Welcome to today's Fireside Chat with LifeVantage Corporation. I'm your host, Doug Lane, Managing Director and Consumer Analyst at Water Tower Research. Today I'm joined by Steve Fife, President and CEO at LifeVantage, and Carl Aure, CFO. So welcome, Steve and Carl. Thanks, Doug. Yeah, thank you, Doug. LifeVantage is a world leader in using nutrigenomics to activate a healthy body, mind, and mood with science-backed products that include unique combinations of naturally occurring compounds. The company activates financial, social, and community wellness by using a direct-selling business model to offer its premium-quality supplements, energy, and skincare products through a connected network of independent consultants around the globe. The company's Safe Harbor statements can be found in the events and presentation sections on its investor relations website. Also, this fireside chat may not be reproduced or written transcript distributed without the express written consent of Water Tower Research. Let's get started. Steve, it's been an eventful year for LifeVantage here in 2025. You came into the year recovering from inventory stockouts of the MindBody GLP-1 System after a successful launch in the 2024 fourth quarter, and now you're exiting 2025 with all of the excitement generated by the recent LoveBiome acquisition. So how do you look back on what 2025 has meant for LifeVantage? Yeah, thanks, Doug. Great question, and you know, I guess it's that time of year when people reflect on the past and probably project into the future a little bit, but you know, when I think about 2025, I believe we've continuing to take steps in the right direction and continue on the journey that LifeVantage is committed to. You know, this journey for me started a few years ago as we really looked at our product strategy and established ourselves as the activation company. We looked at how we compensate our consultants and really modernize that compensation plan, and we're seeing success through the changes, the enhancements that we made, and then we also, you know, started investing in our technology, realizing that in order to keep pace and to accelerate our growth, you know, our technology needed to become modernized. You know, we've announced a partnership with Shopify. We're making progress in that implementation and look forward to being able to launch that in 2026 as we continue the implementation of that. I'd say, you know, the crown jewel of the year for us was the acquisition of LoveBiome. That acquisition, you know, there are a number of aspects that make this and will continue to make it a success. I think it's important to, I guess, set the tone right now of this acquisition was more than just acquiring a great product, but it was really about partnering with a great team of individuals, excuse me, who shared, you know, a very common vision and values around this industry, passionate about science and how we can collectively change people's lives through amazing science-based products and also an entrepreneurial business opportunity. It's that combination of, you know, the people and that shared vision that is what is driving success with LifeVantage right now in 2025 and, you know, we're going to build upon clearly in 2026. Yeah, and I know that LoveBiome is a new company, but you're familiar with some of the players there, right? They're not new members to the direct-selling community. No, that's right. The two co-founders have been in the industry for over 40 years. Actually, Carl worked with them in a previous life, and it's how I became acquainted with them through the relationship that Carl had with Kelly Olsen and Shon Whitney, the two co-founders of the company. The key product that LoveBiome brings to LifeVantage is P84, which is a microbiome blend focusing on improving gut health. I noticed you just released your first in vitro study of P84. So what were the key findings and what's in store for the next stage of your scientific research on P84? Yeah, you know, I mentioned, you know, this journey that we've been on and establishing ourselves as the activation company. And that's critical really to who LifeVantage is and the way we go about establishing ourselves as that. And, you know, we distinguish from supplementation in that our products really are very focused on helping the body activate or produce naturally different things that our bodies need for good health, you know, be it antioxidants through our Protandim Nrf2 product, collagen, hormones, you know, like GLP-1 with our MindBody product. And P84 is another now activator that we have in our, you know, arrow in our quiver, if you will, that helps with the activation of gut health. You know, we back all of our products through studies and not just ingredient studies, but, you know, typically we start with an in vitro test where we will look at specific proteins or peptides to see the impact that it has on, you know, again, the function of a body. In this case, we looked at 14 different peptides and proteins that are all known to regulate, repair, and restore the gut, very focused on the gut microbiome. You know, the results from this in vitro test were amazing. All 14 of the markers showed statistically impressive and relevant results. You know, a couple of examples of those peptides, there's a peptide referred to as GRP, which is responsible for sending alerts to kind of fire up the digestive system in our gut. We saw an increase of over 1,000% in our in vitro tests with P84. Another peptide, TFF3, it's responsible for managing the gut lining and repairing, and it saw over 100% increase. So each one of these 14 peptides and proteins that we tested saw an increase. And, you know, typically when you're doing in vitro testing, an increase of 20% or 30% is statistically meaningful. And so when you see, you know, 100%, 1,000%, it tells you that the ingredients, and it's not just the ingredients, but it's the combination of the ingredients acting with one another are really activating our body's, in this case, you know, gut system. We're thrilled to be able to add this to our product portfolio, you know, marrying it as a hero product along with our Protandim product, our collagen product, and our GLP-1 product. Really establishes another whole space to attract consumers, for our consultants to bring in new consultants and to take our company down, you know, another avenue of health and wellness. Yes. And I remember you launched a new stack right after you acquired LoveBiome. Maybe give us a quick update on how that's working out. What's the reception been there? Yeah. You know, another part of when we do studies, you know, we look at the synergistic benefits of our products taken in tandem. Protandim Nrf2 has been LifeVantage's hero product, you know, a foundational product. P84, LoveBiome's, you know, hero product. And what we did, you know, for a number of reasons, but, you know, a couple of reasons was to bring those two products together and create literature and material around that for our consultants because we knew at the time there would be a synergistic benefit when you take those two products together. We also brought it as a unifying front for the two consultant bases. You know, we've worked hard and we refer to ourselves as Activation Nation, and we feel like we've brought in a new group of people to Activation Nation. And by marrying those two products, it gave a one singular message for our consultants to take out regardless of what your background was or where you came from. So it has been the focus of our stacks philosophy for the next or for the last couple of months. It will be going forward into next year as well as we, you know, integrate the two companies and the product lines together. That's true, Steve. I mean, you didn't just get products. You also got a bunch of independent consultants as well. And how's it been going so far? I guess it's been over two months since the acquisition closed. And so maybe an update on the migration of some of the LoveBiome consultant base over to the Evolve Compensation Plan. Yeah. Well, it's gone amazingly well. You know, and I've been part of a number of acquisitions, and I think I've shared this before, but, you know, from the very first conversations that I had with Kelly and Shon, it was amazing how aligned we were philosophically. I mentioned earlier, you know, the shared vision, but, you know, when you start a journey like this with a new partner and you're so aligned from the very beginning, you know, you figure out how to overcome the little challenges that come through integration, and that's exactly what we've done. You know, we signed the deal on October or September 3rd. The deal officially closed on October 1st, and on November 1st, we were fully integrated as now one company together. You know, and the biggest piece of that was integrating the LoveBiome consultants into LifeVantage and getting them trained and up to speed on our Evolve Compensation Plan. And so there's been a series of trainings that have taken place around that. We have put in place some incentives to help in that transitionary period to help them really learn how to optimize the compensation plan. But, you know, and that's progressing well. You know, we just closed our first month where we're all on one compensation plan. And it's gone, you know, as well as I can imagine. The other thing that is happening beyond just the compensation plan is really how the two groups are merging together as one. During November, well, I guess it started kind of officially in Dallas where we had an in-person event. You were able to attend that. I'm sure you sense the excitement of both of the groups coming together as one. Since, you know, that Dallas event in October, I think we've had about 30 different meetings throughout the world, but, you know, combined group meetings where both LoveBiome and LifeVantage consultants participated in trainings and opportunities and meetings bringing in new people to the company. The outreach, the cross-communication, the cross-support has just been amazing as both teams have welcomed one another. Yeah, there's no question. There was a lot of energy at that convention. And I'm glad to hear it being sustained here, you know, two months later as everybody rolls up their sleeves and goes to work. But let's talk about what's upcoming here. We've got in January, you guys do a global kickoff every January, I guess mid-January to talk about what's going to happen in calendar 2026. Can you sort of give us maybe a sneak peek of what you'll be talking at the global kickoff this year? Yeah, it's kind of unusual, you know, having a June 30th year-end. I feel like we get two beginnings of the year and two ends of the year. You know, because most of us, most consumers, most of our consultants think on a calendar year basis, we do have a kickoff each year to really set the tone, to set the theme. In 2024, our theme was to rise. Last year in 2025, or I guess this current year, it was to drive. Those are words, but, you know, during the year, we build upon that. Each of our promotions and the in-person events that we have, we focus on those words to, you know, to help drive behaviors and our results. And you're right, you know, this year. I'm not going to tease it too much, but this year, and I think it's on October 10th, is our kickoff. We will be announcing a new theme. And it will be kind of our common messaging throughout all of 2026. And in addition, at this kickoff, we'll announce an incentive. We'll announce a couple of destination trips that our consultants earn. And one of our big focuses this year will be a focus on subscriptions and subscriptions for both our consultants and our customers. We know the power of being on a subscription. And so a lot of our messaging, not just at this event, but through the year, will be in terms of training and helping our consultants understand the power of that. And we'll also be announcing some results of another study that we've done that looks at Protandim, P84, and MindBody. And the results are going to be amazing. We'll stay tuned for that. I'm looking forward to it. I know you've got a lot to work with getting the P84 and the LoveBiome products and their science into the portfolio. One thing I think got maybe a little bit buried in all the LoveBiome excitement is the move into Iceland over the summer. Not that Iceland's a big market, but it's really been a while since you've really expanded into new markets. I'm always curious as to what your plans are with regards to geographic expansion. Is there anything there we can look forward to in 2026? Yeah. Yeah. No, you're right. You know, LifeVantage kind of hit the pause button on geographic expansion the last couple of years, in part because our focus was on what I said at the very beginning, you know, on our product strategy, comp plan, and technology. And I, you know, we have made enough progress. I don't think you ever stop on, you know, the journey on any one of those three areas. But I'm comfortable with the progress that we're making there. And now, you know, shifting a little bit more to broadening up the opportunity geographically. When I look at our footprint, where LifeVantage revenue is, where our consultant base and customer base is, we are dominant in the United States and candidly just underrepresented in the rest of the world. And that is a tremendous opportunity for us. And recently, as you said, we launched in Iceland. Iceland is not one of those countries that people probably think about as, you know, the next, you know, what's going to move the company in a significant way, but it was an important strategic decision for us because we had attracted consultants to the company from other companies who had a presence there in Iceland. You know, some of them lived there. Some of them were outside of Iceland, but they had teams in Iceland. And as we, you know, looked into those teams, we looked at the contribution that they could provide really to support them and their businesses. We made the decision to go there, and it's been a success. You know, their results are exceeding our forecast. It got us kind of as a company back in the mindset of what it takes to launch in a market. You know, 2026, there will be, you know, further international expansion coming from LifeVantage. That's a, you know, launching countries. It's a skill. It's something that there's probably 80%-95% overlap from country to country to country. But each, and we need to become experts in that. We will. The 5%-10% uniqueness to each country is really what kind of determines the bandwidth and the length of time it takes us to launch because each country has its own nuances. But I'm excited that we have this first one behind us. We've also made significant progress in the Canary Islands because of relationships coming out of Spain and Mexico into that small country. There will be more to come. There are additional products that we're planning on launching into Iceland even as we look forward into 2026. So it will be, you'll hear more about our geographic expansion as we progress during 2026. Yeah, I'm always interested in that. As you mentioned, you're underrepresented with 80% of direct selling outside the U.S.. And I think only 30% of your business is outside the U.S.. It just seems like there's a lot of white space out there. So I'll keep asking. Yeah. Shift gears here. Carl, you know, you just closed on the acquisition. It didn't sound like it was a big source or a big use of cash. But maybe you can update us on capital allocation plans for 2026? Yeah, sure. Yeah. As I look forward to 2026, you know, I still think that we're committed to those three pillars that we've talked about in the past about, you know, investing internally. You know, one of the things that Steve had talked about is just our e-commerce platform and the investments that we want to continue to support there. That'll clearly be a priority, but I think from a share repurchase standpoint, we're still very committed to share repurchases, especially where current valuation levels are at. You know, we still have just under $17 million remaining under the existing authorization. We do have a 10b5-1 plan out there that's effective through June 30th of 2025, and we'll be able to supplement that through open window purchases as market conditions permit, so we're definitely still very committed. When I think of the priorities, you know, especially at these valuations, I think share repurchases will be at the, you know, at the higher end of the list there. We also remain committed to our dividend. As you know, we put the dividend in place almost four years ago. We're still obviously very committed to that dividend. You know, and as I look back kind of at the current quarter, as our current fiscal Q2, as you mentioned, really from a capital allocation perspective, we've been really hyper-focused on LoveBiome. You know, we did, there was a cash upfront payment on the closing on October the 1st. We used a portion of our existing cash from our balance sheet to fund the closing of LoveBiome. But we've also been investing internally as well, just through the integration efforts that Steve was talking about with LoveBiome, getting them onto our comp plan. There's definitely been also some additional internal investment there just to make sure that that transition goes as smooth as possible. And then along with that, just building inventory as well, you know, building up inventory from a working capital perspective to get sufficient supply of P84 and some of the other popular products of LoveBiome that we anticipate to go forward. And so I would say in current quarter, we've been hyper-focused on LoveBiome, but looking forward for sure, you know, share repurchases would be a priority as our cash balances start to rebuild. That's a good point. This is also your first diet season, if you will, with MindBody. I imagine there's an inventory build perhaps going on there. Absolutely. Yep. So we might see a little bit elevated inventories in the December quarter. I think that's right. Yeah. And what about CapEx for the full year for the fiscal, the June fiscal year in 2026, maybe slightly elevated? Yeah, it'll be slightly elevated versus historical years and mostly because of the development associated with the e-commerce platform. That's where the internal CapEx is going to be not significantly higher than prior years because it will bridge a little bit into fiscal to our next fiscal year as well. But yeah, it'll be elevated primarily due to the e-commerce platform. Okay. That makes sense. And then let me see. Your last global convention was in the spring of 2025. So you're due one in the fall of 2026, if I got my math right. So not quite a year away. So maybe it's a little bit early. But maybe if you put on your crystal ball, Steve, what do you think you'll be talking about with LifeVantage at your global convention? I assume it's in October of 2026. That's right. It will be in October, and you know, between what we have the global kickoff here that we've talked about, that's a virtual event. In November, the U.S. and each of our countries will have kind of regional events, so it'll be, that will be, and those will be in person, so we actually in the U.S., that event is going to be in Las Vegas in April, and then July, we have a virtual event that is a global virtual, and so that's, and then leading up to October, we'll have our global convention, and this is, you know, our conventions are amazing. You know, what's really fun is when we have international consultants come and join us and seeing how they interact with the U.S. team and vice versa. You know, you can see Activation Nation really coming together as one. They bring a, you know, a different energy and excitement. They don't get to, you know, be here as often as we would love to. So it's pretty special when we have these international events. I would look forward to a product launch at our convention in October and then, you know, a lot of recognition for, you know, what I hope to be a big year. As we, you know, building off of the LoveBiome opportunity, the partnership with LoveBiome, I expect that we'll have a lot of recognition and training and motivations. We typically bring in a third-party speaker to inspire and with skills. It's just, they're great events. Really, I think our consultants really look forward to them. I'm sure it'll be fantastic. It'll be your first global convention with the LoveBiome folks. I'm sure there'll be a lot of enthusiasm around that. Anyway, we're about out of time here. Maybe we'll leave it there. Steve, Carl, thank you very much for joining us on today's fireside chat. Yeah, thanks, Doug. Appreciate it. Yeah. Thank you, Doug. Thank you very much. To learn more about LifeVantage, please visit the investor page on their website, LifeVantage.com, or access our research on WTR's website, which is watertowerresearch.com. Thank everybody for joining us. Please note that the views expressed in this fireside chat may not necessarily reflect the views of Water Tower Research LLC and are provided for informational purposes only. This fireside chat may not be distributed or reproduced without the written consent of Water Tower Research and should not be considered research nor a recommendation. WTR is an investor engagement firm, not a licensed broker, broker-dealer, market maker, investment bank, underwriter, or investment advisor. Additional disclaimers can be found at watertowerresearch.com.