Q1 2021 Herbalife Nutrition Ltd Earnings Call
Ladies and gentlemen, please remain on your line the first quarter 2021 earnings conference call for Herbalife Nutrition Ltd will begin momentarily once again, the first quarter 2021 earnings conference call for Herbalife Nutrition Ltd will begin momentarily. Please remain on the airlines. Thank you.
[music].
Good afternoon, and thank you for joining the first quarter 2021 earnings conference call for Herbalife Nutrition Ltd.
On the call today is Dr. Joan and wouldn't Ob, the company's chairman and CEO.
John Desimone, the company's president.
Alex and mosquito and the company's Chief Financial Officer, and Eric Monroe, The company's senior director Investor Relations.
I would now like to turn the call over to Eric Monroe to read the company's Safe Harbor language.
Before we begin as a reminder, during this conference call. We may make forward looking statements within the meaning of the federal Securities laws. These statements involve assumptions and are subject to known and unknown.
Risks and uncertainties that could cause actual results to differ materially from those discussed oriented supported for a complete discussion of risks associated with these forward looking statements and our business. We encourage you to refer to today's earnings release, and our SEC filings, including our most recent quarterly report on form 10-Q.
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Our forward looking statements are based upon information currently available to us we do not undertake any obligation to update or release any revisions to any forward looking statement or to report any future events or circumstances or to reflect the occurrence of unanticipated events. In addition, during this call certain financial perform.
And its measures maybe you discussed the differ from comparable measures contained and our financial statements prepared in accordance with U S. Generally accepted accounting principles referred to by the Securities and Exchange Commission as non-GAAP financial measures. We believe that these non-GAAP financial measures assist management and investors and evaluating our performance.
And preparing period to period results of operations, and a more meaningful and consistent manner as discussed in greater detail and the supplemental schedules to our earnings release, a reconciliation of these non-GAAP measures to the most comparable GAAP financial measures is included in our earnings press release submitted to the S. E C. These.
<unk> together with additional supplemental information are available at the Investor Relations section of our website Herbalife Dot com. Additionally, when management makes reference to volumes. During this conference call. They are referring to volume points I will now turn the call over to our chairman and CEO, John Agua Adobe and good afternoon.
Everyone. Thank you for joining us on the call today, we followed up a record performance in 2020 by delivering the largest first quarter net sales results in company history.
Reported net sales of $1.5 billion increased 18, 9% compared to the prior year.
Five of our six regions experienced net sales growth with three of our regions North America Asia Pacific and EMEA growing by more than 20%.
Our year over year net sales growth rate accelerated compared to the prior quarter and our two year stacked growth rate of 28, 1% is the largest since the first quarter of 2014.
And we ended the quarter on the high note.
With the month of much representing the single months worldwide net sales record.
Our sports nutrition product line continues to drive growth and expand our portfolio.
With worldwide net sales and our energy sports and fitness category, increasing approximately 34% share.
During the first quarter.
Over the past year, we have rolled out additional products and our sports nutrition line to markets, including China, Mexico, EMEA and Brazil.
Outside of sports nutrition, our core weight management products category grew by 16% and the quarter and targeted nutrition, which includes our health and wellness product offerings grew by 21%.
Our strong performance and the first quarter gives us further confidence and our outlook for the remainder of the year as we announced in our press release, we have meaningfully raised and narrowed our full year 2021 guidance.
Our new guidance calls for net sales growth to be and a range of 9% to 15% up from our prior range of 6% to 14%. Additionally, the midpoint of our reported EPS guidance range increased by approximately 7%.
Alex will take you through the details of the financials later in the call as well as provide a full update on our guidance.
Let me highlight a few of our regional results for the first quarter.
Consumer interest and Herbalife nutrition remained strong and the U S.
With net sales, increasing 28% compared to the first quarter of 2020.
Our sales force continues to expand with new distributors, increasing by approximately 15% compared to the prior year period and 24% sequentially.
New preferred members grew 44% in the quarter compared to the prior year and 52% sequentially.
The Asia Pacific region had a record quarter with net sales growth of 22% versus the prior year.
The region also had notable growth from India, which grew 37%, Vietnam, which grew 45%, Malaysia, which grew 55 per cent and Australia, which grew 62%.
In China net sales declined 11% compared to the first quarter of 'twenty 'twenty. This.
This decline for the quarter is in line with our expectations as our sales force continues to transition through the recent enhancements made to our China marketing plan.
We had discussed that at our last quarter's call.
We continue to make progress on our digital transformation and China and anticipate our new middleware platform being developed with Alibaba will be deployed in the second quarter of this year.
The EMEA region and set a new quarterly net sales record with year over year growth of 37%.
Consumer demand for our products is driving the results along with record increases in our local sales force nine.
Nine out of the top 10 countries and EMEA had double digit growth in the quarter per.
Performance was exceptionally strong in the UK up, 157% and Turkey, which was up 70%.
Pain, and Italy have displayed consistent growth that began in Q3 of 'twenty 'twenty and continued through the first quarter of.
And our distributors have continued to use social media and messaging apps to engage and retain new customers.
We have an acute focus on the retention of our customer base.
<unk>, we will be sharing with you at our upcoming Investor Day, We believe we have the right strategy in place to continue delivering results and.
As such we are eager to announce that we will host a virtual investor day in August following our Q2 earnings release, where we'll be able to give you an even deeper dive into our company our strategy and the initiatives that we have underway to continue to drive growth.
The global demand for better nutrition continues to rise and more consumers than ever before are turning to herbalife nutrition.
We are committed to finding innovative solutions to help people thrive ensuring that they can have access to nutrient rich foods and the support system of community to help them live their best lives.
I will now turn the call over to Alex to review the financials. Thank you John first quarter net sales of 1.5 billion represents an increase of 18, 9% on a reported basis compared to the first quarter and 'twenty 'twenty. The growth was broad based as over 50 of our markets grew by double digits or more we had net sales.
Growth and four out of our five largest markets consisting of the U S, which grew 28%, China, which was down 11%, Mexico up 3%, India up 37% and Vietnam up 45 per cent.
For the first quarter, we reported net income of approximately $147.4 million or $1 33 per diluted share and adjusted earnings per share of $1 42, which was a 61% increase over last year.
Currency had a mixed impact on our P&L FX was the net sales tailwind of approximately 180 basis points and the quarter. Excluding Venezuela. However, currency was a headwind to earnings representing a negative year over year impact of approximately three.
Although the average FX rates, we're overall a weaker dollar during the first quarter of 2021.
The comparison of the changes in rates during the first quarter of 2021 versus 'twenty 'twenty created an unfavorable impact to cost of sales and a net headwind that more than offset the favorable impact of the top line, resulting and the headwind to EPS.
Reported gross margin for the first quarter of 79.1% decreased by approximately 150 basis points compared to the prior year period.
The decrease was largely driven by the unfavorable impact of foreign currency fluctuations as well as the increase and freight costs related to orders being shifted to home delivery as a result of COVID-19, beginning.
Beginning next quarter, we will partially annualize the negative impact from freight cost, which began in the back half of the second quarter in 2020.
First quarter 2021 reported and adjusted SG&A as a percentage of net sales were 33.7% and 33.6% respectively.
Excluding China member payments adjusted SG&A as a percentage of net sales was 27.3% approximately 75 basis points favorable compared to the first quarter 2020, which was largely due to general operating leverage on the high level of sales growth within the quarter, partially offset by a return.
The more normal levels of distributor event spending which was significantly disrupted during the first quarter 2020. The result of the top line growth and expense leverage resulted and the largest quarterly EBITDA result in company history with adjusted EBITDA of approximately $254 million, we are issuing guidance for the second quarter 2021 as well.
And increasing our full year 2021 guidance.
For the second quarter, we estimate net sales to be and the range of 13.5% to 19.5% growth, which includes an approximately 200 basis points currency tailwind versus the prior year.
Second quarter reported diluted EPS is estimated to be and a range of $1 17, two of dollar 32, and adjusted diluted EPS to be and a range of $1 20 to two of dollar thirty-seven reported and adjusted diluted EPS include a projected currency benefit of 19 cents compared to the second quarter.
Of 2021.
For the full year, we are increasing our net sales estimates to be and a range of 9% to 15% growth on a reported basis currency remains of tailwind, although moderated compared to last quarter's guidance as the U S. Dollar strengthen throughout the first quarter, we now project and approximate 200 basis point.
Tailwind due to currency compared to the expected 340 basis point tailwind from a quarter ago.
Constant currency net sales are now expected to increase 7% to 13% for the year up from the previous range of 2.6% to 10.6% growth.
We are raising full year 2021 guidance for reported diluted EPS to a range of $4.41 to $4 and 81 sense, along with adjusted diluted EPS to a range of $4.65 to $5.05.
This 35 cent raise to the midpoint of our prior adjusted EPS guidance is primarily driven by the quarter, one beat and our increased sales expectations for the remainder of the year.
EPS guidance continues to exclude the impact of any future, China Grant income and expenses related to the China growth program future share repurchases and excess tax benefits from equity exercises.
Turning to our cash position of our share repurchase activity coming off of full year, 2020, where we generated 629 million of operating cash flow. We began 2021 by generating a $110 million of operating cash flow and the first quarter. This was lower than of our cash flow generation and quarter one of 'twenty 'twenty. However.
For the full year, we anticipate cash flow will be stronger than the 629 million, we generated in 2020.
We currently have $612 million of cash on hand. This cash balance is after our execution of approximately 621 million and share repurchases. During the first quarter, which consisted of 600 million completed in January as part of our structured transaction and an additional $21 million and the open market.
We continue to believe the repurchase of common shares is consistent with the company's long term goal of maximizing shareholder value. We remain committed to return our excess cash flow to shareholders through share repurchases. A strategy that has resulted in approximately 5.3 billion and buybacks over the past 10 years. We currently have almost.
1.5 billion remaining and our existing share repurchase authorization.
This concludes our prepared remarks, operator, please open up the line for questions.
Certainly ladies and gentlemen, if you have a question. Please press star one on your telephone.
To withdraw your question press the pound key.
Our first question comes from the line of Wendy Nicholson with Citi.
Hi, good afternoon.
My first question the guide for the second quarter, I think you said 13, and a half to 19, 5% growth out of the top line and that's a really wide range, which I totally get because theres a lot of volatility out there, but can you give us a sense for maybe what April looked like and kind of what you're expecting.
For some markets like India that seem to be gone and the wrong direction and and I would think would be of real had went for you and the short term.
Thanks, Wendy Thanks for the question so regarding the range of the 13 and of half the 19 and a half debt that is correct. The 6% range. It is actually not not not as wide as we.
Have had in the past and continue to narrow that range as we continue to get comfortable with the consistency that we've seen now three quarters post the onset of COVID-19, and so we continue to narrow on a quarterly basis. It is still wider than sort of pre COVID-19 terms, but we continue to narrow as we move forward here in terms of.
The April results I'm, just going to comment on the first quarter I don't want to get into April quite yet and.
And we'll be happy to give you an update on all of that when we report our second quarter results.
Got it that's fair I appreciate that.
My question has to do with the growth of really strong growth that youre seeing in sports nutrition.
Do you think that the customers are the consumers of those products are the same consumers who are purchasing your weight management product or do you think you are appealing to kind of a whole new.
Group of consumers at this point.
So the sports Nutrition line has been part of our strategy that we've launched a few a handful of years ago. I think there is a combination of people that come into the business looking for a weight management solution that then migrate into other of goals as they stay with the business day.
With herbalife nutrition, such as of entering into sports nutrition, when they had more fitness related objectives, but the objective is also to attract the different demographic the pip to attract a different customer segment that is a more discerning.
The.
Segment as it relates to what they put in their body from a performance standpoint. So it really is trying to achieve two objectives. One is looking to provide the path for those that come in with one goal, but have those goals shift and it's also looking to attract the different demographic of.
That is looking for that specific solution. Yes. This is John egg and Obi I would also add just to that excellent answer. The fact that it's also it's it's drawing in a younger customer a customer that that has grown up more active more engaged and sports more engaged and fitness and where we're seeing the.
Got it.
The launch of that product line and the strategy is to take it into more countries is pulling towards us a new demographic not of weight management, although that is true the those that come to us for weight management regularly you know kind of graduate up to our sports line. There's also this distinct group of young.
To consumers around the world that are drawn to that product line.
Terrific that sounds great. Thank you very much.
Thank you.
And our next question comes from the line of William Ruder with Bank of America.
Hi, This is Marianne for buildings for taking a question can you touch on any raw material inflation, youre seeing and how you're thinking about pricing for the year in light of higher and per car.
So we have long term contracts for our material raw materials and ingredients. So we don't see the.
And the sort of fluctuations that you might be in a state of the soy market. For example isn't something that translates to our raw material increases and any sort of.
The real time kind of the way our raw material contracts are long dated and nature of sometimes spanning more than a year. So we're not seeing that at present and.
Our input costs at this point.
Great. Thanks very much.
Thank you and our next question comes from the line of Doug Lane with Lane research.
Yeah, Hi, good afternoon everybody.
I just wanted to ask about China, a little bit further because your volume point performance, there's been really strong and the mid teens for the last two quarters with China down and the high teens. So it seems to me that that would be.
The really important inflection points and the overall growth rate if you could get debt market back home of right track. So I know you talked a lot of about the new marketing plan and the air but what about from a forward looking standpoint, when do you expect to see some sort of traction from a marketing plan.
And what should we be looking for there.
Hey, Doug This is John So let me just see if I can break that down and that's the two components. So the China is a relatively.
Small component of our overall volume point trade at single digits, I say that because that's I think uncommon with a lot of our peers. So by turning the growth trajectory around which we will do.
It will help the overall growth rate, but my point is it's not hurting us as much of it with some other companies that also means as the huge opportunity for us and China right that the inverse of that is how do we now go out and and.
<unk>, China and greater percentage of our sales.
The percentage of our volume and China for Us and a lot of other companies has been pretty inconsistent right and if you look at the last.
20 quarters, we've had 10 up and down and.
And with no long run rate, it's like change directions and that at times, we're trying to build consistency within China for the long term.
And we're doing that through a lot of the consumer based initiatives, which both include the marketing plan change and actually the personal store and the personal store is a success for us right now.
And I'll give you some stats around the personal store so of the personal store and the total volume in Q1 that came from the person store of.
Our service.
Service providers with over 50% of our sales and some of that SKU by Chinese new year and February but even.
January and March were and the high Forty's and so we've got a good run rate and absolute volume point growth.
From the personal stories and 40% higher than it was Q1 of last year and so there's a lot of transactions now that our consumer based transactions that can be of visibility into that I think will create more consistency. The other thing. We're trying to do is of course with the marketing plan change, which is driving our service providers have transactions of their customers be with the company that.
It takes time right now and you asked when we made a more complicated transaction and transition to something similar it took six seven months for it to integrate before we started seeing things come back. So we made this change in late December.
So somewhere in that trajectory is what we're hoping for China's a little more complex and some things in terms of licensing.
As people become service providers so.
I certainly expect debt sometime this year, we will see this thing turnaround and China.
And create some consistency.
Over the long term and this is John and I would just add debt. We continue to have a lot of confidence in our China business and over time.
And we fully expect China to play a much as John was saying to contribute a much bigger part of our total kind of global global numbers.
And as a good a good a good market for us.
And if you look back because John talked about the fact that over the last 10 quarters. We've had for the last 20 quarters, we've had some up and some down I mean, it's flipped back and forth.
But the.
And the facts are that China as a business today is much larger today than it was 10 years ago for us and it will continue to go out into the future and it.
Let me, let me just make sure.
You're aware I think you are because it was in the prepared remarks that China slightly exceeded our expectations this quarter. So.
It's heading in the right direction, we believe from from at least from what we anticipate.
Okay. That's helpful and now with all the changes you've been making through the marketing plan and the introduction of technology. How important do you think it is true.
Just blocking and tackling and live in person events and that market, where it looks like that could happen.
Half of this year.
Yeah look I think that could help transition right I mean, what we're doing is transitioning to a lot of changes, including semi rural nutrition club changes, there's lots of changes going on.
Within the way service providers perform and China, and they're doing that without the cover of having these big meetings. So having the cover of these big meetings I think can help smooth out the transition.
Okay, and just lastly.
He spent a lot of time on the last call talking about how you are rapidly expanding the segmentation and I think maybe nine markets last year and 21 this year and.
Can you give us some update on the early read on the success of the segmentation strategy and your new markets.
Yes, I mean everywhere, we're launching and it's getting traction right. I mean, you can just give you some of the some of the stats on the market's first right. So as of right now we have 18.
Markets that have segmentation is another 17 coming out and this year that would be 35. There of 32 planned for next year right. So it would be 67 of our 95 market. So a lot of the markets and I would have more than two thirds of half segmentation by the end of next year by the end of this year. The 35 markets, we expect to have segmentation and.
Represents over 80% of our volume right. So it's the overwhelming vast majority of the business, we do will be coming from market segmentation and and the markets, where we've launched it we see an uptick and members. It's still early right. I mean, you get this uptick chicken and the customers now signing up which is by design and been very helpful.
But it's still early right and we know by the way based on the on the activity we've seen in the U S. The having preferred customers and customer transactions, having that data helps us understand customer behavior, better and by understanding customer behavior better. We can do and then do programs with our distributors to increase activity productivity and retention of.
<unk>, which is the new initiative for us the customer retention and something we'll talk about a little bit more at Investor day.
In August.
And also it should be a driver for more rapid advancement into the supervisor range right.
Isn't the qualification quicker.
Qualification is not Oh, you're talking of U S. That's completely different okay. What we're saying is if you want to base your qualifications on consumers that we can see right. There and there was a quick of pathway, but that is really just the north American initiative.
Got it okay, alright, thanks John.
Youre welcome Doug.
Your next question comes from the line of current Martinson with Jefferies.
Good afternoon.
Just looking at the U S market here.
Nice pickup in terms of distributors.
The impact of or if you can tease out the impact of the stimulus benefit and what's driving the.
Growth of new distributors for you.
So the debt.
A good question on the stimulus benefit we haven't really seen those pops in our daily sales. We have daily sales. So we have that type of visibility and we haven't seen those tied are correlated to the stimulus checks were I think.
<unk> seen that and IRI data or and Nielsen data and some of the other and some of the other channels, we just haven't seen that and art and our and our business. So unclear if that.
If there is some impact, but we're just not seeing it any way that we can really comment on it definitively.
Yeah.
Okay, and when you look at SG&A, which certainly came in better than we were expecting.
And as you return to spend four.
The promotional events and.
The outreach.
How should we think about SG&A given the top line growth that youre going to have you know should this be something that we're carrying forward.
Yes, so I don't think were quite at a normalized run rate, yet and our and our operating margin. So for example of this quarter, it's still comparing against the quarter that didn't have a material impact.
It does now and a broad scale way with the COVID-19 impact. So we're still seeing things for example, like significant savings and peony etcetera.
With that said our advertising event basically our promotional activity has returned to normalized levels.
What I would say is from a margin perspective.
Our first quarter.
At 15, 1% operating margin if you take the China Grant outcome, it's about 14% operating margin.
Net margin level, probably running a little full but but much closer to a normalized run rate than where we were for much of 2020.
So we'll continue to do well.
We'll continue to keep our eye on it but there is there is some investment that we are going to have to do behind all of the significant growth that we've seen over the past.
And even even beyond the past four quarters.
And we're going to have to invest and the business, but like I said, we're approaching and operating margin.
That is more of a normalized run rate this quarter than we have from much of 2020.
Thank you very much guys I appreciate it.
Thank you.
And our next question comes from the line of Hale Holden with Barclays.
Thank you I just had one question for <unk>.
I mean, you of markets around the world summer and various stages of of reopening of re closing.
And I was wondering for the reopening of markets. If there was any change line and trend from kind of what you've seen in the last year either.
The benefit from nutrition clubs being open or.
Greater sense per weight loss or.
Distributor engagement and however, you want to sort of define the question.
Yes, I think I think globally, we see the demand for our product and.
And virtually every market I don't think there is more.
Much of a variation I would say, there's not a dramatic variation from one market to the other even even from markets that are performing very differently from the demand side.
It's still it's I think it's still a story of how specific markets are reacting to COVID-19. So for example, you saw the performance and India. Despite a lot of the challenges that I'm sort of you've read and the headlines. So you sort of have that on one side you have on the other side you have a market like Indonesia, who is a very.
The face to face kind of the market and technology isn't something that is culturally embedded as much and that market. So you're starting to see youre seeing and can continue challenge with COVID-19, there where you don't have a plan b or plan C to compensate for some of the and person and then you have markets like Brazil, which is having a second wave.
And of the sort of a second material wave.
We saw a pretty severe.
Impact to Brazil, and the middle of last year things were lightening up and getting a bit better kpis improving at the end of 2020, but then again despite the despite all of that business the recovery.
And this will this latest wave having a significant impact on that market. So I think it's really a case by case.
And <unk>.
Story, rather than any generalization that I can make I think the thing we get comfort and as the demand is there and.
And it's just a matter of how those markets and then react to that demand.
Great. Thank you very much and I appreciate it.
Yes.
Thank you.
And our next question comes from the line of Sebastian Barbero with Jefferies.
Hi team, thanks for taking my questions and congrats from the quarter from.
First one day, so just wanted to ask the by the consumer health landscape.
Which appear to remain supportive of at least in the mid tier and given that you operate a global business was curious to understand how product demand patterns of changing if at all and regions, where the economy has reopened you. For example are you witnessing hired the magic or sports nutrition products and the U S. Today than you were six months ago as people are returning to the gym.
Yes, Sebastian and thanks for that question I think on the demand side I don't think we can discern.
With that level of Grand and granularity and our product portfolio from one from one product to another product in terms of what is the what's the macro demand equation I think we see demand across our portfolio of if you look across our portfolio were up significant significant double digits and weight management and sports nutrition.
And and targeted nutrition.
Our sports nutrition and targeted nutrition categories are growing faster than the weight management.
The category, but I would say that that is probably more a result of our strategic initiatives rather than the demand side of the equation.
As you know we've commented on expanding our portfolio and sports nutrition, and making that and emphasis as John mentioned it attracts a younger demographics something that is good for the long term for both our customers and the company. So I think if you look at the different growth trajectories of our different product categories.
I think it's a little bit more of a function of our strategic initiatives rather than seeing any demonstrable demonstrable difference on the demand side.
Got it and it's in the sense of customers in sports nutrition.
She and her targeted nutrition are sticky and say weight management I don't know if you have that data available.
Yes, we have we have seen that data that suggest that customer lifetime value for the sports nutrition customers.
It is.
And significantly higher than weight management customers.
It's a discerning customers so once the.
Subscribe to a particular nutrition program they tend to stick to that nutrition program longer which is why generally speaking we encourage of healthy active lifestyle.
As part of a long term solution rather than any sort of short term solution in terms of just losing a few pounds for a few weeks where few weeks, we really look to help our customers find long term solutions whatever their goals might be.
Got it.
And I.
I wanted to shift gears, so glib, but China is it your sense that we have we have witnessed.
And this the trough in Q1.
And just your outlook for the year and change in the sense that you know as of the year progresses.
And I try and start getting better.
Well I think sequentially the business will get stronger.
So I wanted to be sure I used the right word because you know the comps will get a little more difficult and.
May and June and even July and in China. So I.
I don't want to speak specifically to the growth rates, but we're seeing the business strength and we're seeing the trends that we were hoping for which as you know some of the consumer transactions that we've talked about.
Interacting with the company more frequently so I like where it's going I don't want and kind of give your expectations debt.
Might give you the wrong idea of about China, It's a journey.
We're on the right path and I think you'll see sequential improvement and the strength of the business, even if the comps get a little difficult a little more difficult.
Okay and last one for me.
Recently appointed Joe Miranda of Street, Chief Digital Officer.
Wondering if you could talk a little bit of on boarding and I'll show the key focus points and the near term as you continue to invest behind tech.
Yes, that's of Great question right. So I mean, the digital office is obviously the front and tech we've got incredibly strong backend technology group of and.
And I think youre familiar we've talked a lot about some of the strict strategies within the tech organization on.
On the front and we're looking to increase productivity and activity of our distributors through number of methods that creates scale and ease of use and.
And Joe spin.
Tremendous and as Onboarding.
He has really got credibility. He think he recognizes the value of interacting with distributors to be able to learn and what's best for them. He has jumped right in.
Of course the.
The most important thing is building his team now.
That's the part of the strategy that we're in.
Is to build the team and I think youll see a big investment and the digital office this year embedded in our forecast.
But the specifics we'll talk more about at Investor day in August.
Thank you.
Thank you.
And now I'll turn the call back over to Dr. John and I Wouldnt Obi for any closing remarks.
Thank you everyone for joining us and I'll start by expressing my deepest gratitude to all of our staff and our distributors around the world who continue to just exceed the expectations, they're all working extraordinarily hard.
As you all know under some extraordinary circumstances the country to country basis, we're very pleased with the results as you've heard I want to acknowledge the speaking of the pandemic.
Well, the as encouraging news and many countries vaccination rates for example, and the U S or are extraordinarily high and many countries are doing quite well in the fight against the pandemic I just want to point out that there are still many countries around the world that are struggling India for example, where a humanitarian crisis.
Is just the.
And.
And even as we as we speak it's devastating to individuals' the families to communities and.
I think it's important that I closed by saying that our thoughts and our prayers are with everyone.
And as they as they work hard to provide for.
The communities and for their families.
The company and.
And is looking to see how we might help by partnering with not for profits around the world and where there are hotspots. We believed that the company has a role to play as well. So we're looking forward to future announcements in that regard, so and with that I'd like to thank everyone for joining us I'll turn this back to Eric.
Thank you all for joining we'll speak to you again next quarter.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating and you may now disconnect.
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And.
Non-GAAP.
And.
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And next year.
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