage. Thanks for eating. 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 and 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 percent. Currently adjusted, revenue was down 8 percent.
Steve Fife: Thanks for eating, good afternoon everyone, thank you for joining us today.
Steve Fife: Our fourth quarter results, again demonstrated strong profitability, despite challenging macro conditions that have continued to create top-line headwinds.
Speaker Change: Our adjusted EBITDA margin was 9.8% and 90 basis point improvement versus a year ago, reflecting continued progress on initiatives to optimize performance and drive profitability.
Speaker Change: I just need to eat it off for the quarter was flat versus last year, while total revenues were down nearly 10%. Perency adjusted revenue was down 8%.
Steven Fife: For the full fiscal year, adjusted EBITDA of 17 million was up 45 percent versus fiscal 23, while revenues were down 6 percent. Emergency 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 Act of Age 2024 virtual event held in July.
Speaker Change: For the full fiscal year, Adjusted David Dawd of 17 million was up 45% versus fiscal 23. While revenues were down 6%. Perency adjusted, revenue was down 5%.
Speaker Change: While overall fourth quarter revenue was softer than we anticipated, we were encouraged by results in our largest geographies.
Speaker Change: in the Americas region, which it counts.
Speaker Change: For over three quarters of our business, revenues were down 4% year-over-year, but increased sequentially 2.4% over fiscal Q3.
Speaker Change: In addition, productivity continued to improve as revenue per consultant rose over 2% compared to a year ago.
Speaker Change: We continue to focus on initiatives to drive consultant engagement, including a recent global act at 8, 2024 virtually then held in July.
Steven Fife: 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 continue to emphasize core behaviors of the rise era in rolling, 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.
Speaker Change: This event was supported by consultant hosted watch parties and local gatherings in all of our markets around the world.
Speaker Change: It served as a platform to reaffirm our commitment to the direct selling industry, as well as how we have adapted our business into modern direct selling.
Speaker Change: During the event, we continued to emphasize core behaviors of the rise era in rolling, retaining and advancing.
Speaker Change: Highlighting and Process 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.
Speaker Change: Another highlight of the event was the announcement of the 2024 Incident Tripped Destination, an extraordinary eight day seven night cruise to Alaska.
Steven Fife: Consultants in our U.S., Canada, Mexico, and European markets earn points towards this bucket list trip by following Arab behaviors. Activate 2024 also featured comprehensive sales training sessions led by Life-Dantage top leaders. These sessions provided invaluable insights, strategies, and tools to elevate consultant's businesses, emphasizing rise era behaviors and equipping consultants with actionable steps to achieve their goals. Events like Activate 2024 reinforce the importance of the 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.
Speaker Change: Consultants in our U.S. Canada, Mexico and European markets earn points towards this bucket list trip by following Arab behaviors.
Speaker Change: At the 820-24, also featured comprehensive sales training sessions led by life damage top leaders.
Speaker Change: These sessions provided invaluable insights, strategies and tools to elevate consultants' businesses, emphasizing rise era of behaviors and eclipsing consultants with actionable steps to achieve their goals.
Speaker Change: Events like Activate 2024 reinforce the importance of the 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.
Speaker Change: We continue to make huge strides in programs designed to sustain long-term growth. An example of both efforts is the recently completed optimization of our reward circle loyalty program in the U.S. Australia and New Zealand markets.
Steven Fife: An example of both efforts is the recently completed optimization of our Reward Circle Loyalty Program in the U.S., 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 Circle 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 it's a subscription ship.
Speaker Change: 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.
Speaker Change: In addition to providing greater value and optimizing engagement for customers, reward circles, now also offer subscription benefits for consultants.
Speaker Change: On the consultant side, rewards include free shipping on enrollment orders when a subscription is scheduled for the future, plus business building rewards every time subscription ships.
Steven Fife: 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 that will now enjoy lower redemption thresholds. These simplifying enhancements to reward circles were driven from customer retention 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.
Speaker Change: Customers benefit from the refresh with first subscription perk, including free shipping and a gift with subscriptions when over a price threshold.
Speaker Change: Customers will continue to earn reward credits.
Speaker Change: with every subscription that will now enjoy lower redemption thresholds.
Speaker Change: These simplifying enhancements to reward circles.
Speaker Change: We're driven from customer retention data and come 16 months after launching the program as part of LV360.
Speaker Change: Recall that our LV360 transformation initiatives.
Speaker Change: Enable us to better meet the needs of consumers looking for a better approach to wellness the our incredible activation products, as well as entrepreneurs looking to build and growth of successful businesses.
Steven Fife: 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 lead experience with liquid collagen. A first of its kind product that not only replenishes loss collagen with 10 types of collagen peptides, but activates the body's own production of the collagen protein.
Speaker Change: LV360 included the launch of Evolved Compensation Plan, a modern compensation system that offers independent consultants, diverse income streams, and opportunities to accelerate their paths to success.
Speaker Change: Evolved Cators to the dynamic needs of modern entrepreneurs in affiliates who are driven to share and sell products as well as those who also want to build robust collaborative teams.
Speaker Change: 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.
Speaker Change: A first of its kind products that not only replenishes lost collagen with 10 types of collagen peptides, but activates the body's own production of the collagen protein.
Steven Fife: That product continues to deliver for us, especially contributing to an increase in both customer and consultant ARPA. Finally, at Activate 2024, we announce the upcoming launch of a new product system we will be introducing in October that expands the life-and-age 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 help, something that knows how to make. But as with other things in your body, age, genetics, poor diet, and sedentary lifestyle leads to declining levels of this essential hormone.
Speaker Change: That product continues to deliver for us, especially contributing to an increase in both customer and consultant Arba.
Speaker Change: Finally, at Active A2024, we announced the upcoming launch of a new product system. We will be introducing an October that expands the life-anage activation story into the rapidly growing category of weight loss.
Speaker Change: As with our other activating products, you take this new system to make something your body needs for health.
Speaker Change: Something that knows how to make, but as with other things in your body, age, genetics, poor diet, and sedatory lifestyle, leads to declining levels of this essential hormone.
Steven Fife: 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.
Speaker Change: Our innovative solution promises to disrupt the weight management space with two ground-breaking formulas designed to suppress food cravings and balance hunter hormones by activating GLP1 production.
Speaker Change: We are incredibly excited about this launch and believe it will be a game changer for our consultants and their businesses.
Speaker Change: 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.
Speaker Change: This new product system will be launched at our upcoming Market Connect event on October 11th and 12th in Kansas City.
Steven Fife: 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.
Speaker Change: In summary, we are making meaningful progress on key initiatives.
Speaker Change: especially around innovation, optimization, and profitability. With adjusted EBITDA margins, again around double digits.
Speaker Change: Despite a very challenging revenue environment. In addition, we continue to focus on driving shareholder value, with share repurchases and dividend payments.
Steven Fife: 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, Aaron Brockovich has resigned from the board to make room for a new board member that the board and Aaron feel will bring exceptional value to the company. Aaron 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 Adalongan 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 Caesar's Entertainment.
Speaker Change: 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.
Speaker Change: After serving as a director for over five years, Aaron Brockovich has resigned from the board to make room for a new board member that the board and Aaron Field will bring exceptional value to the company.
Speaker Change: Aaron has been an amazing partner in Advocate for our brand, and we are thankful for her many years of dedicated service.
Speaker Change: In her place, we are pleased to welcome Raj Adolongton to the Life-Fanage Board.
Speaker Change: Rosh 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 Caesar's Entertainment.
Steven Fife: His experience in digital technologies will be invaluable in advancing our strategic growth initiatives.
Speaker Change: His experience in digital technologies will be invaluable in advancing our strategic growth initiatives.
Carl Aure: Now, let me turn the call over to Carl Aurey, our Chief Financial Officer, to review our fourth quarter financial results. Carl?
Speaker Change: Now, let me turn the call over to Carl Aure, our chief financial officer to review our fourth quarter financial results. Carl?
Carl Aure: Thank you, Steve, and good afternoon, everyone. Let me walk you through our fourth quarter results. Please note that I will be discussing our non-GAAP adjusted results.
Carl Aure: Thank you, Steve, and good afternoon, everyone. Let me walk you through our fourth quarter results. Please note that I will be discussing our non-gap adjusted results. You can refer to the gap to non-gap reconciliation in today's press release for additional details.
Carl Aure: You can refer to the gap-to-non-gap reconciliations in today's press release for additional details. Fourth quarter revenue was 48.9 million, down 9.8 percent on a year-over-year basis, and foreign currency negatively impacted revenue by 0.9 million. Excluding the negative impact of foreign currency fluctuations, fourth quarter revenue was down by 4.4 million, or approximately 8 percent, as compared to the prior year period. Revenue in the America's region decreased 4.1 percent to 38.1 million in the quarter, primarily driven by a 7.8 percent decrease in total active accounts, and partially offset by higher average revenue per account resulting from changes in product mix in the continued penetration of our True Science liquid collagen product.
Carl Aure: Fourth quarter revenue was 48.9 million down 9.8% on a year over year basis, and foreign currency negatively impacted revenue by 0.9 million.
Carl Aure: Excluding the negative impact of foreign currency fluctuations, fourth quarter revenue was down by 4.4 million or approximately 8% as compared to the prior year period.
Carl Aure: Revenue in the America's region decreased 4.1% to 38.1 million in the quarter, primarily driven by a 7.8% decrease in total act of accounts.
Carl Aure: and partially offset by higher average revenue per account, resulting from changes in product mix in the continued penetration of our true science liquid collagen product.
Carl Aure: Revenue in our Asia-Pacific and Europe region decreased 25.2 percent to 10.8 million in the quarter, primarily driven by a 17.1 percent decrease in total active accounts, and the negative impact from foreign currency exchange rate fluctuations. Excluding the negative impact from foreign currency fluctuations, which are primarily attributable to Japan, fourth quarter revenue in our Asia-Pacific and Europe region was down 18.6 percent as compared to the prior year period. Gross margin was 79.5 percent for the fourth quarter compared to 79.6 percent in the prior year period. We are encouraged that we were able to maintain gross margin percentages despite the decrease in revenue.
Carl Aure: Revenue in our age of Pacific and Europe region decreased 25.2% to 10.8 million in the quarter, primarily driven by a 17.1% decrease in total active accounts and the negative impacts from foreign currency exchange rate fluctuations.
Carl Aure: Excluding the negative impact from foreign currency fluctuations, which are primarily attributable to Japan, fourth quarter revenue in our Asia Pacific and Europe region was down 18.6% as compared to the prior year period.
Carl Aure: Gross margin was 79.5% for the fourth quarter compared to 79.6% in the prior year period.
Carl Aure: We encourage that we are able to maintain gross margin percentages despite the decrease in revenue. We continue to be focused on identifying cost savings opportunities across our supply chain to improve gross margins.
Carl Aure: We continue to be focused on identifying cost savings opportunities across our supply chain to improve gross margin. Commissions and incentive expense in the fourth quarter decreased 1.5 million year over year. As a percentage of revenue, commissions and incentive expense was 44.9%, up 160 basis points versus a year ago levels. The increase was primarily due to the timing and magnitude of our various promotional and incentive programs. Non-GAAP adjusted STNA expense was 13.7 million compared with 16.7 million in the prior year period and improved 280 basis points as a percentage of revenue to 28%. Adjusted non-GAAP operating income was 3.2 million compared with adjusted non-GAAP operating income of 3 million in the prior year period.
Carl Aure: Commission's in a sense of expense for in the fourth quarter, decreased 1.5 million year over year.
Carl Aure: As a percentage of revenue, commissions in incentive expense was 44.9% up 160 basis points versus a year ago levels. The increase was primarily due to the timing and magnitude of our various promotional and incentive programs.
Carl Aure: Non-Gap Adjusted ST&A expense was 13.7 million compared with 16.7 million in the prior year period and improved 280 basis points as a percent of revenue to 28 percent.
Carl Aure: The Justice Non-Gap operating income was 3.2 million, compared with the Justice Non-Gap operating income of 3 million in the prior year period.
Carl Aure: Adjusted non-GAAP mid-income was 1.8 million or 14 cents per fully diluted share in the fourth quarter compared to adjusted non-GAAP income of 2.2 million or 17 cents per fully diluted share in the prior year period. We recorded income tax expense of 1.4 million in the fourth quarter of 2024 compared to $600,000 in the prior year period. Excluding the $300,000 accrual related to uncertain tax positions, our effective tax rate for fiscal 2024 was 24.8%. Adjusted EBITDA for the fourth quarter was 4.8 million, or 9.8% of revenues, compared to 4.8 million and 8.9% in the same period a year ago.
Unknown Executive: 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 going to 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.
Speaker Change: Joseph non-gap Medincum, was 1.8 million, or 14 cents per fully diluted share in the fourth quarter.
Speaker Change: Comparer to adjust it, non-gapping, come up 2.2 million, or 17 cents, perfectly diluted share in the prior year period.
Speaker Change: We recorded income tax expense of $1.4 million in the fourth quarter of 2024 compared to $600,000 in the prior year period.
Speaker Change: Excluding the $300,000 accrual related to uncertain tax positions, our effective tax rate for fiscal 2024 was 24.8%.
Reed Anderson: I would now like to turn the conference over to Mr. Anderson. Please go ahead, sir. Thank you.
Reed Anderson: 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 Fife, 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 405 PM 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.
Speaker Change: Adjusted EBITDA for the fourth quarter was 4.8 million or 9.8% of revenues compared to 4.8 million and 8.9% in the same period a year ago.
Carl Aure: Please note that all of the adjustments from GAAP to non-GAAP that I just discussed today are reconciled in our earnings press release issued this afternoon. Our financial position remains strong with 16.9 million of cash and no debt at the end of the fourth quarter. Capital expenditures total 0.3 million in the fourth quarter and 2.2 million for fiscal year 2024. In addition to maintaining a strong balance sheet, we continue to focus on our capital allocation priorities to drive value for stockholders. During the fourth quarter, we used approximately 1.8 million in cash to repurchase approximately 253,000 shares of common stock under our stock repurchase authorization.
Speaker Change: Please note that all of the adjustments from gap to non-gap that I discussed today are reconciled in our earnings press release issue this afternoon.
Speaker Change: Our financial position remains strong with 16.9 million of cash and no debt at the end of the fourth quarter.
Speaker Change: Capital expenditures total 0.3 million in the fourth quarter and 2.2 million for fiscal year 2024.
Reed Anderson: Before we begin, we would like to remind everyone that their 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 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 is most recently filed forms 10K and 10Q.
Speaker Change: In addition to maintaining a strong balance sheet, we continue to focus on our capital allocation priorities to drive value for stockholders.
Speaker Change: During the fourth quarter, we used approximately 1.8 million in cash to repurchase approximately 253,000 shares of common stock under our stock repurchase authorization.
Carl Aure: During fiscal 2024, we used approximately 6.4 million in cash to repurchase approximately 977,000 shares of common stock. As of June 30, 2024, there is still $20.4 million remaining under our stock repurchase authorization. We also announced a quarterly cash dividend of 4 cents per common share of stock for approximately $500,000 in the aggregate. This dividend will be paid on September 17th of 2024 to stockholders of record as of September the 9th. Since the beginning of fiscal 2024, we have returned 13.4 million in total value to our stockholders through stock repurchases and dividends.
Speaker Change: During fiscal 2024, we used approximately 6.4 million in cash to repurchase approximately 977,000 shares of common stock. As of June 30th, 2024, there are still 20.4 million remaining under our stock repurchase authorization.
Reed Anderson: 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 with comparing underlying operating results from period to period. We included a reconciliation of these non-GAAP measures with today's release.
Speaker Change: We also announced a quarterly cash dividend of four cents per common share of stock for approximately $500,000 in the aggregate. This dividend will be paid on September 17th of 2024 to stockholders of record as of September 9th.
Reed Anderson: 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.
Speaker Change: Since the beginning of fiscal 2024, we have returned 13.4 million in total value to our stockholders through stock repurchases and dividends.
Carl Aure: Turning to our outlook for fiscal 2025, we anticipate our full-year revenue will be in the range of 200 million to 210 million. We expect adjusted non-GAAP EBITDA in the range of 18 million to 21 million, with adjusted non-GAAP earnings per share in the range of 70 cents to 80 cents per share. We are committed to continuing to improve our adjusted EBIT on margins, and we believe we are well on track to reach our long-term target of low double digits.
Steven Fife: Now, I will turn the call over to Steve Fight, the president and chief executive officer of LifeVantage. Thanks for eating 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 and 90 basis point improvement versus a year ago, reflecting continued progress on initiatives to optimize performance and drive profitability.
Speaker Change: Turning to our outlook for fiscal 2025, we anticipate our full year revenue will be in the range of 200 million to 210 million.
Speaker Change: We expect adjusted non-gap evid-a in the range of 18 million to 21 million with adjusted non-gap earnings per share in the range of 70 cents to 80 cents per share.
Speaker Change: We are committed to continuing to improve our adjusted even on margins, and we believe we are well on track to reach our long-term target of low double digits.
Unknown Executive: And with that, let me turn the call back over to the operator for questions.
Unknown Executive: Operator? Thank you. Well, now we conduct any question-and-answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star 2 to remove your question from the queue. For participants using speaker equipment, maybe necessary to pick up your hand set before pressing the star keys. One moment, please, while we pull for questions. Thank you.
Speaker Change: and with that, let me turn the call back over to the operator for questions. Operator.
Steven Fife: Adjusted EBITDA for the quarter was flat versus last year, while total revenues were down nearly 10 percent. Currently adjusted, revenue was down 8 percent. For the full fiscal year, adjusted EBITDA 17 million was up 45 percent versus fiscal 23, while revenues were down 6 percent. Emergency 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.
Speaker Change: Thank you. Well, now we can talk to you a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is on the question key. You may press star 2 to remove your questions from the key.
Speaker Change: Thank you. For participants using speaker equipment, maybe not necessary to pick up your hands set before pressing the star keys. One moment please while we pull for questions.
Douglas Lane: Our first question is from Douglas Lane, with WaterCower Research. Please proceed with your question. Yes, sir. Good afternoon, everybody. Start off from the Outlook for fiscal 2025 here, Carl. You're coming off a couple of quarters of sales pressures, challenges, as you mentioned. And you are looking for four-year growth or flat to up mid-single digits for fiscal 2025. And I don't give quarterly guidance, but can you give us a little help with cadence? Is this something we expect a consistent improvement quarter over quarter in 2025? Or is there going to be more of a back-to-earth load?
Speaker Change: Thank you, our first question is from Doug Lane with Water Cower Research. Please proceed with your question.
Doug Lane: Yes, hi, good afternoon everybody.
Carl: Start off from the Outlook for Fiscal 2025, here Carl
Mioe: Mioe coming off a couple of quarters.
Doug Lane: Sales Pressures, Challenges, as you mentioned, and you are looking for four year growth or flat-to-up, mid-fingal digits for fiscal 2025, and all you don't get quarterly guidance, but give us a little help to the cadence. Is this something we expect a consistent improvement quarter over quarter in 2025, or is there going to be more of a back-to-up load?
Steven Fife: 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 act of age 2024 virtual event held in July. This event was supported by consultant-hosted watch parties and local gatherings and 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.
Steven Fife: During the event, we continue to emphasize core behaviors of the rise era in rolling, 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 earn points towards this bucket list trip by following Arab behaviors.
Carl Aure: Yes, thanks, Doug, for the question. Yes, we look forward to fiscal 2025. I mean, I do think that we expect moderate improvement in each quarter in FY25.
Speaker Change: Thanks for the question, and yes, we look forward to fiscal 2025. I mean, I do think that we expect moderate improvement in each quarter in FY25.
Douglas Lane: You know, Q1 likely will be a little bit lower in comparison to the other quarters, but we do expect the momentum to build towards the back half of the year, especially with, you know, we've got a lot that we're anticipating with in Q2, surrounded by the product launch that we have and the following momentum that we expect to see in Q3 and Q4 following. Okay, that's helpful. I mean, I did notice the one number that stood out to me that is reversing sort of a longer term trend. Or is the total active accounts, which is the consultants and the customers that you release, actually improve sequentially for the first time in years.
Speaker Change: You know, few ones likely will be a little bit lower in comparison to the other quarters, but we do expect a momentum to build towards the back half of the year.
Speaker Change: especially with, you know, we've got a lot that we're anticipating with in Q2s around the product launch that we have and the following momentum that we expect to see in Q3 and Q4 following.
Speaker Change: Okay, that's all. I mean, I did notice. One number that stood out to me that is reversing sort of a long-term trend.
Speaker Change: was the total act of accounts, which is the consultants and the customers that you release.
Steven Fife: And I just wondered what's really driving that number? I don't, you know, one point is not a trend, but it is just an interesting change in dynamic, and I just wanted you to comment more about your sequential improvement in active accounts. Yeah, Dr. Steve, you know, I'm glad you noticed that. You know, we're pleased with that. And you know, the reality is, as you know, we've been working on the transformation within the company for about 18 months now, when we, you know, launched a refresh to our compensation plan for the US and Japan and Australia, and then more recently, this earlier this year in Canada, Mexico, and Europe.
Speaker Change: Actually improved sequentially for the first time in years and I just wondered...
Speaker Change: and what's really driving that number? I don't, you know, one point is not a trend, but it is just an interesting change in dynamic. And I just wanted you to comment more about your sequential improvement in active accounts.
Steven Fife: Activate 2024 also featured comprehensive sales training sessions led by life-dantage top leaders. These sessions provided invaluable insights, strategies, and tools to elevate consultant's businesses, emphasizing rise era behaviors and equipping consultants with actionable steps to achieve their goals. Events like Activate 2024 reinforce the importance of the 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.
Speaker Change: Yeah, Doctor, Steve, you know, all of them.
Steve Fife: I'm glad you noticed that, you know, we're pleased with that and you know, the reality is as you know, we've been working on the transformation within the company for about 18 months now and we...
Speaker Change: You know, launched a refresh to our compensation plan for a person in the U.S. in Japan and Australia.
Speaker Change: and then more recently this earlier this year and Canada, Mexico and Europe.
Steven Fife: And, you know, I really attribute that to both the attraction of new people now that, you know, that plan has been placed, as well as, you know, our existing leaders, you know, working through and understanding how they can optimize the plan. So it's, I think it's improved our, well, it has improved our retention. And what we are seeing now is growth, you know, from an enrollment standpoint. So this last quarter in Q4, we had, you know, we had both increased enrollment and improvement in retention, especially in the US.
Speaker Change: And, you know, I really attribute that to both the attraction of new people now that, you know, that plan has been placed as well as...
Steven Fife: An example of both efforts is the recently completed optimization of our Reward Circle Loyalty Program in the U.S., 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 Circle 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 it's a subscription ship.
Speaker Change: are existing leaders.
Speaker Change: Working through and understanding how they can optimize the plan.
Speaker Change: I think it's improved, it has improved our retention.
Speaker Change: and what we are seeing now is growth, you know, from an enrollment standpoint. So this last quarter and before we had, you know, we had both increased enrollment and improved the momentum and retention.
Speaker Change: especially in the U.S.
Steven Fife: As you said, one data point is not a trend, but I believe that we have bottomed out and are looking forward to growing now sequentially. As there have been any impacts on some of these other concepts changing their business model away from traditional direct selling more to affiliate marketing, is there an opportunity there for LifeVantage to pick up some leadership? Absolutely. It's one of the things that, as we look back, we anticipated this trend occurring. Coming out of COVID, there was more and more activity and noise about the affiliate model, and it was one of the key premises of when we changed our compensation plan to make it much more attractive for those individuals.
Speaker Change: and as you said, one data point is not a trend but I believe that we have bought them down and are looking forward to growing now sequentially.
Steven Fife: 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 that will now enjoy lower redemption thresholds. These simplifying enhancements to reward circles were driven from customer retention 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.
Speaker Change: Now, you had any impact on some of these other concepts, changing their business model away from traditional direct selling more to affiliate marketing. Is there an opportunity to dare for why Spanish to pick up some leadership?
Speaker Change: Yeah, absolutely, you know, it's one of the things that...
Speaker Change: As we look back, we anticipate this trend occurring.
Speaker Change: coming out of Golden.
Speaker Change: There's more and more activity in noise about the affiliate model and it was one of the key premises of when we changed our compensation plan to make it much more attractive for those individuals.
Steven Fife: But really, the beauty of our plan is that we kept all of the best attributes for those who want to build a very traditional consulting business. You know, they're more kind of entrepreneurial minded and want to build teams. It's the plan is so very attractive to them as well as also providing an avenue for people that are more interested in just selling products. So rather than having to make really hard decisions around which path or which model we're going to follow or add a new element to a plan and forcing those individuals to kind of make a decision at the beginning when they're joining LifeVantage.
Speaker Change: but really the beauty of our plan is that we kept all of the best attributes.
Steven Fife: 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 lead experience with liquid collagen.
Speaker Change: for those who want to build a very traditional consulting business, you know, they're more kind of entrepreneurial minded and want to build teams.
Speaker Change: It's the plan of so very attractive to them, as well as also providing an avenue for people that are more interested in just selling products.
Speaker Change: So, rather than having to make...
Speaker Change: really hard decisions.
Speaker Change: around which path or which model we're going to follow.
Speaker Change: or add a new element to a plan and forcing those individuals to kind of make a decision at the beginning when they're joining the Life Anage. Our plan allows people to join however they want.
Steven Fife: A first of its kind product that not only replenishes loss 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 announce the upcoming launch of a new product system we will be introducing in October that expands the life-and-age activation story into the rapidly growing category of weight loss.
Steven Fife: Our plan allows people to join however they want and then to move freely between just selling products, like I said, or building teams. So, you know, and I think that the benefits of that we're just beginning to see. Okay, that makes sense.
Speaker Change: and then to move freely between just selling products and, like I said, or built in teams.
Speaker Change: So, you know, and I think that the benefits of that were just beginning to fail.
Douglas Lane: And then, you know, for those of us that pay attention to what's going on, it met a fast and Weight Watchers certainly might raise an eyebrow about the decision to get into the weight management space with such turbulence in that space, you know, currently with the whole GLP-1 thing and how disruptive it's been to just about anybody that participates in weight management these days. So maybe if you get a little down a little more on the weight management, what's your offering? How is it different from the competitors, and what's going to be your approach to that segment?
Speaker Change: Okay, that makes sense.
Speaker Change: and then, you know, for those of us to pay attention to what's going on, it met a fast and weight watchers.
Speaker Change: Certainly might raise an eyebrow after decisions to get into the weight management space.
Steven Fife: As with our other activating products, you take this new system to make something your body needs for help, something that knows how to make, but as with other things in your body, age, genetics, poor diet, and sedatory lifestyle leads to declining 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.
Speaker Change: with such turbulence in that space, you know, currently with the whole GLP-1 thing and how disruptive it's been to just about anybody that participates in late management these days. So maybe if you can build down a little more on the wait management, what's your offering? How's it differ from the competitors and what's going to be your approach to that segment?
Steven Fife: Yeah, you know, you're right. There is a lot of turbulence there, but you know, we've adopted the approach that I think is it's just grounded in LifeVantage's legacy. And that's been, you know, true to it from a science standpoint. And most recently, over the last, you know, several years as we've built on our activations story. You know, if you think about put hand in NRF 2 back in the very beginning, it it activates certain pathways in our bodies to create or to have our body create antioxidants that combat oxidative stress. And that was the foundation of LifeVantage, and since then we've introduced a skin care line and other products, as you know, that all have activation as a core of their story.
Speaker Change: Yeah, you know, you're right, there is a lot of turbulence.
Speaker Change: there, but we've adopted the approach that I think is...
Speaker Change: It's just grounded in life-thanages legacy, and that's been...
Steven Fife: 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.
Speaker Change: You know, true from a science standpoint and most recently over the last several years, as we built on our activation story.
Speaker Change: You know, if you think about pretend and then RF2 back in the very beginning, it activates certain pathways in our bodies to create or to have our body create antioxidants that combat oxidative stress.
Steven Fife: 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.
Speaker Change: and that was the foundation of Life and Action and since then we've introduced a skin care line and other products as you know.
Steven Fife: More recently, collagen is a product that we introduced two years ago or so. And it is a product that helps activate proteins that generate collagen. And as we looked at other products in our pipeline and what was happening in the marketplace, you know, we thought that there's no reason why we can't create an activation story to help those with, you know, that need to focus on weight management. And so probably close to a year ago, we started the development of a product that we will be launching in the middle of October here that activates the GLP1 proteins.
Speaker Change: that all have activation as a core of their story, more recently, collagen, you know, the product that we introduced, I guess, two years ago or so, and it is a product that helps activate.
Steven Fife: 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, Aaron Brockovich has resigned from the board to make room for a new board member that the board and Aaron feel will bring exceptional value to the company. Aaron has been an amazing partner and advocate for our brand and we were thankful for her many years of dedicated service.
Speaker Change: Protein, the January College, and as we look at other products in our pipe-layed line and what was happening in the marketplace.
Speaker Change: You know, we thought that there's no reason why we can't create an activation story to help those with the focus on weight management.
Steven Fife: In her place, we are pleased to welcome Raj Adalongan 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 Caesar's Entertainment. His experience in digital technologies will be invaluable in advancing our strategic growth initiatives.
Speaker Change: and so probably close to a year ago we started the development of a product that we will be launching the middle of October here that activates the GLP-1.
Steven Fife: And, you know, the benefit of that is a two-part system: a couple of tablets and then a powder. And the differentiation there is that it's 100% natural. It still has the benefits of reducing kind of the food noise, a hunger suppressant. And right now, we are through our vitro testing, and the results are extremely promising. We're about two thirds of the way through human clinical testing, and also those preliminary results are tracking to what we believe we can do. So it is entering a space that's noisy now, but we think we have an alternative to provide all of the benefits.
Speaker Change: from the Philippines.
Speaker Change: and you know the benefit of that is a two-part system, a couple of tablets and then a powder.
Carl Aure: Now, let me turn the call over to Carl Aurey, our Chief Financial Officer, to review our fourth quarter financial results. Carl? Thank you, Steve, and good afternoon, everyone. Let me walk you through our fourth quarter results. Please note that I will be discussing our non-gap adjusted results. You can refer to the gap to non-gap reconciliations in today's press release for additional details. Fourth quarter revenue was 48.9 million down 9.8 percent on a year-over-year basis and foreign currency negatively impacted revenue by 0.9 million.
Speaker Change: and the differentiation there is that...
Speaker Change: 100% natural, it still has the benefits of reducing the food noise, a hunger to the presence.
Speaker Change: And right now, we are through our veto testing and the results are extremely promising. We're about to third the way through human clinical testing and also those preliminary results.
Carl Aure: Excluding the negative impact of foreign currency fluctuations, fourth quarter revenue was down by 4.4 million or approximately 8 percent as compared to the prior year period. Revenue in the America's region decreased 4.1 percent to 38.1 million in the quarter, primarily driven by a 7.8 percent decrease in total active accounts, and partially offset by higher average revenue per account resulting from changes in product mix in the continued penetration of our true science liquid collagen product.
Speaker Change: are tracking to what we believe we can do so it is entering a space that's noisy now, but we think we have an alternative to provide all of the benefits.
Steven Fife: And this isn't just, you know, it's to get out of these quicksad, the yoyo diets and all of those types of things. This is intended to be not just a three-month product where you lose the target of amount of weight and you go loss of it, but it's something that you would continue to take to help manage your weight after the loss of, you know, weight that you are targeting, but it really helps, you know, the mental health, the stability of and confidence as individuals. And so we believe that what's, you know, we have a very differentiated product, one that is healthy and still, you know, on mark with what the trends are in the marketplace.
Speaker Change: And this isn't just, you know, it's to get out of these quicksad, the YoYo diets and all of those types of things. This is intended to be not just a three-month product where you lose the target of a amount of weight and then you go off of it.
Carl Aure: Revenue in our Asia-Pacific and Europe region decreased 25.2 percent to 10.8 million in the quarter, primarily driven by a 17.1 percent decrease in total active accounts, and the negative impact from foreign currency exchange rate fluctuations. Excluding the negative impact from foreign currency fluctuations, which are primarily attributable to Japan, fourth quarter revenue in our Asia-Pacific and Europe region was down 18.6 percent as compared to the prior year period. Gross margin was 79.5 percent for the fourth quarter compared to 79.6 percent in the prior year period.
Speaker Change: but it's something that you would continue to take.
Speaker Change: to help manage your lead after the loss of, you know, weight that you...
Speaker Change: Art targeting, but it really helps.
Speaker Change: You know the mental health, the stability and confidence of that individual.
Speaker Change: and so we believe that what we have a very differentiated product.
Speaker Change: One that is healthy and still, you know, I'm Mark with what the trends are in the market place. And, you know, we'll see, and we'll see you not sober, but we're very often at the Citadel with what might the head of us.
Douglas Lane: And, you know, we'll see in October, but we're very optimistic about what life ahead of us. Okay, that's good color. Thanks. Thank you.
Carl Aure: We are encouraged that we were able to maintain gross margin percentages despite the decrease in revenue. We continue to be focused on identifying cost savings opportunities across our supply chain to improve gross margin. Commissions and incentive expense in the fourth quarter decreased 1.5 million year over year. As a percentage of revenue, commissions and incentive expense was 44.9% up 160 basis points versus a year ago levels. The increase was primarily due to the timing and magnitude of our various promotional and incentive programs.
Speaker Change: Okay, that's good colors. Thanks, Steven.
Unknown Executive: There are no further questions at this time.
Steven Fife: I would like to hand the call back over to Steve Fife for any closing comments. Thank you, everyone, for joining us today. As we conclude, I want to extend my appreciation to our committed employees, outstanding independent consultants, stockholders, and faithful customers. The strength of our distinctive platform coupled with the competitive edge of our business model that empowers individuals to establish businesses on their own terms is complemented by a dedicated leadership team, a diverse range of unique products, an engaged consultant community, and a robust financial position. This collectively emphasizes our strategic positioning for the future, enabling us to pursue long-term goals while we consistently build substantial value for our stockholders.
Speaker Change: Thank you. There are no further questions at this time. I would like to hand the call back over to Steve Fife for any closing comments.
Steve Fife: Well, thank you everyone for joining us today and as we conclude, I want to extend my appreciation to our committed employees, outstanding independent consultants, stockholders and faithful customers.
Carl Aure: Non-GAP adjusted STNA expense was 13.7 million compared with 16.7 million in the prior year period and improved 280 basis points as a percentage of revenue to 28%. Adjusted non-GAP operating income was 3.2 million compared with adjusted non-GAP operating income of 3 million in the prior year period. Adjusted non-GAP mid-income was 1.8 million or 14 cents per fully diluted share in the fourth quarter compared to adjusted non-GAP income of 2.2 million or 17 cents per fully diluted share in the prior year period.
Steve Fife: The strength of our distinct platform coupled with the competitive edge of our business model that empowers individuals to establish businesses on their own terms.
Steve Fife: is complemented by a dedicated leadership team, a diverse range of unique products, and engage in consultant community and a robust financial position.
Steve Fife: This collectively emphasizes our strategic positioning for the future, enabling us to pursue long-term goals, while we consistently build substantial value for our stockholders.
Steven Fife: We look forward to updating you on our next talk, which will be after the launch of our new innovative GLP-1 weight management system. Thank you.
Steve Fife: We look forward to updating you on our next call, which will be after the launch of our new innovative GLT-1 wait management system.
Carl Aure: We recorded income tax expense of 1.4 million in the fourth quarter of 2024 compared to $600,000 in the prior year period. Excluding the $300,000 accrual related to uncertain tax positions our effective tax rate for fiscal 2024 was 24.8%. Adjusted EBITDA for the fourth quarter was 4.8 million or 9.8% of revenues compared to 4.8 million and 8.9% in the same period a year ago. Please note that all of the adjustments from GAP to non-GAP that I just discussed today are reconciled in our earnings press release issue this afternoon.
Steve Fife: Thank you.
Unknown Executive: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
Steve Fife: The End
Speaker Change: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
Speaker Change: and the other one is the first one to be the second one.
Speaker Change: [inaudible]
Carl Aure: Our financial position remains strong with 16.9 million of cash and no debt at the end of the fourth quarter. Capital expenditures total 0.3 million in the fourth quarter and 2.2 million for fiscal year 2024. In addition to maintaining a strong balance sheet, we continue to focus on our capital allocation priorities to drive value for stockholders. During the fourth quarter, we used approximately 1.8 million in cash to repurchase approximately 253,000 shares of common stock under our stock repurchase authorization.
Carl Aure: During fiscal 2024, we used approximately 6.4 million in cash to repurchase approximately 977,000 shares of common stock. As of June 30, 2024, there is still 20.4 million remaining under our stock repurchase authorization. We also announced a quarterly cash dividend of 4 cents per common share of stock for approximately $500,000 in the aggregate. This dividend will be paid on September 17th of 2024 to stockholders of record as of September the 9th. Since the beginning of fiscal 2024, we have returned 13.4 million in total value to our stockholders through stock repurchases and dividends.
Carl Aure: Turning to our outlook for fiscal 2025, we anticipate our full-year revenue will be in the range of 200 million to 210 million. We expect adjusted non-gap EBITDA in the range of 18 million to 21 million with adjusted non-gap earnings per share in the range of 70 cents to 80 cents per share. We are committed to continuing to improve our adjusted ebit on margins, and we believe we are well on track to reach our long-term target of low double digits.
Reed Anderson: And with that, let me turn the call back over to the Operator for questions. Operator? Thank you.
Unknown Executive: Well, now we conduct any question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star 2 to remove your question from the queue. For participants using speaker equipment, maybe necessary to pick up your hand set before pressing the star keys. One moment, please, while we pull for questions. Thank you.
Douglas Lane: Our first question is from Douglas Lane, with WaterCower Research. Please proceed with your question. Yes, sir.
Douglas Lane: Good afternoon, everybody. Start off from the Outlook for Fiscal 2025 here, Carl. You're coming off a couple of quarters of sales pressures, challenges as you mentioned. And you are looking for four-year growth or flat to up mid-single digits for Fiscal 2025. And I don't give quarterly guidance, but can you give us a little help with cadence? Is this something we expect a consistent improvement quarter over quarter in 2025? Or is there going to be more of a back-to-earth load?
Douglas Lane: Yes, thanks, Doug, for the question. Yes, we look forward to Fiscal 2025. I mean, I do think that we expect moderate improvement in each quarter in FY25. You know, Q1 likely will be a little bit lower in comparison to the other quarters, but we do expect the momentum to build towards the back half of the year, especially with, you know, we've got a lot that we're anticipating with in Q2, surrounded by the product launch that we have and the following momentum that we expect to see in Q3 and Q4 following.
Douglas Lane: Okay, that's helpful. I mean, I did notice the one number that stood out to me that is reversing sort of a longer term trend. Or is the total active accounts, which is the consultants and the customers that you release, actually improve sequentially for the first time in years. And I just wondered what's really driving that number? I don't, you know, one point is not a trend, but it is just an interesting change in dynamic, and I just wanted you to comment more about your sequential improvement in active accounts.
Douglas Lane: Yeah, Dr. Steve, you know, I'm glad you noticed that. You know, we're pleased with that. And you know, the reality is, as you know, we've been working on the transformation within the company for about 18 months now, when we, you know, launched a refresh to our compensation plan for the US and Japan and Australia, and then more recently this earlier this year in Canada, Mexico and Europe. And, you know, I really attribute that to both the attraction of new people now that, you know, that plan has been placed, as well as, you know, our existing leaders, you know, working through and understanding how they can optimize the plan.
Douglas Lane: So it's, I think it's improved our, well, it has improved our retention. And what we are seeing now is growth, you know, from an enrollment standpoint. So this last quarter in Q4, we had, you know, we had both increased enrollment and improvement in retention, especially in the US. As you said, one data point is not a trend, but I believe that we have bottomed out and are looking forward to growing now sequentially.
Douglas Lane: As there have been any impacts on some of these other concepts changing their business model away from traditional direct selling more to affiliate marketing, is there an opportunity there for LifeVantage to pick up some leadership? Absolutely. It's one of the things that as we look back, we anticipated this trend occurring. Coming out of COVID, there was more and more activity and noise about the affiliate model, and it was one of the key premises of when we changed our compensation plan to make it much more attractive for those individuals.
Douglas Lane: But really, the beauty of our plan is that we kept all of the best attributes for those who want to build a very traditional consulting business. You know, they're more kind of entrepreneurial minded and want to build teams. It's the plan is so very attractive to them as well as also providing an avenue for people that are more interested in just selling products. So rather than having to make really hard decisions around which path or which model we're going to follow or add a new element to a plan and forcing those individuals to kind of make a decision at the beginning when they're joining LifeVantage.
Douglas Lane: Our plan allows people to join however they want and then to move freely between just selling products, like I said, or building teams. So, you know, and I think that the benefits of that we're just beginning to see. Okay, that makes sense.
Douglas Lane: And then, you know, for those of us that pay attention to what's going on, it met a fast and weight watchers certainly might raise an eyebrow about the decision to get into the weight management space with such turbulence in that space, you know, currently with the whole GLP one thing and how disruptive it's been to just about anybody that participates in weight management these days. So maybe if you get a little down a little more on the weight management, what's your offering?
Douglas Lane: How is it different from the competitors and what's going to be your approach to that segment? Yeah, you know, you're right. There is a lot of turbulence there, but you know, we've adopted the approach that I think is it's just grounded in LifeVantage's legacy. And that's been, you know, true to it from a science standpoint. And most recently over the last, you know, several years as we've built on our activations story.
Douglas Lane: You know, if you think about put hand in NRF 2 back in the very beginning, it it activates certain pathways in our bodies to create or to have our body create antioxidants that combat oxidative stress. And that was the foundation of LifeVantage and since then we've introduced a skin care line and other products, as you know, that all have activation as a core of their story. More recently, collagen is a product that we introduced two years ago or so.
Douglas Lane: And it is a product that helps activate proteins that generate collagen. And as we looked at other products in our pipeline and what was happening in the marketplace, you know, we thought that there's no reason why we can't create an activation story to help those with, you know, that need to focus on weight management. And so probably close to a year ago, we started the development of a product that we will be launching in the middle of October here that activates the GLP1 proteins.
Douglas Lane: And, you know, the benefit of that is a two-part system, a couple of tablets and then a powder. And the differentiation there is that it's 100% natural. It still has the benefits of reducing kind of the food noise, a hunger suppressant. And right now, we are through our vitro testing and the results are extremely promising. We're about two thirds of the way through human clinical testing and also those preliminary results are tracking to what we believe we can do.
Douglas Lane: So it is entering a space that's noisy now, but we think we have an alternative to provide all of the benefits. And this isn't just, you know, it's to get out of these quicksad, the yoyo diets and all of those types of things. This is intended to be not just a three-month product where you lose the target of amount of weight and you go loss of it, but it's something that you would continue to take to help manage your weight after the loss of, you know, weight that you are targeting, but it really helps, you know, the mental health, the stability of and confidence as individuals.
Douglas Lane: And so we believe that what's, you know, we have a very differentiated product, one that is healthy and still, you know, on mark with what the trends are in the marketplace. And, you know, we'll see in October, but we're very optimistic about what life ahead of us. Okay, that's good color. Thanks. Thank you.
Unknown Executive: There are no further questions at this time.
Steven Fife: I would like to hand the call back over to Steve Fife for any closing comments. Thank you, everyone, for joining us today. As we conclude, I want to extend my appreciation to our committed employees, outstanding independent consultants, stockholders, and faithful customers. The strength of our distinctive platform coupled with the competitive edge of our business model that empowers individuals to establish businesses on their own terms is complemented by a dedicated leadership team, a diverse range of unique products, an engaged consultant community, and a robust financial position. This collectively emphasizes our strategic positioning for the future, enabling us to pursue long-term goals while we consistently build substantial value for our stockholders.
Steven Fife: We look forward to updating you on our next talk, which will be after the launch of our new innovative GLP-1 weight management system. Thank you.
Unknown Executive: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.