Good day, everyone, and welcome to today’s LifeVantage Third Quarter Fiscal 2013 Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. John Mills of ICR. You may begin.

Thank you. Good afternoon, ladies and gentlemen, and welcome to the LifeVantage Corporation’s fiscal third quarter 2013 conference call. On the call today from LifeVantage are Doug Robinson, President and Chief Executive Officer; and Dave Colbert, Chief Financial Officer. By now, everyone should have access to the earnings release which went out this afternoon at approximately 4:00 pm Eastern Time. If you have not received the release, it is available on the Investor Relations portion of LifeVantage’s website at www.lifevantage.com. This call is being webcast, and a replay will be available on the company’s website as well. Before we begin, we would like to remind everyone that the prepared remarks contain forward-looking statements, and management may make additional forward-looking statements in response to your questions. These statements do not guarantee future performance and, therefore, undue reliance should not be placed upon them. These statements are based on current expectations of management and involve inherent risk and uncertainties, including those identified in the Risk Factors section of LifeVantage’s most recently filed 10-K and 10-Q. These risk factors contain a more detailed discussion of the factors that could cause actual results to differ materially from those projected in any forward-looking statements. Also on today’s call, we will be referring to GAAP and non-GAAP financial results. We have non-GAAP reconciliation tables in the earnings release, and it will also be on our website. We are presenting adjusted gross profit, adjusted gross margin, adjusted operating income, adjusted net income and adjusted EPS because management believes that excluding the product recall cost from the relevant GAAP measures, when viewed with our results under GAAP and the accompanying reconciliations, provides useful information about our period-over-period growth and profitability and provides additional information that is useful for evaluating our operating performance. This call also contains time-sensitive information that is accurate only as of the date of this live broadcast, May 9, 2013. LifeVantage assumes no obligation to update any forward-looking projection that may be made in today’s release or call. Based on the number of participants on today’s call, during the Q&A session, we ask that you please limit the number of your questions to three. And with that, I would like to turn the call over to the company’s President and CEO, Mr. Doug Robinson. Go ahead, Doug.

Thanks, John, and good afternoon, everyone. On today’s call, I’ll briefly review our financial results for our third fiscal quarter and provide a general update on our business and growth initiatives. After that, I’ll turn the call over to Dave Colbert, our Chief Financial Officer, for a more detailed discussion of third quarter results. First, let me provide a quick review of our financials. In the third quarter, we generated revenue of $50.4 million, reflecting a 39% increase compared to the prior-year period. And we achieved net income of $3.4 million. We ended the quarter with a strong cash position of $27.2 million. This financial strength gives us the flexibility to make strategic and selective investments in our business for the benefit of our shareholders, as we see appropriate. As we have discussed on our prior call, throughout fiscal 2013, we faced some significant operational challenges that are reflected on our third quarter financial results. Specifically, we were faced with our voluntary recall of select lots of Protandim; our transition in Japan to a full office, with services and support operations; a reformulation of Protandim in Japan, driven by local regulatory requirements and an increased ratio of preferred customers to distributors. Today, I’ll spend a few minutes describing the steps we have taken to address each one of these events. However, while we’re aggressively addressing these issues, we’ll continue to face headwinds in some cases. That said we also believe that by working through these challenges, we’ve made great strides in our business and are a better company for having persevered. Given our long-term view of the company’s prospects, we’re moving forward with a process that we believe will culminate in the repurchasing of up to $50 million of our stock in this calendar year. We have already purchased $5…

Thank you, Doug, and good afternoon, everyone. As Doug mentioned earlier, in the third fiscal quarter of 2013, we generated net revenue of $50.4 million, which is a 39.1% increase over the third fiscal quarter 2012. Local currency net revenue for the period increased by 43.5%, but this was partially offset by an unfavorable foreign exchange impact of 4.4%. Gross profit in the third fiscal quarter of 2013 increased to $43.5 million from $31.2 million in the same period last year. Our gross margin in the third fiscal quarter of 2013 was 86.4% compared to 86.2% in the same period last year. During the third quarter, we received an initial payment of approximately $500,000 for our insurance company for recall recovery. Excluding this benefit, our third fiscal quarter gross margin was 85.4%. On a year-to-date basis, our gross margin is 81.3%. And on a non-GAAP basis, removing the recall impact, our gross margin was 84.7%. Operating income for the third fiscal quarter of 2013 was $3.9 million or 7.8% of revenue. This compares to $6.4 million or 17.7% of revenue in the prior-year quarter. On a year-to-date basis, our operating income is 7.5%. And on a non-GAAP basis, removing the recall impact, operating margin was 11.2%. The year-over-year operating margin erosion is primarily due to the lower-than-expected sales volume in the quarter. Also impacting our operating margin is our ongoing commitment to invest responsibly in infrastructure and resources in order to prepare for healthy, future growth. To support our expanding business, it’s critical that we make investments into areas such as personnel and office space in Tokyo and Salt Lake City. To give you some perspective, over the course of one year, we’ve built a full-service office in Tokyo, capable of providing multifunctional support for our growing business in Japan.…

Thanks, Dave. We face challenges this fiscal year, and the result’s culminating in our fiscal third quarter. We’ve attacked each challenge head-on with solutions and, in many cases, with multiple solutions. We believe these initiatives were essential for the near- and long-term health of the company and believe they will drive revenue momentum in measurable results in fiscal 2014 and beyond. Throughout it all, we continue to be a healthy company. We’re confident in the long-term viability of the company. And we’re intent on pursuing up to $50 million of share repurchases this calendar year. As we wrap up fiscal 2013 and look toward next year, we’re well-positioned and will benefit from the hard work and progress we made in fiscal 2013. And with that, operator, I’d like to open the call up for questions.

Thank you. (Operator Instructions). And our first question will come from Justin Ruiss of Sidoti. Justin Ruiss – Sidoti: Good afternoon.

Hey, Justin. Justin Ruiss – Sidoti: Just looking at the guidance, I just wanted to get a – just a kind of gist. Is there any revising to the capital spending that you guys are doing this year?

No revision to the capital spending at this point, Justin. Justin Ruiss – Sidoti: Okay. And then it sounds like everything all offset – or at least, I guess everything’s in place now in Japan for growth to, I guess, start and this business to start. Is it a function of just being like late for that? Was it just being backed up? Or do you think you can recoup those sales?

Yeah. Really, Jeff – and it’s about regaining momentum more than anything else. As I said in my prepared remarks, what we faced in Japan was really a culmination of three large, impactful issues happening at once. Certainly, the reformulation of Protandim, which was announced by the local regulatory body in Japan, in early 2012, there was a 12-month period of time run-up to up to companies like ours that have products with certain ingredient that they found to be unacceptable on a go-forward basis that was Ashwagandha to either reformulate or change your business model or what have you. Obviously, we chose to reformulate. We were working hard at that for the full year, starting in early of 2012, but did not have any conclusive evidence or could make any announcements until, frankly, very, very late in the year, December, at such time that we had a product recall, global product recall. And the culmination of the on-the-ground effort, administratively as well, having to re-sign up every distributor, every preferred customer in country. When you add all of three of those issues together, we absolutely lost momentum – sales momentum in Japan. Keep in mind, Japan is the second largest direct selling market in the world, second only to the United States. So we are absolutely committed in that market. That’s why we’ve gone through the efforts of moving to the on-the-ground, to putting our stake down as firmly as we have in country and building the office to the degree that we have. We’re positioning ourselves for that sales momentum on a long-term, go-forward basis. So, absolutely, we’re very bullish about this. And as I mentioned in my prepared remarks, I’m leaving tomorrow for an extended trip throughout Asia-Pacific, really following on our commitments to get that sales momentum back where it needs to be going forward. Justin Ruiss – Sidoti: Do you think there’s anything that could hamper that momentum again? Or do you think all that’s in the past?

Well, that’s a tough question. Certainly, I’d like to believe that everything – all three of those issues that I just mentioned – we are now on the ground. We have re-registered all preferred customers, all distributors. Our recall is largely behind us, that was announced in December of 2012, globally. And the reformulation of Protandim is done. The product has been selling – the reformulated product – since January 1 in Japan. It’s been well received by preferred customers and distributors, alike. And we’ve got great leadership in place over there. So long-winded response to your question, I’m very bullish on the future. And we’re going to spend an awful lot of time and focus in that marketplace for the express purpose that it’s the second largest marketplace in the world for us. By all means, we should spend that kind of time and energy. Justin Ruiss – Sidoti: Got you. Just turning back to North America. How do you feel in terms of how much of the market that you’ve captured? I mean are we still nascent in these?

We are. As I said, we’re one week or so shy of our fourth anniversary in Network Marketing. We have barely scratched the surface. And so that is very, very positive in that we’ve got so much in front of us, so much opportunity. That’s why we are taking the time, the energy to build the infrastructure appropriately for a long-term, sustainable, profitable company. But by all means, we have a lot of runway in front of us in the United States and, for that matter, in North America. Justin Ruiss – Sidoti: Got you. And then just kind of to like – just to get a sense. How, I guess, do you have distribution centers that you’re using now? Are you distributing through third parties? How are you getting the product out there?

We are exclusively and have been, since mid-2009, distributing our products through Network Marketing, through our independent distributors. And absolutely committed to that model now and going forward. And I know, Justin you have a sense for the history of this company. 2013, we’re celebrating our 10th anniversary. But for all intents and purposes, we’re a four-year-old company in that we re-launched the company in mid-2009 into Network Marketing. And when you look at our growth – and I know you’ve seen these numbers – since mid-2009, this company is well on pace to grow very, very responsibly. So we are absolutely committed to our Network Marketing distributors, the model. We think our products fit very nicely in that model. And we think the future is incredibly bright. All that said, we have barely scratched the surface. When you look at our metrics that we provided, that we shared in this call, and then look at the population in the countries that we’re currently doing business in, we have barely scratched the surface. That’s all very, very good news for everyone that is associated with the company, whether you’re a shareholder, whether you’re an employee, whether you’re a distributor or preferred customer. We’ve got a long ways in front of us, and a lot of positive future. Justin Ruiss – Sidoti: And then just lastly. Maybe it’s too early to tell, but is there anything maybe in the pipeline for new products being developed?

Yes, there is. As I’ve said publicly before, we are in the healthy living space. And we also believe we’re – we are and have established a leadership role in Nrf2 science, Nrf2 research. So, as you saw with our recent product launch of Canine Health, it’s a dietary supplement for dogs in – with Nrf2 front and center. We have a long ways to go in the healthy living space. But you can be assured that each of our new products that we come out with will be scientifically validated, unique to LifeVantage, absolutely essential to our preferred customers and our distributors. But today, with only three products; Protandim, TrueScience, Canine Health, we’ve got a long ways to go also. And we will grow our products organically and inorganically. We’ll do it with our own science and research and development. But we’re also looking very closely at opportunities where other companies, frankly, that remind me a lot of our company four or five years ago, might be out there with tremendous scientifically validated products in the healthy living space. But those companies might not have found a way to the marketplace. They haven’t figured out how to take those great products out in the marketplace. We’re being introduced to many, many companies like this that we are – we’re looking very closely at, and that might add to our product list as well. Justin Ruiss – Sidoti: Okay. Well, that answers my questions. Thank you very much.

Thanks, Justin. Appreciate it.

And we’ll take our next question from Jim Galloway of Galloway Enterprises.

Hi, Jim. Jim Galloway – Galloway Enterprises: Hi, Doug. You were just talking about new products and science and everything. There were enthusiastic comments about the new Chief Science Officer when she joined the company last fall, but no mention of the fact she departed after over – only several months. What transpired, and how is the lack of a Chief Science Officer affecting the company? And what’s the job description of the Chief Science Officer and the budget for that department?

Let me try to hit all of your questions, Jim. You’re absolutely right. We made an announcement last October for a start date in November of a new Chief Science Officer. And after only five months or so, it was determined, really, by our Chief Science Officer, that she’d like to go back and pursue consulting, which is the world that she came from before she joined us. And so we honored that resignation and we parted ways. Effective immediately with that resignation, we set about looking for a new Chief Science Officer. We are a company, as you well know from previous conversations, we’re a company that is rooted in our science. And by all means, we want a Chief Science Officer here, in place, and for the long term. So we are going about the search nationally right now for a new Chief Science Officer, and we have high standards. We need someone that is very familiar with the dietary supplement space, very familiar with the healthy living space. And we’re going about that search right now. So when we have something to announce, we certainly will, publicly. I can’t really answer a couple of your – your last parts of your questions around what the budget is for that position, or what have you. But suffice it to say, we’re looking very hard for that – for that position right now. Jim Galloway – Galloway Enterprises: Okay. Thank you. I see how margins are going to be reduced a little bit by the new MyLifeVentures and deep promotions, but I think it’s well worth it. Sounds like a great program. That’s all I have. Thanks.

Thanks, Jim. We’re very, very excited about MyLifeVentures program. As you know, or may know, we just launched it at our April Global Convention. It was incredibly well received. And subsequent to that convention, which really was only a couple weeks ago, we’ve had some of our senior-most distributors, our Master Pro 10s, touring the country and visiting small towns, medium-sized towns, large towns alike, all over the country. And there is an incredible enthusiasm around the program, around the company. Really, a renewed energy and enthusiasm that we, frankly, haven’t seen in quite some time. So we’re incredibly excited about it on a go-forward basis. Thanks for your questions.

(Operator Instructions). And we’ll take our next question from Bradley Donner of J.P. Turner. Bradley Donner – JP Turner: Hi, guys. Congratulations on a good quarter.

Thank you very much. Bradley Donner – JP Turner: I’m kind of new to your company. If you can maybe help me out a little bit with the rollout of Japan, you guys seem to be fully engaged in that. You mentioned that there’s other markets you want to penetrate in the Far East. Could you maybe give me some color on what you’re looking to go after next, and what the plans are and the timetable for that?

Sure. Let me try to provide as much information as I can before we’re ready to announce a specific launch or launches. But suffice it to say, we have two very solid infrastructures built now for the company; one in North America, here at our Utah headquarters, corporate headquarters, and the second now is in Tokyo, Japan. So future expansion, certainly, in the near term, makes the most sense in one or both, frankly, of those two hemispheres. So look for expansion in North America and expansion in Asia Pacific, where we have operations now. Keep in mind, just last December, six months ago, we opened Hong Kong, clearly, in the Asia Pacific area. Earlier in 2012, we opened Australia, also in Asia-Pacific. We are looking, as we said in our prepared remarks, at other markets within those two hemispheres, if you will, and jurisdictions. And we go about the due diligence of entering a country very, very thoroughly. We look at how our products would meet regulatory approval in those countries. We look at the cultural aspects of marketing our products through Network Marketing, our shows and go-to-market strategy. We look at industry leaders in-country and also supported from our current marketplaces. It might be able to help us launch into a country successfully from day one. As you can imagine and appreciate, that due diligence is time-consuming. But it’s worth it for us, since we have so much in front of us, to do this right. In every market that we’re in, in every prospective market that we’re considering, we go about this in a very, very concerted way. Bradley Donner – JP Turner: Okay. Now you mentioned that you – six months ago, you opened Hong Kong. And then, also, within the last several months, you’ve also opened Australia. Are those offices functioning in as much capacity as the office in Japan, or no?

No. Great question. Great follow-on question. Importantly – and this is exactly how we opened Japan, we opened in – I don’t want to get too technical with the response. But we didn’t open Japan right out of the gate with an on-the-ground presence, with an office, with staff, et cetera. In fact, we functioned in Japan for nearly three years on what’s called a not-for-resale basis. So we supported it from afar, from the United States, without an infrastructure. That’s exactly how we’re supporting Australia right now. And in Hong Kong, we have one employee. So, nowhere near the infrastructure that we have here in the United States or in Tokyo. Nor do I anticipate, in some of those countries, ever building a presence anywhere close to what we have here in the United States, or in Tokyo, for that matter. We will always support appropriately so that we can support the distributors in-country and, ultimately, the preferred customers in-country successfully. But never over-build, if you will, especially in a redundant way, where we can support from nearby, if you will. Bradley Donner – JP Turner: Okay. So we don’t see any future plans on really broadening our horizons beyond Tokyo, at least not in the next six to 12 months.

I think that’s a fair – a fair statement. Bradley Donner – JP Turner: Okay. All right. Thanks.

Thank you.

And our final question will come from Al Doney.

Hi. David, I was wondering if you could tell me the terms of the line of credit that you guys have for issuing the buybacks, and a little more color around that.

Sure. Really, about all I can offer up as color is that we’re working with D.A. Davidson and going out. And, frankly, we’re in the process of negotiating term sheets. So at this point, it’s premature to give the exact terms and conditions of what we’re looking at. But suffice it to say, we are targeting $30 million to $40 million for the sole purpose of share repurchases.

Thank you.

And that does conclude our question-and-answer session today. I’ll turn the conference back over to our presenters for any additional or closing comments.

Thank you. And thank you, for your participation on today’s call and, importantly for your continued interest in and support of LifeVantage. Let me reiterate our confidence in our distribution network, our strong, international opportunities, new product opportunities and our growth prospects. We’re a stronger company today than we were at the beginning of this fiscal year, and we’re very excited about our future. We look forward to seeing many of you at our upcoming investor events and speaking with you next on our year-end call this coming September. Thank you very much.

And that does conclude today’s teleconference. Thank you all for your participation.