LifeVantage Corp (LFVN) 2019 Q3 法說會逐字稿

Good day, ladies and gentlemen. Thank you for standing by. Welcome to today's conference call to discuss LifeVantage's Third Quarter Fiscal 2019 Financial Results.

美好的一天，女士們先生們。謝謝你的支持。歡迎參加今天的電話會議，討論 LifeVantage 2019 財年第三季度財務業績。

(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'd like to turn the conference over to Mr. Van Winkle. Please go ahead, sir.

（操作員說明）今天的會議由 ICR 的 Scott Van Winkle 主持。提醒一下，今天的會議正在錄製中。現在我想把會議交給 Van Winkle 先生。請繼續，先生。

Thank you, and good afternoon, and welcome to LifeVantage Corporation's conference call to discuss results for the third quarter of fiscal 2019. On the call, today from LifeVantage with prepared remarks are Darren Jensen, Chief Executive Officer; and Steve Fife, Chief Financial Officer.

謝謝大家，下午好，歡迎參加 LifeVantage Corporation 的電話會議，討論 2019 財年第三季度的業績。今天，LifeVantage 首席執行官達倫·詹森 (Darren Jensen) 在電話會議上發表了事先準備好的講話。和首席財務官史蒂夫·法伊夫。

By now, everyone should have access to the earnings release, which went out this afternoon at approximately 4:05 p.m. Eastern. If you have not received the release, it's available on the Investor Relations portion of LifeVantage's website at www.lifevantage.com.

到目前為止，每個人都應該可以看到今天下午下午 4:05 左右發布的財報。東。如果您尚未收到該新聞稿，可以在 LifeVantage 網站 www.lifevantage.com 的投資者關係部分獲取。

This call is being webcast and a replay will be available on the company's website as well.

此次電話會議正在網絡直播，並且公司網站上也將提供重播。

Before we begin, we would like to remind everyone that our 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 the company's management and will involve inherent risks and uncertainties, including those identified in the Risk Factors section of LifeVantage's most recently filed Forms 10-Q and 10-K.

在開始之前，我們想提醒大家，我們準備的言論包含前瞻性陳述，管理層可能會針對您的問題做出額外的前瞻性陳述。這些陳述並不保證未來的表現，因此，不應過度依賴它們。這些聲明基於公司管理層當前的預期，並將涉及固有風險和不確定性，包括 LifeVantage 最近提交的表格 10-Q 和 10-K 的風險因素部分中確定的風險和不確定性。

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.

請注意，在今天的電話會議中，我們將討論非公認會計準則財務指標，包括調整後的結果。管理層認為，這些財務指標可以促進對 LifeVantage 持續經營業績進行更完整的分析並提高透明度，特別是在比較不同時期的基本經營業績時。

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, May 1, 2019.

我們在今天的發布中包含了這些非公認會計原則措施的調節。本次通話還包含時間敏感信息，僅截至本次直播之日（2019 年 5 月 1 日）準確。

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 CEO, Darren Jensen.

LifeVantage 不承擔更新今天發布或電話會議中可能做出的任何前瞻性預測的義務。現在我將把電話轉給公司首席執行官達倫·詹森 (Darren Jensen)。

Thank you, Scott, and good afternoon, everyone. It's a pleasure to join you today to discuss our third quarter results and increased earnings guidance for fiscal 2019. We had another start of the strong quarter, continuing the sales momentum we have built over the last several quarters. Revenue of $56 million this quarter was among the top 4 revenue quarters in our company's history and followed our record second quarter, which included our global convention and initial launch of our TrueScience Hair Care System.

謝謝斯科特，大家下午好。今天很高興與大家一起討論我們第三季度的業績以及上調的 2019 財年盈利指引。我們又迎來了強勁季度的開端，延續了過去幾個季度建立的銷售勢頭。本季度的收入為 5600 萬美元，是我們公司歷史上收入最高的 4 個季度之一，緊接著我們創紀錄的第二季度，其中包括我們的全球會議和 TrueScience 護髮系統的首次推出。

Third quarter revenue increased 11% year-over-year with strong growth reported across all of our markets.

第三季度收入同比增長 11%，我們所有市場均出現強勁增長。

We saw accelerated growth of our active member count during the quarter with total members up 9% year-over-year, driven by 8% distributor growth and 10% customer growth. Our sales momentum translated into strong growth of adjusted EBITDA, which increased 18% year-over-year. As we progress in this fourth quarter, our confidence in continued growth remains robust, and we are on track to have the highest annual revenue in our company's history.

在分銷商增長 8% 和客戶增長 10% 的推動下，本季度我們的活躍會員數量加速增長，會員總數同比增長 9%。我們的銷售勢頭轉化為調整後 EBITDA 的強勁增長，同比增長 18%。隨著第四季度的進展，我們對持續增長的信心依然強勁，我們有望實現公司歷史上最高的年收入。

We continue to see favorable impacts to our growth rate from each of the key initiatives we have implemented. We remain focused on increasing average order size, geographic expansion, product innovation and driving distributor and customer acquisition.

我們繼續看到我們實施的每項關鍵舉措對我們的增長率產生了有利的影響。我們仍然專注於增加平均訂單規模、地域擴張、產品創新以及推動分銷商和客戶獲取。

Each of these efforts is evident in our third quarter and year-to-date growth we have generated. Let me run through some of the highlights.

這些努力在我們第三季度和今年迄今所實現的增長中都是顯而易見的。讓我來回顧一下其中的一些亮點。

During the third quarter, we had another strong contribution from our Red Carpet program, which is focused on distributor acquisition and contributed to the 8% year-over-year growth of independent distributors. We also launched our direct selling operations in Spain with a well-attended launch event during the quarter. Spain is a promising direct selling market and marks our second European market launch this fiscal year.

第三季度，我們的紅地毯計劃再次做出了巨大貢獻，該計劃專注於經銷商收購，並為獨立經銷商的同比增長做出了 8% 的貢獻。我們還在西班牙推出了直銷業務，並在本季度舉辦了一場出席人數眾多的發布會。西班牙是一個前景光明的直銷市場，也是我們本財年第二個進入歐洲市場。

We continue to target launching in Belgium later in the fourth quarter and today announced the opening of our direct selling operations in Ireland. Our direct selling ops -- expansion in Europe follows the introduction of our customer acquisition program during 2018, which made our products available for purchase on a personal use basis in several markets.

我們繼續計劃於第四季度晚些時候在比利時開展直銷業務，並於今天宣佈在愛爾蘭開設直銷業務。我們的直銷業務——在 2018 年推出客戶獲取計劃後，在歐洲進行了擴張，這使得我們的產品可以在多個市場上供個人使用。

This initial experience with customer sales has enabled us to enter new markets with existing consumer demand. In February, we launched our most recent product innovation, PhysIQ prebiotic, as part of a refresh and relaunch of our enhanced PhysIQ Smart Weight Management System. The update reflects the evolving demand for biohackers, keeping us at the forefront of smart weight management. Initial response has been positive.

這種與客戶銷售的初步經驗使我們能夠進入具有現有消費者需求的新市場。二月份，我們推出了最新的產品創新 PhysIQ 益生元，作為我們增強型 PhysIQ 智能體重管理系統更新和重新推出的一部分。此次更新反映了對生物黑客不斷變化的需求，使我們始終處於智能體重管理的最前沿。初步反應是積極的。

Additionally, we will focus -- we will continue to roll out our recently launched hair care system to additional markets. We will begin launching in 5 of our largest international markets during the fourth quarter. We remain very pleased with the success of the TrueScience Hair Care System.

此外，我們將繼續將我們最近推出的護髮系統推廣到其他市場。我們將於第四季度開始在 5 個最大的國際市場推出產品。我們對 TrueScience 護髮系統的成功感到非常高興。

Our Greater China strategy also continues to deliver accelerated recruiting and sales growth following our very successful launch in Taiwan in mid-calendar 2018.

繼 2018 年中旬在台灣成功推出產品後，我們的大中華區戰略也繼續加速招聘和銷售增長。

Our strength in Taiwan was a significant driver of the 25% revenue and 29% distributor growth in our Asia/Pacific and European region this quarter, along with significant double-digit gains in Australia, Thailand and across Europe.

我們在台灣的實力是本季度亞太和歐洲地區收入增長 25%、分銷商增長 29% 的重要推動力，同時澳大利亞、泰國和整個歐洲地區也實現了兩位數的大幅增長。

There's been lot of talking in the direct selling sector over the past several months around China's 100-day review and the impact of publicly -- publicity on sales of other publicly traded direct selling companies.

過去幾個月，直銷行業圍繞中國的百日審查以及公開宣傳對其他上市直銷公司銷售的影響進行了很多討論。

Recall that LifeVantage does not engage in traditional direct selling in Mainland China. Our model is based on e-commerce without in-country direct selling operations or distributors. And thus, we have seen no impact on our business.

回想一下，LifeVantage 在中國大陸並不從事傳統的直銷業務。我們的模式基於電子商務，沒有國內直銷業務或分銷商。因此，我們的業務沒有受到任何影響。

We also continue to experience strong adoption of our LV digital platform. During the third quarter, we launched the app in Japan and now have the app in use in 3 of our largest global markets.

我們的 LV 數字平台也繼續得到廣泛採用。第三季度，我們在日本推出了該應用程序，現在該應用程序已在我們三個最大的全球市場中使用。

To close, I am pleased with our success thus far in fiscal 2019. We have driven our global business with the acquisition of new distributor leaders, launch of new and updated products, international rollout of existing products, new market development and by driving adoption of our LV digital platform.

最後，我對 2019 財年迄今為止所取得的成功感到高興。我們通過收購新的分銷商領導者、推出新產品和更新產品、現有產品的國際推廣、新市場開發以及推動我們的 LV 數字平台的採用來推動我們的全球業務。

We look forward to a strong finish in the fiscal year and continuing to execute our global growth strategies. With that, let me turn it over to Steve to run through the financial results. Steve?

我們期待本財年取得圓滿成功，並繼續執行我們的全球增長戰略。接下來，讓我將其交給史蒂夫來查看財務結果。史蒂夫？

Thank you, Darren, and good afternoon, everyone. I am also very pleased to report our third quarter results. We generated another quarter of double-digit year-over-year revenue growth and remain confident in the momentum we have built so far this year. 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 detail.

謝謝達倫，大家下午好。我也很高興報告我們第三季度的業績。我們又實現了四分之一的兩位數同比收入增長，並對今年迄今為止所建立的勢頭仍然充滿信心。請注意，我將討論我們的非公認會計原則調整後的結果。您可以參閱今天新聞稿中的 GAAP 與非 GAAP 調節表，了解更多詳細信息。

Third quarter revenue was $56 million, representing a 10.8% increase year-over-year. Third quarter revenue was our fourth largest revenue quarter in history, and we also are on track to generate our strongest full year revenue.

第三季度營收為 5600 萬美元，同比增長 10.8%。第三季度收入是我們歷史上第四大收入季度，我們也有望實現最強勁的全年收入。

Revenue in the Americas increased 6.2% to $40.4 million, and revenue in Asia/Pacific and Europe increased 24.8% to $15.6 million, all year-over-year.

美洲地區的收入同比增長 6.2% 至 4040 萬美元，亞太地區和歐洲的收入同比增長 24.8% 至 1560 萬美元。

On a sequential basis, third quarter revenue was about 4% lower than the second quarter, which was our highest quarterly revenue in history and benefited from both our global convention and the launch of the TrueScience Hair Care System.

按環比計算，第三季度收入比第二季度下降約 4%，這是我們歷史上最高的季度收入，這得益於我們的全球大會和 TrueScience 護髮系統的推出。

Gross margin was 83.4% compared to 82.4% in the prior year period, reflecting the benefit of a price increase during the second half of fiscal 2018, reductions of inventory obsolescence costs and changes to product and market mix.

毛利率為 83.4%，而上年同期為 82.4%，反映了 2018 財年下半年價格上漲、庫存報廢成本降低以及產品和市場結構變化的效益。

Commissions and incentive expenses as a percent of sales increased 50 basis points year-over-year to 48.6%. The year-over-year increase is due in part to the success of our Red Carpet program and incentives as well as other typical variations that occur based on revenue mix.

佣金和獎勵費用佔銷售額的百分比同比增長 50 個基點，達到 48.6%。同比增長的部分原因是我們的紅地毯計劃和激勵措施的成功以及基於收入組合而發生的其他典型變化。

Importantly, the commission and incentive expense rate will fluctuate based on the timing and magnitude of promotions and incentive programs as well as investments in Red Carpet.

重要的是，佣金和獎勵費用率將根據促銷和獎勵計劃以及紅地毯投資的時間和規模而波動。

Adjusted SG&A as a percent of sales were 30.5% compared to 29.3% in the prior year period. The increased SG&A expense reflects the following: Increased stock compensation and employee incentive expense as a result of our stock price increase during the first half of fiscal 2019; year-to-date financial performance; and realignment of our corporate incentive program; as well as higher staffing levels, reflecting additions made in the second half of fiscal 2018. Since those additions, we have maintained our staffing levels.

調整後的 SG&A 佔銷售額的百分比為 30.5%，而上年同期為 29.3%。SG&A 費用的增加反映了以下因素： 由於 2019 財年上半年我們的股價上漲，股票薪酬和員工激勵費用增加；年初至今的財務業績；以及調整我們的企業激勵計劃；以及更高的人員配置水平，反映出 2018 財年下半年的新增人員。自增加這些人員以來，我們一直保持著人員配置水平。

Adjusted operating income was $2.5 million, consistent with the prior year period. However, adjusted EBITDA for the third quarter increased 18.2% to $4 million compared to $3.4 million in the prior year period.

調整後營業收入為 250 萬美元，與上年同期持平。然而，第三季度調整後的 EBITDA 增長了 18.2%，達到 400 萬美元，而去年同期為 340 萬美元。

Given the higher noncash stock-based compensation as well as an increase in our fully diluted shares, both resulting from our increased share price, we continue to believe EBITDA is a better reflection of our cash profitability growth this year. We anticipate approximately 15% to 20% growth in adjusted EBITDA during fiscal 2019.

鑑於非現金股票薪酬的提高以及我們完全稀釋股票的增加（這兩者都是由於我們的股價上漲所致），我們仍然認為 EBITDA 更好地反映了我們今年現金盈利能力的增長。我們預計 2019 財年調整後 EBITDA 將增長約 15% 至 20%。

Adjusted net income was $2 million or $0.13 per fully diluted share, up from $1.8 million or $0.12 per fully diluted share in the prior year.

調整後淨利潤為 200 萬美元，即完全稀釋每股 0.13 美元，高於上一年的 180 萬美元，即完全稀釋每股 0.12 美元。

As I noted, all of the adjustments from GAAP to non-GAAP are reconciled in our earnings press release.

正如我所指出的，從 GAAP 到非 GAAP 的所有調整都在我們的收益新聞稿中進行了調整。

We ended the third quarter of fiscal 2019 in a strong financial position with $15.9 million of cash compared to $1.9 million of debt. During the third quarter of fiscal 2019, we generated $3.9 million of cash from operations, invested $1.4 million in cash -- in capital expenditures and paid down $2.5 million on our term loan.

截至 2019 財年第三季度，我們的財務狀況強勁，現金為 1,590 萬美元，債務為 190 萬美元。在 2019 財年第三季度，我們從運營中產生了 390 萬美元的現金，投資了 140 萬美元的現金資本支出，並償還了 250 萬美元的定期貸款。

We continue to anticipate CapEx to be approximately $2.5 million for the full year, which includes additional expenditures with our app development partner.

我們仍然預計全年資本支出約為 250 萬美元，其中包括與我們的應用程序開發合作夥伴的額外支出。

Finally, during the third quarter, we used $200,000 in cash to repurchase approximately 15,000 common shares under our share repurchase authorization and remain committed to share repurchases.

最後，在第三季度，我們根據股票回購授權使用了 200,000 美元現金回購了約 15,000 股普通股，並繼續致力於股票回購。

Turning to our outlook, we are narrowing our fiscal 2019 revenue guidance to a range of $224 million to $228 million compared to our prior range of $222 million to $232 million.

談到我們的展望，我們將 2019 財年的收入指導範圍縮小至 2.24 億美元至 2.28 億美元，而之前的範圍為 2.22 億美元至 2.32 億美元。

We are increasing our adjusted diluted earnings per share guidance to $0.50 cents to $0.54 per share, up from $0.46 to $0.52 previously. Now let me turn the call back to the operator to facilitate questions. Operator?

我們將調整後的稀釋每股收益指引從之前的 0.46 美元至 0.52 美元上調至 0.50 美分至 0.54 美元。現在讓我將電話轉回給接線員以方便提問。操作員？

(Operator Instructions) And we'll take our first question today with Steven Martin with Slater Capital Management.

（操作員說明）今天我們將向斯萊特資本管理公司的史蒂文·馬丁提出第一個問題。

So I guess the first question is sequential revenues. Let's talk about second to third and now what you're now expecting third to fourth?

所以我想第一個問題是連續收入。我們來談談第二到第三，現在你對第三到第四有什麼期待？

What's your question?

你有什麼問題？

Well. Second quarter revenues were $58 million?

出色地。第二季度收入為 5800 萬美元？

Yes.

是的。

And third quarter revenues were $56 million?

第三季度收入為 5600 萬美元？

Yes.

是的。

And if I take the midpoint of your range for the full year, it looks like the fourth quarter is $56 million?

如果我取全年範圍的中點，看起來第四季度是 5600 萬美元？

Yes. That's right. And so sequentially, second quarter to third quarter, I mentioned in my remarks, clearly, our second quarter benefited from our Global Convention, which in our last call, we talked about how successful that was as well as the hair care launch. We sold out both at the convention and then on our first inventory replenishment, we also sold that out in the quarter. So that demand was -- we were ecstatic about what we saw during the second quarter.

是的。這是正確的。因此，從第二季度到第三季度，我在發言中顯然提到，我們的第二季度受益於我們的全球大會，在我們上次的電話會議中，我們談到了這次會議以及護髮產品的推出是多麼成功。我們在大會上都賣光了，然後在我們第一次補充庫存時，我們也在本季度賣光了。因此，我們對第二季度所看到的需求感到欣喜若狂。

And I think the third quarter results, we still saw improvement across a number of our international countries as well as in the U.S., year-over-year, 10.8% year-over-year growth we're quite pleased with.

我認為第三季度的業績，我們仍然看到許多國際國家以及美國的業績有所改善，同比增長 10.8%，我們對此感到非常滿意。

And then in terms of our implied guidance to the midpoint, we are -- your math is right. We were at the midpoint at $56 million. Obviously, we're always looking to try to exceed our guidance. We also -- during the fourth quarter, we do not have any events either in the U.S. or internationally. And so on the increase -- on that revenue, we fully expect to have higher EBITDA and EPS, similar to last year's fourth quarter. We did about $0.20 of EPS last year on $54 million of revenue. And so we are anticipating a good quarter from an earnings standpoint this quarter.

然後就我們對中點的隱含指導而言，我們——你的數學是正確的。我們處於中點，為 5600 萬美元。顯然，我們一直在尋求超越我們的指導。我們還 - 在第四季度，我們在美國或國際上沒有任何活動。依此類推，就收入而言，我們完全預計 EBITDA 和 EPS 將會更高，與去年第四季度類似。去年我們的每股收益約為 0.20 美元，收入為 5400 萬美元。因此，從盈利的角度來看，我們預計本季度將有一個良好的季度。

Okay. Let's -- so when you look at pluses and minuses of the markets, what market isn't performing going forward? Or given the flat sequential revenues, what market isn't growing?

好的。讓我們看看市場的優缺點，哪個市場未來表現不佳？或者考慮到連續收入持平，哪個市場沒有增長？

Well, I think you're talking sequentially now?

嗯，我想你現在是按順序說話吧？

Yes.

是的。

So again, year-over-year, all of our regions were up and in certain cases, quite substantially high double digits.

因此，與去年同期相比，我們所有的地區都出現了增長，並且在某些情況下，達到了相當高的兩位數。

Sequentially, again, I think we've set our guidance to a midpoint. And as I said, we target on exceeding our midpoint in our guidance range.

接下來，我認為我們已經將指導方針設定為中點。正如我所說，我們的目標是超過指導範圍的中點。

So we don't see any drop-off in any of our markets. We expect some incremental benefit coming from the launch of Spain that we launched at the end of the quarter and then also Ireland, this month and Belgium. But it will be fairly nominal from those, especially Ireland and Belgium within the quarter. But I think it's setting a foundation for our growth in 2020.

因此，我們沒有看到任何市場出現任何下滑。我們預計，我們在本季度末推出的西班牙、愛爾蘭、本月和比利時的推出將帶來一些增量收益。但對於那些國家來說，尤其是愛爾蘭和比利時，本季度的增長將相當微不足道。但我認為這為我們 2020 年的增長奠定了基礎。

Okay. That was going to be my next question. So when you look out to 2020, you've got -- now you've got a year of history or not quite a year of history in -- or you will have in Taiwan and Hong Kong and China. You've launched in a whole lot of new markets, and you've launched in a whole lot of new products. And it looks like you've got distributor growth heading in the right direction and customer growth heading in the right direction. So broad strokes, what should we expect in 2020? Or what are you thinking about preliminarily in 2020?

好的。這將是我的下一個問題。因此，當你展望 2020 年時，你會發現——現在你已經經歷了一年的歷史，或者還不到一年的歷史——或者你將在台灣、香港和中國大陸經歷歷史。你們已經推出了很多新市場，也推出了很多新產品。看起來經銷商的增長正朝著正確的方向發展，客戶的增長也正朝著正確的方向發展。那麼，2020 年我們應該期待什麼？或者說2020年你初步想到了什麼？

Steve, this is Darren. When you say what are we thinking about in what sense? I just want to make sure I...

史蒂夫，這是達倫。當你說我們在什麼意義上思考什麼時？我只是想確定我...

Top line growth. We could start with top line growth and then I'll get to some of the expenses.

營收增長。我們可以從營收增長開始，然後我會討論一些費用。

Steve, obviously, at the end of this fiscal year is when we come out with our guidance for next fiscal year. As I look at it from a business standpoint, I would -- as I see it, I would look for continued growth within the United States. We've seen a lot of improvement in our Canadian and our Mexico market, which have been great producers for us. And we're extremely pleased with the growth that we see coming out of Australia. Australia has just been on fire for us. As well as over the last quarter, Thailand is just off the charts for us.

史蒂夫，顯然，在本財年結束時，我們會公佈下一財年的指導。當我從商業角度來看時，我會——正如我所見，我會尋求美國境內的持續增長。我們看到加拿大和墨西哥市場有了很大的改善，這對我們來說是很好的生產商。我們對澳大利亞的增長感到非常滿意。澳大利亞剛剛為我們著火。與上個季度一樣，泰國對我們來說也表現出色。

As Steve mentioned, we're seeing strong growth. I mean in Europe, we are seeing a 50% year-over-year increase. So that's just in this year. We continue to see additional growth now, as Steve had mentioned before, that we've launched some of additional markets like Spain and we just launched Ireland today. We've got Belgium. So I would continue to see the growth there and in Europe. It really continued strengthening within Taiwan. We're starting to see some good growth now or some beginnings of great growth coming in within our Mainland China area.

正如史蒂夫提到的，我們看到了強勁的增長。我的意思是在歐洲，我們看到同比增長 50%。這只是今年的情況。正如史蒂夫之前提到的，我們現在繼續看到額外的增長，我們已經推出了一些其他市場，例如西班牙，今天剛剛推出了愛爾蘭。我們有比利時。因此，我將繼續看到那里和歐洲的增長。它確實在台灣內部繼續加強。我們現在開始看到中國大陸地區出現了一些良好的增長或一些巨大增長的開端。

So I would still guess that we would see an overall business increase and growth in 2020. Where we're looking at guiding at that point, tune in a few months from now, we will definitely...

所以我仍然猜測 2020 年我們會看到整體業務的增長和增長。我們當時正在尋找指導，從現在開始幾個月後進行調整，我們肯定會......

Yes. I was just trying to get some broad strokes color for 2020. Again, let's talk about levering -- gross margin and more importantly, SG&A. You ramp -- we've talked about it in earlier calls. You talked about it today. You had year-over-year, you've had more -- you've had extra events. You had a lot of product launches. You had a lot of country launches. You added some people. When you look out, and again, broad strokes, 2020, what should we expect -- and I know you've not done your budgeting yet, but what should we expect on some of the expense line items?

是的。我只是想為 2020 年獲得一些粗略的顏色。再次，讓我們談談槓桿——毛利率，以及更重要的SG&A。你的斜坡——我們在之前的電話會議中已經討論過這個問題。你今天談到了這件事。一年復一年，你經歷了更多——你經歷了額外的事件。你們發布了很多產品。你們有很多國家的發布。你加了一些人。當你展望 2020 年時，我們應該期待什麼——我知道你還沒有完成預算，但我們對一些費用項目應該期待什麼？

Yes. So I think, Steve, we have a target P&L model out in our IR deck on our website, which is 84% gross margin, 48% commissions and incentives, 24% SG&A, which would translate to a 12% operating income, 14% EBITDA. And we're very close. We've made 100 basis points improvement year-over-year on our gross margin. I think we have opportunities to continue to improve that. And so we're very close to that target. We're close to our commissions and incentive targets. Where our leverage needs to come from is in SG&A. And we -- without -- we haven't done our full budget for the next year yet, but I can tell you that one of our key initiatives is going to be around supporting our revenue growth with -- while leveraging our G&A. In order to get to our 24%, we clearly have to generate that additional revenue with -- I don't know if it will be flat, but it will not be not proportional growth in our SG&A.

是的。所以我認為，史蒂夫，我們在我們網站上的 IR 平台上有一個目標損益模型，即 84% 的毛利率、48% 的佣金和激勵、24% 的 SG&A，這將轉化為 12% 的營業收入、14%息稅折舊及攤銷前利潤。我們非常接近。我們的毛利率同比提高了 100 個基點。我認為我們有機會繼續改進這一點。所以我們非常接近這個目標。我們已經接近我們的佣金和激勵目標。我們的槓桿需要來自SG&A。我們——沒有——我們還沒有完成明年的全部預算，但我可以告訴你，我們的關鍵舉措之一將是圍繞支持我們的收入增長——同時利用我們的一般管理費用。為了達到 24%，我們顯然必須創造額外收入——我不知道它是否會持平，但我們的 SG&A 不會不按比例增長。

And based on some very top-down modeling that we've done, I think we can do that. We're definitely not going to be at 24% at the end of fiscal '20, but I think you'll see improvement there sequentially as we continue to ramp our revenue.

基於我們所做的一些自上而下的建模，我認為我們可以做到這一點。到 20 財年末，我們的增長率絕對不會達到 24%，但我認為，隨著我們繼續增加收入，您會看到連續的改善。

Okay. Now with respect to the share buyback, and you know where I stand on that. I was, I guess, a little disappointed that you only spent $200,000. Your balance sheet is so much improved. I'm assuming you're going to pay off that last tranche of long-term debt if you haven't already. How about a little more aggressive buyback there to offset some of the share increase?

好的。現在關於股票回購，你知道我對此的立場。我想，你只花了 20 萬美元，我有點失望。您的資產負債表得到了很大改善。我假設您將償還最後一部分長期債務（如果您還沒有還清的話）。是否可以進行更積極的回購以抵消部分份額的增長？

Yes. So we have -- over the last year or so since we've had the buyback program, we've been operating under a quarterly kind of open window trading policy and we set parameters at the beginning of the each open window, right after we announce. And this last quarter, the parameters that we established, candidly the stock only dropped below that level 3 days during the open window and we bought in all of 3 of those days. And the decline in our price in April unfortunately, we were in a blackout period and we could not execute any buybacks during that.

是的。因此，自從我們實施回購計劃以來，我們在過去一年左右的時間裡一直在按季度開放窗口交易政策進行運營，並且我們在每個開放窗口開始時設置參數，就在我們完成回購計劃之後。宣布。坦率地說，在上個季度，根據我們建立的參數，該股票在開放窗口期間僅 3 天跌破該水平，而我們在這 3 天中全部買入。不幸的是，四月份我們的價格下跌，我們正處於封鎖期，在此期間我們無法執行任何回購。

We are clearly contemplating on putting in place a 10b5-1 plan that will allow us the ability to purchase throughout the quarter, not just limited to open windows.

我們顯然正在考慮制定一項 10b5-1 計劃，該計劃將使我們能夠在整個季度內進行採購，而不僅僅是限於打開的窗口。

Okay. And I'm happy to take some of your cash and buy back your stock for you if you guys can't.

好的。如果你們做不到的話，我很樂意拿走你們的一些現金並為你們回購你們的股票。

I appreciate the offer.

我很感激這個提議。

With respect to that last tranche of long-term debt, is there any reason not to just pay it off?

對於最後一部分長期債務，有什麼理由不還清呢？

Well. We balanced that with our share buyback to buyers. So we're playing both of those. We'll -- that will be paid off, our quarterly payments are $0.5 million a year -- or sorry, a quarter. And so will be paid off by the end of next year, even if we just pay in the schedule and we'll be looking at that versus the opportunity to buy back shares.

出色地。我們通過向買家回購股票來平衡這一點。所以我們正在玩這兩個遊戲。我們將——這將被還清，我們的季度付款是每年 50 萬美元——或者抱歉，一個季度。因此，即使我們只是按計劃付款，我們也會在明年年底之前還清，我們將考慮這一點與回購股票的機會。

(Operator Instructions) We'll now hear from [Jim Galloway.]

（操作員指示）我們現在將聽到 [Jim Galloway] 的聲音。

I remember when our total volume was based on Protandim. And now we have so many more products that I'm confused as to why the product growth has not turned into revenue growth. Can you give us a little breakdown on what percentage each of the products represents and what products are growing and what are sort of stagnant? Because I don't know if people move from one product to another when the new one is released and then they don't have much emphasis again on the old one. But I would think Nrf1 and Nrf2 would be a certain percentage and we've got the hair care. Did other products fall back?

我記得當時我們的總產量是基於普天登的。現在我們有更多的產品，我很困惑為什麼產品增長沒有轉化為收入增長。您能否給我們詳細介紹一下每種產品所佔的百分比以及哪些產品正在增長，哪些產品停滯不前？因為我不知道當新產品發佈時，人們是否會從一種產品轉向另一種產品，然後他們就不再那麼重視舊產品。但我認為 Nrf1 和 Nrf2 會佔一定比例，而且我們已經有了護髮產品。其他產品有回落嗎？

Well. Thanks, Jim. Steve will give you the percentages of the various categories here coming up. One of the strategies that we've been addressing previously in other calls has been our stacking strategy. And this has been -- the strategy is basically a bundling of our products to get our consumers as well as our distributors to be purchasing more products other than just the Nrf2, the Protandim. And roughly, that number when it comes to the total revenue that we have, represents -- hovers around 20% or so of our total revenue. So that, that stacking strategy and bundling strategy that we've been deploying has been very successful. In addition, if you look at the most recent launch of our hair care product, that has been very successful for us. And even the updating that we just did of our PhysIQ Smart Weight Management, even though we remain focused on our hair care line, typically during the weight loss season, we still saw a 7% year-over-year increase in the volume of the PhysIQ smart weight system without our regular -- typically we have a weight loss challenge that we have going on. So that new system is also being received very well. And Steve will go over some of the breakdown of our product categories.

出色地。謝謝，吉姆。史蒂夫將為您提供即將到來的各種類別的百分比。我們之前在其他電話會議中討論過的策略之一是我們的堆疊策略。這個策略基本上是我們的產品捆綁銷售，讓我們的消費者和經銷商購買更多的產品，而不僅僅是 Nrf2、Protandim。粗略地說，當涉及到我們的總收入時，這個數字徘徊在我們總收入的 20% 左右。因此，我們一直在部署的堆疊策略和捆綁策略非常成功。此外，如果您看看我們最近推出的護髮產品，您會發現這對我們來說非常成功。即使我們剛剛對 PhysIQ 智能體重管理進行了更新，儘管我們仍然專注於我們的護髮系列（通常在減肥季節），我們仍然看到頭髮護理量同比增長 7% PhysIQ 智能體重系統沒有我們的常規——通常我們面臨著減肥挑戰。所以這個新系統也很受歡迎。史蒂夫將詳細介紹我們產品類別的一些細分。

Yes. So Jim, you're right that Protandim is still our predominant product. We have -- depending on how you look at it, it's about 65% to 70% of our revenue. And that percentage has stayed about the same over the last several years. We've seen -- and so, you could say that a lot of our products -- sorry, our revenue growth, especially over the last year or 2 has been as a result of both the introduction of new products as well as the expansion of Protandim into countries where it wasn't previously registered. An example of that could -- is clearly in Mexico where for up until, I think, about 1.5 year ago, since I have been here, Protandim was not registered and so we're not selling directly into that country. And so even though that's generated some revenue growth, it's still within the same product family as Protandim. But it stayed about the same as our revenue has grown. So it's the other products that are really healthy to accelerate some of the growth that we're seeing.

是的。吉姆，你說得對，普天登仍然是我們的主導產品。我們——這取決於你如何看待它，它約占我們收入的 65% 到 70%。在過去的幾年裡，這一比例幾乎保持不變。我們已經看到——所以，你可以說我們的很多產品——抱歉，我們的收入增長，特別是在過去一兩年裡，是新產品推出和擴張的結果Protandim 進入之前未註冊的國家。一個明顯的例子是在墨西哥，我想，大約 1.5 年前，自從我來到這里以來，Protandim 還沒有註冊，所以我們不直接向該國銷售。因此，儘管這帶來了一些收入增長，但它仍然與 Protandim 屬於同一產品系列。但隨著我們收入的增長，它幾乎保持不變。因此，其他真正健康的產品能夠加速我們所看到的一些增長。

Next, we hear from [Jerry N. Hoffman] with Robeco.

接下來，我們將聽取荷寶 (Robeco) 的 [Jerry N. Hoffman] 的發言。

Can you provide some more color just on the regional trends in terms of revenue, like previously you reported that Taiwan has become the third largest market, I think. Can you provide an update there? And also on the trends in distribution -- distributor and customer counts in particularly in Asia/Pacific and Europe?

您能否就收入方面的區域趨勢提供更多信息，就像您之前報導的那樣，我認為台灣已成為第三大市場。你能在那裡提供更新嗎？還有分銷趨勢——尤其是亞太地區和歐洲的分銷商和客戶數量？

Yes. So just addressing the distributor and member count first. In our press release towards the end, there's actually a table that shows that growth. And so from a distributor standpoint, we were flat year-over-year in the Americas, but we saw an almost 28% increase in Asia/Pacific and Europe. And candidly, on a country basis, we don't break out specifics there, but we saw growth across Europe, Taiwan, China, Australia and Thailand. So most of our regions showed meaningful growth, both from the distributor and customer standpoint as well as from a revenue standpoint. There's obviously a correlation there. And then from a customer standpoint, both the Americas and Asia/Pacific and Europe, the 2 regions that we publicly disclose, both of them grew about 10% from a count -- the distributor or customer count basis. So we mentioned that year-over-year, all of our regions grew from a revenue standpoint, and the same thing is true, all of the regions grew for both a distributor and a customer basis year-over-year.

是的。因此，首先要解決經銷商和會員問題。在我們接近尾聲的新聞稿中，實際上有一個表格顯示了這種增長。因此，從分銷商的角度來看，美洲地區的銷量同比持平，但亞太地區和歐洲地區的銷量增長了近 28%。坦率地說，就國家/地區而言，我們沒有透露具體細節，但我們看到了歐洲、台灣、中國、澳大利亞和泰國的增長。因此，無論從分銷商和客戶的角度還是從收入的角度來看，我們的大多數地區都顯示出有意義的增長。那裡顯然存在相關性。然後從客戶的角度來看，美洲、亞太地區和歐洲，我們公開披露的這兩個地區，從分銷商或客戶數量的角度來看，這兩個地區都增長了約 10%。因此，我們提到，從收入的角度來看，我們所有地區的收入都在增長，同樣的事情也是如此，所有地區的分銷商和客戶基礎都在逐年增長。

Okay. So in terms of preferred customers, in the Asia/Pacific and Europe region, the trend has been pretty flat. So on the 23,000 customers in the last couple of quarters?

好的。因此，就首選客戶而言，在亞太和歐洲地區，趨勢相當平穩。那麼過去幾個季度的 23,000 名客戶呢？

Up 9.5% year-over-year, yes.

同比增長 9.5%，是的。

Yes.

是的。

And a lot of that may be based on whether it's a customer or a distributor count by region, really depends on the way that business is done in the various markets. Especially in North America, we've seen a shift towards more of online communication, especially through social media. We found that our distributors are bringing in a lot more customers, per se, than -- initially than distributors. So you'll see -- you're seeing some of that shift in the Americas. In Asia, they're still focused heavily on bringing in distributors. Not that they're not focused on that in the United States, but they use different communication methods quite often and not as much social media.

其中很大一部分可能取決於按地區計算的客戶數量還是分銷商數量，實際上取決於不同市場中的業務開展方式。特別是在北美，我們看到更多的在線交流的轉變，尤其是通過社交媒體。我們發現，我們的分銷商本身帶來的客戶比最初的分銷商多得多。所以你會看到——你在美洲看到了一些轉變。在亞洲，他們仍然重點關注引進經銷商。並不是說他們在美國不關注這一點，而是他們經常使用不同的溝通方式，並且沒有那麼多社交媒體。

Thanks for clarifying. Indeed, I noticed the strong trends in Americans regions on customers and Asia/Pacific and Europe, the trend is stronger on the distributor side. So thanks very much, and great progress so far.

感謝您的澄清。事實上，我注意到美洲地區的客戶以及亞太地區和歐洲地區的強勁趨勢，分銷商方面的趨勢更為強勁。非常感謝，到目前為止取得了巨大進展。

Appreciate it, thank you.

欣賞它，謝謝。

That will conclude today's question-and-answer session. At this time, I'd like to turn the conference over to Mr. Jensen for any additional or closing remarks.

今天的問答環節到此結束。現在，我想將會議轉交給 Jensen 先生髮表補充或結束語。

We'd like to thank you all for joining us today. We're pleased with the sales and business momentum and remain confident in our 2019 outlook. We will be presenting at the D.A. Davidson Second Annual Consumer Growth Conference on May 30 in Chicago and at the LD Micro conference in Bel-Air in June 5, and we hope to see some of you there. Have a great day. Goodbye.

我們要感謝大家今天加入我們。我們對銷售和業務勢頭感到滿意，並對 2019 年的前景保持信心。我們將在 D.A. 上發表演講。戴維森第二屆年度消費者增長大會將於 5 月 30 日在芝加哥舉行，並於 6 月 5 日在 Bel-Air 舉行 LD Micro 會議，我們希望在那裡見到你們中的一些人。祝你有美好的一天。再見。

That will include today's conference call. Thank you for your participation.

這將包括今天的電話會議。感謝您的參與。