Q4 2020 USANA Health Sciences Inc Earnings Call

[music].

Please standby were about to begin.

Good day and welcome to the you sign of Health Sciences fourth quarter Conference call Today's conference is being recorded.

At this time I would like to turn the conference over to Mr. Patrick Richards Executive director of Investor Relations and business development. Please go ahead Sir.

Thank you and good morning, we appreciate you joining us to review, our fourth quarter and full year results.

Today's conference call is being broadcast live via webcast and can be accessed through.

And from our website at IR Guy and you saw the dot com.

Shortly following the call a replay will be available on our website.

As a reminder, during the course of this conference call management will make forward looking statements regarding future events of the future financial performance of our company.

Those statements involve risks and uncertainties that could cause actual results to differ perhaps materially from the results projected in such forward looking statements.

Examples of these statements include those regarding our strategies and outlook for fiscal year 2021.

As well and certainly related to the magnitude of the scope and duration of the impact the COVID-19 pandemic to our business operations and financials.

The cost of your use of these statements should be considered in conjunction with the disclosure.

Moving specific risk factors and financial data contained in our most recent filings and yet.

I'm joined this morning by our CEO and chairman of the Board, Kevin guest our President and Jim Brown.

Our Chief Financial Officer, Josh checking as well as the other executives yesterday after the market close we announced our fourth quarter results and posted our management commentary results and outlook document on the company's website.

And now I'll give a brief remarks from Kevin before opening the call for questions. Thank.

Thank you Beth and good morning, everyone. We appreciate you joining us to review, our fourth quarter and full year results as well as our initial outlook for 'twenty and 'twenty one.

Overall, we are very pleased with how we performed against the many new and unique challenges of the 'twenty and 'twenty.

Our strong performance and the base with unprecedented pandemic reflects the continued demand for our high quality of nutritional products and <unk>.

Successful execution of our strategic initiatives.

And 'twenty and 'twenty and we found that we were well positioned well prepared and nimble enough to adapt to and succeed in this unprecedented operating environment.

Because of debt, we ended the year with more customers and higher net sales and record earnings per share.

As you can see from our initial outlook, we are expecting 'twenty 'twenty one to be another record year for you saw the.

'twenty and 'twenty was truly a transformative year for our business as we accelerated many aspects of our customer experience strategy.

Been actively investing in the you saw the customer experience for several years now with an emphasis on our digital strategy.

And 'twenty and 'twenty, we capitalized on the groundwork we had already blade and the accelerated many other projects to successfully operate during the pandemic, we improved our websites digital shopping experience associate training customer communications and our overall technology infrastructure.

Additionally, we introduced several new digital tools that allow our sales force to continue sharing and selling you saw and our products and the predominantly virtual environment.

These enhancements to our business as well as many other technical and operational improvements have meaningfully improved the experience that our sales force and customers.

The experience when doing business with you saw it.

Although we recognize that the pandemic is that over our outlook for fiscal 'twenty. One reflects the expectation that we will see progress through 'twenty and 'twenty one towards the more normalized operating environment.

Well, we've learned a great deal of hosting several virtual events this past year.

And we look forward to the future opportunities of <unk>.

Beijing again, with our sales force and customers and an in person says and what it makes sense to do so.

Our business is built the Rev fantastic nutritional products relationships and personal interactions.

And we plan to leverage the benefits of both virtual and in person events moving forward.

The first half of the year, we expect the whole virtual only events for our sales force and maintain our work from home plan for employees.

During the year, we will continue to execute our digital strategy drive growth in existing markets with our emphasis on China.

The launch our new active nutrition product line and other products and that.

Actively seek out business development opportunities.

As we execute the strategy, we are projecting another amazing year for the company.

In closing.

I am very confident and our strategic direction the.

Competency and agility of our team and the strength of you saw this underlying business.

With that I'll now ask the operator, please open the lines for questions.

Thank you the.

The question and answer session will be conducted electronically and if he would like to ask the question. Please press star followed by the digit one if you are using a speaker phone. Please make sure of human touch.

That's true of all of your signal to reach of Clinton and once again star one and we will take our first question from David Bain with Roth capital.

Great. Thank you first congratulations on a fantastic <unk> execution.

And I guess my first question would be if you could potentially of Capsulate the potential route to new market that you suggest in your press.

The press release that you're laying the ground work for them and obviously that can take many forms such as kind of dead or or be strictly organic is there any way. We can think about the potential of immediate impact to a new market in relation to your strategy.

Well.

And strategy for last several years as has been that we wanted to focus our resources all of our existing markets and focus on growth, where where we were currently doing business.

We feel like you've got and upper hand, and that area and feel very confident that it's time for us to move into exploring other opportunities around the globe.

And you won't get some of our peer group there and some of them are and 50 or 60 markets.

Around the globe and we do see that as the potential growth opportunity, but it's not.

The primary strategic growth strategy for the company.

We do see international expansion as an important piece.

But again like you mentioned it takes quite a while for it to have an impact Jim do you Wanna and yeah, I mean, when we looked at the market debt that we selected the go forward and of course at this point of time, because where when we look at it about 18 to 24 months out and we went and announced that to the field, but we do have a plan and the strategy as we go there's just a lot of them.

Work that has to be done from setting up the market and that's everything from logistics to where and how we're going to produce our products to hiring the right staff all of that goes down the path and that's where I and youre looking at that 18 to 24 month runway before we actually launch the market. So you're looking at and the impact probably the end of 'twenty two.

When we look at starting up the market, so you'd see a financial impact and the 23. So it's a ways out but again, we feel and we always have gone down that path of every couple of years of opening of market that we need to have the right runway to make sure. It's the smooth opening and David I would add on and I think of little bit of your question the methods and now we enter China.

That's definitely something that we've considered and evaluating whether the partner makes sense and.

And we kind of look at the opportunities and could you point a lot of the leg work's been done historically and we have these markets kind of sit on the shelf and kind of timing for when it makes sense like the method and the manner. I think we have an idea of what were still in process of of.

Kind of getting to that point.

Okay Fantastic and I guess my follow up would be if maybe you could give us a sense as to what benefit either from a cost structure standpoint of revenue generation through technology or otherwise you know just from the best practices are really what you've learned that could become permanent out of COVID-19.

And.

One of the things that are.

We definitely have learned is that it is it is very we are very capable on the international level of the very high sophistication level, when you're operating and several different languages across the world that we can do of virtually and for me I don't have to get on the plane and fly to China.

And we could still have a very positive impact one area, where I've been pleasantly surprised and says we've launched new products and the new initiatives that we've been able to do a completely problem of virtual perspective and.

<unk> seen seen huge success and so our one of our big takeaways is that we're going to proceed and the future of utilizing a hybrid approach, where we're going to leverage technology, and a more meaningful way and and encapsulate some of the in person opportunities, but just.

Just sheer surely from a management perspective.

And I become very much more accessible to our global community and customer base by luxury leveraging technology and so that's a huge learn for us because a significant piece of our R. S. G of our spend is gun.

<unk> done all of live events and travel and it has changed our basic business model somewhat because we've been so are.

Used to be not played scrabble of all over the world to get in front of our people and so that's been a big learn and and it will dramatically change how we do business here.

Yeah, I mean, the other thing.

From the management team and how we're doing our business when we look at the sales feel you know we talk about digital transformation of our digital footprint, we're seeing a huge adoption when it comes of running your business digitally so as well as the company figuring out how to do it our field and across all of our markets and figured out that way to run their business across the wechat.

Whatever form it is and and continue down the path of growth and we were pleasantly surprised and 2020 and I think that's one of the biggest reasons that we have such a great years that adoption to the digital platforms and.

David This is Doug the little bit more perspective, there and some of our markets and some pockets within existing markets. We've seen it has the pain of resistance to adopting some of the technology and rolled out and this environment is almost force them to use it and I think we've heard of pretty good response from that and so that that's been kind of the pleasant surprise for US to then go back and get more and more.

And the tools yeah for US you know I like the <unk>.

<unk> about it debt, although the Covid has had a negative effect and many people's lives, it's really been and accelerator for you saw them.

And the helping us accelerate and strategies and we already have in place versus the disruptor.

And and I'm very grateful that we were able to accelerate things and we're already in place when we had the immediately pivot.

And to the new operating environment, and so I see it.

And a lot of ways from our strategy side and the accelerator versus the disruptor.

Awesome and I'm, sorry of the census, and my first.

Call.

As an analyst and you.

The stock if I could ask just one thing as a follow up to that deepening digital revenue generation and the whole thing that you've spoken to are you seeing and overall younger demographic and the network.

And.

Well I this is and anecdotal kind of a response to your question of the Ducks has the numbers better than I do but.

Based upon what I'm seeing just from a participation even from a digital perspective I do see a younger population even on my social media accounts and see those who are actively engaging with me as the CEO of the company I do see a younger group of the younger population.

<unk>.

Continually coming into the business, which I see as very positive and.

So and again this is just my observation and a very high level, but I would I would say I would.

And say, yes, we do see a younger demographic coming into the business, Yeah, I would say as well from a relevancy.

The aspect, we're set up now to actually meet the demands of debt younger crowd, where before and when it was mostly done in person and it really didn't have debt effects right now, where we're doing everything digitally and that's the platform that the younger crowd wants to work on and we're continuing to make that so like Kevin and says we're seeing yet I think and the fee.

And we'll see more of a of bringing that demographic and of the business and.

And maybe a few other comments there I think and our higher growth markets, we had a younger demographic and and that's been really clear I think and some of our other markets. What we've seen is we've seen you know to Kevin's point and we've seen some more of these younger group come in but we've also seen more of our legacy customers start using the technology more and so I think all of those things are positive.

And I agree.

Fantastic Congratulations again.

Thank you.

Thank you.

Okay.

And next the move to Sebastian.

Barrow with Jefferies.

Hi, Thanks for taking my question and congrats and reported.

And a few questions for me please.

I'm wondering if you can talk about some of the trends you're seeing other than the consumer health markets, including changes in customer behavior of the past 12 months and how does this compare across your different markets and also if you can talk about retention rates for the Associates Inc.

The nature, and how we sort of trended and patients pre COVID-19 levels.

It is as far as kind of the recent trends Sebastian and I think what we've seen and we talked about it early in 'twenty and 'twenty.

We saw a spike initially is as kind of the rest of the world start and deal with the.

The Covid pandemic and and we saw a spike and some of our immunity products and products that were designed to go back and support of need and functions and.

And we would definitely be net spike kind of drift down, but it's still clipping at a higher run rate of growth and the rest of our products and so without a doubt we've seen that across.

Across our markets, we're seeing of more keen awareness of health and wellness.

And it allows us to go back and have more robust conversations and have dialogue with these with these customers and consumers that we have out there and as it pertains to your second question.

We produce that active customer account number for very specific reason when someone comes in and buy it and they don't like and typically we don't get something that says hey, we're going to do and this other stuff and you saw that active customer accounts captures and purchased and the most recent 90 day period.

And so we think that's the kind of the best transparent is the metric we use internally as well.

Got it and you got the China to grow between 6% to 12% in 'twenty and 'twenty, one the 200 and organic basis as likely between flat to up 6%.

Wondering if you could talk about any changes in the market in recent months.

Including the moving part of course and the competitive landscape.

What gives you the inflection and what gives you the confidence of any collection nascent back over the next 12 months and also any color you can give us all of the 21 trends and what the Street guide imply in terms of growth cadence for the year.

Yeah, and that's and sorry, it's vaccines and it's coming across the little bit of muted on the on your your voice was this specific to China and you ask the question.

Yeah, Yeah, so just trying to understand any changes and the market in recent months, particularly since the meats to moving protocols.

And also if you can give us some color and early 2021 trends and what the <unk> guide implies in terms of growth cadence for the year.

Yeah, and you and I'm sure you read.

Many of the same information that we're getting try and kind of of nuance.

The place, where you have different restrictions and the different guidance really provincially, you know and even though the municipality level and so you know I think the questions, we're getting leading up to the year as I'm trying to add the center control and they weren't having any issues and you've you've obviously seen recently and the news the ethics pockets.

The cut of outbreaks happen and and just trying to get what's really fairly quick to respond.

And we've always stay and attached to kind of the direction that we're getting from our government relations folks and the conversation and theyre, having with the with the government there and so we're kind of tell them that line, but we do see yeah. It really is kind of a new watch staying and it's not a it's not really specific to China as the whole.

But you know that that factors in and kind of the past the estimates.

Once we have the other thing and the market you know I think as a whole what we're getting from our our folks with boots on the ground, it's worsening and overall growth and the market not really that you saw and in that mid single digits. The mid single digits, plus we expect to outpace that of a little bit.

But yeah, that's that's kind of kind of how we see it right now and the competitive landscape is.

Is it really you know not too old for from what we've seen historically, there always are new entrants and stuff right. Now I think that's we just haven't seen kind of the same noise in that area and it really is from established players and really kind of getting a foothold and executing their strategies.

Okay.

Okay and in terms of active nutrition. This new line of marks you mean Q2, you mentioned and we'll have the focus and weight management and digestive health.

Well this.

Jim sort of shape of will it be and a full comprehensive weight loss program backed by some.

The digital tech embedded in it.

Yeah. The active nutrition is more of a full program.

And right now and I would consider all of our line to be at the foods line with our neutral meal and the products that we're looking at shakes, bringing back bars as we've mentioned in past calls we Havent you saw and north facility of its literally a stone throw away from where we're sitting out of our corporate headquarters and we're gonna be making our own powder beverages and bars and that facility moving.

I actually started already because we're looking at launching active nutrition and we've talked about that really the impact for a handful of markets will be and the second quarter and they were going to have additional phases of launch throughout 'twenty and 'twenty. One so we'll see the full impact of active nutrition really into 'twenty and 'twenty, two but we will see those trends happening and the third and fourth quarter. This year.

But it's much more than just the foods launch it programs. There's influencers, there's there's all kinds of different ways to get more of a community around the experience instead of just more foods.

And so this is a little bit of a novel approach and how we approach different product introductions and the past.

And for Us there.

Real focus of lifestyle and.

And versus a product or two that are being the launch out there and if we can truly affect someone's lifestyle and a positive way to improve their health.

We're really wanting to take a more holistic approach to the lifestyle.

As we move forward and so we're.

And we're excited as the health company to be able to round out our offering and that in those categories.

Yeah.

Got it Okay and last one for me and switching to capital allocation priorities.

In light of buybacks in Q4, you know the sides of building cash flow of strategic partnerships and if that's the case and.

And you walk us a little bit Ah can you get sort of more details around your M&A criteria youre looking for companies. So the and the direct selling industry or are you also you can see and brands outside like like like you did with build brands.

And what part of the categories do you believe are opportunities the equity nicely complement your portfolio and then intensive.

What sort of capacity do you have and are you willing to take on leverage to execute.

Yeah, I mean regarding the opportunities are.

Bashing the the.

The bulk of point has really been honored kind of of organic business. We also are actively looking for things that don't necessarily fit directly in the direct selling business that we can go back and acquire core competency there.

We can leverage and or other channels as well.

Use the built brands is a great example to go back and accelerate our understanding of our know how to go back next year on what we have and so those are good examples and geographic expansion and we'd look at vertical integration technology and anything to go back and kind of play and the health and wellness space and you know I think and made us even if it's not directly correlate.

The direct sales channel at this point, but we believe those opportunities are there the leverage going forward.

And then and and then regarding leverage and stuff yeah, Yeah, if we see opportunities the stuff without a doubt I, we're not afraid to go back and put a couple of times EBITDA and the books of the debt and we're just looking for that opportunity and you believe me of the deal flow. The world. We're evaluating on a regular basis now's as far beyond what we've done historically and we're looking for those of opportune.

The reason really evaluating those and I'm pretty dynamic basis.

Got it thank you.

And that's the move to Doug Lane with Lane research.

Yeah, Hi, good morning, everybody, that's what all of them.

And we could.

Hey, I just want to focus the pre could on the customer counts and.

Two of lesser extent, even the active associate counts, where it's really been.

A tale of two stories this year were outside of China, and the growth has been remarkable but inside of China. It just doesn't seem to be getting any better. So let's if we could start with the good the 40% increase and.

Active preferred customers year over year outside of China, I mean, how how sustainable is that what kind of number of shouldn't be thinking about for 2021 as far as the asking sorry.

Yeah, I would say over the last couple of years, the the strategy the cabins and curse group to go back and the stock is really focusing on the consumer and you see and all of our markets across the globe that focus first and foremost on the customer.

And at the end of the day, we grow the company by having more of individuals and families of consumer products and I think of lead to the incredibly well and we've been executing on it I think that makes it easier and easier for associates going forward as well from a business opportunity perspective, so that that debt focus hasn't changed and we'll keep leaning into that going forward.

China set a couple of unique challenges back to back in and and a couple of years and so that's you know I think we're coming out of that I think are the China team over there really worked hard to go back and build a base and we can really leverage going forward and the the feedback we get a day or encouraged and excited about the opportunities we have going forward and and really see some some moment.

And we're moving forward and the business.

Yeah, and I'm trying to I think the the one concern that I would have again it was a great quarter and the one sort of number of it stuck out on the <unk>.

Concerns side was that the preferred customer number decelerated so much sequentially from the 193000 164000, and so what happened in the quarter the.

The impact of the customer number and China.

Yeah.

And do it that trial program that we ramp beginning end of Q2, and Q3 and it really encouraged of our associates to go back and and and to share of the opportunity and we created a very linear compensation for a short period of time and so it really encourage them to go back and and reach out and attract and is that is that the trial probe.

Graham in debt you saw some of those numbers drift down and and even with the decay and some of those left and the customer numbers and <unk> in Q3 overall I think our Q4 numbers, where catalyzed by the momentum created from that program and.

And as a whole we also benefited modestly from currency, but that that was the primary catalyst and the and the change of the counts there.

Are you seeing any lift in China.

And especially on the active associates and so unless to a lesser extent of deceleration there as well, but you know the the associate count and China continues to sort of drift lower here. So I'm wondering is.

Are you looking for and improvement in 'twenty, 'twenty, one and just sort of the stabilization in China.

I don't try and cause it's almost half of your business.

Yeah, Yeah, I think we're looking for progress there and I could go back and see that reflected and kind of the outlook numbers that we have where we're not going to go back and grow unless the customers are moving at the right direction.

And the confidence is there and and and kind of the momentum there and the plans are there and the strategy. This is the this is an investment year for China, and Theyre, taking full advantage of that and we see progress and executing those investments.

Okay.

Thanks, Doug.

And the.

Next we'll move to Ivan.

With Tigress financial partners.

Thanks for taking my call and congratulations on another great quarter.

[noise], Inc.

What were the strongest product categories, and the strongest products and the most recent quarter and what kind of part of trends are you seeing with the product demand trends and interest from customers and associates are you seeing.

Yeah, Mike Doug mentioned, the little bit earlier.

And health continues to be the product line that self paced and anything else.

And then and when we look at it you know we did a lot of programs throughout 2021.

Promotional activity as well from incentives as well as part of launches I mean, we launch more products and 2020 excuse me 2020 of that we ever have.

And you know that was part of our overall strategy to create.

Some growth and the markets and.

And the distractions of COVID-19.

And you know, but again that immune health is continuing to be the line that that's moving forward and I would say in 'twenty and 'twenty, one and hopefully might be talking about at the active nutrition and would be the catalysts throughout the year when it comes and new product launches, but I don't see the map of immune health to really go down and 2021.

And how are you like.

The associates to educate and market and health and that it should continue long after hopefully the pandemic.

And it gives and the rear view mirror.

I think that's part of who you saw the is I mean part of what we do is training to make sure. They are associated and tell the story of our products and why the high quality as needed throughout the world and and we continue to do that and the markets and we talked a little bit about the the challenges this year that we've overcome and that's doing that training really from.

The online digital zoom wet wechat wherever that is platform to get it done, but we've continued to do that and but what do you think and when we lost the active nutrition and March the end of March really what kind of happened as the first couple of months of dedicated to and understanding of training of our associates and were.

Really rolled that product line out of little bit later in the second quarter, but it's incredibly important for us and the company the RMR associates and sales field to be able to tell that story of our products and why we're better than the competition.

Yeah, I would say and the other things.

Years ago, we acquired a production company that makes incredible content and.

And it really is the dynamic way to go back and share of the message and education, one of the things that our China market has planned this year and is to go back and rapidly and a lot of that capability with the market it'll go back and build brand awareness week content velocity, many really positive things there and they're working on and so more and more we can go back and kind of leveraged debt that know how and.

Expertise and find creative ways to take care of that information and and in a digital way.

And.

And how do you envision what kind of events that you're going to have for the active nutrition and launch.

Yeah, I mean, right now the those events and.

We're really launching the handful of markets to start with U S, Canada, and Mexico, Australia, and New Zealand and will be following shortly and those would be virtual events that we train our associates using the webex or zoom, mostly for those markets and you know it's gonna be training on the products themselves, but also the programs that go along with it well.

And so we're doing the user trials at the moment, so that information will come out during that and it's all been positive thus far and.

We're really excited about active nutrition and and for US another area that we talk about from and excitement standpoint is bringing that technology and producing those products ourselves at the company. It's been something over the last well I've been at the song of 15 years. That's been my biggest headache is dealing with a lot of third party manufacturers, who are no longer dealing with.

At this point of time, but bringing that in house is really going to have an impact to our ability to launch new products, new flavors and try things at a faster pace and we've ever had and the past.

And that's something that we're either and that we're doing with active nutrition, the we havent done before.

What's the relationship to your question is we haven't ambassador program.

As we've taken.

Some of our.

A business builder of associates out there who are health advocates.

And we're actually currently.

Having them involved with the product working with our science team our R&D team.

And that expertise a day from a product knowledge perspective, as well as helping us put the program together and assist us directly the boots on the ground and it's almost like a working focus group.

That is helping us build to the launch and so we will already have embedded so to speak a group of bad because you can have great experiences with the product as ambassadors throughout these markets, which will give us a huge boost as we launch the products.

And what do you feel the size of the active market.

And active nutrition market is relative to your current market I mean, there are a lot of companies that purely due.

The performance related stuff and it's pretty big and what do you think is going to be your unique attributes and your competitive advantage. When you go into this.

Yes, so just for clarity and I think that whole kind of fitness and exercise stuff will be a little bit down the road and usually we're gonna be focusing and I'll kind of weight management healthy snacks.

We think the markets are really large market.

And it's something we can go back and really leverage our existing customer base to go back and help tell the story through some of the technology, we've talked about so and we think that's the big opportunity I think just.

Managed and expectations here, a little bit first and foremost Jim and Walter note, our Chief operating officer really been working hard and go back and and get that production operation up and go into the very thoughtful meaningful way and then after that we're gonna launch of select markets Inc.

Q2, and your system and rolled it out and start broadening out the product base and it really is the more holistic offering and so many things we see out there of very.

And just product focus and what we plan and definitely having somebody that's broader than that which roll in and baked for nutrition and exercise and those types of things going forward as well.

And then on.

I guess this is the first call since you announced your ear.

The investment and built brands.

Can you go into a little detail about what attracted you to what opportunities you see how are you going to work with them.

And it's gonna be the benefit to you saw that and that's it.

Consumers of your product.

And these expectations.

Yes, it was built brand.

Deal itself with an investment into the company.

Minority investment, but what we really were interested in was some of the aspects of it we get gain from the company, they're right down the road from US maybe 30 minutes running literally millions of bars by year and the things that we wanted to do is get expertise into our affiliates are facility a little quicker you know, we're gonna be world class at making.

Foods, and powdered beverages, and but we're just not that right. The second and you can take a little bit of time to get there. So the the sharing of knowledge from an operational standpoint that was the benefit. The other thing is that we're using their formulation and R&D team to help us create and are you sort of bar with some of the the learning that they have and some of the technology.

And that they have and that will probably turn into many bars and the future and again, that's going to speed up the process for us as you saw and to launch of product because it will be able to use their expertise and really wasn't as much about the investment, which we have high hopes it will we'll get a great return from that investment, but it was about the operating.

<unk> excellence and the ability to get a new bar from an R&D standpoint of quicker than our normal process and just five and from my perspective as the CEO.

I had the great opportunity and you go down to build bar and sit with their CEO for a couple of hours.

And we were able to strategically brainstorm.

Could we have some synergies together, there and a completely different market that we're in a day of a completely different approach.

How they deliver and manufacture and sale of products and so for me the synergies that come from.

And someone who's actually survey.

Somewhat the health burst and active nutrition market already and the different way is very important from a learning perspective on top of the investment opportunity, which I think is a very great use of our capital and also getting the new core competency, but also the synergies that come from us being a partner with someone.

And who has somewhat of a similar business, but yet it does it is a completely different way.

And it's exciting and I'm looking forward to the active nutrition launch and more about the you saw the bar.

I mean, they tend to lean keto, Paleo, which I think is a big market more than a fad, but I think it is and important.

Nutrition focus of what are your thoughts on that.

Yes.

And looking for borrower pays to go back and honestly have obviously, some sort of protein, but also of some nutritional debt, but as well with different local areas. So that's something that we've been developing the and looking down the path of I would say that we have anything specific.

And in line with the App and we definitely have some things that are catered towards health and benefits and just to that point and also we're always looking for different delivery white and different ways of deliberate nutrition.

And with some of these bars.

The prototypes, where we've had the fortified with various vitamins and minerals within a very case, the chocolate bar [laughter] and it's it's a great different delivery system that we're exploring and also as we look at of the these avenues so to your point.

Whether it's heat or what it might whatever it might be.

And it really opens up a host of opportunities for us from the share delivery perspective.

The other area too when it comes to bars like Kevin is talking about.

We historically have had three or four large mass and offering now with the new foods plant and and having that supply chain and by ourselves and we could have a lot more entries into the bar area as both of the powdered beverage area because we're not you know.

Held under the same contractual obligations that were out of our third parties and really large brown and everything else. It makes it more complicated debt a lot of variation. So that's that's something that we're gonna be able to support the active nutrition line width.

Okay.

And I appreciate the the.

The insight and the update and congratulations again on the results and with the new and much more of a milk ongoing success in 2021.

And they side of it.

Yeah.

And that will conclude the question and answer session. At this time I would like to turn the call back over to Mr. Patrick Richards.

Right.

Thank you for your questions and for your participation in today's conference call you of any remaining questions. Please feel free to contact the investor relation to take care of 190, 547 and 358.

Yeah.

And that will conclude today's call. We thank you for your participation.