Conference Transcript - HLF 2026-06-11

Dave Mossberg, Host

All right, we'll go ahead and get started. I'm Dave Mossberg with three-part advisors. We have Herbalife up. Next, this is a really good example of kind of how we find companies to present this conference. We went through LA a couple years ago and met with the company and at the suggestion of one of our sponsors, who's a top 15 shareholder of you guys. And so we go around. It's much a curated list, and this is a good example of kind of how we find companies to present. And with that, I'll turn it over to the company. I'll turn it over to Erin.

Erin Banyas, Head of Investor Relations

Good morning, everyone, and thank you for joining us today, whether in person or via webcast. I'm Erin Banias, head of investor relations at Herbalife, and I'm joined today by John DeSimone, our chief financial officer, who will lead the presentation. Before we begin, I would like to direct you to the cautionary statement regarding forward-looking statements on page 2 of our presentation, which is available under the Investor Relations section of our Herbalice website. The presentation includes a discussion of some of the more important factors that could cause results to differ from those expressed in any forward-looking statement within the meaning of the Private Securities Litigation Reform Act of 1995. As is customary, the content of today's presentation will be governed by this language. In addition, during today's presentation, we will be discussing certain non-GAAP financial measures. These non-GAAP financial measures exclude certain unusual or non-recurring items that management believes impact the comparability of the periods referenced. Please refer to our presentation materials for additional information regarding these non-GAAP financial measures and the reconciliations to the most directly comparable GAAP measure. And with that, I will now turn it over to John to begin today's presentation.

John DeSimone, CFO

Thanks, Erin. For those listening remotely, I'll let you know what page we're on. So as we turn pages, you can follow. So I have a presentation, but let me start with what I think are maybe three key takeaways, the stories behind each that we'll go into in the presentation. But first, for those who are unfamiliar with Herbalife, we've been around for 46 years. And it's a very resilient company with a very resilient model. The company has had its ups and downs, both company-specific and macro-related, and has come out strong through all of it over the years. And so that resiliency is an important takeaway. way. Number two, we're in a category that's growing. We're a functional food company more than a supplement company, but nutrition is growing. And our number one product is protein based product. And proteins are incredibly fast growing market. That's becoming more important. And we have the number one protein shake in the world from a market share standpoint. So that's the second point. So again, resilient company, we're in a category that's relevant and growing. And the third, we generate a lot of cash. As a company, historically, we've generated a lot of cash. I'll give you some stories about that as we get through the presentation. But to give you perspective, based on free cash, so operating cash less CapEx in 2025 against today's market cap, we have over a 20% free cash flow yield. That's an important metric because we use that to drive value and we will continue to drive value with that cash for our equity investors and we'll talk about how we do that so those are the three kind of themes that this presentation is wrapped around so jumping to the first content slide which is slide three this is herbal life at a glance it's really just an overview I'll talk about the boxes on the right first we're a five billion dollar company that's our net sales our EBITDA margins adjusted EBITDA margins last year were 13.1 percent now there's a journey that we went through as a lot of direct sellers did in covid where everything went great and then coming out of covid there was a bubble we've stabilized but i will tell you in 2023 our adjusted EBITDA margins were 11.3 percent we got them up to 13.1 and we continue to expect them to grow again i'm moving left to right on the boxes um on the far right um it's our debt level you know we have we've generated a lot of cash but we bought back a lot of stock uh some of it practically by the company some of it through an activist that was on the board um and you know our at the end of 2023 our gross debt leverage ratio was 3.9 times we've gotten that down to 2.7 uh and on a net basis it's 2.1 um so i think that's an important metric for investors and we just redid a debt debt deal and saved a lot of money and i'll talk about that later moving down on the boxes number one protein shake in the world I already said that we have 6.4 million members people that can buy directly from Herbalife of that over 2 million are distributors that can buy and resell and sign people up and then the last box which is a very unique element of Herbalife and I have a page on this in the presentation is we sell through something called nutrition clubs not exclusively but it's an important part of our business model. It's a brick and mortar fixed location where people can get single serving product. So you just come in and get a shake, not a whole canister, but just what you need for that day. I'll talk about that later, but it's very unique to us. We have about 60,000, a little over 60,000 globally and almost 9,000 in the U.S. So that's a quick look at the summary. You can see the pie charts. We're very diversified geographically, and you can see the product categories that we operate in jumping to our vision our vision is to be the world's premier health and wellness company community and platform community and platform are important part of that we're really a community-based company it's how we sell and it's an important part of how we drive success in the marketplace and I'll talk a little bit about that too this next slide I'm moving to slide five for those on online this is really the roadmap for the presentation. There's eight topics on here. Each one of these has some slides behind it. We'll talk about our distribution channel and what we think is a competitive advantage. We'll talk about our brand recognition, our science, the categories we operate in, how they have large growing total adjustable market. We'll talk about some acquisitions we've done, our geographic diversification, our management team, and then lastly we'll talk about the financial performance, which is super important. Slide six, this is the power of our distribution channel. We're a direct seller. We're going to talk about clubs on the next slide. I want to get to nutrition clubs, but the important thing is we're leveraging the power of community and connection to help people drive results. It's an important part of helping people achieve nutrition or any kind of health-oriented goals is to do it in a community setting. Some of that community can be online, some of it can be in person, but we're leveraging that. We're not moving away from people, we're moving to people. And it's been part of our legacy and it's part of our future. We think it's an important part of ultimately having the products drive results because results are the most important thing for people to stay on the products. I'm going to spend a moment on nutrition clubs. This is slide seven. A nutrition club, as I said earlier, is a fixed brick and mortar location owned and operated by a distributor or a group of distributors. I'm gonna paint an image for you don't not an image of what it might look like inside but just how it transacts inside and then we'll talk about how it looks I'm gonna use Starbucks not to say I want you to picture a Starbucks right but you can buy a pound of coffee make it at home and some people do you can make your own coffee at home or you can go to Starbucks and get a single serving of coffee that's what you can do with Herbalife you can buy your own canisters of products make it yourself, put it in your cabinet at home, or you can go to a nutrition club and buy a single serving. Nutrition clubs operate in lots of different formats. A lot of those formats have menus. You go into the club, there's a menu, you pick what you want to order, you can pick the flavor. It can be a energy tea, it can be a meal replacement shake, it can be whatever that club offers. It's made with Herbalife product. Okay, so the nutrition club flips direct selling upside down. Direct selling is generally characterized by a distributor meeting a customer or a group of customers infrequently and asking for a large purchase. Our distributors through clubs see their customers frequently and ask for a small purchase. It's much more sticky. So it has a lot of benefits for distributors, too, in that it creates a forced discipline for a distributor because they have to get up every morning and put a key in the door because they have customers coming and that's different than traditional direct selling where a distributor has to figure out what to do every day and who to talk to. So it's a very unique model to Herbalife and it has a lot of strengths that's not available in other direct selling channels. And to give your perspective on the strength of that model in the U.S. and I'm going to give you data on the next slide but about a third of our sales in the U.S. happen in that single serving format. About another third happen through club operators meaning they they also sell other things besides the single serving so clubs are important part of our business in the u.s different markets it has different levels of importance right so i'm going to jump to the next slide this gives the geographic diversity of nutrition clubs we have 63 000 globally you can see the percentage on the map i'm going to talk about the box on the bottom left which is in the U.S. specifically, we have our own POS system. We see every transaction that happens. We don't have that everywhere, but we have that in the U.S. So in the U.S. in 2025, a little under 9,000 nutrition clubs, a little under 4 million unique customers came through those clubs. There were 49 million retail transactions. The average transaction was $18.50, and the retail business for the clubs was a little under a billion dollars, $900 million. Not all of those are our sales. Those are distributors buying from us, reselling it with their markup, but that's their sales. So almost a billion-dollar business in the U.S. through nutrition clubs. It's an incredibly powerful business model. I will say many of you might be asking, well, if you have almost 9,000 of these clubs, why haven't I seen them? The reason you haven't seen them is we don't allow our distributors to put Herbalife on their sign and I know this is going to sound odd so I want to explain it there's there's a concept in direct selling called protect the second sale what that means if a distributor spends the time and effort and energy to sell a customer the first time they want to know they have a chance at that second sale and what's happened in direct selling in the past for other companies is when they put their product on shelf at retail and compete with the distributors it destroys their distributor business because it demotivates their sales force avon's tried it tupperware tried it twice with target every time these direct sellers go to retail it kills their their direct selling business and it's in their 10ks that it killed their business and so they pulled out so if i were a distributor wanted to sell herbal life to you the first time and knew you can go to any one of 9 000 stores you could drive by and buy product i wouldn't feel motivated so that's the reason we don't allow signage it's been a real journey for us as we've went from a traditional direct solid to the nutrition called models and we realized you know we had lots of rules and those rules change over time and they may change in the future but that's where we are now and that's why you may not see them having said that if you're interested in the story after this presentation let us give you some addresses of clubs so you can go and see it I think as an investor the benefit you get from going to a club is it becomes more tangible business for you than what you might think of for direct seller you get to see customers see transactions see how they operate and you get the channel check you get to talk to distributors see how the business is going hear what they're telling you about the business the strengths and weaknesses and so it gives an investor a more tangible way to understand the business but also talk to people besides the company to find out how the business is going and I would suggest going more than one club because are in lots of different formats. There can be clubs that are beautiful, high-end, lots of flavors, 150 flavors of shakes, to more down market. Distributors are allowed to open and operate clubs that fit the community they're trying to serve. And so that's why they're in many different formats. So it's an important model. So I just wanted to spend a little time on that. I'm going to jump to slide nine. Don't need to spend a lot of time on slide nine, but this is but it's still an important point we have something called a sales leader when you have a distributor who's selling product or at least signing up with the hopes that they can sell product right and a lot of people in direct selling it's a very low risk opportunity to see if you want to be in the business or not that's the top of the funnel the bottom is the funnel they become a sales leader which means they have the opportunity to earn on their organization right so they built a business and they can earn commissions we call it royalties but I think in your terminology, think of commissions three levels deep on other people's businesses, and they can get bonuses and whatnot. Our retention rate of our sales leaders is around 70% globally. There's a mix by region, but it's still very strong. We think this is industry-leading, and the only reason we think and don't know is because other direct sellers don't report this number. I can tell you, you know, 20-something years ago when our current executive chairman joined as CEO, this retention rate was 27%, 27.3%. So huge progress. A lot of our business is done through these distributors that have been in for a while and that are retained. I'm not going to spend a lot of time on this slide. This just talks about our market share and who our competitors are. it's not all of our it's not all of our categories it's not all of our competitors it's just done by euro monitor on what they they pick as our top competitors our competitors are really different regionally but we have the number one active and lifestyle nutrition brand in the world number one weight management and well-being brand in the world and the number one protein shake in the world seed to feed this is a strategy we have we got into self-manufacturing in 2000 in, I want to say, 2000, don't quote that, I think it was like 2009, I don't know, maybe somewhere around 2010, a little after we got into self-manufacturing, prior to that everything was outsourced, we manufacture about maybe a little less than 50% of our nutrition products, but we have quality control for all of it. We have seven labs globally. All the labs It's our ISO 17025 certified, my green lab certified, we've got all the certifications. But I think the key takeaway here is we put a lot of effort and energy into quality and efficacy, and we go right back to be able to trace the field for which our ingredients come from. And on the botanicals, which is the extraction of ingredients from botanicals, we have our own manufacturing extraction facility uh for which we extract our our own botanicals next couple slides just look at some of the product portfolio and the brand portfolio within herbalife i don't need to spend a lot of time on this you can do your own research um on it but um like i said we're mostly a functional food company two-thirds of our products are more again classified as food i call them functional food because they have purpose it's food with the purpose we're pretty small in the supplement business you'll see that's an opportunity for us and we'll see it talk about how we're gonna take advantage of that opportunity in the future in the supplement space but much more of a functional food company we also sell under a number of different brands we have the Herbalife brand we have Herbalife V which is the vegan brand Life.io is a new brand that we're launching Bionic is a brand we just purchased that we're launching we'll go talk about that too Herbalife 24 is our sports brand a couple skin lines and then the second to last line is a Ayurveda product line so we have a lot of different brands for which we sell looking at the total totalable adjustable market there's really three categories here I don't love the setup of this is done by third parties a lot of our products that fall into weight management our protein products to get used for other things than weight management but they're in the weight management category, and that's mostly protein shakes. Targeted nutrition is what I want you to think of as supplements, and we have a very low market share in that category, but yet most people think of us as a supplement company, and I'm going to tell you why and what we're going to do to really grow that business. And in the sports business, we have a strong sports line. We have big opportunity in sports but we have a very strong strongly formulated sports line that's that does well for us so before I turn the page well let me go back on the supplement category one of the reasons we don't have a lot of supplement businesses it doesn't really fit our business model that well all and so we're changing that and the way we're changing it is to get into personalized nutrition and I want before I get into the next slide personalized nutrition is the ability to formulate a supplement specifically for you based on your needs a one-to-one relationship between the ingredients and the quantities of those ingredients and what you need so for everybody in this room you can each have your own formula that's what we're getting into now I'm to talk on this slide about some acquisitions we've done I'll start with our acquisition strategy we generate a lot of cash but we do not use a lot of cash for acquisitions our acquisition strategy is to find good content really good content that doesn't have distribution and we can leverage our distribution so we can buy the good content cheap and we can create value by leveraging our distribution so look at that but we did four acquisitions in the last just over a year the first one is a health and wellness application okay it's still been launched in beta but what I want you to think of I'll talk a little bit more about the application it's called protocol it's going to be a connective device to have as much consumer data into our ecosystem if you go back to our vision we want to be that platform company that's part of that vision platform means we need the customer transactions the customer data in in our system not just having a distributor buy and resell it's a connective device it's an experience in the app it's the experience layer for for a consumer I'll spend a little time on that in the next couple slides then we've done two personalized nutrition acquisitions one is called link bioscience which is not a brand it's a manufacturing business and bionic is a brand they both sell in different formats the personalized nutrition formulas I just spoke about so as a customer of Herbalife you can answer questions and based on those questions we can create a personalized formula for you with your name on it one formula for all your supplements you don't need to take a bunch of tablets one form link bios is powder which can have more ingredients and bionic is granules so think of bionic as a more accessible price point and link which will be on the link won't be the brand we sell it but link is the acquisition will be a higher price point and it will come with your name on it if it was a powder from link it'll have all your ingredients in one powder you get you two scoops put it in a drink and you had all your supplementations for a day in Bionic it's the same thing so that's an important strategy I'll come back to Bionic because we're launching Bionic this month in a bunch of countries and next month in the US and I'll talk about that in a moment. And then the third one is Prove It. It was another direct seller, but the real unique element of Prove It was ketone products that they had exclusively for the channel that we want, and we're launching that this year also. A little bit more on Bionic, and I don't need to talk too much about Bionic. It's an established brand. They struggled with distribution, which is why we were able to get them at a good price. We are launching it in 11 European countries later this month and in the U.S. next month in July. It's a category that should be incremental for us because we're very small in the supplement category. And it's a very unique selling proposition that I think will lift the entire business because it gives distributors a reason to go and talk to their customers because it's unique. It's not something you can go buy anywhere. So I think this is an important part. Of these four acquisitions that we've done, this is the first launch of anything a distributor can use to make money so it starts to come to everything we've said for the last year to our distributors it's all been here's what's coming now something is going to be here that they can monetize so I think it's an important element of the future for us protocol is an app I don't have to get too deep into it but we put it into four buckets it tells you what to measure so you can measure all your health data what to take it can you the products you need to take and it can link you to bionic based off your inputs you can get your outputs that's why by the way life io the io is input output so it's using your input to create an output product for you specifically it tells you what to do and what to measure and who to do it with which is you know your distributor so i think it's in beta it'll get a big enhancement in July um and when we can start transacting within that app is when we're likely to go live and take the word beta off but it's an important part of our strategy also because it's the experience layer I think one important element and maybe this is just to build some credibility for protocol um I think everybody knows who's on the screen I'm on page 16 18 excuse me um Cristiano Ronaldo who we've sponsored for a long time um so we have a good relationship with him I will tell you a little bit about him first is he he thinks he's and we think he's the most measured athlete in the world what we're talking about with bionic he was a customer bionic by the way and a pot owner in bionic he has always measured his personal data and created his own supplementation for performance the challenge of course is he could do it he's a wealthy athlete but it wasn't available to the masses and what we're doing is bringing to the masses and what Cristiano Ronaldo did is he invested in protocol so he's a minority interest holder in protocol he put in seven and a half million dollars he got for that he got five percent and then he had another five percent ownership for the ability uses likeness and some other performance criteria that he has around supporting protocol when we're ready to have him support protocol so he sees the value in this also and because he's the most followed not only athlete human being on the planet he has over a billion followers in social media so there's a lot of value that that he can create and he can bring a lot of those followers to us and he has the opportunity to maybe earn a little bit off of that too so that's that's another revenue stream for him but again think of an influencer model which we haven't really got into this is kind of our first launch into that model and it's with the biggest influencer in the world and so it's a huge opportunity for us once we're ready to launch it. Moving away from that back to geographic diversity we're in 95 markets you can see that how it's spread across the world not a ton of concentration risk a little bit of concentration risk but not as much as many companies. A little bit about our management team top row most senior execs they if you add them up their years of experience 140 years of experience on that top row. Importantly, I'll point to the second person, which is our chief executive officer. He was our number two distributor in the world. He joined the company as a distributor, I think it was 1992 or somewhere in the early 90s. He was 32 years plus as a distributor, uber successful, really knows how to, you know, woke up every day for 32 years trying to sell more Herbalife product at street level and build sales organizations and he's done both incredibly successfully. Like I said, the second most successful distributor in the 46-year history of Herbalife and we brought him in as head of strategy a few years ago, promoted him to president and then he became CEO and we're lucky to have him because even though we've got a lot of talent at Herbalife, it's great to have somebody on the inside who's actually sold Herbalife at street level. I think it's a huge competitive advantage and then you can see through the rest, that middle row there, there's a good mix of experience and new people as we bring in new blood, and same for that third row. I'm going to spend a moment on this slide, slide 21, which is the, this looks a little complex, so I'll talk you through it. The gray bar, that light gray bar, that's our debt level. A little bit of history. We generate cash, so why do we have debt? We bought back over six and a half billion dollars of stock since 2007. um i was cfo from 2010 to 2018 so i was a big part of that my first time around a cfo um we did that i thought pretty prudently and without levering up a little bit um but then we went through a big activist campaign one on one side one on the other we had call icon on the board he was a big shareholder and he had the company buy back a billion nine of stock directly from him a billion two of it was during covid um and we live it up for that and what we've been doing now is is paying that down right so we only have leverage we generate plenty of cash only had leverage because of because of buyback some of it was because it was forced as part of you know getting an activist out um and again generate cash is the key message here okay yeah there's also evidar on there you can see the percentage dropped coming out of covid and how we're working our way back up. You can see cash flow from operations, and then you can see interest expense. The interest expense was at the last bar, $206 million last year. The reason why that's important is we had a very expensive debt deal. We did in 2024, which is when I came back as CFO and helped out with that deal. That's on page 22. Well, 22 is the new deal, but the old deal was done coming out of COVID. performance was bad industry was struggling and like a high yield coupon which was just part of that deal was at 12 and a quarter had a 12 handle and so we just redid that deal same same notional value for the high yield got it at seven and three quarters so 450 basis point improvement also did a term loan a didn't do a term loan b but replaced the term loan b increased the revolver Long story short, $45 million of annual interest savings with the new debt deal versus the old debt deal. So it's a huge opportunity to generate a lot more cash from a business that already has a cash flow yield of over 20%. And so it gives us a huge amount of flexibility in generating value in the future. We have said publicly we want our debt to get down to $1.4 billion gross by the end of 2028, a billion net. So we still plan to pay down debt. Doesn't mean buybacks are off the table, but because we generate enough cash to be able to hit the billion four. But we said that was our focus, and that's kind of where we are now. But we're not opposed to looking at the best way to generate value for shareholders. But that's something we have said publicly, that we're going to continue to generate cash and pay down debt, which, by the way, also, look, our multiple is incredibly low. That's a reality, right? it. And so we can generate value for shareholders by paying down debt. So if our multiple doesn't change, you're still transferring, you know, if it's $600 million more, we're going to pay down in debt. That's $600 million of value that transfers to equity holders. That's a 60% return, a little under 60% return on the current equity value. It's a huge opportunity, right? There can be arguments that buying stock can add more value. But either way, we generate a lot of cash, and we're going to add value with that cash to our equity holders. What's the best way? That's up for debate. But either way, it adds value to equity holders, and it's a big opportunity. A little bit more now on slide 24. Let me get to the financial highlights. There were a billion three sales in Q1, 7.8% net sales growth, 5.4% constant currency. We had the benefit of currency. EBITDA margins in the quarter was 13.3%. had a little bit of CapEx in the quarter. We're not a capital intensive business, that's important. We do spend, but we're not big. Just for the sake of time, because we're down to four and a half minutes and I want to leave a second for questions and answers, I'm just gonna jump to the last content slide, which is our guidance. The top section is Q2, the bottom section is full year. The first column is net sales, then it goes to EBITDA and CapEx. You can see in net sales, we're projecting growth for the year, both on a constant currency and reported basis both for Q2 and for full year EBITDA there's some timing issues in Q2 so EBITDA this year will in Q2 will be below last year but there's some of there's a few things that happen from timing that's swinging it but it doesn't change the year full year we're looking for EBITDA growth and you can see our CapEx is 50 to 80 million dollars that does not include capitalized SAS costs which are a little more that'll add to that But long story short, CapEx and capitalized SaaS costs and acquisitions combined somewhere between 2% and 3% of net sales. That's the historic run rate, and that's where you expect to stay. So I kind of breezed through that, but I've got three and a half minutes left. I wanted to leave it open for questions, if anybody has questions.

Dave Mossberg, Host

Yes.

John DeSimone, CFO

Yeah, so the question was, for those online, was what's going on with nutrition clubs? Are they growing, shrinking, leveling off? What's happening? So I'll start with the U.S. and talk globe. So the U.S. had a huge spike in clubs during COVID. Pre-COVID, we were at 6,000. COVID, because they were essentially, they were called essential, they delivered food, right? They were food, so they were essential. So they were allowed not only to stay open, too open. So we jumped from 6,000 to 12,000. We're down at nine, and it's been pretty steady now for a year. So it's stable in the U.S. you know um it's we we could predict which ones are going to close based on volume but a lot of people just in indirect selling in general i mean rents were super low during covid some people could open places for nothing and a lot and it was the only way to operate the business so a lot of people did clubs so we're in a net better place than we were pre-covid and we're steady now but we went through a decline um and globally we're we're pretty stable yes that's a great question so the question is with what happened with the two activists you know we had a short seller and then we had somebody you know opposite um what changed the herbal life so obviously through the short seller high profile we did have an ftc uh investigation uh into the model and we did make some changes and so what i will say is the core argument that the short seller had was we have no customers right people didn't really want to buy the product that they were forced to that was the argument what we agreed to with the ftc for the us is that we would not reward our distributors when other distributors buy product we can only reward our distributors when they resell it to a customer and they can only qualify to earn by reselling it to a customer who is not a distributor so it has to be a clean customer so we had to implement that change we had a built system to do we had to do a POS system for clubs and they gave us I think nine months to build it and so we built it and I think what we've proven is a we've had the clubs. I mean, we had the customers, right? Because as soon as we, we had a track and we could, and that started in 2017, we started tracking customers. But the key thing that changed is the reward mechanism for distributors can now only be earned through sales to customers. So the inherent risk in direct selling is if I recruit you, a distributor, and I convince you to buy a thousand dollars in product and tell you you can make money, you buy a thousand dollars in product, I've made my commission, and I leave you, and you got it. It's called inventory loading, right? We don't have that. I mean, we had controls against that. We didn't think it was happening anyway, right? But the incentive program could drive that behavior without the proper controls. What we agreed to with the FTC is build those controls into the reward system by taking that incentive away for somebody to potentially do something bad. So I have no motivation to sell you a distributive product that you can't resell, because I don't earn on it until you resell it. so that was the key change um and like i said i think i think implementing successfully proved the thesis of the short seller wrong anyway but it also better protects us in the future and you as an investor because now we have that change in place and we've had it now like we're nine years in, in, uh, call icon. He was getting out and, um, he got out in, in, uh, like I, I think we, we bought back, I want to say like 600 million from him in 2018. Um, but then he really got control of the board, uh, in kind of 2020 and 2021 and 2022, they bought, we bought back a billion two from him and he got to cut him out. So he's no longer involved. He has not been involved for years. The, the, the reason I was saying that is because that's the reason we have the debt levels we have, right, is basically, you know, buying that activist out of his position. He was pro-erbalife on the board. His exit strategy wasn't to do a secondary. It was have the company buy back stock. It wasn't a request, if you know what I mean. It was forced based on whatever you want to say, but that's why we had the debt, and now we're paying it off and getting back to a more reasonable level the question was how much do our direct sellers own a verbal like very little there might be some but nothing nothing I'm not aware anything particular that our distributors own of the company I mean our CEO bought some stock there might be distributors who bought stock some bought stock when the company was purchased by private equity back in 2002 but I don't know if they still own it or not so it's if it's if it's anything it's really small yeah thank you I think we're two minutes over I appreciate everybody thanks