UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________________________________________________ Form 10-Q ________________________________________________________________________________ ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission ...

LifeVantage Corporation (NASDAQ:LFVN) Q2 2023 Earnings Conference Call February 2, 2023 4:30 PM ET Company Participants Reed Anderson - Investor Relations Steve Fife - President and Chief Executive Officer Carl Aure - Chief Financial Officer Operator Good day, ladies and gentlemen. Thank you for standing by. Welcome to today’s Conference Call to discuss LifeVantage’s Second Quarter Fiscal 2023 Results. [Operator Instructions] Hosting today’s conference will be Reed Anderson with ICR. As a reminder, today’s ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________________________________________________ Form 10-Q ________________________________________________________________________________ ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commissi ...

Financial Performance - Net revenue for the three months ended September 30, 2022, was $51.774 million, a decrease of 2.6% compared to $53.224 million for the same period in 2021[17]. - Gross profit for the same period was $41.832 million, down from $43.793 million, reflecting a gross margin of approximately 80.7%[17]. - Operating income decreased to $1.290 million from $4.612 million, indicating a significant decline in operational performance[17]. - Net income for the quarter was $610,000, a decrease of 81.7% compared to $3.316 million in the prior year[17]. - Total revenue for the three months ended September 30, 2022, was $51.77 million, down 2.7% from $53.22 million in the same period of 2021[62]. - Revenue from the Americas region was $36.37 million, slightly down from $36.45 million in 2021, while revenue from the Asia/Pacific & Europe region decreased to $15.41 million from $16.78 million[62]. - Basic and diluted income per share for the three months ended September 30, 2022, was $0.05, compared to $0.25 in the same period of 2021[60]. Assets and Liabilities - Total current assets as of September 30, 2022, were $42.923 million, down from $46.957 million as of June 30, 2022[16]. - Total liabilities decreased to $35.710 million from $39.190 million, indicating improved financial leverage[16]. - Cash and cash equivalents decreased to $17.619 million from $20.190 million, reflecting a cash outflow during the quarter[16]. - Total stockholders' equity increased to $31.890 million from $31.516 million, showing a slight improvement in the company's net worth[16]. - Cash and cash equivalents at the end of the period were $17,619,000, a decrease of 11.6% from $19,929,000 at the end of Q3 2021[25]. - The company had $12.2 million in cash accounts at one financial institution as of September 30, 2022[39]. Cash Flow and Expenses - Cash flows from operating activities resulted in a net cash used of $1,345,000 for Q3 2022, compared to a net cash provided of $465,000 in Q3 2021[25]. - The company’s cash paid for income taxes was $439,000 for the three months ended September 30, 2022, compared to $468,000 in the same period of 2021[25]. - Operating lease expense for the three months ended September 30, 2022, was $0.7 million, a decrease from $0.8 million in the same period of 2021[67]. - Research and development expenses for the three months ended September 30, 2022, were $100,000, down from $200,000 in the same period of 2021[48]. Inventory - Total inventory as of September 30, 2022, was $18,636,000, an increase of 13.1% from $16,472,000 as of June 30, 2022[41]. - The company’s inventory included $14,571,000 in finished goods, representing 78.2% of total inventory as of September 30, 2022[41]. Legal and Regulatory Matters - The company is involved in a class action lawsuit alleging operation of a pyramid scheme, with the case currently in the Federal District Court for Utah[95]. - The court dismissed three of the plaintiff's four claims, including antitrust and unjust enrichment claims, but allowed a securities fraud claim to proceed[95]. - The plaintiffs filed a second amended complaint including a 10(b)(5) securities fraud claim, which the company responded to on December 23, 2020[95]. - The court denied the plaintiff's motion for class certification on April 19, 2022, and the case has been stayed until November 25, 2022[95]. - The company has not established a loss contingency accrual for the lawsuit, believing liability is not probable or estimable[95]. - The company may face other litigation and regulatory matters, including product liability claims and commercial disputes, but does not expect these to materially affect its business[96]. Future Outlook - The company anticipates ongoing challenges related to market expansion and product acceptance, which may impact future performance[11]. Shareholder Actions - During the three months ended September 30, 2022, the Company declared a quarterly cash dividend of $0.03 per share, totaling $0.4 million[82]. - The Company has a remaining authorization of $27.7 million under its share repurchase program as of September 30, 2022[80]. - For the three months ended September 30, 2022, the Company issued approximately 36,000 shares under the Employee Stock Purchase Plan (ESPP)[90]. - The Company reported stock-based compensation of $0.6 million for both the three months ended September 30, 2022 and 2021[91]. - As of September 30, 2022, there were stock option awards outstanding for an aggregate of approximately 14,000 shares under the 2010 Long-Term Incentive Plan[85]. - The maximum number of shares available for issuance under the 2017 Long-Term Incentive Plan is 2.9 million as of September 30, 2022[86]. - The Company has reserved 0.4 million shares of its common stock for issuance under the ESPP, with 0.2 million shares available as of September 30, 2022[88]. - The Company has not issued any preferred stock as of September 30, 2022[81]. Market Risks - There were no substantial changes to market risks during the quarter ended September 30, 2022, compared to the previous annual report[146].

Financial Data and Key Metrics Changes - Fourth quarter revenue was $51 million, reflecting a challenging operating environment with $2 million in foreign exchange headwinds, down approximately 3% year-over-year excluding currency impact [10][31] - Sequentially, fourth quarter revenue rose approximately 2% and over 4% excluding negative foreign currency impact, with a 100 basis points improvement in gross margin [10] - Adjusted operating income was $0.5 million compared to $5.8 million in the prior year period, and adjusted net income was $0.2 million or $0.01 per fully diluted share [37] Business Line Data and Key Metrics Changes - Revenue in the Americas region declined 10.5% year-over-year to $33.7 million, primarily due to a 10.9% decrease in total active accounts [31] - Asia Pacific region revenue increased 0.7% to $17.2 million year-over-year, despite a 2% decrease in total active accounts, driven by an increase in average revenue per account [32] - The new collagen product launched in June showed strong early results, with July revenue exceeding forecasts by 70% and a customer to distributor ratio improving from 1.38 to 1.08 [16][17] Market Data and Key Metrics Changes - The APAC Europe region revenue increased 4% sequentially compared to the third quarter, with over 11% growth excluding foreign currency impact, aided by an 8% increase in active independent distributors [12] - The Philippines market showed significant traction with increased focus on leader rank advancements, contributing to long-term market stability [13] Company Strategy and Development Direction - The company is transforming its business model to be more agile and inclusive, focusing on three growth areas: people, products, and consumer experience [27] - Plans to launch liquid collagen in various international markets later in the fiscal year are in progress, with successful strategies from U.S. events serving as guides [22] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model and highlighted the importance of focused investments in information technology, marketing, and selling initiatives to position for accelerated revenue growth [43] - The fiscal 2023 outlook anticipates revenue in the range of $200 million to $212 million, with adjusted non-GAAP EBITDA expected between $12 million and $14 million [41] Other Important Information - The company ended the fourth quarter with $20.2 million in cash and no debt, maintaining $5 million of availability under its revolving line of credit [39] - Non-GAAP adjusted SG&A expense increased to $16.6 million, primarily due to higher event-related costs and increased labor expenses [36] Q&A Session Summary Question: What are the expectations for future revenue growth? - Management indicated that the actions taken to transform the company are starting to gain traction despite a challenging environment, with focused investments expected to drive future revenue growth [43] Question: How is the new collagen product performing? - The new collagen product has shown exceptional early results, with significant revenue growth in the months following its launch, indicating strong market demand [16][17]

Company Operations and Expansion - LifeVantage Corporation operates in 15 countries, including the US, Japan, and Australia, focusing on nutrigenomics and direct sales[19]. - LifeVantage expanded its operations to the Philippines in fiscal year 2022 as part of its global expansion initiative[23]. - The company reported high engagement in virtual events, with over 2,000 attendees at some meetings, indicating strong distributor involvement during the COVID-19 pandemic[21]. - As of June 30, 2022, the company had approximately 63,000 active independent distributors, consistent with the previous year[60]. - The company had approximately 93,000 active customers as of June 30, 2022, down from 107,000 in 2021[68]. Product Offerings and Innovations - In fiscal year 2022, LifeVantage launched several new products, including IC Bright and TrueScience Liquid Collagen, expanding its product offerings[22][23]. - The LifeVantage app was enhanced to provide distributors with tools for business management and insights into their activities, supporting a digital-first approach[24]. - The company is exploring new product delivery systems, starting with the introduction of TrueScience Liquid Collagen shots this year[41]. - LifeVantage's Petandim product is specifically formulated to combat oxidative stress in dogs, receiving the Quality Seal from the National Animal Supplement Council[52]. - The Vitality Stack includes four nutrigenomics products designed to support healthy organs, while the Ultimate Stack adds additional products for gut health and increased sirtuin activity[54]. Financial Performance - The company reported total revenue of $206.36 million for the fiscal year ended June 30, 2022, a decrease from $220.18 million in 2021[74]. - Net income for the fiscal year ended June 30, 2022, was $3.12 million, significantly lower than $12.89 million in 2021, representing a decrease of 75.8%[218]. - Gross profit for the fiscal year ended June 30, 2022, was $168.26 million, down from $181.99 million in 2021, reflecting a decrease of 7.6%[218]. - Operating income for the fiscal year ended June 30, 2022, was $7.58 million, a decline of 57.0% compared to $17.62 million in 2021[218]. - Total stockholders' equity as of June 30, 2022, was $31.52 million, a decrease from $36.81 million in 2021, reflecting a decline of 14.5%[218]. Marketing and Sales Strategy - The sales compensation plan is among the most rewarding in the direct selling industry, with frequent commission payments to distributors[27][28]. - The company utilizes a direct selling model that allows independent distributors to provide personalized customer service and education about products[55]. - LifeVantage's red carpet program aims to attract experienced sales leaders, contributing to long-term revenue growth[26]. - The sales compensation plan offers one of the highest percentages of sales paid to independent distributors in the direct selling industry, with commissions paid daily, weekly, or monthly[61]. - The LifeVantage app is designed to enhance distributor sales productivity through AI and machine learning, guiding users on effective sharing strategies[71]. Regulatory and Compliance Issues - The company is subject to FDA and FTC regulations regarding the formulation, manufacturing, and advertising of its products[94][100]. - The company is subject to significant security and privacy regulations, which may increase expenses and affect operations[125]. - The company must comply with the Dietary Supplement and Nonprescription Drug Consumer Protection Act, which imposes significant regulatory requirements that could raise costs[169]. - The company is subject to risks related to tax positions and transfer pricing policies, which could increase the effective tax rate and harm operations[177]. - The company has faced negative publicity in the past, which has harmed its business and could affect consumer perceptions of its products[158]. Challenges and Risks - The COVID-19 pandemic has created significant volatility and disruption in financial markets, potentially affecting the company's operations[122]. - The company has faced challenges in motivating independent distributors, which is crucial for its business growth[120]. - The company experienced disruptions in independent distributor operations due to COVID-19, affecting their ability to connect with potential new distributors[123]. - The company may need to raise additional capital to expand its product offerings, which could be dilutive to existing stockholders[143]. - The company is exposed to foreign currency fluctuations, particularly with a significant percentage of revenue generated in Japan, which could adversely impact financial results if the U.S. Dollar strengthens against the Japanese Yen[146]. Sustainability and Corporate Responsibility - The company has invested in sustainability initiatives, including reducing environmental impact and improving global human conditions[110]. - The company has established a sustainability committee to engage stakeholders and discuss initiatives, meeting three times during the year[115]. - The company has implemented a digital starter kit to reduce material usage, contributing to its sustainability goals[113]. - In fiscal year 2022, the company provided monetary donations to various relief efforts, including those affected by the war in Ukraine and natural disasters[115]. - The company has adopted an equity ownership policy to ensure executives and directors have meaningful equity holdings in the company[116].

Financial Data and Key Metrics Changes - Revenue for Q3 2022 was $50 million, down 3% year-over-year, with a decline of 4.2% sequentially from Q2 [11][30] - Adjusted net income was $1.7 million or $0.12 per fully diluted share, compared to $2.8 million or $0.20 per share in the prior year [35] - Gross margin decreased to 80.7% from 82.9% in the prior year, attributed to increased inventory obsolescence and elevated shipping expenses [34] Business Line Data and Key Metrics Changes - Revenue in the Americas declined 8.2% year-over-year to $33.4 million, driven by a 10.7% decrease in total active accounts [31] - Asia Pacific and Europe region revenue increased 9.3% to $16.6 million, supported by a 4.3% increase in total active accounts [32] Market Data and Key Metrics Changes - Internationally, total active accounts grew by 4.3%, with revenue increasing 9.3% or 17.3% when adjusted for foreign currency impact [11] - In Japan, revenue increased slightly by 0.1% on a constant currency basis, despite lower revenue attributed to foreign currency fluctuations [33] Company Strategy and Development Direction - The company is focused on three primary areas for growth: people, product, and customer experience [16] - A new product strategy has been introduced to enhance future product line growth, emphasizing the activation benefits of the flagship product, Protandim Nrf2 Synergizer [18] - The company is committed to a balanced approach between share repurchase and dividend payments to maximize shareholder value [76][78] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging operating environment but expressed confidence in the company's long-term value creation strategy [9][41] - The introduction of a quarterly dividend of $0.03 per share reflects the company's commitment to enhancing shareholder value [10] Other Important Information - The company ended the quarter with $17.8 million in cash and no debt, maintaining a strong financial position [37] - A new event, Activate 2022, is planned to align distributors and promote growth strategies [28] Q&A Session Summary Question: Can you discuss the gross margins and inventory obsolescence? - Management noted that the decrease in gross margins was primarily due to inventory obsolescence related to the personal care product line and ongoing pressures on shipping and fulfillment costs [44][45] Question: What are the expectations for distributor growth in the Americas? - Management indicated that they believe they have bottomed out in distributor enrolments and are cautiously optimistic about future growth, supported by the MVP incentive program [54][55] Question: Can you elaborate on the scientific support for the products? - Management highlighted that Protandim Nrf2 Synergizer is backed by over 30 clinical studies and peer-reviewed research, emphasizing its effectiveness in reducing oxidative stress [59][60] Question: How does the company view competition in the market? - Management stated that there is no direct competition with the same patented technology and peer-reviewed studies as Nrf2, differentiating their products from general antioxidants [65][66] Question: What is the rationale behind introducing a quarterly dividend? - Management explained that the dividend is part of a balanced approach to maximize shareholder value, alongside ongoing share repurchase programs [76][78]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________________________________________________ Form 10-Q ________________________________________________________________________________ ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO (Address of ...

LifeVantage Corporation (NASDAQ:LFVN) Q2 2022 Earnings Conference Call February 1, 2022 4:30 PM ET Company Participants Reed Anderson - ICR Steve Fife - Chief Executive Officer Carl Aure - Chief Financial Officer Conference Call Participants Doug Lane - Lane Research Disclaimer*: This transcript is designed to be used alongside the freely available audio recording on this page. Timestamps within the transcript are designed to help you navigate the audio should the corresponding text be unclear. The machine- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________________________________________________ Form 10-Q ________________________________________________________________________________ ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commissi ...