如新 (NUS) 2010 Q1 法說會逐字稿

Good day, ladies and gentlemen, welcome to the Q1 2010 Nu Skin earnings conference call. I will be your operator for today. At this time, all participants are in listen-only mode. Later, we will be conducting a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host, Mr. Scott Pond, Director of Investor Relations. Please proceed, sir.

Thanks, Derrick. Good morning everyone, appreciate you joining us on this morning's call. With us on the call are Truman Hunt, President and CEO, Ritch Wood, Chief Financial Officer, Dan Chard, President of Global sales and operations and Scott Schwerdt, President of America's, Europe and South Pacific.

Just a reminder during this call comments may be made that include forward-looking statements. These statements involve risks and uncertainties and actual results may differ materially from those discussed or anticipated. We encourage you to refer to today's earnings release and our SEC filings for a complete discussion of these risks. Also during this call, certain financial numbers may be discussed that differ comparable numbers obtained in our financial statements.

We believe that these non-GAAP financial numbers assist management and investors in evaluating a comparing period to period results in a more meaningful and consistent manner. Please refer to our investor portion of the web site for a reconciliation of these non-GAAP numbers. With that, I will now turn the call over to Truman

Thanks Scott. Good morning everyone. As our release indicates, we started the year with a terrific first quarter. An accelerated growth rate resulted in record sales and earnings which led us to an increase in guidance for the remainder of the year. We generated revenue of $364.1 million in the quarter. This represents a 23% increase over the first quarter of 2009, reported revenue was positively impacted 8% by foreign currency swings. Putting our costs at constant currency growth of 15%, which is well ahead of our guidance of 9% to 10% growth.

You'll note our revenue growth is also inline with 13% year-over-year growth rate in executive distributer count . These are the sales leader who are really driving our business forward. So, we're pleased to have reached a record level of executives during the quarter.

Our first quarter earnings came in at $0.48 per share, also exceeding by a healthy margin our guidance of $0.39 to $0.42. This represents a 71% increase in earnings after excluding restructuring charges last year. These outstanding results were the result of solid activity in all of our geographic regions and reflect a better than expected response to the introduction of our ageLOC transformation skin care system in a few key markets most notably South Korea. Which you'll note had a blowout quarter as a result of their limited time offering of the ageLOC skin care system. Now as we've discussed over the past few years the ageLOC scientific approach represents our unique ability to attack both the signs of aging as well as the ultimate sources of aging that are found in the human genome.

Our proprietary innovative approach to antiaging enables us to identify, target and reset the specific groups of genes that we believe play a critical role in significant aspects of the aging process. This has led us to develop entirely new category of antiaging products that we've labeled aging response modulators. During the quarter we sold $55 million of the new ageLOC skin care products keeping ageLOC solidly on track to becoming our most successful product launch ever.

To add further fuel to the ageLOC story, we also introduced at the beginning of the year a new ageLOC addition Galvanic Spa. Over the past few years the Galvanic Spa and related treatment gels have become our top selling products. The new ageLOC skin care system works nicely with the Galvanic Spa because it provides the daily regimen of skin care products that enhance and optimize the impact of spa treatments which are typically done two to three times per week.

During the quarter we also saw Galvanic Spa sales hold steady with the prior quarter and actually up 18% year-over-year. So we are very pleased with that despite all of the attention on the new skin care system. And at the same time our nutrition business remains strong. Another indicator pointing to the overall health of the business. The tactic that we're using with the ageLOC launch is to introduce the new product system with a limited time offer that we will refer to frequently as a prelaunch event.

This prelaunch usually lasts for about three to five days, and is typically focused on our distributer leaders and is tied typically to a distributer event all of which are integrated into a comprehensive product training program.

Then in the ensuing months, we'll follow up the prelaunch with ongoing product sales to the masses generally which typically takes place three months after the prelaunch. So, this launch process has been tested and refined in Korea very successfully over the past several years. And we found that we achieved deeper penetration among our distributer leaders in stronger trial among new distributors and customers with this approach.

AgeLOC -- the new ageLOC transformation system has now prelaunched in all of our geographic regions. And is now available for sale to the masses in the US, Europe, South Korea and Japan. In the second quarter, the system will be available for sale to all convention attendees at our Greater China Convention we're holding in Hong Kong in the month of May. And then Taiwan, Hong Kong and Southeast Asia will make ageLOC available for sale to the masses in the third quarter of this year.

And then finally, pending product registrations and just regulatory hurdles, ageLOC will be available on an ongoing basis in mainland China in January of 2011. Now, we're also continuing to innovate on the product front and we'll begin the launch process for the first ageLOC nutrition product in the United States, Europe and Japan in the fourth of this year.

This product will be focused on preserving the production of cellular energy leading to improved vitality benefits. So with the roll out of skin care system and with the upcoming innovation in the nutrition category, we have a very healthy pipeline to continue to infuse product innovation into our channel. I just want to make a couple of quick comments about a few specific geographies. With strong growth around the world we continue to become more diversified and less reliant on any single market.

The last few quarters we have seen very consistent growth in all of our geographic regions. Our double digit growth rates around the world have been partially offset by a continued decline in Japan. But we continue to see continued revenue trend improvement in Japan. In 2008 you will recall we were down 12% in Japan and then in 2009, the decline was cut in half to 6%, and we expect to see continued revenue trend improvement in 2010 versus 2009.

We're also encouraged by the results in China over the past four quarters. We continue to be impressed with China's potential, largest direct selling competitors are doing very well in China, and our goal there is to secure the same level of market share on the mainland to comparable to what we enjoy in Taiwan and Hong Kong. I also want to note that Southeast Asia is a rising to the top of our growth charts and is becoming an all star market particularly Malaysia and Thailand are just extremely strong right now with very healthy momentum and ageLOC will roll out in Southeast Asia for the masses again in the third quarter of this year so we expect to see continued strong trends in Southeast Asia.

In addition to our strong product initiatives we are very pleased with the on going effort to improve profitability. We continue to see improvements in nearly all of the areas of our income statement. Which is reflected in our operating margin which improved to 12.7% in the first quarter. So we are comfortable that our operating margin for the year will be at the high end of the 12.4% to 12.9% range that we targeted for the year.

Overall, I think you will agree that the first quarter bodes well for the remainders of the year. The ageLOC skin care system is generating tremendous momentum and we look forward to introducing our first ageLOC nutrition product in the fall. We're generating growth in all of our regions and we're reaping the rewards of our business transformation efforts over the past few years. So with that I'll turn the time over to Ritch to go over

Good morning, everyone. Good morning, Truman The local currency revenue figures for each of our major markets have posted on our investor relations website. So we'll just go into the details of our financial statements here. The Company's operating margin for the first quarter improved to 12.7%.

We are very encouraged by profitability improvement. And this quarter puts us well on our way to our stated objective of 12.5% to 12.9% operating margin for this year. Our gross margin for the quarter jumped to 82.2%, that's a 40 basis point improvement over the prior year period. And this improvement is related to the sales of the higher margin ageLOC products as well as the positive benefit from foreign currency fluctuation.

Selling expenses for the quarter were 42.4%, as compared to 42% in the Q1 of 2009, 40 basis point increase this rate is closer to our historical average. Selling expenses for the quarter were 42.4%, as compared to 42% in the first quarter of 2009, or approximately a 40 basis point increase. This rate is closer to our historical average and is slightly higher than the prior year due to the increased productivity of our sales leaders during the first quarter. We expect our selling expenses to remain in this historical range of 42% to 42.5% for the balance of 2010.

General and administrative expense for the quarter $98.9 million or 27.2% of sales, compared to 29.8% of sales in the prior year. We continue to gain efficiencies as a result of our transformation efforts over the past several years and we see continued opportunities to leverage our global infrastructure and improve profitability as we move forward. For the quarter we reported a gain of $0.6 million, in the other income expense line of our income statement. Related primarily to foreign currency translation gains. Offset by approximately $1.3 million net interest expense.

Our tax rate for the quarter was inline with our guidance at about 3.6%, compared to 37.4% in the prior year. And slightly lower than our historical average and this is due to as we discussed earlier, expiring statutes on some thin 48 tax reserves which created a benefit to this particular quarter.

Our balance sheet continues to be strong. And gets stronger as we go forward. We report a cash of $180 million. Our debt is now $156 million.

We paid $7.8 million of dividends during the quarter, purchased $10.1 million of company stock, leaving our outstanding share count at approximately 64.8 million shares. Though this morning we're increasing both our revenue and earnings per share guidance for 2010, we are increasing our revenue guidance by approximately $50 million, on the topside and little bit more than that on the low end of the guidance. That puts us at $1.44 billion to $1.46 billion reflecting approximately 8% to 9% local currency growth for the year and a benefit of 1% to 2% from foreign currency also for the year.

We're also increasing our expected earnings per share for this year to a $1.80 to $1.88. We continue to project 2010 operating margin the be in the 12.5$ to 12.9% range. For the second quarter specific, we project revenue to be in the $362 million to $370 million range. With earnings per share of $0.44 to $0.47.

The revenue forecast anticipates a strong launch of the ageLOC products here at the Greater China Convention in mid May. As well as a benefit of approximately 3% to 4% from foreign currency fluctuations. We expect the second quarter tax rate to be back in our historical level range of approximately 37.5%. With that, we will now open the call for questions.

At this time ladies and gentlemen, (Operator Instructions) The first question coming from the line of Olivia Tong with Banc of America Securities. Please proceed.

Thanks. Good morning, guys.

Good morning.

First question just if you could give a little bit of detail now that you done the launch in Japan, reception that you got to ageLOC and appreciate the color on the staggering of the limited time offer and then the full release but if you could give a little more detail on Japan first.

Yeah. We did prelaunch the ageLOC skin care system in Japan during the first quarter and Olivia you will recall that the ageLOC transformation set is really comprised of two primary components. One is the future serum and the other is the element set, which is the cleanser, toner, the day cream and night cream. The Element set launches in April in Japan for sales to the masses. So it hasn't been available other than on a limited time basis previously.

As we mentioned in the call, we continue to expect, in our remarks, we continue to expect revenue improve in Japan during the course of the year. And I mean generally, Olivia as you know there is three ways to grow the business. One is to recruit more people.

Second is to have a better retention rate and a third to increase productivity in non existing distributors. If we look at Japan in the first quarter, we saw healthy improvement in the retention rate and modest improvement in our productivity rate which is two of the three key ways to grow the business. We are also seeing healthy trend in our executive count in Japan. So look we are not out of the woods there yet. We recognize that Japan continues to weigh on our overall results. But we are seeing some signs of hope there and I think our optimism for continued trend improvement is justified.

Got it. Thanks. Then just rest of the countries where you seen the full rollout, of ageLOC, they clearly very different degrees of sales growth. Korea had phenomenal growth. While the Americas sort of in the high single digit, there is just huge range of growth amongst the markets that have received it, so wondering if you could talk a little bit about you know different market dynamics by region and what might be the drivers behind those differing growth rates.

Korea's growth in the first quarter Olivia was tied to the prelaunch event that they held there during the quarter. So that similar prelaunch event was held in the fourth quarter in the United States at our global convention. So Korea's growth rate will come down in the subsequent quarters here coming off of their highly successful prelaunch event in the first quarter. I think these prelaunch events where our distributer sales leaders are really stocking some inventory, to distribute to organizations they are making some of the markets look like or the growth rate is higher than others. As we mentioned Korea was the first quarter prelaunch event, greater china china will be the second quarter, you will see another pop in the greater China region in Q2.

Do you expect it to be of similar magnitude to the Korea one?

No. It's possible. The event doesn't take place until May. We know they have very ambitious goals for the level of product they will be selling. But Korea is just huge. Korea better than any of other markets has refined this launch process which will now be implemented globally. They do it well and very successfully. And that's why we are leveraging elsewhere in the world.

Right. When did the Korea event occur?

January.

Great. So right at the beginning of the quarter.

Right at the end of January, that's right.

Got it. Do you expect to do similar type of launch strategy for the Pharmanex side when you do the ageLOC Pharmanex product, you know, limited time and then to the masses afterwards.

Yeah we are currently evaluating the impact of this strategy everywhere that we do it so. So far we like it. So I would expect the fourth quarter of this year you will see similar prelaunch events in the United States, Europe and Japan with roll out of the product on a full time basis in the first quarter of 2011.

Got it. Then I know it's still early a little bit for getting a sense of replenishment of ageLOC, if I understand correctly a 30 day product sale, wondering if you have any thoughts on that.

The market that is furthest along, are the US and Europe. And we are very pleased with what we are seeing on a month over month sequential basis with improving sales of all of the ageLOC transformation set components, month over month. We are taking that as a good sign. Our subscription orders are up. And that's also a good sign with respect to just follow on orders of the product.

Got it. Just lastly, I notice there was a sight reclassification between selling expense and G&A, what was that?

Primarily a reclassification of some incentive trip expenses which in the past we always recorded down in our G&A expenses. But with the change of wealth maximizer we put more focus around incentive trips qualification levels and so forth. We feel like it's more appropriate to record those as a selling expense given the fact that the distributors actually have to qualify, then we cover the cost of the expense. It's about a 30 basis point reclassification between G&A and selling expense, we made the same reclassification in the prior year so we are comparing apples-to-apples.

Thank you very much. Appreciate it.

Your next question is from Tim Ramey with DA Davidson. Please proceed.

Good morning guys, congratulations on an amazing quarter. Following up on the uses of cash and generation of cash and share repurchase. You were fairly modest in the quarter in your share repurchase. Any thoughts on that? Accelerating or what is your strategy there, net cash of $25 million right now.

We do believe that's a good use of cash and we always tried to put excess cash back to shoals through dividend or share repurchase and anticipate that would continue to be our focus going forward.

We are of the belief we can continue to invest back in the business particularly in the area of innovation which we feel like we have a great opportunity to do right now. We are in the process of getting approved final plans for innovation center where we will house our R&D and some technology innovation right here close to our headquarters. So we will use a little bit of cash increase our capEx to continue to drive that forward as well. But generally speaking, you know our best uses of cash will probably be in the dividend stock repurchase area.

Sounds good. Just as we -- you, don't know if you've given sort of more color on the pace of the global rollout of ageLOC, would be nice to know how that ramped throughout the course of 2010.

What are you referring too specifically what do you mean the global rollout.

How does that you mentioned using the Korean model, sort of around the world, how should we be thinking about that as we model quarterly progressions here.

Well, yeah, again we are going to see big pots at the prelaunch events. We certainly saw that in the fourth quarter in the United States obviously. We saw it in the first quarter in Korea, we will see it in the second quarter in Greater China. And again about three or four months later typically we're providing the product for on going sales to the masses. I don't know what to add other than that, Ritch do you have any other thoughts?

That's exactly right. We made a strong second quarter for Greater China. The other markets after the pop, generally settling back down to somewhere around the growth rates that are trending out prior to going in to that, sort of prelaunch mode. This quarter, second quarter is going to be fairly strong in Greater China as well as some pop in Southeast Asia for prelaunch there. Then third quarter should be real strong in Southeast Asia where we are launch at convention, Greater China solid as we do the full roll out to the masses there. In the fourth, all the markets will have the ageLOC transformation set and on normal sale there, and then we will have prelaunches of the ageLOC nutrition supplement.

For modeling we have not built in a big pop in the fourth quarter for this product. We are also comparing against a large convention quarter in the prior year. So I think we have been conservative in how we modeled out the business not necessarily big hits with the prelaunches but monitoring that as we come and that's what's caused some of the exceeding our guidance in the last couple of quarters.

Terrific, thanks so much.

Your next question comes from the line of Mark Astrachan with Stifel Nicolaus.

Good morning everyone. Couple of housekeeping questions on the Pharmanex business, what were the currency neutral sales in that business?

It was right about flat. I think we were up 6% with currency right about flat without currency.

Then the ageLOC affect in Japan. Down 4%, I'm assuming that includes some of the ageLOC sales, what would that have been stripping some of that out.?

It's really hard to break that out because of the way our executives are seeking to get volume, they will trade between products a little bit. We felt like we had a really strong fourth quarter with the serum launch. So we anticipated coming back Labor Day. Performed where we would have anticipated. Hard for me to break out exactly what the ageLOC impact was in Q1.

Got it. Okay. Then on the ageLOC Pharmanex product from a margin stand point, ageLOC skin care products are margin enhancing is it similar.

Yeah it will be very similar to the potential products that it would potentially cannibalize in the nutrition business. Still have very strong margins and we will certainly not be a drag on the margin if anything could slightly improve the margin.

Okay. Great. Given the strong ageLOC sales this the quarter. Any supply related constraints or are you getting enough product that you need?

We are completely caught up now. No longer are we air freighting or rushing orders. We have really been able to wrap around and get that under control.

Sort of related to that, given that the cash balance is accumulating now, I know you talked a bit before about potentially looking to vertically up great manufacturing would it make sense to do that in local markets or just contract out to other manufacturers where you have stronger sales like in Japan or Korea for example.

I think most of our manufacturing is all done here in the US. So if we were to look at vertically (inaudible) it would be here primarily if the US. We think that potentially makes sense so we continue to evaluate different ideas. But don't anticipate anything huge in that area if we did something it would be smaller.

Okay, great, thanks a lot and congrats on the nice quarter.

Your next question comes from the line of Doug Lane with Jefferies. Please proceed

Good morning everybody.

Hi, Doug.

Get back on the cash question first, we I pick up that $30 million to $35 million in capital expenditures this year with that innovation center is that right is that what we were talking about before?

Yes. That's right. About $35 million probably.

35, all right. So if I got call it roughly $125 million in free cash flow, even after that, the dividends maybe $30 million, can you give us a rough idea, where I should put the remaining $90 million of free cash flow once I paid the dividend?

Yes. We got about -- debt payments this year are actually quite high. So around high 30's. Then from there it comes down to how doto utilize the balance of $50 million, $60 million. We are evaluating all the ideas right now Doug, our -- historically we would use the majority of that as stock repurchase. We will continue to evaluate that as we go forward. We really haven't declared plans this point in time for what we would do that with.

I mean, cash is $180 million on the book, that's more than you usually carry, safe to say that's really at this point too high?

Well certainly more than we need. A good place to have it I think puts news position to continue to look for ways to drive shareholder value. We are going to be real careful and real conservative. You know that, you worked with ate long time, certainly puts us in a good position to drive shareholder value.

Doug let me chime in on the innovation center question with a little bit more detail. This is going to be about a 2-year build from here going forward. A $40 million to $45 million expense. What's nice about it however, is that it will be EPS positive given the least restructures we will be able to do out of current facilities. So again a healthy thing for us to do from a cash perspective. And a really nice health investment going forward.

On currency, I missed what had you said about the second quarter. Where do you look for the currency to be in the second quarter, Ritch?

3% to 4% benefit. For the year 1-2. I got the currency moving the other direction. I think that's careful for the balance of the year, Q3, Q4 I got the yen and 97 range. I got several other currencies kind of weakening against the dollar as well the Euro, and few it's not necessarily what everybody is projecting but I tried to be care informal the model to make sure as currencies move it doesn't catch us off guard.

That's fair. I understand that. One thing that stuck out on the in the growth was really broad based and Japan maybe backtrack backtracked a, a little bit, -- the US sort of had a full quarter benefit of the broad distribution of new ageLOC line, I was wondering I guess I was I guess I would have expected something more in a stronger double digit growth in the us. Is that who you are talking about where they borrowed first quarter sales in the fourth quarter the relaunches?

I think that's possible. But in the US, Doug, we continue to deal with I think the ramifications of where we have been economically over the last year and a half to two years. As we said in the past, we are not immune to the pressure on consumer spending. But fortunately the business opportunity has more than offset the pressure on consumer wallets. And so yeah I mean we would lake to have a higher growth rate too in the US but when we look at what our competitors are doing here, we actually seem to be fairing much better than they are, so it's hard to be disappointed with it.

I think the one thing as you look at guidance the US was right in line with where we guided the year to be for them. Most of the other regions exceeded where we had guided we all get anxious to see it pushing up ahead of our guidance. We are very pleased we think the first quarter was real solid we love the way our executive numbers are trending. The US business is looking real good for us. Even though the growth rate isn't at par with the other market.

Okay. Finally, is there -- are there any new geographies on tap in the next 12-18 months?

Well you are not going hear us touting new geographies much because we expect modest impact from the opening of Ukraine and Argentina in the second half of the year. We believe, Doug, there is so much potential in existing markets we don't need much focus on new markets right now.

Okay. Thank you.

Yep.

Your next question comes from the line of Mimi Noel with Sidoti and Company. Please proceed.

Hello, Mimi. All right. Next.

Next question is from Rommel Dionisio with Wedbush Morgan.

Thanks, good morning. I wonder I realize relatively new product launch still being rolled out on ageLOC is it possible to talk apout or quantify, or some feedback from distributors how the reorder or replenishment pattern has been for customers that tried ate couple of months ago, are they ordering replenishment?

As we mentioned, it really is early in he process but what we like two things. We like improving month over month, ageLOC trends in the markets where the product has is now available in the US and Europe, in particular. And we also like what is happening to our subscription rates for ageLOC. As you know, this is really the first time on the skin care side of the business we designed a product that fits a 30 day supply. We think that was a smart thing for us to do from a marketing perspective and really improve recorder rates in the skin care category to a greater degree than anything we had in the past. So I think we are know a little bit better, at this time after the second quarter, how ageLOC's trending but we like what we are seeing so far.

Great that's all I had, thank you.

Thanks, Rommell.

Your next question comes from the line of Scott Van Winkle with Canaccord. Please proceed.

Good morning.

Hi, Scott.

So Greater China the event coming just I guess a logistical question, does all of that revenue get credited to Hong Kong when you report the quarter?

That is correct.

It will be so sales from Taiwan and China will be reported in the Hong Kong sales number.

What's the expected attendance relative the a year ago?

Total is about 10,000 people. I think that's very similar with where it was a year ago. Well wasn't held last year it would have been two years ago, yeah two years ago.

Okay. In the comments about in Korea the leadership taking inventory potentially for down lines that market is a very tight knit market if I understand correctly with that organization and leadership is that a common model for even fulfillment to see it kind of run down through the organization or is it just because it was a preorder event?

Well I think this model really originated in Korea, Scott. So they are good at it. They actually are astoundingly good at it. They really even set sales goals for each of the sales organizations within the market with respect to how much they anticipate selling in each of the different sales groups. And we are getting started with the same process in other markets, they're probably efficient at it because they've done it several times.

It's new products specific?

Yeah. It's been tied to new product launches.

Okay. Looking forward to the supplement launch later this year, you talked about a cellular energy I believe. Is that -- what should we expect this to replace or to is it going to be part of a multivitamin solution or is this maybe an incremental product.

The price point on this product is going to be in the US $50. We are positioning it as a companion to our current LifePak regimen. So essentially it's an up sale to a our core nutrition product LifePak at a reasonable price point so it's not like the ageLOC transformation set. It's not a $200 price point product. It's a $50 price point for a monthly supply, and incremental to a users current regimen. The products that are likely to be cannibalized a bit would include our core EMax product and our overdrive product which are also energy and vitality related. But this product will be by far our most compelling energy and vitality story ever.

Okay. And in a longer term with the comments about Southeast Asia, and obviously the great success in Korea, is -- is there any logistical change you need to make in the business with the growth happening in Asia or because you have been is strong in Japan for so long that you are used to it?

You know, just a comment on kinds of things we are trying to do to increase our profit margins around the world it stems back to transformation efforts. We now have a regional warehouse where we do supply chain activities in Singapore, we done that in Europe. Expanded the role of regional warehouse there, there are certainly things from a logistical standpoint we can do to make our sells more efficient and affective at the same time what we really are encouraged about is the balance that we are gaining around the world. We have now ever region that can be impactful to overall results and because those markets are getting larger the growth rate coming out of Europe the growth rate out of southeast Asia, are becoming more and more meaningful to our overall results. Offsetting Japan we expect Japan to be 30 % of our revenue. So it becomes a little less impactful as the other markets grow.

Ritch, in the housekeeping item the tax rate, back to 37.5 in Q2, should we expect that Q3 and Q4 as well or the normal rate in Q3?

Yes. We have one more year of a dip in Q3. It should dip down to about 34%. I think in earlier I said about 33%. But because our operating income is higher we don't get quite the same benefit off of kind of a fixed accrual that we are releasing. So about 34% in the third quarter and back up to 37.5$ in the fourth quarter.

Thank you very much.

Yep.

As a reminder ladies and gentlemen, (Operator Instructions) Your next question comes from the line of Bret Jordan with Avondale Partners . Please

Hey. Good morning. This is Anand in for Bret. Thanks for taking my question. I may have missed it but what were the -- what was the benefit of the ageLOC prelaunch in Korea?

It was about $15 million in dollars terms.

Perfect. All my questions have been asked, thanks.

Let's conclude the call by just thanking you for joining us and it was a great quarter for Nu Skin Enterprises. And as we said in the past over the past couple of quarters, these are the best of times for Nu Skin Enterprises. We're very pleased with where we are, with the work accomplished over the last several years and the future is very bright. So, feel free to call us should you have further questions, thank you.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a great day.