Good day, ladies and gentlemen. Thank you for standing by. Welcome to today's conference call to discuss LifeVantage's first fiscal quarter of 2021 financial results. [Operator Instructions] Hosting today's conference will be Scott Van Winkle with ICR. As a reminder, today's conference is being recorded. And now I would like to turn the conference over to Mr. Van Winkle. Please go ahead, sir.

Thank you. Good afternoon and welcome to LifeVantage Corporation's conference call to discuss results for the first fiscal quarter of 2021. On the call today from LifeVantage with prepared remarks are Steve Fife, interim Chief Executive Officer and Chief Financial Officer; and Justin Rose, Chief Sales and Marketing Officer. By now, everyone should have access to the earnings release, which went out this afternoon at approximately 4:05 p.m. Eastern Time. If you do not -- 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 our prepared remarks contain certain 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 the company's management and involve inherent risks and uncertainties, including those identified in the Risk Factors section of LifeVantage's most recently filed forms 10-K and 10-Q. Please note that during today's call, we will discuss non-GAAP financial measures, including results on an adjusted basis. Management believes these financial measures can facilitate a more complete analysis and greater transparency into LifeVantage's ongoing results of operations, particularly when comparing underlying operating results from period to period. We've included a reconciliation of these non-GAAP measures with today's release. This call also contains time-sensitive information that is accurate only as of the date of this live broadcast, November 3, 2020. LifeVantage assumes no obligation to update any forward-looking projection that may be made in today's release or call. Now I will turn the call over to the company's Interim CEO, Steve Fife.

Thanks, Scott, and good afternoon, everyone. I hope you are all doing well and continuing to stay safe and healthy. It is my pleasure to join you today, and I am equally pleased to introduce our investors to Justin Rose, our Chief Sales and Marketing Officer, who has been with the company for over 5 years and has over 30 years of experience in the industry. Justin is joining me today with prepared comments and will participate in the Q&A. We have been busy during the first quarter with some leadership changes and are continuing to adapt to the ongoing COVID-19 pandemic. Our business continues to perform well with year-over-year growth in distributor and driving increased engagement across our member base. We delivered $54.8 million of revenue, a modest decline of 2.5% compared to the prior year period, primarily reflecting the fact that we did not hold an Elite Academy event during this year's first quarter as we did in the prior year. However, we generated 42.5% growth in adjusted EBITDA and nearly doubled adjusted earnings per share. These gains reflect the leverage on past investments and reduced event expenses. We believe we are in a strong position to drive continued earning growth and of course, we continue to focus on driving revenue growth. During the first quarter, we opened for business in Singapore and expanded our NFR offering into Malaysia, although the timing of the launch did not contribute significantly to the Q1 results. We recently expanded our Axio product flavoring offering at our virtual convention, and our team is working diligently on expanding our online and video tools to accelerate our efforts to grow our active account base. Justin will speak about our new deliverables momentarily. I remain incredibly proud of our entire organization, employees and distributors at adapting to the challenging environment. We all continue to work remotely and are seeing strong levels of productivity and success. In January, we will move into our new corporate offices, providing further capacity to support our growth and enhance our distributor and customer support capability. Our entire team is energized as evidenced by their reaction to our recent virtual convention. Additionally, I've had the privilege to spend countless hours on the phone with our field leadership. I am overwhelmed by their passion for LifeVantage and their desire to grow the business and broadcast our story. I'm excited for the opportunity that lies ahead. Before I turn to a discussion of the first quarter results, let me turn the call over to Justin Rose, our Chief Sales and Marketing Officer, to discuss our recent activities and the successes of our first-ever virtual global convention. Justin?

Thank you, Steve. It's an honor to join you today and a pleasure to speak to all of our valued shareholders and stakeholders. As Steve just mentioned, we just completed our global convention, in which we had 13,000 unique visitors who tuned in and participated in our event. And with multiple household viewers and small gatherings, we estimate expanded participation at around 20,000 individuals from over 18 different countries. The overall excitement and optimism about the future of LifeVantage is as high right now as any time since I've been here in the last 5-plus years. The highlight of the event was launching a unified global system to the field with app integration for our ITT sales system, which stands for invite, tool and team. This includes a first-touch video as the invite, an overview video that is recommended for the first tool that they share and then followed up with third-party validation from a team member, which is usually in a 3-way call format. This is the first time that we've had full alignment on how to do and how to teach customer and distributor acquisition. We gained full support from our top leadership with the ITT system. We spoke clearly and often about the importance of following a system and how being fully aligned now enables the company to better support the field with complementary programs and promotions. The videos can be shared both directly through the app or through an individual's replicated website, providing the ability to connect the viewer to the person who actually shared the video. Videos can be watched at www.lifevantage.com/flip for the first touch and www.lifevantage.com/learn for the overview. To drive these efforts, we introduced Operation 25 ITT as our call to action for the event, allowing participants to start putting the system…

Thank you, Justin. Before I review the financials, let me reiterate the strong positioning of LifeVantage in not only today's environment, but in any environment. Our business model, where 70% of sales are on a subscription, provides recurring revenue and limits volatility during times of external disruption as we have seen over this year. We are positioned to be highly effective while working remotely and are leveraging technology across our organization. Of course, most important, we provide healthy solution to a global population that is increasingly focused on health. We believe we have the team, the products, the business model and a healthy financial position to achieve our goals. As we proceed through fiscal 2021, we will continue to be focused on the key metrics that drive our business, including: one, enrollment; two, attrition; three, average revenue per account; and four, Net Promoter Score. We will also continue to drive innovation to further supplement our leading product offering and open new markets to expand our reach. I want to thank each and every one of our LifeVantage team members for their continued focus and commitment. And I reiterate my confidence in our future. Now let me walk you through our first quarter results in more detail. Please note that I will be discussing our non-GAAP adjusted results. You can refer to the GAAP to non-GAAP reconciliation in today's press release for additional details. First quarter revenue was $54.8 million, down 2.5% on a year-over-year basis. Revenue in the Americas declined 3.7% to $38.7 million largely due to not conducting our Elite Academy event this year while revenue in Asia Pacific and Europe increased 0.7% to $16.2 million both year-over-year. Growth in the Asia Pacific and Europe region reflected a 4.8% increase in the number of active independent distributor accounts with…

[Operator Instructions] And our first question is from Doug Lane with Lane Research.

First question. Steve, in the adjustments, you have leasehold abandonment and some lease items. Is that the transition from your corporate headquarters? Or what exactly are those items?

Sorry about that. I was on mute. But yes, that's exactly what it is, is that we've made the decision that we're not going back into our current office space. So we accelerated the depreciation and leasehold improvements of those things as we start to build out our new office that will take occupancy in January.

Okay. And shifting gears to -- you mentioned not having the Elite Academy. Were there other events in fiscal 2020 in the second, third and fourth quarter we should know about that won't likely be repeated this year that might impact the sales line?

Yes. So we had regional events in Q1 of last year as well. It wasn't just an Elite Academy. So the overall event impact was about 2/3 of that revenue shortfall, again, primarily the Elite Academy, but some other regional events. We had a very successful virtual convention in October. And as of right now, we are planning kind of a normal event cadence for the remainder of our fiscal Q3 and Q4. We're currently planning on those being live but are also having contingencies in place for them to be virtual, depending on what the circumstances are at the time of those events. So no significant change from our normal cadence, but that will be determined based on what the local requirements are at the time.

Right. And where are they geographically? Just so we kind of have an idea what regions you're holding these events. Is it in all of them or on just -- on specific markets?

It is. We plan on having an Elite Academy in Salt Lake City in March, and then there are a series of regional events throughout most of our international markets.

Okay. That makes sense. And then looking at the distributor number where you ended the June quarter and last fiscal year with a really nice boost in that number and then it kind of decelerated over the summer. And I wondered what you're seeing as far as the tail off in the distributor growth. I would have thought that it would have continued. It seems like a lot of direct-selling nutrition companies have seen a little tailwind here coming out of the spring. And I was just wondering with LifeVantage, what was going on in the September quarter there.

Yes. So we -- there is some definite seasonality to our business with our fiscal Q1 being a lower overall enrollment quarter for us. Our distributor count was actually up about almost 5% year-over-year. So that growth trend, we were pleased with that. And I think then going into our convention, we've put in place even prior to that some incentives and promotions. But coming out of what was announced at our convention, we're really excited about both our opportunity to get on to a standard system as well as this friends and family referral program that Justin talked about. We think that that's really going to be a catalyst for us to leverage our distributor growth that we experienced this quarter and translate that into new enrollments both of distributors and of customers that then really create a higher sense of loyalty with our customer base.

[Operator Instructions] And our next question is from [ Jim Galloway, ] a private investor.

Chairman, congratulations on your convention. That's outstanding to have that quantity of people there. So that sounds really good and so does the ITT system. Can you give me some sort of a breakdown as to the 11,000 customers that we lost in the Americas as to if there was a certain product that was related to most of them? Or is it not product specific?

I don't think, Jim, that it's product specific. What we've actually seen over the last year or so is -- and especially with COVID is actually an increase in our overall product mix tilted towards our Protandim family of product. And candidly, we attribute that to people being more well aware of health and wellness needs driven by COVID. And -- but we also think that they're placing a higher priority or making a choice of our Protandim product over maybe some of our other product lines that might be a little bit more discretionary like our TrueScience Skin Care line. So I don't know that we attribute the customer decline to our products. I think it's more a matter of, like I said, we have seen growth in our year-over-year distributor base as people think more around the business opportunity rather than just being consumers of our products.

Okay. And one last question is, how much is being spent on R&D on new Protandim products?

Specifically on new Protandim products, we introduced NAD last year at our convention and it was a big success when we launched it. It does not have the same level of science behind it as our Nrf2. So we continue to conduct studies and are working with institutions of providing kind of a more science-based background to that product. For those that are kind of in the know, they understand what the benefits of NAD are, but we're -- we continue to do research in that area so that we can help to educate the more general population.

And that is the end of our question-and-answer session. And I'll now turn the call back over to Steve Fife for closing remarks.

Thank you for joining us today. We remain confident in our business model and are working hard to ensure we are able to continue to deliver the LifeVantage products to our customers. We hope that you all stay safe and healthy and look forward to updating you on our next call. Thanks and have a great day.

And this concludes our conference. You may disconnect your lines at this time. Thank you and have a great day.