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LifeVantage(LFVN) - 2022 Q4 - Earnings Call Transcript

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]