Good day, ladies and gentlemen and welcome to the Q3 2015 Nu Skin Enterprises Earnings Conference Call. My name is Whitley and I will be your operator for today. At this time, all participants are in listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Scott Pond, Head of HR. Please proceed.

Thank you, Whitley and thank you for joining us this afternoon. With me in the room today are Truman Hunt, President and Chief Executive Officer; Ritch Wood, Chief Financial Officer; and Ryan Napierski, President of Global Sales and Operations. During the call, comments will be made that include forward-looking statements. These statements involve risks and uncertainties and actual results may differ materially from those discussed or anticipated. Please refer to today’s earnings release and our SEC filing for a complete discussion of these risks. Also during the call, certain financial numbers maybe discussed that differ from comparable numbers obtained in our financial statements. We believe these non-GAAP financial numbers assist management and investors in evaluating and comparing period-to-period results in a more meaningful and consistent manner. Please see the Investor Relations page of our corporate website at ir.nuskin.com, for any required reconciliations for non-GAAP financial numbers. I will now turn the time to Truman.

Thanks, Scott and good afternoon everyone. We appreciate you joining us on the call today. As you saw in our release, our third quarter revenue came in at $571 million, which is even with the prior year on a constant currency basis and was negatively impacted 10% by foreign currency. Our revenue trend reflects continued improvement in the global business. If we look back a few quarters in constant currency, in the first quarter of this year revenue was off 12%, second quarter improved to a 7% decline, and the third quarter was flat. The fourth quarter is projected to see continued trend improvement in local currency revenue, with revenue increasing in the 7% range. We have recently begun a new business cycle, which entails a 2-year calendar of product introductions. Our current cycle includes two significant products, which we have talked a lot about. ageLOC Youth and ageLOC Me, which we anticipate will become the core of our nutrition and skincare offerings going forward. The first region to launch one of these new products was South Asia-Pacific, with the recent launch of ageLOC Youth. The launch was very successful as reflected in our release, driving growth of 44% in local currency revenue year-over-year, with a 36% growth figure in the number of sales leaders sequentially. So, with the success of this launch in South Asia-Pacific, we think we can be reasonably optimistic that as we rollout these products around the world we will continue to see a positive response. For comparative purposes, I want to note that revenue in the third quarter of last year included about $81 million in LTO product introduction sales versus $47 million in new LTO product sales in the third quarter of this year. So, I think a fair year-over-year comparison would show that…

Thank you, Truman and good afternoon everyone. As Truman mentioned, we see continued progress in our business. Some of this progress, however, is masked by a very strong U.S. dollar. As we continue to compare our business on a year-over-year basis in constant currency terms, the third quarter comparison was the best performance we have had since the first quarter of 2014. However, the pace of the China recovery continues to be slower than we had hoped and it was the reason for our revenue shortfall to guidance in the third quarter. As discussed in our release, we incurred a non-cash inventory charge of $38 million related to China. This write-down in our inventory balance address the remaining slow moving inventory in China and rightsizes, particularly our Tru Face Essence inventory level, so that we can move forward with a more typical promotion schedule and our overall inventory level is now at $260 million, which is approximately the level at which our inventory was in the third quarter of 2013 and it’s really consistent with our historical inventory levels. As for key financial metrics, operating margin for the third quarter was 7.4% compared to 16.4% in the prior year, with gross margin at 73.3% versus 82.9% in the third quarter of 2014. Both operating margin and gross margin were negatively impacted by the $38 million inventory expense related to China, which was about a 6.7% impact. So, without that charge, gross and operating margins would have been 79.9% and 14.1% respectively. Similar to our practice and discussion in previous quarters of this year, we reclassified the cost of sales, some inventory related expenses that historically have been reported in general and administrative expense. While this reclassification has no impact to operating income or earnings per share, it was immaterial to…

[Operator Instructions] Our first question comes from the line of Frank Camma with Sidoti. Please proceed.

Good afternoon, guys.

Good afternoon.

On the inventory itself, can you just talk about the products itself that were written off and whether they have expiration dates and can they be later sold, I was confused about that? I mean, are they totally charged off or is this something that might come back?

Yes, thanks, Frank. The basis for writing those off is an expectation that we will not sell them. We take the value down about half of the $38 million was Tru Face Essence Ultra product that was built for 2014 LTO that following the government intervention really we saw our business slow down. So, there was excess inventory there. The other balance, the other half was a number of different products that again were built the first part of 2014 and the end of 2013, which have an expiry date that’s coming fairly soon. So, it doesn’t give us a lot of time to promote through that either. So, yes, it really takes our inventory balance to a point where we can really move forward and not have to focus on promotional activity to move those products.

Okay, got it. And do you still sell those products in those markets or is it – what’s the plan going forward for those products in particular?

Yes, many of them we still sell. In fact, Tru Face Essence is a great product, but it really just what we wrote off was the excess, the amount that we didn’t believe that would be able to sell.

Okay. And just talking about the active counts, I know that the sales leaders are sort of kind of what you look at for go-forward sales, but obviously the total numbers were down overall. I just wonder if you could talk about that or why you had the launches there, but why do you think the direction of the total counts is down in basically every market?

Yes. We do expect, Frank, those numbers to trend consistently and we are pleased with the improvement in the sales leader number both year-over-year and sequentially. We would anticipate that as we start to rollout our products that we will start to see the active count improve as well. And so I think it’s fair to look for some active count improvement here as we go into next year.

Okay. And the final question is just on the intercompany FX can you talk about the markets that had the most weight on that?

Sometimes Frank it’s just one or two markets. In this case, it was really across the board. It seems like when China devalued the currency in August it sort of hit most of the emerging markets and so it was an across the board. There wasn’t one single market that made it up. It was really several markets that made up that balance of the $0.13 impact.

Okay, fair enough. Thanks.

Thanks, Frank.

Your next question comes from the line of Tim Ramey with Pivotal Research Group. Please proceed.

Hi, thanks so much. If I missed it, pardon me, but did you – have you stuck to or do you plan to stick to your LTO plans in China for 2016? And if so, can you refresh me on what the timetable looks like on that?

We do plan to stick to the product rollout schedule for 2016 in China. It’s an ageLOC Me launch. We will introduce it first to our top sales leaders in December. It’s about 5,000, 6,000 units, right, Ritch? So, not a huge number, just essentially to our top sales leaders in December and then it will rollout in the course of the first two quarters of next year.

Okay. And Ritch, I am just trying to get through the math here. If I take the inventory charge out of EPS, then I think we come up with a diluted EPS of about $0.71 leaving the retranslation in and that’s about what you are calling for in the fourth quarter in terms of your guidance. It’s not obvious to me that there would be a retranslation hit in the fourth quarter as well in the other income line, but maybe I am wrong. Tell me how I should think about that?

Yes. Good question, Tim. And first of all trying to project what’s going to come through that line below operating income is tricky as it relates to foreign currency. Right now, currency has made a little bit of a strengthening. I have not, I would say in the last three weeks, but I haven’t built that at all into the forecast. Secondly, we have in the fourth quarter a convention, which runs around $8 million. So, that’s sort of different than what Q3 was and reflective in our guidance as well.

Okay. But from your perspective, you would have think that – you would think that the balance sheet retranslation would be effectively a 3Q event and not so much a continuing event?

Yes. Unless the dollar continues to strengthen, it shouldn’t be a continuing event. If the dollar weakens a little bit from where it was at the end of Q3 then we could recapture a little bit of those losses.

Got it. Okay. I think that’s it for me for now, but maybe I will jump back in. Thanks.

Thanks, Tim.

Your next question comes from the line of Bill Schmitz of Deutsche Bank. Please proceed.

Thanks. Good afternoon.

Hey, Bill.

Hi, Bill.

Can you talk about sort of what’s changed, because you used to be able to sort of set a clock on your guidance, because you had so much on subscription and it seems like you got pretty good feedback from the field into the quarter. So, what’s really changed that kind of makes the guide so much lumpier?

Yes. I mean, we really felt good about the prospect of growth here in the second half of the year, Bill, as you know. And it’s a little bit frustrating, because if you step back and look at the year, I think we see trend improvement that is encouraging to go from 12 down to 7, down to flat to 7 up is still heading in the right direction. It’s just not quite as strong as we would have hoped. And what’s changed is that Greater China is softer than we anticipated. And I mean it tailed off late in Q3. It was really August, September where we saw KPIs start to fall out of line a little bit. And at that point in time, there was also a sharp stock market correction in China in August, although the market there had been really kind of troubled for the prior couple of months as well. Our management team just wasn’t seeing, it wasn’t feeling it until August and the KPIs just softened a little bit. So, that’s what changed was just some softening in China. Interestingly enough I think that in many respects the numbers that we put out today are probably not as negative on Mainland China as what people expected in some ways as well. 8% down there might be a little bit better than what some people were projecting. And yet none of this really speaks to what we think the market’s potential is. I mean, we continue to believe in the market. I think that our team’s sentiment there about product promotions negatively impacting the market over the course of the last 18 months is a fair perception. We really have been trying to work our way through inventory and with the impending launch of ageLOC Me when we ran into a little softness here in the forecast, we just made the decision with our Board that it’s better to look forward than to try to cleanup the past and that’s what we are doing. We are really turning our attention to our product launch and looking ahead.

Okay, that’s helpful. On the inventory that you are writing down, could you just give that to your distributors as an incentive or do you have to just like throw it into a landfill?

Yes, I want to speak to that, because I am kind of refusing to throw it away. This is great product, and TFEU is one of our most popular products globally. We packaged it in China in a pump tube instead of in the pearls that we used here in the United States. And people love the product. And we are going to make as good a use of it as we can. I mean, even if we do end up using it as a spiff, we will use a good chunk of this.

Okay, that’s helpful. And then I have been getting all these calls from some folks that think it’s unsavory, but can you just cover like what the whole VitaMeal thing, is like how big it is from a sales and profit perspective and how it’s booked and does it count for volume? So, I think it’s just great to take it off the table.

Yes.

I think I have the answer.

Okay. It’s going to be hard for me to not be a little bit defensive of this program, because it’s just a little bit frustrating when you are doing to much good to have people take cheap shots at something that is doing so much good. We started this program in 2002 when we became acutely aware of the plight of millions of children who starve to death every year. And we just decided to use our expertise in nutrition to put together a product that is ideally suited for them, it’s called VitaMeal. It comes in a 30-day supply, one meal a day for 30 days. Distributors purchase it for $20 to $25 depending on the market. We make a corporate contribution in addition to that of VitaMeal on top of what our salespeople or other people purchase. And then we arrange with third-party charitable organizations to distribute the food around the world. So, in the course of the last 12, 13 years, we have distributed 450 million meals, primarily in Africa, Latin America and China. We manufacture VitaMeal in all of those environments, both Africa the U.S., as well as China. And it’s just an awesome way for us to use our expertise in nutrition and for our force for good culture to be deployed in a way that’s sustainable and provides an economic incentive to address one of the world’s most crushing dilemmas, which is we have the food if we could just figure out how to get it to the kids who need it. So back in 2002 when we are contemplating this program, I knew we recognized at the time that there would be those who might look at the for-profit aspect of this program with some skepticism. And I sat on the program for…

Yes, it makes total sense. I mean materiality wise like how big is it both sales and profits?

It’s about 1.5% of sales.

Okay.

Yes, third quarter was 1.6% of sales.

Okay, got it. And does it make similar like operating margins like the corporate average?

Yes, yes. It’s a product just like priced and sort of positioned just like any other product we would sell.

Okay, alright. Thanks guys. I didn’t mean to bring up a tender topic.

Actually we appreciate you bringing it up. Thanks.

Alright. Thanks, guys. Bye-bye.

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

Hi, thanks. First couple of questions around China, Truman, you talked about that market being a little weaker later in the quarter and talked about the timing relative to the stock market. Was there a direct correlation between ending the promotions in that market and the revenue falling short of your expectations in China? And then second, can you give us an order of magnitude as to what type of promotion level, 20% off of list or 30% or whatever the number maybe?

Yes. The decision was made to favor the launch of ageLOC oils in the quarter in place of a fairly heavy promotion schedule. And so in the quarter we ended up moving about $15 million of the cosmetic oils and our forecast was actually more in the $35 million to $40 million range. And so that was the delta that wasn’t made up through our promotion schedule in favor of shining the spotlight a little bit on other products that were packaged with cosmetic oils. Did that answer your question, Scott.

The promotion schedule really kind of ended in July, as the oils were then made available in August. So it was meant to offset the two. And while the oils did okay, it just didn’t generate incremental volume like we would have anticipated and didn’t quite offset what we sort of took out probably from the promotional schedule.

So my guess is that the shortfall in that market relative to your expectations would have been in August and September?

That’s correct.

So and then about half of the shortfall we could attribute to oils and half we could attribute to the non-oils side of the business, I mean if that’s the way the math works out?

Yes. I mean there are economic factors and other things going on. So it’s a little bit difficult to parse, but that would be math that would work.

Yes. And then how inexpensive were you selling like Tru Face Essence relative to what its normal price point would be?

There has actually been several different promotions we have run. But generally with a package of products you would get a Tru Face Essence or it would be lined up in other kits, where the kit would be discounted at say 20% to 30%. So there have been several different ways to package and promote the products that change month-to-month, change with expos and just adjust as we have kind of move through the various products.

Got it. And then thinking about the inventory write-down and the fact that half of it was True Face Essence’s, is that product I mean that’s not half of your sales in China, but is it 20% of your sales in China or some magnitude like that?

No, it’s I don’t know I don’t have the exact number, but it’s not 20% of our sales there. It’s a smaller product from that. Galvanic Spa continues to be our top selling product in China. And Galvanic Spa or the Tru Face Essence product is a very good product. It’s just that we had a lot of inventory built for that and just never reached to that level of sales.

Okay. And then on launch timing, you went through some of the markets where Me and Youth is being launched, can you just kind of give us the cadence of launches for Me and Youth over the next few quarters by region?

Yes. So in the fourth quarter we have got ageLOC Youth launching in the U.S. and actually in the month of November. In the month of December, we have ageLOC Me being introduced in Japan and Korea with fairly sizable expectations for the launches there. And we have a small leader introduction of ageLOC Me in the fourth quarter in China.

Okay. And so the Japan, Korea December launch is a real launch, it’s not just kind of a showcase the senior to sales leaders?

Yes. It’s more the traditional LTO in both of those markets.

Okay. And then when you talk about China, should we consider Hong Kong and Taiwan kind of the same cycle?

They are on the same schedule, yes.

Okay. And then you did mention Youth in China or North Asia, is that a later 2016 event?

Yes. The registration process there is a little more lengthy. And frankly those markets also chose to go with ageLOC Me first. But they will get ageLOC Youth actually in the course of 2016, later in the year.

Got it. So Ritch, when you are setting up guidance for Q4, you are expecting not to put words in your mouth, but you are expecting North Asia to get that big boost here in Q4, kind of like we saw South Asia-Pacific did in Q3?

Yes. That’s correct.

And then just one last one, the Americas number was a little lower than I expected, any commentary there about that $71 million reported?

Yes. I think it was generally where we would have anticipated. They too are preparing are preparing for an ageLOC Youth launch, which will happen in November. So we didn’t have any strong promotions or pushes during the quarter. It was up about 5% year-over-year on a constant currency basis, both Latin America and North America. So generally, it was in line with where we would have anticipated and we do expect to see more strength here in Q4.

Great. And I am sorry one more question, if you don’t mind. With Me and Youth launching over the next few quarters, how did you – Ritch how did you forecast and kind of set up the supply chain to get inventory this time around, obviously you are still thinking about the last cycle, I am wondering what’s different this time, from the standpoint of making sure you have enough access to it, yet not signing any commitments that might hurt you?

Yes. The two primary changes we made were to split the global launch schedule in half. So half the market is focusing on ageLOC Me and half focusing on Youth, so from a supply chain standpoint, we can balance it that way. Secondly, you will notice that the size of our LTOs are quite a bit less, for example, than the $560 million LTO that we did with TR90 at the end of 2013. So we have reduced the amount in the case of Southeast Asia, all of the markets sold out of their LTO amount. So our plan would be to put amounts on the table that we really believe we will sell through in the LTO, leaving good demand as we launch the product next year.

Great. Thank you very much.

Thank you.

Your next question comes from the line of Olivia Tong from Bank of America. Please proceed.

Great. Thank you. First question just if you could give a little bit more color on China given that the actives and the exacts [ph] are down sequentially and actives are down year-over-year. In Q2 you had said that China stabilized and the market volatility wasn’t really impacting you guys, but then obviously that turned pretty significantly in Q3. So just trying to understand, what are sort of some of the underlying factors in your view, as to what rolled that turn down, why such a significant shift in terms of the way you think about macro from Q2 to Q3?

Yes. It’s true, Olivia that when we – I think on our second quarter call we indicated that we weren’t really feeling the macro effect of the stock market turmoil there and our team really wasn’t. They weren’t hearing it. They weren’t feeling it from sales leaders on the street. And frankly it’s really difficult to measure the impact of what’s going on there. I would make a couple of comments. I mean I think there may well be instances of other companies in our channel, who might not have experienced the same effect that we did there. That might be a reflection of the fact that maybe they went into the market turmoil with better underlying business momentum than what we have had there, as we have been trying to turn the business around. I was interviewing recently a marketing executive for a large skincare company, she is the VP of Marketing for the Asia region, and I was interested to hear from her. This is a traditional distribution company that they were surprised with the softness that they were seeing in the Greater China region and they were also attributing it to the macros. But I think what we can say with more confidence, is that the scaling back of the promotional schedule, in favor of shining the spotlight on oils, just didn’t pan out the way that we hoped that it would. And we saw our KPIs soften as I indicated I think August and September and forecasts came down a bit for Q4. And I mean those are essentially the reasons that we have diagnosed so far for the softening there.

Got it. So is it the plan in Q4 to sort of not only introduce the ageLOC Me product, but also to the sales leaders, but also how do you think about promotions in Q4 and sort of first half of 2016 within China?

We always have promotions going on globally. In Greater China, we have been working through significant inventory issues as you know and so our promotion calendar there has been much heavier than it’s been anywhere else. So we will return to a normalized promotion schedule and essentially look to the future and focus the spotlight on ageLOC Me, immediately here going forward instead of trying to solve the inventory problem through a heavier promotion schedule in Q4 and beyond.

Got it. Okay. And sorry in advance for revisiting the VitaMeal question, but I guess can you talk, obviously there has been quite a bit of scrutiny around the commissions that distributors can earn on them, so can you talk about the commission structure on VitaMeal, is it any different versus other products within the line. And then also what’s been the trend in terms of revenue, you mentioned 1.6% of sales, but just generally speaking, has it been growing as a portion of the portfolio and that would be great? Thank you.

The margin on it and the commission on the product is similar to what we applied to any other product. We didn’t want to have an economic incentive or disincentive for featuring or not featuring VitaMeal on our product portfolio. So, it’s essentially just a neutral issue from a product perspective against the rest of the product portfolio and for salespeople against their commission structure. We see spikes in VitaMeal’s contributions from time-to-time particularly when there is a natural disaster, for example when we have an earthquake and there is carnage somewhere in the world, we will often see VitaMeal contributions spike. Occasionally in a given market like in Argentina, most recently we see an increase in VitaMeal sales, because we are having problems getting other products through customs and into the market. And so when people don’t have whatever they are trying to sell, they might focus some attention on VitaMeal, but overall really through the course of the program over the last 12, 13 years, the product has remained about 1.5% of sales. The total size of the product has grown over time as the business has grown over that same period, but we haven’t seen a really dramatic spike globally in the overall level of VitaMeal sales.

Got it. Thanks. And then lastly on share repurchase you mentioned the upping of the share repurchase program, can you talk about how you think about cadence as the years progress?

Yes. We continue to like to buy our stock back and have consistently been in the market. If you look at the last four quarters, we have bought back about 4.5% of our outstanding shares at 2.6 million shares. We have essentially used excess cash from operations to do that. So, we have not used at all the balance sheet. Since 2011, we have bought back over 10% of our outstanding shares, so over the last four years. So, I would expect that we will just continue to be consistently in the market using excess cash and you can tell by this increase in authorization that our Board is supportive and giving flexibility to use this as an opportunity if it presents itself. So, we will continue to just be consistent in the market. I think that’s what you would anticipate from how we operate this program.

Got it.

Olivia, let me make just one other comment relative to VitaMeal, just FYI. There are sales leaders in our world who are passionate about that program and those who are will often have it be a more predominant part of their promotional activities than others might. There are a handful of sales leaders around the world who probably are more passionate about VitaMeal than anything else, because they have been to Malawi, they have been around the world they see the good that it does. And so that’s kind of where they spend their time and that’s a very small percentage of sales leaders and the 1.5% of revenue that VitaMeal represents really is kind of reflective of the overall tone of the program globally.

Understood. Thank you so much.

Yes.

Your next question comes from the line of Beth Kite with Citi. Please proceed.

Hey, Ritch and Truman. I have a couple of questions first on reps and sales trends and then a few more on margins. Starting with reps, so the sales leader number obviously sequentially was really good for South Asia-Pacific on the back of Youth and so thinking about this 6% sequential improvement you saw in North Asia with Me kind of what’s your pipeline like of folks trying to get into the sales leader bucket and kind of how do you think that might trend over the next quarter or two with Me?

We would expect the sales leaders to trend nicely with the launch of Me in both Korea and Japan in the upcoming quarter.

And any visibility in terms of how many people are in that pipeline to try and close this quarter with Me or anything like that?

We generally don’t kind of go all the way through the layers, but this LTO really hits in December, which is when we would anticipate the push to be as people participate in that LTO. And generally if we see the leading indicator be the executive number and then the active follow that as the products get out and we begin to launch those. So, I think that trend that we saw in Southeast Asia have a good push in the sales leader number would be what we would anticipate, particularly in North Asia in the fourth quarter as well.

Some of our sentiment here, Beth, is really anecdotal, because like Joe Chang, our Chief Scientist is in Korea this week training sales leaders on ageLOC Me and his comment to us yesterday as he goes to these meetings of thousands and thousands of people day after day is that the army is ready to go to war. So, we just have to see how the quarter unfolds, but we are hopeful.

Got it. Perfect. And then one other new product which is it still correct that Youth will launch in Hong Kong this quarter?

Yes, in a limited fashion, we don’t have a lot of product available and obviously just salable in Hong Kong, but there will be some sales, let’s call it, maybe $5 million of sales this quarter, so not a significant amount.

Okay, perfect. And then a couple of questions on margins for the P&L, I know you have some moving pieces of the reclassification as well as foreign exchange, but with Me and Youth, I would just think and knowing of having kind of dug into the gross margin of Me with you that you will start to see some improvement. Is that a good thing to think about an accurate way to think about it here in the fourth quarter and into 2016 as more of your sales are coming from these two new products?

Yes, it should help, Beth. And secondly just the fact that we are not running as much promotional activity will also help. So, those two factors, number one, you are selling the new product that’s sort of full margin and secondly, we reduce the amount of discounting, both of those items should have a benefit to our gross margin. The sort of variable that’s out there still is what happens to foreign currency, but generally speaking, those two items will be in our favor as we come into 2016.

Perfect. And then one last one, on the G&A so that’s kind of been on an absolute basis between $135 million and $140 million so far each quarter this year. I know you said roughly $8 million in the fourth quarter for the global convention. Is that kind of incremental to the $135 million, so we are looking at like $140 million, $145 million or might it be even higher for some other reasons?

No, that should be correct. Yes, that should be accurate adding kind of that base amount plus the additional convention expense.

Alright, perfect. Thank you all so much.

Thanks, Beth.

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

Yes, thanks and afternoon everybody.

Hey, Mark.

I wanted to ask about Greater China and just maybe even Mainland China specifically, but curious how category growth is trending sort of where do you think growth rates are today and how do you think about your competitive position therein?

Yes. Category growth looking back over the past two years, we obviously have had a lot of focus on our TR90 weight management product, which has been really pretty successful despite the business interruption that we have had there over the course of the last two years. TR90 in the calendar year 2015 will represent about a $250 million product. And is that right, Ritch?

Yes.

So, a good category and one that I think we have done fairly well with under the circumstances. I think the attention is definitely going to shift towards the Me launch as we start prepping sales leaders for that later this quarter and going into 2016. So, there is going to be a lot of attention on that. So, really, actually if we look at the strength of skincare and Galvanic specifically and TFEU and if we look at TR90 on the nutrition side of the equation, both categories are healthy and I think that we can grow in both categories. What do you say, Ritch, anything you want to add to that?

I think that’s exactly right. And then as we look at sort of the broader industry, the direct sales industry, we continue to see a lot of examples of companies that are succeeding in growing there. So specific into our product categories, it feels like there is good opportunity to grow and even broader in the industry of direct sales. There is good opportunity to see growth as well, so just got to get the momentum back at our back and we just haven’t had a new product cadence here for 2 years, so we are looking forward to getting that business cycle going and expecting to have that drive good results.

Okay, great. Thank you. And just to go back to VitaMeal and apologies for doing it. I guess I struggle, I mean this is sort of new to me I don’t understand really why or how VitaMeal is used by distributors, you said some are passionate about it, so I guess I get that, but how is it used generally by distributors or is it only by those distributors who are passionate about it. And then is it recorded as a sale based on the geography in which those distributors who are buying it are using it?

Yes. So distributors will use it as part of our, really our corporate culture. I mean we have a mission statement that revolves around being a force for good in the world, through the products that we develop and the opportunity that we provide and the culture that we promote. And so usually VitaMeal is a relatively small part of what a distributor might –the average distributor would do around the world. I mean typically they are out promoting skincare or nutrition. And then as someone gets introduced to our corporate culture and we kind of immerse them in everything we are trying to do, they will find out about some of the humanitarian enterprises that we are involved with. And we have a relatively high percentage of our distributors, for example who contribute 1% of their commission checks to our Force for Good Foundation on an ongoing basis. And VitaMeal becomes another way to participate in making the world a better place. And then as I mentioned, so the sale is recorded in the country where the distributor makes the purchase of VitaMeal. Most – some of them will take possession of VitaMeal and actually do what they will want with it. They will either use it themselves or use it perhaps for their own emergency food supply or donate it to their church or to their local charity or whatever. Most of it we arrange the donations of through third party charitable organizations. So we will have an arrangement with the World Food Program or Feed the Children, where we work with them to identify good causes around the world that are consistent with what we are trying to do. And in Malawi for example, our partner there Feed the Children does the distributions, primarily into orphanages, community centers, and schools, so often kids who are eating the VitaMeal have to go to school in order to have a nutritious meal, which we think is a win-win. And let’s see, what am I leaving unanswered, Mark, does that help?

Yes. That helped. Thank you. Just last question, so in moving this earnings call forward a week, does that mean then that we wait until when the call would have been for the Q to come up?

No. Our plan is to file the Q early next week.

Great, okay. Perfect. Thank you.

And we should just mention the reason we moved the call forward primarily was Truman will be in China next week. So it makes it hard for him to call in, it’s a lot easier to do it this week.

And just with respect to scheduling, for those of you who were on – who attended our annual distributor convention in Salt Lake City a few weeks ago, we referenced the possibility of filing an 8-K to clarify what was going on in Greater China. I just want to come back to that and let you know that as we contemplated that in light of the prospect of potentially facing an inventory write-off here, we just didn’t feel like we should put out information until we put out all of the information. And so that’s why we elected not to file an 8-K.

And we have another question from the line of Tim Ramey with Pivotal Research Group. Please proceed.

Just circling back on the LTO cadence, I think at one point you had talked about doing about $150 million in sales in 2015 from LTOs, I guess you were at $35 million to $40 million light in the 3Q, do you have an updated number of what you think LTOs will represent in 2015?

Yes. We expected about $50 million to $60 million in Q3 and Southeast Asia did right about what we had anticipated, $47 million there. And then we had expected somewhere between $80 million to $90 million of LTO volume in Q4, and we still anticipate that to be about the case. So we really haven’t changed those forecasts.

Okay. So the LTO did not relate to, it only related to Me and Youth not the essential oils?

That’s right. Yes. That’s exactly right.

Okay. I think that’s it. Thanks.

Okay. Thanks, Tim.

Listen, we appreciate everyone joining us on the call again today, as always. Just in conclusion, we would reiterate that we are please today see trend improvement and we believe that the new product cycle that e are just launching gives us good ammunition for growth. We look forward to seeing you at our Annual Investor Day on December 4 in New York City, where we will review more detailed plans about 2016 and happy to answer questions that we can before then. Thanks very much.