Q4 2021 USANA Health Sciences Inc Earnings Call

Good day, ladies and well good day, ladies and gentlemen, and welcome to your sort of Health Sciences fourth quarter Conference call. Today's conference is being recorded at this time I'd like to turn the conference over to Mr. Patrick Richards Executive director of Investor Relations and business development. Please go ahead.

Speaker 1: Good day ladies and gentlemen and welcome to USANA Health Sciences' fourth quarter conference call. Today's conference is being recorded. At this time I'd like to turn the conference over to Mr. Patrick Richards, Executive Director of Investor Relations and Business Development. Please go ahead.

Thank you. 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 directly from our website at IR got you saw that dot com shortly.

Speaker 1: Thank you. 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 directly from our website at ir.usana.com.

Speaker 2: shortly following the call a replay will be available on our website.

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

Speaker 2: 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.

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

Speaker 2: Those statements involve risks and uncertainties that could cause actual results to differ, perhaps materially, from the results projecting such forward-looking statements.

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 2022.

Speaker 2: Examples of these statements include those regarding our strategies and outlook for fiscal year 2022.

Speaker 2: as well as under certainty related to the magnitude, scope, and duration of the impact of the COVID-19 pandemic to our business operations and finance.

As well as certain D related to the magnitude scope and duration of the impact of the COVID-19 pandemic to our business operations and financial results. We caution you that these statements should be considered in conjunction with disclosures, including specific risk factors and financial data contained in our most recent filings with the.

Speaker 2: We caution you that these statements should be considered in conjunction with disclosures, including specific risk factors and financial data contained in our most recent filings with the SEC.

Sir.

Speaker 2: I'm joined this morning by our CEO and Chairman of the Board, Kevin Guest, our President, Jim Brown, our Chief Financial Officer, Doug Heching, as well as the other members of our executive team. Yesterday after the market closed, we announced our fourth quarter results and posted our management commentary document on the company's website.

I am joined this morning by our CEO and chairman of the Board Kevin guest our President Jim Brown, our Chief Financial Officer, Doug hacking as well as the other members of our executive team.

Yesterday after the market closed we announced our fourth quarter results and posted our management commentary document on the company's website. We'll now hear brief remarks from Kevin before opening the call for questions.

Speaker 2: We'll now hear brief remarks from Kevin before opening the call for questions.

Speaker 3: Thank you, Pat, 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 2022.

Thank you Pat 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 2022.

Speaker 3: 2021 marked a year of solid performance in what remains a dynamic operating environment. For the full year, we grew net sales by 5%.

2021 marked a year of solid performance in what remains a dynamic operating environment for the full year, we grew net sales by 5%.

However, as the COVID-19 pandemic has evolved over the last two plus years, we've learned that its impact to our business is not linear this.

Speaker 3: However, as the COVID-19 pandemic has evolved over the last two plus years, we've learned that its impact to our business is not linear. This is evident in our fourth quarter results, where lockdowns and disruptions to our operating environment pressured our financial performance.

This was evident in our fourth quarter results, where lockdowns and disruptions to our operating environment pressured our financial performance we.

We continue to manage the business with sustainable long term growth in mind and in 2021, we've made meaningful progress on several strategic initiatives.

Speaker 3: We continue to manage the business with sustainable long-term growth in mind. And in 2021, we made meaningful progress on several strategic initiatives.

Technology investment remains a focal point and last year, we made several improvements and enhancements to our digital tool offerings, including rollout of a product recommendation tool introducing customized branded website creation tools and releasing the first version of our native shopping app.

Speaker 3: Technology investment remains a focal point, and last year we made several improvements and enhancements to our digital tool offerings, including rollout of a product recommendation tool, introducing customized and branded website creation tools, and releasing the first version of our native shopping app in China.

In China.

Speaker 3: These enhancements provide our customers with an excellent shopping experience, and we believe this will help drive customer acquisition.

These enhancements provider customers with an excellent shopping experience and we believe this will help drive customer acquisition.

Speaker 3: Additionally, we maintain an unwavering focus on product innovation and our scientists and product specialists made progress on our long-term product development roadmap.

Additionally, we maintain an unwavering focus on product innovation, and our scientists and product specialists made progress on our long term product development roadmap.

We've also transitioned more manufacturing to our foods facility in Salt Lake City, and we expect to see product and financial benefits in the coming years as we focus on leveraging our investment in this facility.

Speaker 3: We've also transitioned more manufacturing to our foods facility in Salt Lake City, and we expect to see product and financial benefits in the coming years as we focus on leveraging our investment in this facility.

Speaker 3: As we embark on USANA's 30th anniversary this year, we will continue to strategically invest in the business with investments focused on our digital transformation initiatives, product innovation, growing our business in China, and pursuing business development opportunities, all with the objective of growing our active customer count.

As we embark on <unk> 30th anniversary. This year, we will continue to strategically invest in the business with investments focused on our digital transformation initiatives.

<unk> innovation growing our business in China, and pursuing business development opportunities all with the objective of growing our active customer accounts.

We are excited to resume hosting in person EBIT. This year in markets, where it is safe and where we are permitted to do so we are currently planning to celebrate your side of the 30th anniversary by hosting a hybrid virtual in person event.

Speaker 3: We are excited to resume hosting in-person events this year in markets where it is safe and where we are permitted to do so. We are currently planning to celebrate USANA's 30th anniversary by hosting a hybrid virtual in-person event. For more information, visit USANA.gov

Speaker 3: Salt Lake City and we're also planning to host an in-person event in China in the back half of the year. We continue to believe that in-person events are both important and additive to driving excitement and momentum within our sales force. Additionally, we plan to run short-term sales programs across several several of our markets throughout the year to suit the needs of individual markets.

And Salt Lake City and were also planning to host an in person event in China in the back half of the year.

We continue to believe that in person events are both important and additive to driving excitement and momentum within our Salesforce. Additionally, we plan to run short term sales programs across several several of our markets throughout the year to suit the needs of individual markets.

Speaker 3: Before turning the call over for questions, I'd like to briefly discuss our fiscal 2022 outlook.

Before turning the call over for questions.

I'd like to briefly discuss our fiscal 2022 outlook.

We are cautiously optimistic on a return to normalcy.

Speaker 3: We are cautiously optimistic on a return to normalcy as some of our markets currently remain severely impacted by COVID-related lockdowns, while other markets are seeing signs of reopening. As such, our net sales and diluted earnings per share guidance carry a wider than normal range.

Some of our markets currently remains severely impacted by Covid related lockdowns, while other markets are seeing signs of reopening as such our net sales and diluted earnings per share guidance carry a wider than normal range.

Speaker 3: We anticipate that net sales will accelerate throughout the year. We also expect some pressure on our operating margin relative to historical performance which reflect

We anticipate that net sales will accelerate throughout the year. We also expect some pressure on our operating margin relative to historical performance, which reflects inflationary pressures on key areas of our business strategic investments in our digital infrastructure and incur.

Speaker 3: inflationary pressures on key areas of our business, strategic investments in our digital infrastructure and increased travel and event related costs.

<unk> travel and event related costs and.

In closing we are confident our strategies will enable us to become even more positioned to drive future growth.

Speaker 3: In closing, we are confident our strategies will enable us to become even more positioned to drive future growth.

Speaker 3: With that, I'll now ask the operator to please open the line for questions.

With that I'll now ask the operator to please open the line for questions.

Thank you.

Ladies and gentlemen, if you'd like to ask a question you may do so by pressing star one on your telephone keypad. Please make sure the mute function on your phone is turned off so the signal can be read by our equipment.

Speaker 1: Ladies and gentlemen, if you'd like to ask a question, you may do so by pressing star one on your telephone keypad. Please make sure the mute function on your phone is turned off so the signal can be read by our equipment. Star one for questions will pause for a few seconds.

Star one for questions, we'll pause a moment to assemble the phone queue.

We will take our first question from Steph Westlake with Jefferies. Please go ahead.

Speaker 1: take our first question from Steph Westnick with Jefferies. Please go ahead.

Thank you good day, everyone and we have a few questions. If we could the first is just on your remarks on the call today regarding the sales acceleration through the year. So it's a two part question. One if you can just give us some sense of magnitude kind of a starting point to the ending point as these contemplated in your guidance and then just remind us if there are any.

Speaker 4: Thank you. Good day everyone. We have a few questions if we could. The first is just on your remarks on the call today regarding the sales acceleration through the year. So it's a two-part question. One, if you can just give us some sense of magnitude, kind of the starting point to the ending point as you've contemplated in your guidance, and then just remind us if there are any unusual comparison effects to the prior year, just recognizing 2021 was a somewhat unusual year as the year played out.

Unusual comparison effects to the prior year, just recognizing 2021 with a somewhat unusual year as the year played out.

Yes, Stephanie this is Doug and so I appreciate your question.

Speaker 5: Yeah, Stephanie, this is Doug and so I appreciate your question.

Speaker 5: So the ramp up during the year has to do with some of the kind of the holiday period you see right now we're in Chinese New Year. It's tough to get a whole lot done during that period of time. And then the timing of some of these.

So the ramp up during the year has to do with some of the kind of the the holiday period, you see right now we are in Chinese new year, it's tough to get a whole lot done during that period of time and then the timing of some of these test programs and promotional activity that we have planned throughout the year and so as I'm sure you're aware, what we did in <unk>.

Speaker 5: test programs and promotional activity that we have planned throughout the year. And so, as I'm sure you're aware, what we did in 2020 was in the third quarter, pretty heavy promotion period with every market happening at the same time. That happened in the second quarter of 2021. That'll be a little bit more spread out and kind of ramp with expected significance throughout the year, really kind of culminating in the third quarter. And so that is, you know, kind of hopefully kind of captures both those things, is that we'll see a build.

2020 was in the third quarter pretty heavy growth period with every market happening at the same time that happened in the second quarter of 2021 that'll be a little bit more spread out and kind of a ramp with the expected significant throughout the year really kind of culminated in the third quarter and so that that is kind of hopefully kind of captures both of those things is that we will.

See a build in <unk>, you'll see the first quarter at or modestly above sequentially, and then kind of build from there.

Speaker 5: I imagine we'll see the first quarter add or modestly above sequentially and then kind of build from there.

Okay. That's really helpful. Doug and then my second question is related to your comments on cost inputs. You can just give us a sense of your cost basket, what's the most heavily densify it in the basket, where youre seeing the most pressure.

Speaker 4: Okay, that's really helpful, Doug. And then my second question is related to your comments on cost inputs. If you can just give us a sense of your cost basket, what's the most heavily densified in the basket, where you're seeing the most pressure, and if you have or do you plan to take price and at what magnitude to offset some of the pressure?...

And if you have or do you plan to take price and at what magnitude to offset some of the pressure.

Yes, I mean relative to the product itself.

Speaker 5: Relative to the priority itself, you really have all the inputs that are flowing in there. You have materials far and away are the biggest.

Really have all the inputs that are flowing in there you have material is far and away are the biggest cost pressure right now and there is there is a little bit of a risk profile. There is we've got bids for our suppliers, but we don't even have a secured price throughout the year and so theres a little bit of unknown and I think they are just kind of dealing with their uncertainty as well and so we're seeing some definitive pressure there in <unk>.

Speaker 5: cost pressure right now and there's a little bit of a risk profile there as we've got bids for our suppliers but we don't even have a secured

Speaker 5: price throughout the year so they're a little bit unknown and I think they're just kind of dealing with their uncertainty as well and so we're seeing some definitive pressure there. In markets outside mainland China we're seeing somewhere in that 5 to 7% range is pressure on material cost.

Markets outside mainland, China, we're seeing somewhere in that 5% to 7% range as pressure on material costs.

Speaker 5: Wages, I think, definitively we've seen wages across the board, not only in the production environment but throughout the organization just with this.

<unk> I think definitively seen wages across the board not only in the production environment, but throughout the organization just with this.

Speaker 5: environment we've kind of come into and it's not just domestic, we're seeing in the other markets as well. And then some of the overhead and some of the transportation costs continue to go back and get pressured. We're hoping to start seeing some of the transportation costs and just the magnitude that we've been paying above historic levels start abating in the back half of the year. I think some of these other things we see is a little bit more persistent throughout the year.

Environment, we've kind of come into and it's not just domestic we are seeing in the other markets as well and then some of the overhead and some of the transportation cost continue to go back and get pressured we're hoping to start seeing some of the transportation costs and the just the magnitude that we've been paying above historic levels start abating in the back half of the year I think some of these other.

Things, we see is a little bit more persistent throughout the year.

Okay and have you taken price yet or do you intend to and if you can give us a sense of.

Speaker 4: Okay, and have you taken price yet or do you intend to and if you can give us a sense of You know It's five to seven percent kind of a blended average cost increase or are you seeing costing higher than that? And you're going to price into that higher level of cost

It is 5% to 7% kind of a blended average cost increase are you seeing costing higher than that and you're going to price into that higher level of cost.

Speaker 5: Yeah, and so we've spent a lot of time with this. We've talked with our sales leadership, our markets.

And so we've spent a lot of time with as we've talked with our sales leadership, our markets kind of direction from from Kevin and Jim.

Speaker 5: and a direction from Kevin and Jim, and really trying to take a pretty thoughtful, pragmatic approach. So yes, we will have a price adjustment, but it's modest, as we expect some of these things to start to abate, and then we'll adjust accordingly. And that will typically happen into first quarter, first to second quarter, and it really varies by market, but it should be relatively modest in price adjustment, and I think we're trying to balance a bunch of things there. Elizabeth muchas gracias,

And really trying to take a pretty thoughtful pragmatic approach. So yes, we will have a price adjustment, but it's modest as we expect some of these things to start abating, then we'll adjust accordingly and that will typically happen in the first quarter first and second quarter.

And it really varies by market, but it should be relatively modest and price adjustment and I think we're trying to balance a bunch of things there.

<unk>.

Okay. Last question is just on some of the tests that you've been running to activate euro.

Speaker 4: Okay, last question is just on some of the tests that you've been running to activate your associate network. And I think you mentioned to to drive customer count. Can you give us just some sense of early learnings from those tests? Anything that you've found to be successful that you expect to deploy more widely in 2022? Thank you.

Youre Associate network and I think you mentioned two to drive customer count can you give us just some sense of early learnings from those tests anything that you've found to be successful that you expect to deploy more widely in 2022. Thank you.

Yes, so it's definitely we're fortunate to have David <unk>, who heads up our sales around the world with the exception of mainland China and then Brent night again here. So maybe I'll, let those gentlemen talk on that since they are present today is probably you can hear it right from the horse's mouth good morning.

Speaker 5: Yeah, and so Stephanie, we're fortunate to have David Mohm who heads up our sales around the world with exception mainland China, and then Brent Knight again here, and so maybe I'll let those gentlemen talk on that since they're present today. You can hear it right from the horse's mouth. Good morning.

Yes.

Speaker 6: Yeah, so we've run a number of tests in the back end of 21 and I think what we've seen as a result of that is a high level of engagement not just through the rewards process but certainly from the experiences that we've been out and solutions that we've been able to deliver through those programs.

Yes, so we've run a number of tests in.

The back end of 'twenty, one and I think what we've seen as a result of that as a high level of engagement not just through the rewards process, but certainly from the experiences that we've been able and solutions that we've been able to deliver through those programs. So.

Definitely.

Speaker 6: definitely a stickier process with our customers.

Stickier process with our customers and a longer tail in terms of the purchasing over a series of cycles.

Speaker 6: and a longer tail in terms of their purchasing over a series of cycles.

Graham from <unk> perspective anything else.

Speaker 7: Grant, from a China perspective, anything else to... Yeah, I'll just speak briefly to the short-term sales incentives that we've ran over the last couple of years. We've certainly had several learnings from both of those events.

I'll just speak briefly to the short term sales incentives that we've ran over the last couple of years. We've certainly had several learnings from both of those events.

Speaker 7: We've really heavily analyzed the types of individuals that are being attracted by those incentives.

We've really heavily analyze the types of individuals that are being attracted by those incentives.

Speaker 7: and what their tail looks like once they come into the business.

What their tail looks like once they come into the business.

Speaker 7: So we have made some adjustments for forward-looking promotions to accommodate the types of individuals that those incentives are attracting. And so we hope to have continual improvements to those results as we move forward. And I think, Stephanie, from our perspective, and we've been pretty open about this, I think you saw that in the program we ran in 2020. We had a little bit of catalyst.

So we have made some adjustments for forward looking promotions to accommodate the types of individuals that those.

Incentives are attracting and so we hope to have continually continual improvements to those results as we move forward.

And I think it's definitely from our perspective, and we've been pretty open about this I think you saw that in the program. We ran in 2020, we had a little bit of catalyst to the business I think particularly just kind of given the fact, we're just getting into the COVID-19 environment there.

Speaker 5: to the business, I think particularly just kind of given the fact we're just getting into the COVID environment there. And you know, what we probably didn't fully appreciate at the time is we had some companion efforts going on at the same time that were pretty additive to that. Those were not present and what we did in 2021. So the sales team have designed and architected what we're going to be doing this year to have more similarities to 2020 and a few more enhancements from what we've learned.

And what we probably didn't fully appreciate at the time as we had some companion efforts going on at the same time that we're pretty additive to that those were not present in what we did in 2021. So the sales team have designed and Architected, what we're going to be doing this year to have more similarities to 2020 and a few more enhancements from what we've learned.

Okay. That's really helpful. If I could talk one more and just noticing that China sales on a quarter to quarter basis or sequential basis actually did show some improvement do you attribute that to some of these companion driven coincident.

Speaker 4: Okay, that's really helpful. If I could toss one more in just noticing that China sales on a quarter to quarter basis or sequential basis actually did show some improvement. Do you attribute that to some of these companion driven coincident?

Speaker 4: is that driving promotions or is that something that maybe is more structural and fundamental and we've kind of seen the bottom of that market in terms of performance?

Driving promotions or is that something that maybe is more structural and fundamental and we've kind of seen the bottom of that market in terms of performance.

Yes, Stephanie this is Brent.

It's an interesting observation, we're very optimistic about the signs that we're seeing coming out of China.

Speaker 7: It's an interesting observation. We're very optimistic about the signs that we're seeing coming out of China.

Speaker 7: I'm very optimistic for 2022. I think to your question though, if

I'm very optimistic for 2022, I think to your question, though.

It's difficult to know I think that there are some structural improvements that we've made over the last couple of years and we're starting to see the fruits of those labors are digital enhancements and improvements that we're making the shopping experience has certainly improve things.

Speaker 7: It's difficult to know. I think that there are some structural improvements that we've made over the last couple of years and we're starting to see the fruits of those labors. Our digital enhancements and improvements that we're making to the shopping experience have certainly improved things.

Speaker 7: And we're also very excited about new leadership that's come on board with new ideas and they have the ability to really help turn around momentum that's been somewhat lackluster over the last several years.

And we're also very excited about new leadership that has come on board.

With new ideas and they have the ability to really help turnaround momentum.

Been somewhat lackluster over the last several years. So I think all of those things compiled together quite.

Speaker 7: So I think all of those things compile together quite optimistic about the direction we're going to be going in China.

Quite optimistic about the direction, we're going to be going in China, Yes, Stephanie just Doug I'd, probably add on in the in our fourth quarter results, we had a little softer than what we expected just because we had to push some of these events out that we had planned to the market our national sales meeting, which we had deferred is now we had to cancel for the period other product related promotions.

Speaker 5: You know, we had a little softer than what we expected just because we had to push some of these events out that we had planned to the market. Our national sales meeting, which we had deferred, is now, we had to cancel it for the period. Other product related promotions, you know, in reference to that event got pushed down and had limited impact because of that. So, I think Brent.

In reference to that event got pushed down and had limited impact because of that so I think brents comments are appropriate, but I think even with the light of that.

Speaker 5: comments are appropriate, but I think even with the light of, you know, that we had to go back and push some things out and had to go back and postpone it, just kind of adapting to the environment. That's very helpful. Thank you and encouraging.

We had to go back and pushing things out and had to go back and postpone or just kind of adapting to the environment.

That's very helpful. Thank you and encouraging as well.

I'll jump back in queue. Thanks, everyone.

Thank you Stephanie.

As a reminder, star one for questions. We will go next to Doug Lane with Lane Research. Please go ahead.

Speaker 1: As a reminder, star one for questions. We'll go next to Doug Lane with Lane Research. Please go ahead.

Speaker 5: Yes, hi, good morning, everybody. On the cost front, I get the cost inflation and shipping and materials and what have you, but can you talk a little bit more about the associate incentives? They were up 110 basis points in the quarter. Is there going to be a pressure point next year or this year as well?

Yes, hi, good morning, everybody.

On the cost front, yes, I get the cost inflation in shipping and materials and what have you, but can you talk a little bit more about the associate incentives. They were up 110 basis points in the quarter or is there going to be.

Is that going to be a pressure point next year or this year as well.

No I think it's in check and I think Doug in all honesty I think the comparison, yes on a year over year basis Thats. The math I think the fourth quarter of last year was was lower than what we typically see.

Speaker 5: No, I think it's been checked and I think Doug in all honesty, I think in comparison, yes, on a year-over-year basis, that's the math. I think the fourth quarter of last year was lower than what we typically see. I think the level that we had, as far as what we're reporting here, is I think roughly in line.

I think the level that we had as far as what we're reporting here is I think roughly in line kind of with what Youll see for the year. In 2021, you will see in 2022. So I think it just happened that last year, we were just a little bit lighter as we scramble and a bunch of the events and travel and some of this other stuff got postponed we had a little bit of pickup in the fourth quarter last year that we did.

Speaker 5: kind of with what you'll see for the year in 2021, you'll see in 2022. So I think it just happened that last year we were just a little bit lighter as we scrambled in a bunch of the events and travel and some of this other stuff got postponed. We had a little bit of pickup in the fourth quarter last year that we didn't have this year.

Half of this year.

Speaker 5: Okay, fair enough. Can we talk a little bit more about your convention this year? It's a 30th anniversary. It sounds like it's going to be perhaps a little bit more of an event than typically in the past. I know you mentioned it's a hybrid event, but that will include an in-person component, obviously. Is there going to be any kind of special promotions run during or ahead of that? Any kind of special new product activity we should look for? Just any kind of more color and what you think the impact of the convention will be this year?

Okay fair enough.

Can we talk a little bit more about your convention. This year. Its 30 <unk> anniversary it sounds like it's going to be perhaps a little bit.

More uneven.

And typically in the past I know you mentioned, it's a hybrid with them, but that are included in person component. Obviously is there going to be any kind of special promotions run. During are ahead of that and you kind of especially as new product activity. We should look for just any kind of more color on what you think the impact of the convention will be this year.

Speaker 3: Well, Doug, this is Kevin. You know, we are.

Well, Doug this is Kevin.

You know what.

We are.

Speaker 3: We rely heavily on our events as it relates to momentum in the business. And we're excited at the prospect of being able to get together. Being our 30th anniversary also is an opportunity for us to generate excitement.

We rely heavily on our events.

As it relates to the momentum in the business.

We're excited at the prospect of being able to get together being our 30 <unk> anniversary also as an opportunity for us to generate excitement.

Speaker 3: around the world. So we are going to

Around the world. So we are going to plan for the worst and hope for the best meaning we're going to do a simultaneous.

Speaker 3: plan for the worst and hope for the best. Meaning we're going to do a simultaneous.

Speaker 3: virtual event while we're doing a live event.

A virtual event, while we're doing a live event.

We've never really seen anything like this before we're excited about the technology, we're going to use in the interaction to make it as personal of an event globally, we expect.

Speaker 3: We've never really seen anything like this before. We're excited about the technology we're going to use and the interaction to make it as personal of an event globally. We expect, you know, we're going to have several thousand people here in Salt Lake City in attendance, but we expect tens of thousands of people globally to participate virtually in this event. As a result, relationship to your question about promotion.

We're going to have several thousand people here in Salt Lake City in attendance, but we expect tens of thousands of people globally to participate virtually in this event.

As result relationship to your question about promotions.

Speaker 3: uh... we will have uh... from promotions that are tied to our thirty anniversary tied to the new products uh... that we've been wanting and hoping and waiting to watch that are in the queue uh... and uh... but it's not going to be as it relates to the convention

We will have.

Some promotions that are tied to our <unk> anniversary tied to some new products.

That we've been wanting and hoping and waiting to launch that are in the queue.

But it's not going to be as it relates to the convention.

Speaker 3: directly it's not going to be an overwhelming uh... product launch and or self-promotion period because we are trying to uh... have that happened throughout the year not just in one of that and also thinking about the fact that there is a possibility that the event could be limited just because of unexpected cold with the issues so we're not relying on that event for certain product launches and or promote

Directionally, it's not going to be an overwhelming prada.

Product launch and or sales promotion period, because we are trying to.

That happened throughout the year not just in one event and also thinking about the fact that there is a possibility.

The event could be limited just because of unexpected COVID-19 issues. So we're not relying on that event for for certain product launches <unk> promotions.

Okay that makes sense. Thanks, Kevin just one last thing with all these lockdowns and what have you.

Speaker 5: Okay, that makes sense. Thanks, Kevin. Just one last thing with all these lockdowns and what have you, you know, you mentioned in in your commentary that the Philippines was down 52% in local currency, which is a big number. Does that imply that that there could be some significant bounce backs as we come out of this COVID? Or do you think that's kind of a permanent reset of the sales level there?

You mentioned in your commentary that the Philippines was down 52% in local currency, which is a big number does that imply that there could be some significant bounce backs as we come out of this colgate or do you think thats kind of a permanent reset of the sales level there.

Speaker 7: I think we're going to have to build from there. I don't think it's going to go back and bounce back overnight. You have a market that's very densely populated.

I think it's we're going to have to build from there. It's not I don't think is going to go back and bounce back overnight you have a market that's very densely populated.

Speaker 7: And in many cases, this market was doing a great deal of in-person transaction. I mean, probably one of the higher of all our markets of doing things in office. And that shut off, you know, essentially overnight. And that environment has really gone through a great deal. So yeah, I think we'll make progress. The team is, I can tell you, is working hard day and night, is committed as ever. But it's going to take some time. And I think they're anticipating to make some progress this year. But it's not jumping right back to where it was in 2020. Okay.

And in many cases this market was doing a great deal of in person transactions I mean, probably one of the higher of all of our markets are doing things in office and that shut off essentially overnight.

And that environment has really gone through a great deal. So yes, I think we'll make progress. The team is I can tell you is working hard day and night as committed as ever but it's going to take some time and I think they are anticipating to make some progress this year, but it's not it's not jumping right back to where it was in 2020.

Okay fair enough. Thank you.

Thanks, Doug.

Speaker 1: Thanks Doug.

Star one for questions, we'll pause a moment to assemble the queue.

It appears we have no further questions at this time I would like to turn it back to your presenters for any additional or closing remarks.

Speaker 1: It appears we have no further questions at this time. I'd like to turn it back to your presenters for any additional or closing remarks.

Thank you for your questions and for your participation on today's conference call do you have any remaining questions. Please feel free to contact Investor Relations at <unk> 190, 547 to one zero. Thank you.

Speaker 2: Thank you for your questions and for your participation on today's conference call. If you have any remaining questions, please feel free to contact Invest Relations at 801-954-7210. Thank you.

Ladies and gentlemen. This concludes today's conference. We appreciate your participation you may now disconnect.

Speaker 1: Ladies and gentlemen, this concludes today's conference. We appreciate your participation. You may now disconnect.