Q2 2020 Natures Sunshine Products Inc Earnings Call
Good afternoon, everyone and thank you for participating in today's conference call disgusted natures Sunshine financial results for the second quarter.
30 2020.
Joining us today, our natures Sunshine CEO parents more.
So Joseph Beatty, an executive Vice President and General Counsel.
Following their remarks, well open the call for your question.
Before we go further I would like to turn the call.
Our.
The company's safe Harbor statement within the meaning.
Securities Litigation Reform Act of 1995.
Provide important cautions regarding forward looking statement.
Please go ahead.
[noise]. Thank you [laughter] good afternoon, and thanks to all for joining our conference call to discuss their second quarter.
2020 financial results I'd like to remind everyone.
Paul is available for replay via telephone at dialing.
Through August 20.
Yeah wide webcast that will be posted in the Investor relations portion of our website at natures Sunshine.
The information on this call may contain certain forward looking statements. These statements are often characterized by someone allergies.
Just be lease hold me to what they expect in other similar expressions [noise].
If you pay minimum guarantees of future [noise].
And you actually get to be materially different than the results implied forward looking statements.
Factors that could cause results to be it can differ materially from doesn't quite herein.
[noise], but we're not limited to the stuff is just spoken to compete.
<unk> form 10-K under the caption risk factors.
In other reports filed with the Securities and Exchange Commission [noise].
Information on this call speaks only as of today's date when the company disclaims any duty.
Certain information provided here.
Now I'd like to turn the call over Q.
The CEO Nature's Sunshine turns more.
[laughter] octane, everyone and thanks for joining todays Colo your old.
I think she's been helping during these challenging times as we continue to deal would be.
That's it ended uncertainty caused by the global effect to cope with 19 economic turmoil in social unrest.
He said that it's good to hear with all of you today to discuss our second quarter results.
I'm sure off or something to be initiatives that will be implementing in the back half will be here.
With me today is our Chief Financial Officer, Joe Maybe you can walk you through our financial results in greater detail.
Going to kick things off today with a brief summary business [noise].
So let me begin by saying that our team during natures Sunshine is doing well and though we continue to stay focused on movie business forward.
I'm very pleased with our second quarter performance, especially given the challenging operating environment.
Overall, we had another solid quarter.
Spiked delivering a 2% decrease in revenue on a local currency basis.
Significant progress in several key markets like NFC, U.S., which saw revenues increased for the second consecutive quarter.
3% in local currency.
Oh situation in Europe was up 14% on a local currency basis in China was up 39%.
Currency.
Well come back and talked about these markets a bit later.
We also continued to see.
Positive results on the bottom line due to our cost reduction initiatives with a 45% increase in operating profit.
21% increase in adjusted EBITDA.
Bring almost $10 million for the quarter.
We're committed to continuing to make progress in this area I got a restructuring. It gets you into students are expected to deliver more than $4 million annualized savings.
Stepping back to look at our performance over the first six months of year for white good insight into the momentum we're building, but it also normalizes somewhat finding issues related to shifting buying patterns that we saw in the first half a point swing.
During this period, we've seen a 2% increase in revenues on a local currency basis, driven by NSP U.S. up 5%.
[noise], 15%.
Central and eastern Europe, 34%, all on a local currency basis.
We also saw strong profit increases in the first half with a 20% 26% increase in adjusted EBITDA delivering over $19 million for the first six months of yours.
Clearly the building momentum you know very challenging environment and our team has stayed the course navigated the increasingly complex environment and worked tirelessly to ensure that we continue to make progress on our business transformation without disruption.
Well I can't overemphasize, how impressed I've been with our team's ability to adapt collaborating.
But would come up with those editor Tara.
And I want to give successful spacing recognition for shipping manufacturing and quality teams that have continued to keep our manufacturing and distribution distribution facilities fully operational weapons pandemic, which has allowed us to meet the increasing demand for our products and continue to serve our incredible distributors without interruption.
[noise] Force health and safety of our employees distributors and customers because our top priority. So while some state local restrictions related to the pandemic. It doesn't look good.
We're still strictly following and in many cases exceeding CDC guidelines and continue to have the preventative and protective measures in place to be discussed during our last call, including regular viewed pointing daily temperature scans educational hiking practices isolating workgroups limited.
Direction access to common areas increased handstands housing station and requiring masks and wells for all employees at our facilities.
[noise] consumers are counting on us now more than ever in every one of the major Sunshine is dedicated to navigating these unprecedented times and we remain committed to delivering the highest quality products and services in the market.
[noise], let's talk little bit more of a reasonable performance and share some of the highlights from our second quarter results [noise].
Starting with North America, we're very pleased with our performance, especially given the challenging operating environment brought on by Toby My team.
Economic downturn.
The long from negative sales trend of our U.S. business.
Overall sales were flat for North America, However, as I mentioned earlier NSP U.S. saw a 3% increase on red ink revenues on a local currency basis.
I'm going to U.S. was driven by improved feel fundamentals and increased sales across all categories, which is extremely positive and consistent with some of the group trends, we saw cost to supplement industry as a whole of course.
There's a significant milestone because it's really the first time in a long time, certainly we've been able to capitalize on the overall market group.
We think the result of shifting consumer sentiment engagement with our brand along with increased interaction with our sales team clearly it's a positive developments at the team for parents to launch a series of new initiatives as part of our transformation.
I'll come back and talk about the press releasing a little bit later, when I walk you through our progress on a global growth strategies.
Turning to Asia was a pandemic kick us early it's been hard and we continue to be negatively impacted by the ongoing impact will be 19.
The second quarter revenue decreased just over 4% on a local currency basis, which is much better than we expected given the restrictions on.
Meetings, the extended closer offices training facilities and sales centers and the cancellation of key incentive programs.
Reaching our change has been forced to adapt to the day to day challenges in Marquis increasingly using remote meetings and sales tools to a lot while implementing new incentive programs to drive engagement.
As I mentioned earlier, China was the first market in Asia to social to show signs of improvement delivering 39% revenue growth.
Local currency support.
Growth was partially driven by an overall increase in demand for supplements, but most of the growth came from increased distributor activation and new customer acquisition.
Japan also delivered solid performance with revenue growth of 4% on a local policy basis.
Since the start of a pandemic our Japanese distributors have increased their use of online and remote sales taxes. During a joined the second quarter there were more effective in driving customer activation.
What we're pleased with the progress in China, and Japan, It's still too early to make any forward looking assessments.
In Korea revenue decreased almost 20% on a local currency basis, driven by government restrictions on meetings and events and the mandatory quotes or our stated before business Center.
As a reminder, our Korean business, there's a high touch markets that historically relied on meetings events and experience based incentives to motivate and drive distributors.
Fortunately the investments that we made in 2019, a digital technology and remote ordering allowed us to move forward and keep our people engaged. It's also important to remember that we have excellent fundamentals in Korea.
I could fit business to be a growth driver, what's the market fully recovers.
In the meantime, the team is using Webinars zone pole digital and social media tools to keep people engaged.
And your we continued to see improved performance.
[laughter] fading affects cobiz 19, and the collapse of the Russian ruble still revenue increased 4%.
The region on a local currency basis, driven by continued gains in central Eastern Europe was 9% growth in Russia, and 44% growth in Poland.
Strong feel fundamentals and a more developed online presence helps the management team overcome the external market challenges and mandated closer or retail locations throughout the region.
Walking closures and business was pixels in Continental Europe led to negative sales that offset gains in central and eastern Europe.
Helped drive engagement moving forward the changes introduced an attractive promotional immune pack and rewalk one of their keep products, which should combine to help drive sales as markets. We open.
[noise] in Latin America, we've also been significantly impacted by Cobiz. My team has mandatory curfews the suspension of public services and the mandatory closure of our retail outlets have combined to slow market growth.
As a result second quarter revenue declined 16% in local currency.
Moving forward, we except we expect to see improved performance and let them due to a revitalize new product development program and the introduction of online ordering capabilities across the region again.
What's the market restrictions are lifted we believe these changes will start to have a positive impact on the business.
So to sum up our performance I just want to reiterate how encouraged we are by the first half sales trends, especially in several of our key markets and the continued improvement in our bottom line.
Even though we're still in the early stages our transformation. It's a good indication of the opportunity that lies ahead [noise].
With that said I like to spend some time updating you on our transformation plans for the second half of 2020.
As you know our transformation is built around our five strategies brand power field anarchy.
Digital first manufacturing Inc. and finally, what we call the right stuff.
We prioritized North America, and last year as key markets disappear when our transformation plans due to the changing consumer dynamics, there untapped market potential and our long term negative sales trends that we've experienced didnt ease of use.
We'll be watching a series of brick doing if she gets in both abuse and I'd like to your walk you through some of the key changes that will be implementing starting in late Q3.
Let me begin with brainpower, what we plan to accelerate and deliver the full rollout or updated branding that includes our new packaging consumer facing assets and brand imagery.
We'll also introduce they knew and boxing experience.
Foam affinity and create a premium customer experience [noise].
To bring all this together and reposition natures Sunshine Hearts and minds of consumers will also be launching our new horse of nature digital campaign designed to improve consumer awareness and drive activation.
The new campaign will reestablished linked to subside as an industry pioneer and herbal expert.
Sizing the Powerbar brand through new messaging and lifestyle imagery.
Jumping details are still lots of development and we look forward to introducing our unique platform to a significantly larger consumer base through these efforts [noise].
Finally [noise].
We're also going to start more aggressively marketing our baseline of CTV products sold under the brand.
Ken It's the combination of two words quality and had to get to Ken.
Our plan is to use.
Our extensive head to head testing it shows kept its superior all other top brands of CBD currently on the market to build a powerful campaign.
Hey, Paul Research, we believe camp is the best CBD out in the market offering better performance.
Our quality and better transparency than any other brands.
As such we're developing a campaign to help build them architecture.
Turning to field energy, our focus will intensify as we update and contemporize, the distributor and consumer experience [noise].
What are the most important changes will be implementing the launch of a new membership program for customers.
We call the program premium membership and for a small annual fee premium members will enjoy exclusive savings are all crisscross additional savings off all sale items early access to promotional events private sales promotions and free shipping.
The premium membership program is an important first step in defining and differentiating hopefully distributors. There's just customers. That's it becomes increasingly important for us to strengthen our customer focus and deliver programs that will make our brand more attractive to teach group.
Another important initiative, if the loss of a new subscription program designed to support therapeutic benefits and increased customer retention.
We call the program subscriber and thrive.
This will be a significant change how we engage with customers in the future.
Today to many of our customers end up being onetime buyers at our goal is to help those customers get the whole therapeutic benefit from our products.
As such so that's why in fried will become the default purchase option on our new website and will offers the lowest possible price for our products free shipping and they free one year premium membership.
Of course, we walk program to be as consumer friendly as possible. So we've made sure that there was a one quick cancel pause and change button. So that customers can customize their subscribing broad experience can meet their needs.
Just wanted to thrive as one of the most important and more powerful ways. So we can support our consumers wellbeing because.
For a consistent supplement routine is the best way to maintain healthy lifestyle with major Sunshine.
Of course, what almost important development is the launch of our new top when it gets distributors and updated and more flexible earnings plan with improved growth potential.
[noise] implant is based on significant research and more clearly aligns with todays relationship driven distributor the values stronger rewards for a customer for driving customer growth and encouraging customers to share natures Sunshine with others.
In addition to the exciting new programs and initiatives to support distributor growth. The new health plan will now offer distributors for rates to earn.
First way to earn its by selling our industry, leading products and certain customers.
Second only to earn its by identifying new qualified distributors, who would be interested in selling our products and serving customers.
The third way to earn this by identifying qualified distributors in other geographies to sell our products and serve customers.
This is made possible by moving from 11 unique plans to be having to pass to a single plan for North America in Latin America.
And finally with the introduction of new sharing tool and an innovative affinity program.
Fourth we earned is by encouraging customers to simply click and share our products with other consumers.
Through the easy and convenient social media sharing tools that will allow them to recede benefits of their own.
The news during tools and affiliate program will allow distributors to expand their influence in exciting new ways and even earn across new geographies that they'd like to.
Obviously, we want to accommodate the increasingly demanding needs of today's distributors. So in addition to introducing an updated digital platform that I'm going to talk about net.
The new plan also allows distributors to be paid within about 30 minutes of a customer transaction instead of having to wait until the end of the month they get paid [noise].
[noise] moving to digital first.
Before we bought.
New website with new features and functionality and updated design.
As I mentioned earlier, we'll also be introducing new sharing tools for customers distributors and affiliates with a host of new several assets to help promote customer growth [noise].
Distributors will also have access to a new set of back office tools, and the and bolt and folio replicated website that will allow them to create and build their own digital business opportunity.
This is just the first step in our digital transformation, but it's an important one since this new platform allows us to more effectively manage distributor transactions.
Finally have a system that will allow us to link customer transactions to their responsible distributor in order to ensure that were fully supporting our distributors customer growth efforts [noise].
Turning to manufacturing Inc., our plan continues to focus on taking our industry, leading quality and reliability to the next level.
Last year, we received our U.S.D.A. organic and ISO 9001, certifications, which further widening the quality gap between Nature's Sunshine and the competition and this year will upgrade our coaches certification and secure additional items. So certifications that will further.
Great our commitment to manufacturing excellence.
As I mentioned earlier, we'll also for this free shipping and an improved on boxing process to improve the customer experience.
In park in partnership with our supply chain team.
Finally, our rights stuff strategy will continue to focus on streamlining processes aggressively managing expenses and proactively evaluating organizational effectiveness to improve operating margins.
Of course in light of recent current events.
Become increasingly apparent that another important aspect of having the right stuff.
Thanks to ensure that we're building an organization that embraces and champions diversity inclusion and B quality.
As such we're launching a fixed part educational series that we call stronger together.
That focuses on educating our employees on how to create an open and inclusive work environment.
We're doing everything in our power to be a positive influence in our community, including launching a college scholarship program and a series of internships targeting employees and minorities.
Community.
In summary, we've made significant progress, bringing our French plant for life I look forward to launching the new initiatives in late Q3.
Of course, as we partner with our incredible distributors to move the gives US forward, we want to make sure. They had ample time to adjust to the new initiatives and that we fully support them throughout our journey.
Help move everyone forward, we've created a 12 month bridge program designed to ensure that our distributors have an opportunity to be successful limited world without the fear and financial risk.
The bridge is a unique program demonstrates our own wavering commitment to our distributors.
And our steadfast belief in their ability to assume the leadership role that made natures sunshine and industry piety or almost 50 years ago.
Well be in a better positioned to talk about the potential impact of each one of these initiatives and that and the new proposition during our November called the right now given the environment. It's still too early comment so with that I'd like to turn the call over to Joby, Our Chief Financial Officer, who will walk you through our financial results for the second quarter in more detail Joe.
Thank you Karen and good afternoon, everyone.
Net sales in the second quarter, rainy 70.3 million compared to 90.7 million in the same quarter last year [noise].
Local currency basis, net sales decreased 2% year over year.
Unfavorable foreign currency exchange rate fluctuations impacting net sales by approximately 1.5 man compared to the prior year.
Net sales in Asia, or 52.8 million compared to 45.2 million in a year ago quarter [noise].
The decrease was primarily attributable to the effects of market shutdowns brought on by the Cobot 19 pandemic [noise].
On a local currency basis net sales in China increased 39%.
Japan local currency sales increased 4%.
So to your sales declined 20%.
Future results may continue to be negatively impacted by the pandemic and fluctuating foreign currency rates [noise].
Net sales in Europe increased 3% year over year to 15.5 man or 4% growth in local currencies.
The increase in net sales reflects growth in central and eastern Europe.
Including strong performance in Russia, and interest and despite if they actually pandemic related market shutdown [noise].
[noise] North American net sales were 34.5 million.
Turning to 34.6 million in a year ago quarter.
As Jeremy mentioned.
Slight decline reflects the softened demand we experienced in April as a result was the fear based buying trends in the early days with a pandemic.
Which has since recovered as customers began to replenish their supplies and return to more normalized purchasers.
The approximate 3% goal, we experienced for NSP U.S. steering the ship corner support his statement.
We believe that very strategic and ecommerce enhancements, we are launching in the coming months will set us up nicely to capitalize on the solid demand, which surging Kim resurgent stemming from the U.S. market [noise].
Net sales in Latin America, and other were 4.6 million compared to 5.9 million in a year ago quarter.
<unk> decreased primarily due to the substantial shutdown of circle flat markets.
Gross margin was 73.6%.
73.7% in the prior year.
Volume incentives as a percentage of net sales were 33.4% compared to 34.5% in the same period last year.
The decrease was driven by changing market mix, including China growth.
The effects of various global market ship downs due to cope with 19.
Selling general and administrative expenses for 28.5 man.
Down from 31 million in the prior year.
The 8% decrease was primarily due to savings from restructuring activities in the U.S. in Latin America.
[noise] decreases in travel and event related costs.
The result, Tilden 19.
And then you will be a t. respond and 2020.
As a percentage of sales extraordinary expenses decreased 150 basis points to 32.7% [noise].
54.2% and the same period in 2019.
Excluding the impact <unk> 0.4 man and restructuring expenses in the prior year important one man.
T related income this year.
<unk> expenses for 32.8% of net sales compared to 33.8% in the prior year period.
We were told you get 40 section infringement operating income to 6.6 million or 7.6 net sales.
Third operating income of 4.5 name or 5% of net sales in the prior year period [noise].
Excluding the previously mentioned unusual items relating to restructuring and be accumulated income.
We generated 6.5 million of operating income or seven point, Fortunately net sales for the fourth quarter.
Turn to 4.9 man or 5.4% of sales in the prior year period.
Primarily related to SGN any savings in addition, as cherish mentioned earlier.
We have been able gainful bottom line leverage.
The result of streamlining processes and prudently managing cost across the business.
All right stuff strategy.
Adjusted EBITDA as defined in our press release as net income from continuing operations before income taxes, depreciation amortization and other income or loss adjusted to exclude share based compensation and certain noted adjustments increased 21.
<unk> percent to 9.7 million in shipment quarter 2020, that's compared to eight man and the second quarter of 2019.
This increase was driven primarily by the aforementioned cost savings from reduced travel and event related extensions and ongoing restructuring activities [noise].
Net income attributable to common shareholders for the quarter.
Increased significantly to 5.8 million or 29 cents per diluted share as compared to 2.7 man or 14% 14 cents per diluted share in a year ago period.
Turning to liquidity.
We had cash cash equivalents on June Thirtyth of 70.3 man.
5.4 million of debt.
The first six months 2020.
We generated 14.4 million of cash from operations as compared to using cash of 1.1 million in the comparable prior year period.
The increase primarily due to changing olson capital, including payment timing circle.
Abilities.
Overall, we're pleased with our balance sheet strength and liquidity [noise].
Although we recognize that the token separate 19 pandemic and related impact on future financial results remains uncertain.
We believe our strong liquidity.
Just had a favorable position to mitigate unexpected impacts in the future.
Accordingly, we remain committed to maintaining and continuing to improve our overall cash and liquidity position.
Before opening the call your questions I wanted to echo the sentiment shared the church [noise].
Well there remains much more could be done in nature Sunshine.
We're quite pleased with the progress we've made so far.
Look forward to continued strong results from our global growth initiatives.
No I was.
Turning back over to the operator for puny.
Operator.
Sure.
Question.
[laughter].
Sure.
Sure.
[noise] again.
One question.
Hello, everyone.
[noise] <unk>, our first question from [noise].
[noise], though you don't they face.
[noise] based thing Dave.
Jeremy [noise].
Yeah.
So it'll be.
We take it off hold on.
Is that better.
Oh, Yeah, that's great. Thank <unk> dollar okay.
So I know you don't like.
Giving any forecast and I know you know like you've now come through the bulk of the pandemic.
Can you.
Broad strokes.
Talk about what you're expecting for the back half.
[noise], you know I I wouldn't necessarily say, we'd golf as opposed to depend bendeka.
Based on.
The the trend line numbers, they got the marketplace, but I'd say we are.
Like I mean, I'm excited about a a strategy that we had in place.
I think there are.
Outlined.
I'm excited about the key markets as we mentioned that or are kind of going into into right direction as well.
Yeah, we still we still have to get through the implementation of.
Okay strategies and get done kind of landed successfully.
We've got great distributors, they're focused I think we got that distributors immoral practitioners in the U.S. business or some of the smartest most capable most loyal people out there.
And they are Oh, Jeff.
I know that brought that we've got some meetings, let's put some other.
Outside experts and they.
There's just so impressed as I have been without without people, so they'll say, but I think where we're doing everything we said to keep the momentum going and to build the foundation for both for the future.
But again I I still deal with there being a lot of uncertainty.
In the markets around the world.
Especially in Asia, especially in light of Tam.
Even here in the U.S., but again, we're trying to give ourselves a chance to win and a chance to compete.
All right well you know I'm not going to let you off the hook quite that easy.
[laughter] right. When you look at your deposit the monthly progression of sale.
I assume the April was the worst of the three months.
[noise], we've got a fair assumption.
[noise] three somebody directionally to reasonably fair assumption, but I would.
I wouldn't say, Steve not to jump ahead, but I wouldn't say isn't it.
You know the trend line is <unk> show substantial upward movement over the quarter. There is an upward trend over the quarter, but not dramatic okay. Okay.
[noise] with respect to actually DNA, there were a lot of ins and outs this quarter.
And when you look at Ash DNA.
For the and I know, you've got a lot of initiatives kicking in the third quarter.
And you know you had the bad and you Didnt have meetings.
Give us.
Parameters.
On where S.G.N. a.
Should be Bert you were at.
31 million for the first quarter you were at 28 filing for the second quarter.
Within that range, what should the third and fourth quarter look like.
[noise], just because I don't know yes.
Steve is I think you now we don't.
We don't give.
You know that level.
James We don't get much guidance at all as you know, but I would say Directionally, let me just say from an overall standpoint.
You know, we're pleased with the the favorable trends, we're seeing even with the ins and outs in as June were we clearly have the initiatives to reduce as soon as a percent of sales going forward and that the initiative was launched back couple of years ago, and we're starting to see who seek some of the benefits.
That even with again some of the ins and outs related to the and.
But I'd tell you in regards to the second half is.
Right.
Yes look at any given quarter and somehow measure as junaid, because there can be adjustments fluctuations due to the level of events or a that type of activity that's going on and obviously in the second quarter. There wasn't much of that activity the third quarter, there might be a little bit more so that in of itself.
They lend itself to potentially some uptick as a percent intense today at the same time, you know there's still a lot of uncertainty as to how exactly sales will play out in Q3 in Q4.
So while there may be from a dollar standpoint, so I love to it it doesn't necessarily right.
I mean that as a percent of sales that you would see meaningful increase.
Okay, I'm going to try I'm going to try to different way.
[laughter] on.
Looking at cost to goods sold.
And S.G. anyway.
As baseball game.
Where are you in terms of.
A winning the cost out.
[noise] well not.
Not using the of the new doubleheader format of the major legs.
Alright.
Those are seven ending games using a typical baseball game.
Yeah, I would say you know wondering is such an outstanding.
Let me just jump to the operating income or even get any margin. Steve frankly, it's obviously, we have a lot of initiatives you're seeing any significant improvement in operating margin EBITDA margin, but we're not done yet okay.
The longer term.
Cool and targets.
You know north of where they currently are so do you should again interfaced she reached technology.
I went into service any stretch.
I don't think so but.
Also.
No pass before.
Okay.
All right well you know what do you ended the day you know you can do.
You've done a great job taking costs out and I appreciate the six seven thinning analogy.
It really is going to drive the margin is.
Topline growth.
Because it's still you've done a great job with sort of flattish kind to revenues what do you know the real I think the real.
Leverage into double digit margins who's going to come when you can translate all this all what you're doing into topline growth.
And along that line and changing subjects you know if you can't get lack of them you know.
Up and running or function better soon.
Thank you know cut your losses.
You know too much attention it too much time too much money.
For a market that just at the end of the day I don't think do you know veer too many countries. There that are two screwed up.
So let me when they ask one last question in Ah I do this every quarter.
We're now up to $70 million.
You know you worried a year year and a half ago about consistent cash generation I would say your cash generation is pretty damn consistent.
If you had a.
If you have a back half of the year equivalent to approximately equivalent to affect the first half of the year, you're going to be looking at.
$90 million a cash.
You are going to be you have no debt.
You got 20 million shares outstanding.
And I know you have some very smart people on your board and I'd like to know.
When somebody is going to do something with respect to reinstating the dividend or buying back stock or buying a slug of stock from your Chinese investor or something but it is not productive at the end of year to be sitting with $90 million worth a cash and I hope I hope, you're you're board members and.
Control shareholders are listening.
Yeah, it wouldn't be inappropriate for those.
Comments on anything that the board had been hasn't come out, but you know again right now.
In this environment our strategy is to.
You know we have arse one facility here in its fantasy sports serves our business around the world and so it kind of it in a co bid.
For the World, we are holding onto our cash from being a being cautious and being able to play it safe right now, but I think we're having a because they were having all the appropriate discuss and at the board level, John would you like to anything to that.
Sums it up soon it's fair question, yes.
But clearly given the situation.
Under the uncertainty well I hope you know what you touched on earlier that maybe more.
You know tasks offense or six food being on the pandemic I don't know, whether we are we arent frankly, so and until we see little more light at the end of that tunnel as I noted in my comments I believe in our current position is two to maintain and and continued to build on our liquidity such it will be very well.
All position at some you know unfortunate situation unfortunate situation does arise having said all that.
Again, it's a fair comment for question and those conversations.
Our continued to take place at the board level.
Well rest assured I'm going to continue to ask the question.
I appreciate it [noise].
Alright, Thank you very much.
Thanks, They say.
Same.
[noise] like question at this time.
I want to star one for questions.
[noise] at this time their question answer session I would now like Paul.
Closing remark.
[noise] approval and once again I want to thank everybody for listening to today's call. We look forward to speaking to you. It again in the future about on our third quarter results.
But again it means on stay safe and thanks for all your support and thanks for joining us have a great day. Thank you.
Ladies and gentlemen, this does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation.
Oh.
[noise].
Yeah.
[noise].