Q1 2021 Natures Sunshine Products Inc Earnings Call
[music].
This call is available for replay.
The of telephonic dialing on through May 20th.
And via of live webcast. So it will be posted in the Investor relations portion of our website at natures Sunshine Dot com.
The information on this call may contain certain forward looking statements. The statements are often characterized by terminology such as.
Believe how may anticipate expect will and other similar expressions.
Forward looking statements are not guarantee of future performance and the actual results may be materially different from the results implied by forward looking statements.
Factors that could cause the results to differ materially from those implied on this call. The include but are not limited to the.
The factors disclosed in the company's annual report on form 10-K under the caption risk factors.
And another report filed with the Securities and Exchange Commission.
The information on this call speaks only of of today's date in the company disclaims any duty to update the information provided herein.
Now I'd like to turn the call over to the CEO of nature Sunshine, Mr tenants Moorhead Terence thank.
Thank you day and good afternoon, everyone and thank you for joining today's call. It's a pleasure to be here with you today as we continue our journey to transform our company.
We continue to make excellent progress against on a global strategies as we build momentum and strengthen our business.
As a result of our efforts on pleased to say the nature of Sunshine was recently.
Was recently honored by the American Business Award with six Stevie Awards. The awards include recognition for digital website achievements achievement in management.
Grand renovation of the year organizational recovery.
Most valuable COVID-19 response, and customer service team of the year.
The awards on a reaffirmation of the work we've done but of course, our goal is to continue to transform the business and deliver exciting and innovative change the delivers historic results.
And in the first quarter of 2021.
We continue to make progress on our journey, while delivering another quarter of record breaking results on.
Pleased to announce our third quarter.
Okay are to me are third consecutive quarter of net sales over $100 million and once again for the third consecutive quarter. We delivered the largest sales in the 49 year history of our company outperforming the previous two quarters that also delivered historic resolve.
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Overall consolidated first quarter net sales came in at $102 $4 million up 7% vs. The first quarter of 2020.
Or Asian, Latin American and European operating business units, all reported robust growth for the quarter.
North America was down slightly.
But we're actually very pleased with the progress that we've seen with our North American business unit and I'll share. Some additional insights later in the update.
I believe it's important to note that the entire team of nature of Sunshine continues to remain focused in our passion and commitment to sharing the healing power of nature is stronger than ever.
We're very pleased with the momentum we're seeing in the business and believe our first quarter results underscore the progress we've made repositioning our company for sustainable growth.
Specifically in the first quarter top line results benefited from our ability to execute against our five global growth strategies brand power field energy Digital first manufacturing, Inc, and the right stuff.
Which led to the record breaking performance across the business.
Are strong performance was driven by increased customer growth.
Kind of the continued positive response to our transformation initiatives by our incredible practitioners and retailers who of remained vigilant throughout the.
Ah strategies also help to deliver of improvements to the bottom line as adjusted net income attribute attributable to comments of shareholders increased 68% to $4.1 million and adjusted EBITDA increased 20% to 11 $6 million.
I will provide of more comprehensive overview on our strategy is a bit later, but first I'd like to share a few key highlights from each of our of us.
Starting with North America, we're reporting a 3% decrease in sales for the first quarter with sales NSV U S coming in relatively flat down 1% following four consecutive quarters of strong growth.
Despite the slight decline in sales that are actually quite a few encouraging signs as we see the underlying fundamentals behind the business continue to improve.
Remember at the end of the first quarter of 2020.
U S consumers were stockpiling good at the onset of of the of the pandemic.
This resulted in the top comparable for us in the first quarter. So we're pleased that we only saw a slight decline in sales.
What's really encouraging however is that our award winning branding and website are helping to generate more traffic to the business.
And as consumers continue to prioritize of their health, we're seeing customer growth accelerates and an uptick and engagement.
A good example is the increase in the number of people signing up for our subscribing thrive auto ship program, which now represents more than 25% of our orders in the U S.
We've already doubled the number of people on the program and as we move forward will continue to drive to focus on driving customer growth.
And the aggressively expanding subscribing price as we believe this will significantly improve on long term growth potential.
In the meantime, the team continues to make excellent progress implementing the new business model and the quick look at the team's performance in April suggest that they are on track to deliver of strong growth with solid increases and customer acquisition orders and sales.
We look forward to rolling out the next generation of enhancements to the business model and the second half of the year and we will continue to fine tune our key initiatives as we build momentum.
Moving to Asia, we saw sales for the quarter grew 9% in local currency driven by 38% growth in China, and 44% growth in Japan, both on a local currency basis.
China's growth was driven by our award winning rebranding and the launch of of new and improved version of their metabolic fortress product line.
They also benefited from increased digital activity that focused on driving more online traffic and increase the customer acquisition.
In Japan, the growth was driven by a series of field incentives designed to take advantage of the local market trend of people being more engaged in more interested in improving their health and as a result, we were able to enjoy significant order growth from new customers.
In Taiwan, we continue to aggressively build field fundamentals to further penetrate the market as sales increased 285% on our local currency basis.
Finally, Korea, our largest market in Asia was down 16% as pandemic related restrictions continue to hamper our ability to fully unleashed on our team.
We continue to focus on the health and safety of our South Korean distributors and our team in Korea remains committed to working on new initiatives to meet customer needs. Despite the ongoing COVID-19 restrictions.
We are confident that our Korean business will strengthen and rebound as COVID-19 restrictions are relaxed and we expect to see continued growth across the region driven by strong field fundamentals attractive incentive programs and increase customer engagement.
In Europe, we experienced 5% growth on our local currency basis.
Sales and Russia were relatively flat up 0.4% in local currency due to the rescheduling of some of the new product launches that have been shifted to later of the year and the ongoing challenges from COVID-19 restrictions. Nevertheless, the team used digital events and targeted promotions to maintain.
Ailes and build momentum for the second quarter.
We also took the opportunity to open three new retail centers in Underpenetrated areas of the country that we believe will improve our ability to drive growth in the near future.
The locations are owned and operated.
Ah distributors and they provide enhanced access to products training and support for customers looking for a convenient way to improve their help with the brand. They know they can trust.
In Poland, we saw tremendous growth in the first quarter with sales increasing 43% in local currency.
Consistent execution and an intense focus on field fundamentals helped deliver a strong results in strong results for the for the business and.
In Western Europe, COVID-19 restrictions and market closures led to of modest 2% sales decrease in local currency.
However, we continue the host virtual events and used targeted promotions to drive customer activation.
Moving forward, we believe western Europe offers significant growth potential for our company the.
The industry is attractive and growing and we're already seeing a glimpse of the potential power of these markets with strong growth from markets like the UK, where our sales are increasing in excess of 25% with limited support.
As such we are currently on pace to begin the process of fundamentally re launching our business in western Europe in the back half of 2021.
The relaunch will include new more attractive branding updated packaging enhanced field support and the new digital toolkit the.
The initiatives will be rolled out over time and similar to our transformation or other transformation initiatives, we expect performance to significantly improve as a result of the changes.
Finally in Latin America, our transformation initiatives and revamped go to market strategy have been a tremendous success as first quarter sales increased 21% in local currency with each market in the region growing double digits.
This is the third consecutive quarter of growth per Latam and the team has done an excellent job executing our plan.
The launch of the new business model is increase the amount of field contact and improved communication, while the new compensation plan appears to be having a positive impact on sales force productivity.
We're still on the early days, but overall, we're pleased with how because customers and distributors have responded to the transformation and we expect to see meaningful improvements to feel fundamentals customer activation and continued growth as we move forward.
The strong performance across R. O b used demonstrates that our transformation initiatives are starting to take hold.
The entire team of nature of Sunshine is dedicated to driving our sales driving our strategies penetrating are key markets and keeping the positive momentum moving forward.
Before diving into the on an update on our five global growth strategies I'd like to make a few comments on the external factors impacting our supply chain.
Since the start of the pandemic our business has been relatively unaffected by what COVID-19 has done to the supply chains of so many other businesses around the world.
We took aggressive actions at the beginning of the pandemic to increase the inventory and that has served as well.
However towards the end of the first quarter, we started to see more intense pressure on ingredient of packaging availability as well as an end to end tightening across all aspects of our logistics pipeline, causing product delays and driving up costs in several areas.
As a result, we've experienced an increase in products shortages and saw Q1 gross margins decreased by 60 basis points as we intensified our efforts to meet growing demand by investing more heavily to compensate for gaps in the supply chain.
Fortunately, we believe that are unique small batch manufacturing capabilities are skilled and flexible QA team and.
And our long term supply of relationships will help shelter us from the full impact of the world's supply chain issues and we've done an excellent job so far.
As the market remains dynamic I reaffirm my confidence and the strong operational and financial Foundation that our team is built and we will work to offset the incremental impact on gross margins with the savings in other areas.
Now I'd like to move on to discuss our progress on our five global growth strategies, and let's start with brand power and our award winning rebranding.
The updates to our packaging and marketing collateral are receiving a strong reception from consumers and distributors of lake and we will be rolling out the full rebranding to our international markets in the second half of the year.
On our initial feedback suggests that the rebranding not only energizes existing customers, but of all of that it's also more attractive to new consumers as well.
This is important because we believe that of customers experienced with the brand is an important part of building sustainable relationships.
In the first quarter, we were excited to introduce a new unboxing experience that featured in new on newly designed and stylized shipping box.
Thank you message, well being new customers and more customer friendly packaging.
We also improve the customer experience through the introduction of our force of nature digital marketing campaign that more effectively positions the company in line with consumer aspiration.
So far the new campaign has exceeded our expectations outperforming customer of engagement benchmarks and delivering excellent performance vs industry standards on response rates and conversions.
In summary, we continue to see a strong positive response to a revamped marketing efforts and we believe our brand power initiatives will continue to drive customer growth.
On field of energy, we continue to rely on remote work tools to stay connected as we navigate pandemic related restrictions.
Fortunately, we've been able to reach an incredible number of distributors through zoom calls Webinars and video conferences and the team as aggressively looking for new ways to drive customer growth and improve activation.
The team in Asia has been an especially good job leveraging technology to improve field communications as evidenced by the tremendous growth in China, Japan and Taiwan.
Of course feel the energy isn't just about developing strong fields of fundamentals. It's also about redefining and expanding our sphere of influence in the market.
Enter that and as I mentioned earlier, we opened three new retail centers in Russia as part of our plan to be more omnipresent and accelerate customer growth on.
Another important from part of our field energy strategy is the overall of our business model.
We continue to make excellent progress in our two initial launch markets North America, and Latin America, and it's actually quite phenomenal what we've been able to accomplish in the six months since we launched.
The progress, we're making on subscribing thrive, where we've doubled the number of people in the program is an excellent example.
We're also making strong inroads on our new affiliate program that is specifically designed to attract influencers that love to share the healing power of nature Sunshine and receive rewards when they do so.
Since its launch in September we've seen about of 300% increase in the affiliate generated orders as new affiliates use our products and then share and recommend them to friends family and acquaintances on their social media.
Of course of practitioners and retailers continue to be the driving force behind our business and we're grateful for their continued support and partnership as we transformed the business together.
Moving to just to digital first we continue to make progress building engagement and making enhancements to a digital platform.
Since launching our award winning website, we've seen a significant increase in traffic as consumers find the site more attractive and easier to shop.
Based on the results of our initial testing we're also expanding our digital marketing campaign in the U S and expect to make continued inroads attracting new customers to Ah brand.
Moving forward I'm excited to share the next step in our digital first transformation.
In the second half of 2021 natures Sunshine will introduce new personalization capabilities for our distributors in the United States.
This is an exciting new breakthrough for our company and we are delighted that the new capabilities will allow our distributors to customise and personalise orders for their customers.
This is an important initiative for us because it's an integral part of our strategy to move away from transactional relationships to lifecycle relationships that make natures Sunshine a meaningful part of customers daily lives.
With the first phase of our personalization ish initiatives, where.
We're focused on giving our distributors a one of of kind of set of proprietary tools.
Customise and personalise their customers orders with future opportunities for customers to build their own Personalised health programs.
Under the new personalization program customers will receive Personalised health packs free sorted and conveniently packed based on their individual needs.
The program organizes the customers vitamins and minerals in individual couches or packs that are organized for morning noon and evening of night consumption or however, there nature of Sunshine practitioner designs.
The paths of convenient to use easy to take with you on the go and.
And the service is complementary.
Each month consumers will receive a full month's supply of nutrients that will be automatically replenished and shipped directly to their homes.
Of the customers of their practitioners one of change their program. They can do so at any time.
And what's so exciting about the program is that our research suggests that personalization can improve customer compliance and usage by as much as 50%.
Resulting in improved health for our clients and increased sales from our practitioners and retailers.
Once again this is an exciting next step for our business and we believe the fact that we have a world class network of herbal healers industry, leading product quality.
One of the most of the extensive product lines in the industry capable of addressing of addressing almost any health issue and of 49 year tradition of formulating in manufacturing products. The deliver results you can feel gives us the competitive advantage over other players in the market.
We are extremely excited about the new personalization program and we look forward to continuing to sharing the healing power of nature with even more people as we move forward.
Turning to manufacturing, Inc. We've made tremendous progress distinguishing ourselves from the competition by amassing an industry, leading list of accreditation and manufacturing certifications.
Are excellent and product quality performance reliability and testing is a hallmark of nature of Sunshine.
Additionally on.
Our small batch manufacturing capabilities combined the precision care and attention to detail of artists it'll craftsmanship with the speed and efficiency.
Of an operation that is almost 50 years of global experience.
That's just one of the many ways that nature of Sunshine is able to consistently deliver superior products without sacrificing productivity.
Small bass manufacturing allows us to respond to shifting demand trends, but more importantly.
It allows us to use rare and superior grade ingredients like our wild crafted top scholar and many other wild crafted herbs that are harvested in their purest form and not pulled from both the production.
Hit the special skill and it makes a difference when you want to deliver products that offer the highest levels of potency and effectiveness and when you need to address the discriminating concerns of consumers looking to benefit from personalization.
Those consumers want real science and real results from a company they can trust.
Finally, alright stuff initiatives continue to drive transformational chain.
Our ongoing of effort to improve organizational effectiveness means that we continue to evaluate every area of of our business and look for new ways to improve productivity.
And the first quarter of a restructuring initiatives and process helped increase of.
Of operating profit, 7% and delivered seven $6 million, while operating margins improved 60 basis points, excluding one time and unusual expenses.
EBITDA also improved significantly up 20% vs. Prior year, reaching 11 $6 million, which is the highest first quarter EBITDA in the company's history.
Based on our plans moving forward, we expect to see continued profit improvements as we enhanced products productivity and streamline processes.
As I hope you can see we're committed to moving the business to the next level, while significantly improving shareholder value.
We expect our business the continues to build momentum and deliver strong results and our capital allocation strategy is designed to complement our operating strategy by effectively putting our capital to work.
That means our first priority is to make sure that we have sufficient cash reserves on hand to meet our financial obligations, but our second priority is to make strategic investments that expand our capabilities and accelerate market penetration and finally on third priority.
Is to reward shareholders directly by allocating funds to dividend payments and share repurchase programs as possible.
We believe these priority these priorities align with and support shareholder interests and we will continue to drive growth.
With that I'd like to turn the call over to Joe who will walk you through our first quarter of by 2001 financial results in more detail Joe.
Thank you carrots and good afternoon, everyone.
So let's jump right into it net.
Net sales on the first quarter increased 7% to accompany a record of $102.4 million compared to 95 nine main in the year ago quarter.
This is the third consecutive quarter of record net sales.
This increase was primarily driven by our execution of our business transformation plans, new product development and growth of new customer acquisition across markets fix.
Excluding foreign exchange rates net sales increased 4% in the first quarter of 2021.
On an absolute basis net sales in Asia increased 16% of 35 $8 million compared to $31 million in the year ago quarter.
This represented of 9% increase on our local currency basis.
The increase was primarily attributable to strong sales in China and Japan.
Which year over year increases of 38 and 44% respectively.
Net sales in Europe increased 8% to $22.2 million compared to $26 million in the year ago quarter.
This represented of 5% increase on our local currency basis the.
Increase reflects the continued success of new product launches and stronger field fundamentals throughout central and Eastern Europe.
Poland had an especially strong quarter was 40% year over year local currency growth.
North American net sales for 37 8 million compared to 38 $8 million in the year ago quarter.
The slight decrease just attributed to the fact, the first quarter of 2020 cause of tough cop is it takes into account the impact of U S. U S consumers stockpiling consumer goods at the start of the pandemic.
Net sales in Latin America, and other increased 21% in local currency to six 7 million compared to five 6 million in the year ago quarter with the increase primarily due to the continued success of our transformation initiatives in these markets.
Kicking it on the with our revamped field fundamentals and the new compensation plan. This church mentioned.
Gross margin was 73, 7% compared to $74, 3% in the year ago quarter.
The reduction reflects the impact of inventory reserves changes in market mix and certain supply chain challenges.
Volume incentives as a percentage of net sales or 33.4%.
Compared to 34, 4% in the year ago quarter.
Decline is due to changes in market mix, including growth and NSP China.
The improvement also reflects initial savings from the prior year launch of our new business model and compensation plan in North America and Latam.
Selling general and administrative expenses or 33 $6 million.
Compared to $31.1 million in the year ago quarter.
The increase was primarily attributable to sales growth and higher costs associated with the implementation of our business transformation initiatives.
As a percentage of net sales SG&A expenses were 32.8%.
To 32.4% in the year ago quarter.
Excluding the impact of capital allocation related expenses in the first quarter of this year.
Key refunds on the prior year quarter.
SG&A expenses or 32.6% of net sales compared to surge of 2.9% and the year ago quarter.
Operating income in the first quarter improve 276 million or 75% of net sales compared to operating income of $7.2 million or seven 5% of net sales in the year ago quarter.
Excluding impact of the current year capital allocation expenses and prior year refunds, we generated seven $8 million of operating income or seven 8% of net sales for the current quarter.
An increase of 17% compared to six $7 million or $6, 90% of sales in the year ago quarter.
The increase is primarily attributed to the aforementioned net sales increase.
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 of age compensation and certain noted adjustments.
Increased 20% to $11.6 million in the first quarter as compared to nine $7 million in the year ago quarter.
Net income attributable to come on shareholders for the quarter increased significantly to $4 million or 20 cents per diluted share as compared to $2.5 million or 15 cents per diluted share in the year ago quarter.
Turning to the liquidity we.
We had cash and cash Kuvasz on March 31 of.
Of $91.3 million.
Or 71.4 million post funding of the special dividend and three $3 million of debt.
For the quarter, we generated 2.7 million of cash from operations as compared to $13 five main in the prior year quarter.
The quarter over quarter difference is primarily deep.
Due to the timing related working capital changes.
To 2021, we expect the future capital allocation initiatives will continue to include strategic investments to support her customer acquisition and activation.
While we anticipate that the investments we are currently making and plan to make as part of our business transformation will increase our SG&A and capital expenditure to us going forward we.
We expect of long term benefit of the these investments will allow us to sustain our growth and drive future operation on programs for years to come.
Furthermore, we will closely monitor overall return on investment on our investments and adjust his game the appropriate.
We look forward to sharing more information in the future as we continue our strategic and transformative investments.
Now now I will turn the time back to the operator for Q&A of.
Operator.
Thank you Sir if you would like to ask the question case signal by pressing star one on your telephone keypad, if you're using a speaker phone. Please make sure your mute function as turned off to let us know treat our equipment again price star one to ask the question on our part.
From moments of everyone an opportunity and the for questions.
And we'll take our first question of the date and John Hollander with Chesapeake Advisory Group.
Hi, there one of the things for the time the congratulations.
Okay.
Thanks, John.
Thanks for doing the call.
They're going to pass of.
About capex on the prior call I believe the guidebook to about two times of spending of.
Year and 2020.
For this quarter and the financials, we can see about $1 billion will stands on capex.
Could you update the capex guidance debt.
In line with two times of last year.
No I think that's the.
That's where we expect to be in 2021, and it was only a million dollars from the first quarter, but as of pointed out on my comments, we do believe over the subsequent quarters.
The investment in Capex will increase but overall or somewhere in the two X multiple four of 2020, which was approximately.
Man.
Great. Thank you.
Target when you think about that Capex benji of of target return like return on invested capital that you use.
Well, we certainly look at the the long term return on all of our capital of.
Expenditures, but.
I was saying generally while it's not and many different from each particular investment.
Just overall, we expect those capital and capital investments to pay for themselves on a relatively short period of time in the neighborhood of two to three years.
Okay. Thank you.
On the prior call I'd asked about which metrics.
Crack and.
And I was referred to the prior comments.
The track the subscribe in price.
And also the track the level of of.
The early.
On this call it doesn't seem like those numbers move very months the prior call with the rest of the 25%.
Of orders from subscribing drive in this call again on the 5% that also the prior call 300% increase in the.
He will join the affiliate and the <unk>.
Guess on this call of 300% affiliate generated on just hoping you could comment these of the right method.
Yes, I think the other again, we're still early on in the in the lodge process. So.
I just wanted to give you a kind of of says that we are tracking moving in the right direction.
We actually continue to build momentum and both of those areas.
As we see the progress that we're making of getting more learnings and each on each of one of those key programs were fine tuning.
Our goal is to can I get to a very kind of different place, but again.
We're talking about a relatively large installed base of of consumers on something of our orders on something like subscribed to drive so even as we're amassing kind of more and more orders of.
The incremental kind.
Kind of of gains are.
Relatively small at this point in time, but again, our expectation is that we'll see some pretty dramatic movement of on that in the future.
And obviously you can.
You can just kind of do the math on it for.
Every percentage of orders that we're getting that are in subscribing drive the incremental orders that we get on that really does have an impact on lifetime value of consumers. So it's an area, where we really do on a focus and on the affiliate program.
Again, I gave you some general numbers are around growth that sort of sharing at this point in time, because we're so early in the program.
But.
Again, the residual off of one person one consumers sharing with 234 of five other people is again of nice New addition to.
To the business and we're still dealing with relatively kind of small baseline numbers.
But the impact of starting to.
We're actually starting to be able to see the impact.
Okay, great. Thank you.
Also of just one more brief question in the beginning of the call. There was comment about gross margin the impacted by packaging the other clupeid related call.
Able to quantify that a little bit of of the 20th.
100 pips.
So I'll take the old Joe well the.
The overall changing gross profit margin was was.
It was clearly in less than 100 bps, but it's a combination of different things in the <unk>.
Led to the approximate 60 minutes decline in gross profit margin including of.
As from inventory reserves we.
In a couple of the promotional kind of situations, but in regards to the the pandemic.
<unk> exactly.
We did have some situations, where we had are free from inventory and so forth. So.
Out of that 60 deaths and of.
Maybe a third of its associated with that kind of activity.
Okay and I'm sorry, just one last question I had written up throughout the App was what percentage of sales in Q1, where would you really driven.
To the number joke.
I don't have that that number off the top of my head. We can we can make note of that and get back of.
So the request.
Okay, great. Thank you very much of your time those are all my questions Congrats to get on the days.
True.
Thanks, John Yeah, Thanks for the questions.
As a reminder of press star one that we have a question will hear from Steven Martin with later.
Let's say about the the online.
Good good.
Near me.
Yes, the up here okay.
Okay.
Sales.
Yeah.
Yeah.
Right.
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Pay cash.
Later in the clear.
Thank you.
Okay.
Having trouble hearing the right now could you Ah I don't know if you're calling on a cellphone yeah. No I took it off speaker I was having a hard time, so what I ask well.
Last year, you, adding in April 1st price increase that you defer due to the pandemic.
Did you take it this year to on.
Sure some of your cost increases.
We actually took the price increase in I believe of April Joe Yes. This year, so not in the not in the first quarter.
That will you'll see that in the second quarter.
Okay. That's good.
Is it enough to offset some of those headaches you're talking about.
Yes, we certainly believe it's kind of upset.
Ah meaningful portion of them, yes, now again, it's difficult to predict Hell on all plays forward, but is Terrance mentioned in his comments. We believe we did a very good job and being proactive and try and strengthen our overall supply chain position and so forth.
To do.
The as best as we can minimize the impact, but there's still some uncertainty on that as of place forward.
Got it.
With respect to Korea.
What's your expectation on timing of that market.
Sort of starting to return to normal.
I think we'll we expect to see some really.
Relatively soon this year, but as I mentioned.
I won't be able to really unleash the power of that team until the restrictions that leads of been east.
They still can't have meetings face to face with more than I think it's five people.
And they really do rely on on a lot of except the high touch market for them, but they've got a lot of things going on that they have launched our new app to to supplement their.
Out of the training that they would normally do in person and they put literally hundreds of products videos training videos. So this was relatively recently introduced so there really are kind of working around the clock to try and get to.
Figure out a new way to to drive activation as the.
Well see some some uptick in their performance kind of.
Shortly but again, we won't be able to unleash that market until some of those restrictions come down.
Okay.
And I know, we're still coming out of pattern.
Pandemic related issues like Korea.
We've talked in the past about.
Guidance.
And being in the year being prepared to give us some range even with the range.
Where do you.
We are in that process.
Right now we.
Really are still of.
Driving through the transformation. So I got kind of got two things are managing the one is is kind of making sure that the the transformation initiative that we're putting in place are on.
Or solid and sustainable which everything that we're seeing would support that again, both in the U S. In Latin America in.
The key areas, where we're focused in like China and.
<unk>, so we're really starting to see some good stability and those market, but I'd say, but we are still on the learning process and then of course, the overlay on top of that COVID-19 on the uncertainty that lives with that so I don't think we have a high enough degree of of confidence to give to give full guidance, yet, but we do have the real confidence in.
Our business real confidence in the momentum going forward, we're still several quarters of way probably from from providing some some solid guidance dear.
Jody of of any additional comments on that no I think parents responded.
Appropriately.
Steve Your question.
Hi.
Non just going to go ahead with on our third consecutive they're just gonna say of just being our third consecutive of $100 million quarter, you'll remember two quarters ago I said.
$100 billion don't expect that to the the new trend line kind of of.
We don't know yet and then we delivered another one now we've delivered our third or third kind.
The consecutive quarter plus under a million dollars.
So again I think we're starting to get some build momentum each each one of those quarters larger than the previous one.
Strategy, starting to really come on line and gained some traction so again refer of really good about the the business internally and and again as soon as we can we will start to because of.
Unveil more to you.
Okay.
I applaud the as you know your your special dividend and I know you talked about.
Capital allocation.
You announced the buyback recognizing that it was towards the end of the quarter.
You have a target, but the buyback in the way of.
Sure Count reduction do you have a goal of utilizing.
X amount of dollars per year, because you still are going to throw off.
20 plus million dollars of cash.
And.
You are still cheap and it would be great if the share count.
Got reduce the level.
Yes.
I'll start with the I'll, let Joe Joe follow up.
We've announced the the buyback we put the the parameters around it.
Will be as I guess appropriately as aggressive as we can and pursuing Matt.
I don't want to be too forward.
Looking at the on that but.
We have the authorization and we're going to take the opportunities as we can jodie of of any additional comments.
Two of Steve Obviously, we did.
Especially of dividend close 20 million.
Hear of about one month ago right.
We did we did and as the stock repurchase plan.
The set aside of $15 million for that and I am just see.
To to use the money appropriately and wisely and.
It's a little bit early to come on specifically on targets and so forth, but I would you see we do the the.
Fully integrated.
Careful of allocation policy.
We certainly want to maintain we want to maintain cash reserves and also make sure. We have plenty of the liquidity in best in the business. The extent that we end of the concluding that there is excess capital one way or the one way or the or the other will look too.
Send that back of our shareholders.
Alright.
Thanks, a lot guys.
Safe.
At this time. This concludes our question and answer session on now like to turn the call back over to Mister Morehead for closing remarks.
Okay, well again I want to thank everybody for participating in today's poll.
And.
The again, we look forward to speaking with you again, when we report our second quarter of results in August.
So with that the conclude the call. Thanks again, thank you the give everybody.
Ladies and gentlemen, this does conclude the days teleconference. You may disconnect. Your lines at this time. Thank you for your participation.
[music].
Mhm.