LifeVantage (NASDAQ:) Company (Nasdaq: LFVN) has introduced its fourth-quarter monetary outcomes for the fiscal 12 months 2024. Regardless of a difficult financial atmosphere, the corporate has managed to take care of sturdy profitability, with an adjusted EBITDA margin of 9.8%, reflecting a 90 foundation level enchancment year-over-year.
Nevertheless, LifeVantage confronted an almost 10% decline in whole revenues, with a very unfavorable impression from international foreign money fluctuations. The corporate’s deal with advisor engagement and upcoming product launches, together with a brand new weight administration system, are key methods to drive future development. LifeVantage’s dedication to creating shareholder worth was additionally evident in its share repurchase and dividend initiatives.
Key Takeaways
- LifeVantage reported a 9.8% adjusted EBITDA margin, a 90 foundation level enchancment from the earlier 12 months.
- Complete revenues fell practically 10%, with adjusted EBITDA remaining flat year-over-year.
- The Americas area noticed a 4% income decline year-over-year, however a 2.4% improve sequentially.
- LifeVantage plans to launch a brand new weight administration product system in October.
- The corporate introduced share repurchases and a quarterly money dividend of $0.04 per share.
- Fiscal 2025 income is projected to be between $200 million and $210 million, with adjusted non-GAAP EBITDA between $18 million and $21 million.
Firm Outlook
- LifeVantage anticipates full-year income for fiscal 2025 to vary from $200 million to $210 million.
- The corporate expects adjusted non-GAAP EBITDA to be between $18 million and $21 million.
- Adjusted non-GAAP earnings per share are projected to be within the vary of $0.70 to $0.80.
- LifeVantage goals to enhance adjusted EBITDA margins to succeed in low double-digits in the long run.
Bearish Highlights
- Fourth-quarter income declined by 9.8% year-over-year to $48.9 million.
- The corporate skilled a unfavorable international foreign money impression of $0.9 million.
Bullish Highlights
- Gross margin remained secure at 79.5% regardless of income decline.
- Adjusted non-GAAP web earnings was reported at $1.8 million, or $0.14 per totally diluted share.
- The corporate has a powerful monetary place with $16.9 million in money and no debt.
Misses
- The decline in whole revenues signifies a difficult macroeconomic atmosphere affecting gross sales.
Q&A highlights
- LifeVantage mentioned sustaining gross margin percentages and highlighted cost-saving measures within the provide chain.
- The corporate’s efforts to lower commissions and incentive bills contributed to improved non-GAAP adjusted SG&A bills.
- Administration expressed optimism in regards to the future, significantly with the upcoming launch of the burden administration product.
LifeVantage Company ended the quarter on a powerful observe, with a deal with driving advisor engagement and sustaining profitability within the face of declining revenues. The corporate’s strategic initiatives, together with the International Activate 2024 Digital Occasion and the optimization of its Rewards Circle loyalty program, are geared in the direction of sustaining long-term development. With the introduction of Raj Anbalagan to the Board of Administrators, LifeVantage can be poised to learn from his experience in digital applied sciences. As the corporate prepares for the launch of its new weight administration product, buyers and stakeholders are trying ahead to the potential impression on the corporate’s efficiency within the aggressive well being and wellness market.
InvestingPro Insights
LifeVantage Company (LFVN) has demonstrated resilience in its monetary efficiency, as evidenced by the newest knowledge and evaluation from InvestingPro. With a market capitalization of $111.89 million, the corporate’s methods to boost shareholder worth are noteworthy. Listed below are a few InvestingPro Ideas that align with the corporate’s latest bulletins and could also be of curiosity to buyers:
InvestingPro Ideas counsel that LifeVantage’s administration has been aggressively shopping for again shares, signaling confidence within the firm’s worth and future prospects. Moreover, the corporate holds additional cash than debt on its stability sheet, offering a strong monetary basis and suppleness for future development initiatives.
From an information perspective, LifeVantage boasts a powerful gross revenue margin of 79.32% for the final twelve months as of Q1 2023, reinforcing the bullish spotlight talked about within the article relating to the soundness of gross margins. The P/E ratio stands at 30.8, which, when coupled with the corporate’s web earnings expectations to develop this 12 months, might point out potential for future earnings enlargement. Moreover, the inventory is buying and selling close to its 52-week excessive, with a value 98% of the excessive, reflecting sturdy market confidence.
For buyers looking for a extra complete evaluation, InvestingPro provides further suggestions, together with insights on shareholder yield, web earnings development expectations, and the inventory’s technical indicators, such because the RSI suggesting the inventory is in overbought territory. There are a complete of 12 InvestingPro Ideas out there for LFVN, which may be explored for a deeper understanding of the corporate’s monetary well being and inventory efficiency.
For extra detailed evaluation and extra InvestingPro Ideas, go to: https://www.investing.com/professional/LFVN
Full transcript – Lifevantage Company (LFVN) This autumn 2024:
Operator: Good day, girls and gents. Thanks for standing by. Welcome to right now’s convention name to debate LifeVantage’s Fourth Quarter of Fiscal 2024 Outcomes. At the moment, all members are in a listen-only mode. Following the formal remarks, we’ll conduct a question-and-answer session. Directions will likely be supplied at the moment so that you can queue up. Internet hosting right now’s convention will likely be Reed Anderson with ICR. As a reminder, right now’s convention is being recorded. I’d now like to show the convention over to Mr. Anderson. Please go forward, sir.
Reed Anderson: Thanks. Good afternoon, and welcome to LifeVantage Company’s convention name to debate outcomes for the fourth quarter of fiscal 2024. On the decision right now from LifeVantage with ready remarks are Steven Fife, President and Chief Govt Officer; and Carl Aure, Chief Monetary Officer. By now, everybody ought to have entry to the earnings launch, which went out this afternoon at roughly 4:05 p.m. Japanese Time. When you’ve got not obtained the discharge, it’s out there on the Investor Relations portion of LifeVantage’s web site at www.lifevantage.com. This name is being webcast, and a replay will likely be out there on the corporate’s web site as effectively. Earlier than we start, we want to remind everybody that our ready remarks include forward-looking statements, and administration might make further forward-looking statements in response to your questions. These statements don’t assure future efficiency, and subsequently, undue reliance shouldn’t be positioned upon them. These statements are based mostly on present expectations of the corporate’s administration and contain inherent dangers and uncertainties together with these recognized within the Danger Elements part of LifeVantage’s most lately filed Kinds 10-Okay and 10-Q. Please observe that in right now’s name, we’ll focus on non-GAAP monetary measures, together with outcomes on an adjusted foundation. Administration believes these monetary measures can facilitate a extra full evaluation and higher transparency into LifeVantage’s ongoing outcomes of operations, significantly when evaluating underlying working outcomes from period-to-period. We included a reconciliation of those non-GAAP measures with right now’s launch. This name additionally accommodates time-sensitive data that’s correct solely as of the date of this dwell broadcast, August 28, 2024. LifeVantage assumes no obligation to replace any forward-looking projection that could be made in right now’s launch or name. Now, I’ll flip the decision over to Steven Fife, the President and Chief Govt Officer of LifeVantage.
Steve Fife: Thanks, Reed, and good afternoon, everybody. Thanks for becoming a member of us right now. Our fourth quarter outcomes once more demonstrated sturdy profitability regardless of difficult macro situations which have continued to create high line headwinds. Our adjusted EBITDA margin was 9.8%, a 90 foundation level enchancment versus a 12 months in the past, reflecting continued progress on initiatives to optimize efficiency and drive profitability. Adjusted EBITDA for the quarter was flat versus final 12 months, whereas whole revenues have been down practically 10%. Forex adjusted income was down 8%. For the complete fiscal 12 months, adjusted EBITDA of $17 million was up 45% versus fiscal ’23. Whereas revenues have been down 6%. Forex adjusted income was down 5%. Whereas general fourth quarter income was softer than we anticipated, we have been inspired by leads to our largest geographies. Within the Americas area, which accounts for over a 3 quarters of our enterprise, revenues have been down 4% year-over-year, however elevated sequentially 2.4% over fiscal Q3. As well as, productiveness continued to enhance as income per advisor rose over 2% in comparison with a 12 months in the past. We proceed to deal with initiatives to drive advisor engagement, together with our latest International Activate 2024 Digital Occasion held in July. This occasion was supported by advisor hosted watch events and native gatherings in all of our markets all over the world. It served as a platform to reaffirm our dedication to the direct promoting trade, in addition to how we now have tailored our enterprise into trendy direct promoting. Through the occasion, we proceed to emphasise core behaviors of the Rise ERA, enrolling, retaining and advancing highlighting spectacular statistics supporting the constructive impacts of those behaviors on advisor efficiency, together with enterprise development, elevated retention charges and up to date chief rank developments inside the group. One other spotlight of the occasion was the announcement of the 2024 Incentive Journey Vacation spot, a rare eight day, seven evening cruise to Alaska, consultants in our U.S., Canada, Mexico and European markets earn factors in the direction of this bucket listing journey by following ERA behaviors. Activate 2024 additionally featured complete gross sales coaching classes led by LifeVantage high leaders. These classes supplied invaluable insights, methods and instruments to raise consultants companies, emphasizing Rise ERA behaviors and equipping consultants with actionable steps to attain their targets. Occasions like Activate 2024 reinforce the significance of the neighborhood for direct gross sales firms and types. Activation Nation has rallied across the imaginative and prescient for this firm and is worked up for what’s to come back. We proceed to make big strides in packages designed to maintain long-term development. An instance of these efforts is the lately accomplished optimization of our Rewards Circle loyalty program within the U.S., Australia and New Zealand markets. The replace demonstrates our ongoing dedication to enhancing the expertise for each our consultants and prospects in addition to our dedication to optimizing program design to fulfill shopper calls for. Along with offering higher worth and optimize engagement for patrons, Rewards Circles now additionally provide subscription advantages for consultants. On the advisor facet, rewards consists of free delivery on enrollment orders when a subscription is scheduled for the long run, plus enterprise constructing rewards each time a subscription ships. Clients profit from the refresh with first subscription perk, together with free delivery and a present with Subscriptions when over a value threshold. Clients will proceed to earn Reward Credit with each subscription that may now take pleasure in decrease redemption thresholds. These simplifying enhancements to Rewards Circle have been pushed from buyer retention knowledge and are available 16 months after launching this system as a part of LV360. Recall that our LV360 transformation initiatives allow us to higher meet the wants of customers on the lookout for a greater strategy to wellness through our unbelievable activation merchandise in addition to entrepreneurs trying to construct and develop profitable companies. LV360 included the launch of the Evolve compensation plan, a contemporary compensation system that provides unbiased consultants, various earnings streams and alternatives to speed up their path to success. Evolves caters to the dynamic wants of contemporary entrepreneurs and associates who’re pushed to share and promote merchandise in addition to those that additionally wish to construct strong collaborative groups. Innovation has been one other key space of focus over the previous a number of years, and we have been very happy with the outcomes, together with the numerous development we have skilled with Liquid Collagen. A primary of its sort product that not solely replenishes loss collagen with 10 varieties of collagen peptides, however prompts the physique’s personal manufacturing of the collagen protein. That product continues to ship for us, particularly contributing to a rise in each buyer and advisor ARPA. Lastly, at Activate 2024, we introduced the upcoming launch of a brand new product system, we will likely be introducing in October that expands the LifeVantage activation story into the quickly rising class of weight reduction. As with our different activating merchandise, you are taking this new system to make one thing your physique wants for well being. One thing that is aware of the best way to make, however as with different issues in your physique, age, genetics, poor food regimen and sedentary way of life results in the degrees of this important hormone. Our modern answer guarantees to disrupt the burden administration area with two groundbreaking formulation designed to suppress meals cravings and stability starvation hormones by activating GLP-1 manufacturing. We’re extremely enthusiastic about this launch and consider it is going to be a recreation changer for our consultants and their companies. There isn’t a comparable product or product system prefer it in the marketplace, and we’re delivering it in a means that stays true to our model and strategy to well being. This new product system will likely be launched at our upcoming Market Join occasion on October 11 and 12 in Kansas Metropolis. In abstract, we’re making significant progress on key initiatives particularly round innovation, optimization and profitability, with adjusted EBITDA margins once more round double-digits, regardless of a really difficult income atmosphere. As well as, we proceed to deal with driving shareholder worth with share repurchases and dividend funds. Lastly, earlier than turning the decision over to Carl, I wish to share a number of feedback on the latest change we introduced to our Board of Administrators. After serving as a director for over 5 years, Erin Brockovich has resigned from the Board to make room for a brand new board member that the Board and Erin really feel will deliver distinctive worth to the corporate. Erin has been a tremendous companion and advocate for our model, and we’re grateful for her a few years of devoted service. In her place, we’re happy to welcome Raj Anbalagan to the LifeVantage Board. Raj has over 20 years of expertise managing and executing giant expertise and e-commerce packages and he at present serves because the Chief Info and Product Transformation Officer at Caesars (NASDAQ:) Leisure. His expertise in digital applied sciences will likely be invaluable in advancing our strategic development initiatives. Now let me flip the decision over to Carl Aure, our Chief Monetary Officer to evaluation our fourth quarter monetary outcomes. Carl?
Carl Aure: Thanks, Steve, and good afternoon, everybody. Let me stroll you thru our fourth quarter outcomes. Please observe that I will likely be discussing our non-GAAP adjusted outcomes. You’ll be able to discuss with the GAAP to non-GAAP reconciliations in right now’s press launch for extra particulars. Fourth quarter income was $48.9 million, down 9.8% on a year-over-year foundation, and international foreign money negatively impacted income by $0.9 million. Excluding the unfavorable impression of international foreign money fluctuations, fourth quarter income was down by $4.4 million or roughly 8% as in comparison with the prior 12 months interval. Income within the Americas area decreased 4.1% to $38.1 million within the quarter, primarily pushed by a 7.8% lower in whole lively accounts and partially offset by greater common income per account, ensuing from adjustments in product combine and the continued penetration of our TrueScience Liquid Collagen product. Income in our Asia/Pacific and Europe area decreased 25.2% to $10.8 million within the quarter, primarily pushed by a 17.1% lower in whole lively accounts and the unfavorable impression from international foreign money alternate charge fluctuations. Excluding the unfavorable impression from international foreign money fluctuations, that are primarily attributable to Japan, fourth quarter income in our Asia/Pacific and Europe area was down 18.6% as in comparison with the prior 12 months interval. Gross margin was 79.5% for the fourth quarter in comparison with 79.6% within the prior 12 months interval. We’re inspired that we have been in a position to preserve gross margin percentages regardless of the lower in income. We proceed to be targeted on figuring out value financial savings alternatives throughout our provide chain to enhance gross margins. Commissions and incentive expense within the fourth quarter decreased $1.5 million year-over-year. As a share of income, commissions and incentive expense was 44.9%, up 160 foundation factors versus a 12 months in the past ranges. The rise was primarily as a result of timing and magnitude of our varied promotional and incentive packages. Non-GAAP adjusted SG&A expense was $13.7 million in contrast with $16.7 million within the prior 12 months interval and improved 280 foundation factors as a share of income to twenty-eight%. Adjusted non-GAAP working earnings was $3.2 million in contrast with adjusted non-GAAP working earnings of $3 million within the prior 12 months interval. Adjusted non-GAAP web earnings was $1.8 million or $0.14 per totally diluted share within the fourth quarter, in comparison with adjusted non-GAAP earnings of $2.2 million or $0.17 per totally diluted share within the prior 12 months interval. We recorded earnings tax expense of $1.4 million within the fourth quarter of 2024 in comparison with $600,000 within the prior 12 months interval. Excluding the $300,000 accrual associated to unsure tax positions, our efficient tax charge for fiscal 2024 was 24.8%. Adjusted EBITDA for the fourth quarter was $4.8 million or 9.8% of revenues in comparison with $4.8 million and eight.9% in the identical interval a 12 months in the past. Please observe that the entire changes from GAAP to non-GAAP that I focus on right now are reconciled in our earnings press launch issued this afternoon. Our monetary place stays sturdy with $16.9 million of money and no debt on the finish of the fourth quarter. Capital expenditures totaled $0.3 million within the fourth quarter and $2.2 million for fiscal 12 months 2024. Along with sustaining a powerful stability sheet, we proceed to deal with our capital allocation priorities to drive worth for stockholders. Through the fourth quarter, we used roughly $1.8 million in money to repurchase roughly 253,000 shares of frequent inventory beneath our inventory repurchase authorization. Throughout fiscal 2024, we used roughly $6.4 million in money to repurchase roughly 977,000 shares of frequent inventory. As of June 30, 2024, there’s nonetheless $20.4 million remaining beneath our inventory repurchase authorization. We additionally introduced a quarterly money dividend of $0.04 per frequent share of inventory or roughly $500,000 within the combination. This dividend will likely be paid on September 17, 2024 to stockholders of file as of September 9. For the reason that starting of fiscal 2024, we now have returned $13.4 million in whole worth to our stockholders by means of inventory repurchases and dividends. Turning to our outlook for fiscal 2025. We anticipate our full 12 months income will likely be within the vary of $200 million to $210 million. We anticipate adjusted non-GAAP EBITDA within the vary of $18 million to $21 million with adjusted non-GAAP earnings per share within the vary of $0.70 to $0.80 per share. We’re dedicated to persevering with to enhance our adjusted EBITDA margins, and we consider we’re effectively on monitor to succeed in our long-term goal of low double-digits. And with that, let me flip the decision again over to the operator for questions. Operator?
Operator: Thanks. We’ll now be conducting a question-and-answer session. [Operator Instructions] Our first query is from Doug Lane with Water Tower Analysis. Please proceed together with your query.
Douglas Lane: Sure. Hello. Good afternoon, all people. Simply beginning off on the outlook for fiscal 2025 right here, Carl. You are coming off a few quarters gross sales pressures, challenges you talked about, and you’re on the lookout for full 12 months development or flat to up mid-single digits for fiscal 2025. And I do know, you do not give quarterly steering, however are you able to give us a bit of assist with cadence? Is that this one thing the place you anticipate a constant enchancment quarter-over-quarter in 2025 or is there going to be extra of a again half load?
Carl Aure: Yeah. Thanks, Doug for the query. Sure. As we sit up for fiscal 2025, I imply, I do suppose that we anticipate a reasonable enchancment in every quarter in FY ’25. Q1 probably will likely be a bit of bit decrease compared to the opposite quarters, however we do anticipate the momentum to construct in the direction of the again half of the 12 months, particularly with — we have quite a bit that we’re anticipating with in Q2 surrounded the product launch that we had, and the next momentum that we anticipate to see in Q3 and This autumn following.
Douglas Lane: Okay. That is useful. I imply I did discover one quantity that stood out to me that’s reversing form of a longer-term pattern was the whole lively accounts, which is the consultants and the purchasers that you simply launched truly improved sequentially for the primary time in years. And I simply puzzled what’s actually driving that quantity. I do not — one level will not be a pattern, nevertheless it’s simply an fascinating change in dynamic. And I simply puzzled if you happen to might remark extra about your sequential enchancment in lively accounts.
Steve Fife: Yeah, Doug. That is Steve. I am glad you seen that. We’re happy with that. And the fact is, as , we have been engaged on the transformation inside the firm for about 18 months now once we launched a refresh to our compensation plan, first within the U.S. and Japan and Australia. After which extra lately this — earlier this 12 months in Canada, Mexico and Europe. And I actually attribute that to each the attraction of recent folks now that, that plan is in place in addition to our current leaders working by means of and understanding how they’ll optimize the plan. So it is I feel it is improved — effectively, it has improved our retention. And what we’re seeing now’s development from an enrollment standpoint. So this final quarter in This autumn, we had each elevated enrollments and enchancment in retention, particularly within the U.S. And as you mentioned, one knowledge level will not be a pattern, however I consider that we’re — we now have bottomed out and are trying ahead to rising now sequentially.
Douglas Lane: Have you ever had any — has there been any impression from a few of these different ideas altering their enterprise mannequin away from conventional direct promoting extra to affiliate marketing online? Is there a possibility there for LifeVantage to choose up some management.
Steve Fife: Sure, completely. It is one of many issues that as we glance again, we anticipated this pattern occurring popping out of COVID there’s increasingly exercise and noise in regards to the affiliate mannequin, and it was one of many key premises of once we modified our compensation plan to make it far more enticing for these people. However actually, the great thing about our plan is that we stored the entire greatest attributes for many who wish to construct a really conventional consulting enterprise. They’re extra sort of entrepreneurial minded and wish to construct groups. The plan remains to be very enticing to them in addition to additionally offering an avenue for those who are extra inquisitive about simply promoting merchandise. So moderately than having to make actually laborious selections round which path or which mannequin we’ll observe, or add a brand new ingredient to a plan and forcing these people to sort of decide in the beginning once they’re becoming a member of LifeVantage. Our plan permits folks to affix nevertheless they need after which to maneuver freely between simply promoting merchandise and like I mentioned, or constructing groups. And I feel that the advantages of that we’re simply starting to see.
Douglas Lane: Okay. That is smart. After which for these of us that take note of what is going on on at Medifast (NYSE:) and WeightWatchers, definitely would possibly increase an eyebrow in regards to the determination to get into the burden administration area with such turbulence in that area at present with the entire GLP-1 factor and the way disruptive it has been to only about anyone that participates in weight administration today. So perhaps if you happen to might assist construct down a bit of bit extra on the burden administration, what’s your providing? How does it differ from the opponents? And what is going on to be your strategy to that section?
Steve Fife: Yeah. You are proper. There may be numerous turbulence there, however we have adopted the strategy that I feel is, it is simply grounded in LifeVantage’s legacy, and that is been true from a science standpoint and most lately, over the past a number of years, as we have constructed on our activation story. If you consider Protandim Nrf2 again within the very starting, it prompts sure pathways in our our bodies to create or to have our physique create antioxidants that fight oxidative threats. And that was the inspiration of LifeVantage. And since then, we have launched the skincare line and different merchandise, as , that each one have activation on the core of their story. Extra lately collagen is a product that we launched, I assume, two years in the past or so. And it’s a product that helps activate proteins that generate collagen. And as we take a look at different merchandise in our path — pipeline line and what was occurring within the market, we thought that there is no purpose why we won’t create an activation story to assist these with — that want deal with weight administration. And so most likely near a 12 months in the past, we began the event of a product that we’ll be launching in the course of October right here, that prompts the GLP-1 proteins. And the good thing about that, it is a two-part system, a few tablets after which a powder and the differentiation there’s that 100% pure. It nonetheless has the advantages of lowering sort of the meals noise, a starvation suppressant. And proper now, we’re by means of our in vitro testing and the outcomes are extraordinarily promising. We’re about two-thirds of the way in which by means of human scientific testing and likewise these preliminary outcomes are monitoring to what we consider we are able to do. So it’s coming into an area that is noisy now, however we expect we now have a substitute for present the entire advantages. And this is not simply — it is to get out of those fast fats, the yo-yo diets and all of these varieties of issues. That is supposed to be not only a three month product the place you lose the focused quantity of weight and then you definately go off of it. However it’s one thing that you’d proceed to take to assist handle your weight after the lack of weight that you’re focusing on, nevertheless it actually helps the psychological well being, the soundness of — and confidence of people. And so we consider that what – we now have a really differentiated product, one that’s wholesome and nonetheless on mark with what the tendencies are within the market. And we’ll see in October, however we’re very optimistic about what lies forward of us.
Douglas Lane: Okay. That’s good colour. Thanks, Steve.
Operator: Thanks. There aren’t any additional questions right now. I want to hand the decision again over to Steve Fife for any closing feedback.
Steve Fife: Nicely, thanks, everybody, for becoming a member of us right now. And as we conclude, I wish to lengthen my appreciation to our dedicated workers, excellent unbiased consultants, stockholders and devoted prospects. The energy of our distinctive platform, coupled with the aggressive fringe of our enterprise mannequin that empowers people to ascertain companies on their very own phrases is complemented by a devoted management group, a various vary of distinctive merchandise, an engaged advisor neighborhood and a sturdy monetary place. This collectively emphasizes our strategic positioning for the long run, enabling us to pursue long-term targets whereas we persistently construct substantial worth for our stockholders. We sit up for updating you on our subsequent name, which will likely be after the launch of our new modern GLP-1 weight administration system. Thanks.
Operator: This concludes right now’s convention. Chances are you’ll disconnect your traces right now. Thanks on your participation.
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