Yahoo Finance Lifevantage Corp (LFVN) (Q3 2024) Earnings Call Transcript Highlights: Mixed Results Amidst ...
Adjusted EBITDA: $5.1 million, up 55% year-over-year.
Adjusted EBITDA Margin: Increased by 440 basis points to 10.5%.
Revenue: $48.2 million, down 10.2% year-over-year.
Gross Margin: 78.9%, decreased from 80.2% the previous year.
Net Income (Adjusted Non-GAAP): $2.8 million, or $0.21 per fully diluted share.
Revenue per Consultant: Increased over 6% year-over-year.
Liquid Collagen Revenue: $11 million, up approximately 7% from last year.
Dividend: Quarterly cash dividend increased to $0.04 per common share.
Share Repurchases: $1.9 million used to repurchase 292,000 common shares.
Fiscal 2024 Revenue Outlook: Adjusted to $202 million to $205 million from previous $207 million to $213 million.
Fiscal 2024 Adjusted EBITDA Outlook: Expected to be between $16 million and $18 million.
Release Date: May 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Lifevantage Corp (NASDAQ:LFVN) reported a significant year-over-year improvement in adjusted EBITDA, which increased by 55% to $5.1 million.
Adjusted EBITDA margin improved by 440 basis points to 10.5%, reflecting ongoing optimization of LD360 initiatives and improved productivity.
Revenue per consultant increased by over 6% year-over-year, marking a consistent rise for the fifth consecutive quarter.
The launch of new products and enhancements, such as the TrueScience skincare line and liquid collagen, continues to drive product innovation and market competitiveness.
Lifevantage Corp (NASDAQ:LFVN) maintains a strong financial position with $17.4 million in cash and no debt, alongside a new $5 million revolving line of credit.
Negative Points
Third quarter revenue of $48.2 million was down 10.2% year-over-year, impacted by lower than expected performance, particularly in international markets.
A decline in total active accounts, with a 13.9% decrease in the Americas and a 17.1% decrease in the Asia Pacific and Europe regions.
Gross margin decreased to 78.9% from 80.2% in the prior year period, influenced by shifts in product mix and increased costs.
The company revised its fiscal 2024 revenue outlook downwards from the range of $207 million to $213 million to $202 million to $205 million.
Despite efforts to boost consultant engagement and sales, challenges in international market performance, particularly in Japan and the Philippines, persist.
Q & A Highlights
Q: Can you explain the performance of international markets, particularly why they were weaker than expected? A: Carl Aure, CFO of LifeVantage, noted that Q3 was particularly soft in Japan and the Philippines. Despite these challenges, the company remains optimistic, especially after a recent successful event in Japan.
Q: What gives you optimism that the downward trend in sales will improve in the fourth quarter? A: Steven Fife, CEO, mentioned that despite a slow start in January and February, initiatives launched in March, such as new product introductions and incentive programs, have shown positive results. These initiatives are expected to continue driving growth.
Q: Why has the commission and incentive expense line decreased to its lowest level, and when do you expect it to return to a normal range? A: Carl Aure explained that the decrease was due to the timing of certain incentives and the absence of an incentive trip in Q3. He anticipates that this expense will normalize to around 43% in Q4 due to increased promotional activities.
Q: What are the expectations for the company's financial performance for the rest of the fiscal year? A: Carl Aure projected that revenue for fiscal 2024 would be between $202 million and $205 million, with adjusted non-GAAP EBITDA expected to be between $16 million and $18 million. The company also anticipates adjusted non-GAAP earnings per share to be between $0.57 and $0.67.
Q: Can you discuss the impact of the Evolve compensation plan and Rewards Circle customer loyalty program on the business? A: Steven Fife highlighted that the rollout of these programs in new markets like Canada, Europe, and Mexico has been positive, driving engagement and growth in these regions since their introduction.
Q: What strategic moves are being made to enhance shareholder value? A: Carl Aure mentioned that the company is focused on capital allocation, having repurchased shares and increased the quarterly dividend. These actions are part of LifeVantage's ongoing efforts to deliver value to shareholders.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
