USANA Health Sciences Inc (USNA) Q4 2020 Earnings Call Transcript

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USANA Health Sciences Inc (USNA -1.28%)
Q4 2020 Earnings Call
Feb 10, 2021, 11:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day and welcome to the USANA Health Sciences' Fourth Quarter Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Mr. Patrique Richards, Executive Director of Investor Relations and Business Development. Please go ahead, sir.

Patrique Richards -- Executive Director, Investor Relations and Business Development

Thank you and 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. Shortly following the call, a replay will be available on our website.

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. 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 2021 as well as uncertainty 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 SEC.

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

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

Kevin G. Guest -- Chief Executive Officer and Chairman of the Board

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 2021. Overall, we are very pleased with how we performed against the many new and unique challenges of 2020. Our strong performance in the base of an unprecedented pandemic reflects the continued demand for our high-quality nutritional products and successful execution of our strategic initiatives. In 2020, we found that we were well positioned, well prepared and nimble enough to adapt to and succeed in this unprecedented operating environment. Because of this, we ended the year with more customers, higher net sales and record earnings per share. As you can see from our initial outlook, we are expecting 2021 to be another record year for USANA.

2020 was truly a transformative year for our business as we accelerated many aspects of our customer experience strategy. We've been actively investing in the USANA customer experience for several years now with an emphasis on our digital strategy. In 2020 we capitalized on the groundwork we had already laid and accelerated many other projects to successfully operate during the pandemic. We improved our websites, digital shopping experience, associate training, customer communications and our overall technology infrastructure. Additionally, we introduced several new digital tools that will allow our sales force to continue sharing and selling USANA products in a predominantly virtual environment. These enhancements to our business as well as many other technical and operational improvements have meaningfully improved the experience that our sales force and customers experience when doing business with USANA.

Although we recognize that the pandemic is not over, our outlook for fiscal '21 reflects an expectation that we will see progress through 2021 toward a more normalized operating environment. While we have learned a great deal hosting several virtual events this past year, we look forward to the future opportunities of engaging again with our sales force and customers in an in-person setting when it makes sense to do so. Our business is built around fantastic nutritional products, relationships and personal interactions. We plan to leverage the benefits of both virtual and in-person events moving forward.

During the first half of the year we expect to hold virtual only events for our sales force and maintain our work from home plan for employees. During the year, we will continue to execute our digital strategy, drive growth in existing markets with our emphasis on China, launch our new Active Nutrition product line and other products and actively seek out business development opportunities. As we execute this strategy, we are projecting another amazing year for the company.

In closing, I am very confident in our strategic direction, the competency and agility of our team and the strength of USANA's underlying business. With that I will now ask the operator to please open the lines for questions.

Questions and Answers:

Operator

Thank you. [Operator Instructions] And we'll take our first question from David Bain with ROTH Capital.

David Bain -- ROTH Capital -- Analyst

Great, thank you. First, congratulations on a fantastic 4Q execution. I guess my first question would be, if you could potentially capsulate the potential route to new market that you suggested in your press release that you're laying the ground work for, I mean, obviously that can take many forms, such as China did or be strictly organic. Is there any way we can think about the potential immediate impact to a new market in relation to your strategy?

Kevin G. Guest -- Chief Executive Officer and Chairman of the Board

Our strategy for last several years is -- has been that we wanted to focus our resources on our existing markets and focus on growth where we were currently doing business. We feel like we've got a number hand in that area and feel very confident that it's time for us to move into exploring other opportunities around the globe. If you look at some of our peer group, they are in -- some are in 50 or 60 markets around the globe and we do see that as a potential growth opportunity, but it's not the primary strategic growth strategy for the company. We do see international expansion as an important piece, but again like you mentioned, it takes quite a while for it to have an impact. Jim, do you want to add?

Jim Brown -- President

Yes, I mean, when we look at the markets that we selected to go forward and of course at this point in time is where -- when we look at is about 18 to 24 months out, we wanted to announce that to the field, but we do have a plan and a strategy as we go. There's just a lot of work that has to be done from setting up a market and that's everything from logistics to where and how we are going to produce our products to hiring the right staff, all of that goes down the path and that's why we're looking at that 18 to 24 months run rate before we actually launch the markets. So you're looking at an impact probably the end of '22 when we look at starting up the market. So you see a financial impact into '23. So it ways out, but again we feel, and we always have gone down that path every couple of years ago opening a market that we need to have the right runway to make sure it's a smooth opening.

Kevin G. Guest -- Chief Executive Officer and Chairman of the Board

And David I would add on, I think a little bit of your question the method and the manner we enter China that's definitely something that we consider in evaluating whether a partner makes sense as we kind of look at the opportunities. And to Jim's point, a lot of the laid work has been done historically and we have these markets kind of said on the shelf and kind of timing for when it makes sense, like the method and the manner, I think we have an idea, but we're still in the process of kind of getting to that point.

David Bain -- ROTH Capital -- Analyst

Okay, fantastic. And I guess my follow-up would be, if maybe you could give us a sense as to what benefit either from a cost structure standpoint or revenue generation through technology or otherwise. Just from best practices or really what you've learned that could become permanent out of COVID?

Kevin G. Guest -- Chief Executive Officer and Chairman of the Board

One of the things that we definitely have learned is that it is very -- we are very capable on an international level, a very high sophistication level when you're operating in several different languages across the world that we can do it virtually. And for me, I don't have to get on a plane and fly to China and we can still have a very positive impact. One area where I think I'm really surprised is as we launch new products and the new initiatives that we've been able to do a completely from a virtual perspective and seeing huge success and so our -- one of our big takeaways is that we're going to proceed in the future utilizing a hybrid approach where we're going to leverage technology in a more meaningful way and encapsulate some of the in-person opportunities, but just sheerly from a management perspective, I become very much more accessible to our global community and customer base by leveraging technology. And so that's a huge learn for us, because a significant piece of our SG&A -- our spend is done on live events and travel and it has changed our basic business model somewhat, because we have been so used to being on planes traveling all over the world to get in front of our people. And so that's been a big learn and it will dramatically change how we do business here. I don't if you guys want to...

Jim Brown -- President

Yes, I mean, the other thing, perhaps from the management team and how we're doing our business when we look at the sales field, we talked about digital transformation, our digital footprint, we're seeing a huge adoption when it comes to running your business digitally, so as well as the company figuring out how to do it our field across all of our markets has figured out that way to run their business across WeChat whatever form it is and to continue to have a path of growth and we were quite incredibly surprised in 2020 and I think that's one of the biggest reason that we had such a great years that adoption to the digital platforms.

Doug Hekking -- Chief Financial Officer

Yes. And David, this is Doug. A little bit more perspective there again. In some of our markets and in some pockets within existing markets, we've seen a hesitation or resistance to adopting some of the technology we've rolled out and this environment has almost forced them to use it and I think we've heard a pretty good response from that and so that's been kind of a pleasant surprise for us to go back and get more and more folks using the tools.

Kevin G. Guest -- Chief Executive Officer and Chairman of the Board

Yes, for us I'd like, thinking about it that although COVID had a negative effect in many people's lives, it's really been an accelerator for USANA and helping us accelerate the strategies that we already have in place versus a disruptor. And I'm very grateful that we were able to accelerate things that were already in place when we had immediately pivot to the new operating environment. And so I'd see it in a lot of ways from our strategy side an accelerator versus a disruptor.

David Bain -- ROTH Capital -- Analyst

Awesome. And I'm sorry, since it's my first call as an analyst on your stock. If I could ask just one thing as a follow-up to that deepening digital revenue generation, the whole thing that you've spoken to, are you seeing an overall younger demographic in the network?

Kevin G. Guest -- Chief Executive Officer and Chairman of the Board

I think, well, I -- this is an anecdotal kind of a response to your question and Doug has the numbers better than I do. But based upon what I'm seeing just from a participation -- even from a digital perspective, I do see a younger population, even on my social media accounts and see those who are actively engaging with me as the CEO of the company, I do see a younger group and a younger population continually coming into the business which I see is very positive. And so again this is just my observation at a very high level. But I would say -- I would say yes, we do see a younger demographic coming into the business.

Doug Hekking -- Chief Financial Officer

Yes, I would say as well from a relevancy aspect, we're set up now to actually meet the demands of that younger crowd, where before when it was mostly done in person, it really didn't have that effect. Right now, we're doing everything digitally. That's the platform that the younger crowd wants to work on and we're continuing to make that. So like Kevin said, we're seeing it. I think in the future we will see more of bringing that demographic into the business.

Jim Brown -- President

And maybe a few other commentary, I think there are higher growth markets, we had a younger demographic and that's been really clear. I think in some of our other markets, what we've seen, as we've seen -- to Kevin's point and ago, we've seen some more of these younger group come in, but we've also seen more of our legacy customers start using the technology more. So I think all those things are positive.

Kevin G. Guest -- Chief Executive Officer and Chairman of the Board

Yes. I would agree with that.

David Bain -- ROTH Capital -- Analyst

Fantastic. Congratulations again. Thank you.

Kevin G. Guest -- Chief Executive Officer and Chairman of the Board

Thanks.

Operator

And next we'll move to Sebastian Barbero with Jefferies.

Sebastian Barbero -- Jefferies -- Analyst

Hi. Thanks for taking my question and congrats on the quarter. A few questions from me please. Wondering first, if you could talk about some of the trends you're seeing overall in the consumer health market, including changes in customer behavior over the past 12 months and how does this compare across your different markets? And also if you can talk about retention rates for your associates and preferred customers and how these have trended versus pre-COVID levels?

Jim Brown -- President

As far as kind of the recent trends, Sebastian, I think what we've seen and we talked about early in 2020, we saw a spike initially as kind of the rest of world started dealing with the COVID pandemic and we saw a spike in some of our immunity product were designed to go back and support immune functions and we have definitely seen a spike kind of drift down, but it is still clipping at a higher run rate of growth in the rest of our products. And so, without a doubt, we've seen that. Across all our markets, we're seeing a more keen awareness of health and wellness and it allowed us to go back and have more robust conversations and have dialog with these customers and consumers that we have out there.

As it pertains to your second question, we produce that active customer count number for very specific reason. When someone comes in and buys and they don't buy, again typically we don't get something that they were going to do and this other stuff. So that Active Customer count captured and purchased in the most recent 90-day period. And so we think that's kind of the best transparent metric we use internally as well.

Sebastian Barbero -- Jefferies -- Analyst

Got it. And you guided that China to grow between 6% to 12% in 2021, that's on an organic basis is likely between flat to up 6%. I'm wondering could you talk about any changes in the market in recent months, including meeting protocols in the competitive landscape? What gives you an inflection, what gives you the confidence when inflection is in tact with the next 12 months. And also any color you can give us on early '21 trends and what does your guide imply in terms of growth cadence for the year?

Doug Hekking -- Chief Financial Officer

And sorry Sebastian, it's coming across a little bit muted on the -- on your voice. So was this specific to China, that you asked the question?

Sebastian Barbero -- Jefferies -- Analyst

Yes, yes. So just trying to understand any changes in the market in recent months, particularly as it leads to meeting protocols and also if you can give us some color in early 2021 trends and what does your guide imply in terms of growth cadence for the year?

Doug Hekking -- Chief Financial Officer

And I'm sure as you've read, many of the same information that we're getting, China is kind of a nuanced marketplace where you have different restrictions, different guidance really provincially and even at the municipality level. And so I think the questions we're getting leading up to the year is how China has a better control and they weren't having any issues and you've obviously seen recently in the news that these pockets of kind of outbreaks happen and China was really fairly quick to respond. We always stayed attached to kind of the direction that we're getting from our government relations folks and the conversation they are having with the government there. And so we're kind of telling that while we do see, it really is kind of a nuanced staying and it's not real specific to China as a whole. But that factors in kind of the best estimates we have.

The other thing in the market, I think as a whole, what we're getting from our folks with boots on the ground as we're seeing overall growth in the market not related to USANA in that mid-single digits to mid single-digits plus. We expect to outpace that a little bit, but that's kind of how we see it right now. The competitive landscape is really not to alter from what we've seen historically. They are always new entrants and stuff. Right now I think we just haven't seen kind of same noise in that area and it really is from established players, really kind of getting a foothold in executing our strategies.

Sebastian Barbero -- Jefferies -- Analyst

Okay. And in terms of Active Nutrition, this new line launched in Q2, you mentioned will have a focus on weight management and digestive health. Will this be some sort of shake or will it be full comprehensive weight loss program backed by some digital tech embedded in it?

Jim Brown -- President

Yes, the Active Nutrition is more of a full program. Right now, what I would consider are likely to be as a foods line with our new trivia on the products there. We're looking at shakes, bringing back bar as we've mentioned in past calls, which you saw in North facility which literally the stone throw away from where we're seeing our corporate headquarters, and we're going to be making our own powdered beverages and bars in that facility. We've actually started already because we're looking at launching Active Nutrition, and we talked about that, really the impact for a handful of markets will be in the second quarter and then we are going to have additional phases of launch throughout 2021. So we'll see the full impact of Active Nutrition really into 2022, but we'll see those trends happening in the third and fourth quarter of this year. But it's much more than just a foods launches programs, there's influencers, there is all kinds of different ways to get more of a community around this area instead of just more foods. And so this is a little bit of normal approach how we've approached different product introductions in the past.

Kevin G. Guest -- Chief Executive Officer and Chairman of the Board

And for us, there is a real focus on lifestyle and versus a product or two that are being launched out there. If we can truly effect someone's lifestyle in a positive way to improve their health, we're really wanting to take a more holistic approach to the lifestyle as we move forward and so we're excited as a health company to be able to round out our offering in those categories.

Sebastian Barbero -- Jefferies -- Analyst

Got it. Okay. And last one from me, switching to capital allocation priorities. There was some nice buybacks in Q4, results are building cash for strategic partnerships and if that's the case, can you walk us a little bit -- can you give some more details run your M&A criteria. You're looking to companies solely in the direct selling industry or are you also considering brands outside like you did with Built Brands, what product categories do you believe are opportunity that could nicely compliment your portfolio and then in terms of what sort of capacity do you have and are you willing to take on leverage to execute?

Jim Brown -- President

Yes, I mean regarding the opportunities Sebastian, the focal point has really been our kind of organic business. We also are actively looking for things that don't necessarily bid directly into direct selling business that we can go back and acquire core competency, that we can leverage in our other channels as well. The Built Brands is a great example, go back and accelerate our understanding our know-how to go back next year on what we have. So those are good examples, I think geographic expansion, we'd look at vertical integration, technology anything to go back and kind of playing the helping wellness space and I think it may look -- I think it was not directly correlated to direct sales channel at this point, but we believe those opportunities there is leverage going forward.

And then regarding leverage and stuff, yes, we see opportunities and stuff without a doubt. I -- we're not afraid to go back, a couple of times EBITDA on the books of debt. We're just looking for that opportunity, and we believe the deal flow that we're evaluating on a regular basis, now as far beyond what we've done historically. And we're looking for those opportunities and really evaluating those on a pretty dynamic basis.

Sebastian Barbero -- Jefferies -- Analyst

Got it. Thank you.

Operator

Next we'll move to Doug Lane with Lane Research.

Doug Lane -- Lane Research -- Analyst

Yes, hi, good morning everybody.

Kevin G. Guest -- Chief Executive Officer and Chairman of the Board

Hey, Doug.

Doug Lane -- Lane Research -- Analyst

I just want to focus if we could -- hey, I just want to focus if we could on customer counts, to a lesser extent, even the active associate accounts where it's really been a tale of two stories this year, where outside of China the growth has been remarkable but inside China it just doesn't seem to be getting any better. So let's -- if we could start with the good, the 30% increase in active preferred customers year-over-year outside of China, I mean how sustainable is that and what kind of number should we be thinking about for 2021 as far as that's concerned?

Jim Brown -- President

Yeah, I would say over the last couple of years, the strategy that Kevin has encouraged the group to go back and adopt is really focusing on the consumer and you see in all our markets across the globe that focus first and foremost on the customer. At the end of the day we grow the company by having more individuals and families consumer products. And I think if we do that incredibly well, we've been executing on it. I think that makes it easier and easier for associates going forward as well from a business opportunity perspective. So that focus haven't changed and we'll keep leaning into that going forward. China has had a couple unique challenges back to back in a couple of years. And so that's, I think we're coming out of that. I think the China team out there really worked hard to go back and build a base, so we can really leverage going forward and the feedback we get is very encouraged and excited about the opportunities we have going forward. And really see some momentum moving forward in the business.

Doug Lane -- Lane Research -- Analyst

Yes. On China, I think the one concern that I would have, again it was a great quarter. But the one sort of numbers that stuck out on the consent side was that the preferred customer number decelerated so much sequentially from 193,000 to 164,000. So what happened in the quarter to impact the customer number in China?

Kevin G. Guest -- Chief Executive Officer and Chairman of the Board

Yes, It had to do with that trial program that we ran beginning -- end of Q2 and Q3 and it really encouraged our associates to go back and share the opportunity and we created a very linear compensation for a short period of time. And so it really hurts them to go back and reach out in the track and as that trial program ended, you saw from those numbers drift down and even with the decay and some of those lift in the customer numbers in Q3, overall, I think our Q4 numbers were catalyzed by the momentum created from that program as a company as a whole. We also benefit modestly from currency, but that was the primary catalyst in the change in accounts there.

Doug Lane -- Lane Research -- Analyst

Are you seeing any lift in China. I mean, especially in the Active Associates we saw a less -- to a lesser extent a deceleration there as well, but the Associate Account in China continues to sort of drift lower here. So I'm wondering is -- are you looking for an improvement in 2021 just sort of stabilization in China. I've been following China because it's almost half of your business?

Doug Hekking -- Chief Financial Officer

Yes, I think we're looking for progress there. I think you go back and see that reflected in kind of the outlook numbers that we have. We're not going to go back and grow unless the customers are moving to the right direction. I think the confidence is there and kind of the momentum is there and the plans are there and the strategy. This is an investment year for China and they are taking full advantage of that and we see progress in executing those investments.

Doug Lane -- Lane Research -- Analyst

Okay, thanks Doug.

Operator

Next we'll move to Ivan Feinseth with Tigress Financial Partners.

Ivan Feinseth -- Tigress Financial Partners -- Analyst

Thanks for taking my call and congratulations on another great quarter.

Kevin G. Guest -- Chief Executive Officer and Chairman of the Board

Thanks.

Ivan Feinseth -- Tigress Financial Partners -- Analyst

What were the strongest product categories and the strongest products in the most recent quarter and what kind of product trends are you seeing with product demand trends in interest from customers and associates are you seeing?

Kevin G. Guest -- Chief Executive Officer and Chairman of the Board

Yes. Like Doug mentioned a little bit earlier, the immune health continues to be the product line that's outpacing anything else. And then, and when we look at it, we did a lot of programs throughout 2021 from a promotional activity as well from incentives as well as product launches, I mean, we launch more products in 2020 than we ever have. And that was part of our overall strategy to create some growth in the markets and lessen the distractions that COVID-19 and -- but again that immune health is continuing to be the line that's moving forward. I would say in 2021, hopefully when we are talking about it, that Active Nutrition would be the catalyst throughout the year when it comes to new product launches. But I don't see the demand for immune health to really go down in 2021.

Ivan Feinseth -- Tigress Financial Partners -- Analyst

And how are you like helping your associates like to educate in market immune health and that it should continue long after hopefully the pandemic is in the rear view mirror?

Kevin G. Guest -- Chief Executive Officer and Chairman of the Board

I think that's part of what USANA is. I mean part of what we do is training to make sure that our associates can tell the story of our products and why the high quality is needed throughout the world and we continue to do that in the markets and we talked a little bit about the challenges this year that we've overcome and that's doing that training really from a online digital Zoom, WeChat whatever that is platform to get it done, but we continue to do that and when we launched Active Nutrition in March, in the end of March, really what's going to happen in the first couple of months is dedicated to an understanding and training of our associates and we'll really roll that product line out a little bit later in the second quarter, but it's incredibly important for us as a company to RMR Associates and sales field to be able to tell that story of our products and why we're better than the competition.

Jim Brown -- President

Yeah, I would say the other things, we -- years ago, we acquired a production company that makes incredible content and really the dynamic way to go back and share the message in education. One of the things that our China market has planned this year is to go back and replicate a lot of that capability within market. It will go back and build brand awareness, content velocity many really positive things there and they're working on and so more and more we continue to go back and kind of leverage that know-how and expertise and find ways to share that information in a digital way.

Ivan Feinseth -- Tigress Financial Partners -- Analyst

And how do you envision what kind of events you are going to have for the Active Nutrition launch?

Kevin G. Guest -- Chief Executive Officer and Chairman of the Board

Yes, I mean right now those have been and we're really launching a handful of markets to start with US, Canada, Mexico, Australia, New Zealand will be following shortly. I mean, those would be virtual events that we train our associates using web Zoom mostly for those markets. And it's going to be training on the products themselves but also the program that go along with it. We are also doing user trials at the moment. So that information will come out during that and it's all been positive thus far. We're really excited about Active Nutrition and for us with another area that we talked about from an exciting standpoint is bringing that technology and producing those products ourselves at the company. It's been something over the last -- well, I've been at USANA 15 years, it's been my biggest headache is dealing with a lot of third-party manufacturers who are no longer not dealing with at this point in time, but bringing that in-house is really going to have an impact to our ability to launch new products, new flavors and try things with a faster pace than we've ever had in the past.

Jim Brown -- President

Yes. It's something that we're Ivan that we're doing with Active Nutrition that we haven't done before, with relationship to your question is, we have an ambassador program which is, we've taken some of our business builder associates out there who are helping advocates and we're actually currently having them involved with the product, working with our science team, our R&D team, giving that expertise that they from a product knowledge perspective as well as helping us put a program together that assist us directly put boots on the ground. It's almost like a working focus group that is helping us build to the launch. And so we already have embedded, so to speak, a group of advocates who have great experiences with the product as ambassadors throughout these markets, which will give us a huge boost as we launch the product.

Ivan Feinseth -- Tigress Financial Partners -- Analyst

What do you feel the size of the active market -- Active Nutrition market is relative to your current market? I mean there are a lot of companies that purely do sports related performance related stuff, but it's pretty big and what do you think is going to be your unique attributes and your competitive advantage when you go into this?

Kevin G. Guest -- Chief Executive Officer and Chairman of the Board

Yes. So just for clarity Ivan. I think that whole kind of fitness and exercised up will be a little bit down the road. Here is what we're going to be focusing on kind of weight management healthy snacks. We think the market is a really large market and it's something we can go back and really leverage our existing customer base to go back and tell the story through some of the technology we've talked about. So we think it's a big opportunity. I think just managing expectations here a little bit, first and foremost, Jim and Walter Noot, our Chief Operating Officer are really been working hard to go back and get that production operation up and going in a very thoughtful meaningful way. And then after that, we're going to launch in select markets in Q2 and systematically roll that out and start broadening out the product base, and it really is a more holistic offering like so many things we see out there are very just product focus and we plan to definitely have some ideas [Phonetic] broader than that which grow in things for nutrition and exercise and those types of things going forward as well.

Ivan Feinseth -- Tigress Financial Partners -- Analyst

And then on, I guess this is the first call since you announced your investment in Built Brands. Can you go into a little detail about what attracted you to, what opportunities you see, how are you going to work with them. What's going to be the benefit that you saw and as consumers of your product what can they expect from this?

Jim Brown -- President

Yes, with Built Brands, deal itself was an investment in the company, minority investment. But what we really were interested in was some of the aspects that we gained from that company. They're right down the road from us maybe 30 minutes running literally millions of bars by year and the things that we wanted to do was get expertise into our facility a little quicker. We're going to be world-class in making foods and powdered beverages, but we're just not that right this second, it's going to take a little bit of time to get there. So there is the sharing of knowledge from an operational standpoint. That was a benefit. The other thing is that we are using their formulation and R&D team to help us create USANA bar with some of the learnings that they have and some of the technology that they have and that will probably turn into many bars in the future. And again that's going to speed up the process for us as USANA to launch a product, because we'll be able to use their expertise and really it wasn't as much about investment, which we have our high hopes that we'll get a great return from that investment. But it was about their operational excellence and the ability to get it on new bar from an R&D standpoint quicker than our normal process.

Kevin G. Guest -- Chief Executive Officer and Chairman of the Board

And just, Ivan, from my perspective, as the CEO, I had the great opportunity to go down to build bars, sit with their CEO for a couple of hours and we were able to strategically brainstorm, how could we have some synergies together. They are in a completely different market that we're in. They have a completely different approach to how they deliver and manufacture and sell products. And so for me the synergies that come from somebody who is actually serving somewhat the help versus an Active Nutrition market already in a different way is very important from a learning perspective on top of investment opportunity, which I think is a very great use of our capital, and also getting the new core competency, but also the synergies that come from us being a partner with someone who has somewhat of a similar business, but yet does it in a completely different way.

Ivan Feinseth -- Tigress Financial Partners -- Analyst

It's exciting, and I'm looking forward to the Active Nutrition launch and more about the USANA Bar with Built. I mean, they tend to lean keto, paleo which I think is a big market more than fad [Phonetic]. But I think it is an important nutrition focus. So what are your thoughts on that?

Jim Brown -- President

Yes, we'll be looking for bar piece [Phonetic] to go back and obviously have -- obviously some protein, but also some nutritional bit as well with different focal areas. So that's something that we're -- we've been developing and looking down the path. I would say that we have anything specific in line with the [Indecipherable]. We definitely have something that are catered toward health benefits.

Kevin G. Guest -- Chief Executive Officer and Chairman of the Board

And just to that point also, we're always looking for different delivery ways -- different ways to deliver nutrition and with some of these bars we've had prototypes where we've had them fortified with various vitamins and minerals within a very tasty chocolate bar and it's a great different delivery system that we are exploring also as we look at these avenues. So to your point, whether it's keto or what it might -- whatever it might be, it really opens up a host of opportunities for us from a sheer delivery perspective.

Jim Brown -- President

And the other area too when it comes to bars like Kevin is talking about, we historically had three or four large offering. Now with the new foods plant and having that supply chain managed by ourselves, we could have a lot more entries into the bar area as well as the powdered beverage area, because we're not held under the same contractual obligations that we are with third parties in really large run and everything else that makes it more complicated to have a lot of variations. So that's something that we're going to be able to support that in nutrition line with.

Ivan Feinseth -- Tigress Financial Partners -- Analyst

I appreciate the insight and the update and congratulations again on the results and wishing you a much more -- ongoing success in 2021.

Kevin G. Guest -- Chief Executive Officer and Chairman of the Board

Thank you Ivan.

Jim Brown -- President

Thanks Ivan.

Operator

And that will conclude the question-and-answer session. At this time, I would like to turn the call back over to Mr. Patrique Richards for additional or closing remarks.

Patrique Richards -- Executive Director, Investor Relations and Business Development

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 Investor Relations at 801-954-7358.

Operator

[Operator Closing Remarks]

Duration: 31 minutes

Call participants:

Patrique Richards -- Executive Director, Investor Relations and Business Development

Kevin G. Guest -- Chief Executive Officer and Chairman of the Board

Jim Brown -- President

Doug Hekking -- Chief Financial Officer

David Bain -- ROTH Capital -- Analyst

Sebastian Barbero -- Jefferies -- Analyst

Doug Lane -- Lane Research -- Analyst

Ivan Feinseth -- Tigress Financial Partners -- Analyst

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