Q1 2020 Earnings Call
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[music], Thank you and welcome to Deluxe Corporation's first quarter Twentytwenty earnings call.
I'm at Mirror, Vice President corporate Finance and Treasurer and joining me on today's call is very Mccarthy, President and Chief Executive Officer, and Bush, our Chief Financial Officer.
At the end of today's prepared remarks, very Keith and I will take questions.
I'd like to remind you the comments made today regarding management's intentions projections financial estimates were expectations about the future strategy for performance of the company.
Our forward looking in nature as defined in the private Securities Litigation Reform Act. It makes 90 park.
These comments are subject to risks and uncertainties, including risks related to coordinate team, which could cause actual results could differ materially from projections.
Additional information about factors that might cause our actual results to differ.
From projections are outlined in the press release today.
We've spoken with leading economists and I've engage with dozens of C.E.O.'s and experts seeking additional perspective.
Conclusion is that our results seem consistent with what others are seeing.
And no one agrees on the shape or timing of a recovery.
[noise] during the first quarter, we were not surprised that promotional solutions and cloud solutions experience the greatest code at 19 impact.
Both segments, how businesses get started operate and grow instance, many businesses closed significantly downsize their operations are simply went into hibernation these segments for materially impacted.
In addition to small businesses, we also provide discretionary products to large companies and they cancel planned conferences. They cancelled orders for some of those support products that we create for those conferences.
And promotional solutions, Tom Ricchio with doing an x. is doing excellent work adjusting the cost base in line with lower revenue levels and being opportunistic to adjust product offerings to existing customers.
Very sharp decreased and promotional rather new in the middle of March by certain categories declining as much as 45 per cent from plan.
By geography, we saw the most prominent declines in the northeast region of the country.
We expect promotional revenues to be materially impacted and the second quarter.
At a higher rate than the macro economy decline rate.
And we expect to see only modest improvement as we move into the third and fourth course.
On a positive note are promo team as identified some new opportunities offering P.P.E. solutions and branded rappers kidded for use in the real estate industry.
The silver lining in all of this is that the segment level promotional solutions generates the lowest adjusted either dot margins of all for segments.
As a result weakness in this segment has a lower impact on our profitability an operating cash flow.
We experienced a similar covert 19 impact and the cloud solution segment.
And Jerry Capers, too is doing great work managing costs and positioning his business for a rebound.
The businesses, most <unk> unpacking, the cloud solution segments, where data driven marketing incorporation services logo design web design and web hosting.
In data driven marketing, we've seen some financial institutions temporarily suspend marketing put consumers and small businesses.
We expect cloud revenue to be significantly impacted and the second quarter.
At a higher decline than the macro autonomy decline rate.
But we believe we will see some rebound and the third and fourth quarter.
We have developed a new cloud scheduling technology for the banking industry tell banks better support their customers I.
I mean have particular optimism and data driven marketing and engage with some financial institution clients in the design of recovery marketing programs for later in the year.
[noise] checks continue their secular decline in January and February and a steeper declined began to accelerate in March.
Continuing into April.
Tracy angle heart, our <unk>, our chief of operations have done a great job scaling down our plant operating expenses.
We expect to check volume to track with macro economic conditions were cover into a more standard secular decline rate sometime in the fourth quarter.
Now a few comments on payments, which continues to be are shining star.
<unk> I agree to joined US in late November last year, and it's already delivering impressive results.
We're all very proud of the stand out performance for payments.
In the first quarter payments grew at 18%.
This segment is benefiting from previously announced wins with synchrony financial adviser as well as from other new business we sign.
And the currents environment, we continue to find new opportunities with pay in payments with many new and longstanding customers are part of our financial strength provides them with an additional level of comfort.
Many of our competitors do not have disadvantage.
We also announced the recently formed medical payment exchange, we call M.P.X.
Throw a joint venture with Echo House, we solve a large scale payment challenge, how to effectively and efficiently manage medical payments and disbursements.
Are solution allows the explanation of benefits or the he will be to travel with a digital payments through email.
The email contains a secure track that can be printed into positive like any other check.
Converted instantly for a digital A.C.H. deposit or applied to many different payment types like debit cards pay Pal and more.
Correlating the he will be with the digital payment solidly intractable problem that has forced and non recurring payments to remain on paper and reliance upon the postal service.
Without an E.L.B. connected to the digital payment the cash application along with final set of old settlement and reconciliation or nearly impossible.
M.P.X. to solve that problem and we're now uniquely positioned to digitize this multi billion dollar market.
[noise] based on what we see now we expect to see continued strengthen payments and we expect to outperform macro economic conditions in the second quarter and likely throughout the year.
[noise] next I want to share with you what we're doing to protect our employees on our business.
In order to continue our support for our customers and operate the business. We've implemented work from home practices for all employees, whose rolls allow including most of our customer contact centre owner employees.
We estimate more than 3000 of our 6500 employee owners are now working from home.
To do this we're utilizing one of the six new technology, we use we invested in last year to facilitate collaboration and communication.
We told you last April we we're investing in our infrastructure and as a result of those investments and new related technology, we were able to move to a work from home model in a matter of a days for many of our employees remarkably including our contact centers.
How do we not made these investments on our formerly antiquated infrastructure.
It would've been considerably more difficult for us to transition to work from home model and our customers would almost certainly have experienced disruption impacting our revenue.
Here again, we're showing how our strategy and investments are yielding a return.
For deluxe, there's working in one of our facilities deems critical to the U.S. payments industry.
Implemented additional protections, including employee wellness screening and increased facility cleanings.
Provided hand, sanitizers and other protective gear, such as face masks gonna implemented do social distancing procedures and incremental hour hourly pay increases as part of our hero pay compensation.
In short.
Cannot be more proud of how the team has pulled together, it's nothing less than remarkable.
[noise] in March.
We announced the actions we implemented to help counter the impact of covert 19.
Since then we've taken further actions.
Collectively these actions include.
Reducing salaried employees base by 20%.
Which included mine together with a balance of the executive leadership team and the cash compensation payable to our board of directors.
Can't find a 2020 merit pay adjustments and suspended are four o., one k. match contributions.
Delaying some capital expenditure projects.
Differing most of our external consulting spend.
And the furlough of deluxe versus facilities that lack product demand to remain open.
In mid April we expanded our furlough program to address some of our fixed operating an S.G.N.A. costs to better align our business with lower volume.
Fortunately the locks <unk> disruption very strong financially with load net debt.
Late March as soon as we saw the initial declines in our business, we took action to enhance our financial flexibility and we increased our borrowings on our revolving credit facility to 1.14 billion dollar.
While our net debt remains unchanged.
We're now holding cache of about $300 million and are quick expense actions have resulted in sustaining our cash balances through the month of April.
Our leadership team holds daily status calls.
To review operations, let's take measures to ensure boys are safe and then we continue to live or the same high quality of solutions and services to our customers.
[noise] run frequent contact with our board of directors at home weekly status calls to keep the price of our challenges progress and wins.
Well there was so much more than what I just covered but I think this gives you a flavor for the actions are leadership team is taken to steer us through uncharted waters, while taking great care of our employee owners and our customers.
Now all turned over to Keith will provide the details of our first quarter financial results, but I'll come back and share my thoughts on our strategy and how're positioning ourselves for the recovery.
Thanks, very good afternoon, everyone.
A very noted in light of the current circumstances, we're very proud of how our teams have pulled together and rallied to help one another through the last few weeks.
We delivered a solid performance in the first quarter, while simultaneously driving or business transformation forward.
Total revenue in the first quarter was $486.4 million.
Consistent with our Investor day message, our business experienced sales driven revenue growth in the first two months or the year for the first time nearly a decade.
However is march unfolded or business was significantly impacted by cold at night team and we ended with revenue declining 2.5%.
First quarter results by segment included.
Payments revenue of $77 million growing over 18% or $12 million above last year.
Cloud solutions revenue was nearly $76 million in decline about $2 million for last year.
Promotional solutions revenue was approximately $143 million in decline about 13 $13 million from last year.
And checks delivered merely $191 million of revenue in decline about $9 million for the last year.
[noise] gap diluted loss per share for the first quarter was one dollar in 45 cents.
Including asset impairment charges of $90.3 million and restructuring integration and other costs of $19.7 million.
Societa with the company's transformation.
I'll discuss the impairment impacting Q1 earnings in a moment.
Excluding after tax nongaap adjustments of $2.53 per share adjusted diluted E.T.S. was one dollar and eight cents and compared to $1.54 says in 2019.
Reported <unk> for the first quarter was a loss of $27.9 million.
Excluding about $111 million of expense related to impairments restructuring integration and other nongaap adjustments adjusted EBITDA was about $83.3 million compared to $113.7 million last year.
Adjusted either Don margin ended at 17.1% in the quarter down from 22.8% last year.
Covert 19 negatively impacted the quarter by approximately $16 million of revenue and reduced adjusted EBITDA margin by approximately 120 basis points.
Before the effect of covert 19, we estimate are adjusted EBITDA margin would've been 18.3% right in line with what we had discussed it analysts day.
Are adjusted EBITDA margin also declined from last year due to the items, we discussed at analysts day, including revenue mix changes Onboarding new wins in transformation investments.
In addition, we recorded bad that expense of $5.4 million in the quarter.
Other items of note during the quarter included conducting goodwill intangible asset impairment assessments, resulting in noncash acid impairment charges totaling $90.3 million in the quarter, primarily for the impact of covert 19.
The Cobra 19 related nine cash acid impairment charges totaled $85.4 million in the quarter.
Included 63.3 million partial impairment of goodwill in the promotional solutions segment.
In addition, goodwill for the clouds solutions segment was fully impaired by $4.3 million, along with certain intangible assets totaling $19.7 million.
Unrelated to call. The 19, we also recorded noncash asked impairment charges, a $5 million associated with an asset held for sale in the clouds solutions segment as well as a write down of a customer list in a promotional solution segment.
Moving to the balance sheet and Cashel statement.
At the end of the quarter weird drawn $1.14 billion on the credit facility, which was an increase of about $256 million from the beginning of the year.
When we saw revenue begin to decline in March we were very proactive and making the additional draw on our credit facility to further strengthen our liquidity.
We expect to maintain the current levels that are balance sheet for the near term until we have greater clarity on the rebound of the U.S. economy.
It's important to know that our net debt has remained unchanged as a result this action.
Currently have about $300 million of cash in short term investments.
Further highlights are basic financial straights.
The revolving credit facility matures and 2023 and has a total size of $1.4 billion to $5 billion.
The facility includes an accordion feature, allowing us subject to lender consent, which we would expect to receive to expand by up to $285 million beyond the 1.14 billion level. We currently have drawn.
Alternatively, we believe we currently have the opportunity to access the capital markets for additional sources of liquidity, if necessary, enabling us to enhance our capital structure or attack compelling market opportunities.
Based on what we have seen on the second quarter to date, we do not anticipate extended periods of negative cash flow.
At the end of the first quarter, our debt coverage ratio was 1.9 for which needs to be maintained below 3.5 times based on our credit facility coverage.
Or interest coverage ratio needs to be above three times and was at 9.79 at the end of the first quarter.
With regards to the recent government stimulus package, we're differing tax payments based on recent legislation, allowing us to improve near term cash flow.
We have not access any government loan programs and don't anticipate accessing the loan programs. However, we continue to monitor legislation to see if there are other offerings that may help us to this downturn.
For the first quarter cash provided by operating activities was about $18.6 million in capital expenditures were $6.4 million.
Free cash flow defined as cash provided by operating activities less capital expenditures was $12.2 million in the quarter.
The primary driver the decline in free cash flow, where revenue mix changes, which were materially compounded by covert 19 impacts in previously disclosed investments in our business transformation.
During the first quarter, we purchased $14 million of time in stock and as we noted on our last earnings call. We plan to purchase left stock and 2020 than in previous years.
We plan to pause additional stock repurchases in the second quarter.
Our financial priority is to maintain strong liquidity and flexibility to the coping 19 crisis and we have made the decision to pause some of our capital projects in the near term. For example, we slowed are as far from a and sales force implementation.
We've also take an additional cash preservation actions to minimize working capital requirements, including extended in terms on payables.
Discounts on certain contracts and doing other nonessential purchases and spending.
As previously announced we suspended or 2020 outlook it consistent with that we're not providing second quarter or for your guidance.
Barry has already provided you general perspective on how we expect our for businesses to perform relative to the overall macro economy.
We expect to resume sharing our specific outlook when we return to a more macro economic stability.
For all things considered we delivered a solid first quarter our strategy is working.
We delivered sales driven revenue growth in January and February for the first time in nearly a decade.
We're taking the right actions to protect our company today imposition us for the economic recovery to calm.
In a critical importance, we believe we have adequate liquidity to get us through the cobin 19 crisis.
Spite, what we know will be a very challenging year.
Deluxe has a strong balance sheet, great leadership team in a deeply engaged and committed workforce of employee owners, enabling us to weather the storm.
Now I'll turn the call back to Barry.
Thanks Keith.
So you've heard how our business was significantly impacted by covert 19 in March we immediately further strengthen our liquidity and began an intense focus on expenses to get them aligned to lower volumes.
But I don't watch you lose sight of some of the great accomplishments, we had on the first quarter.
We held our first ever company wide to self kick off meeting led by our strong new Chief revenue Officer, Chris Thomas.
He's bringing together our sales organization to strengthen our understanding of one deluxe and <unk> and further prepare our team for our new go to market strategy.
We held the largest customer event in the history of deluxe, bringing together hundreds of our key customers across our entire portfolio of businesses.
Not just one or two areas like we did in the past.
Use the opportunity to introduce these customers to all the new deluxe has to offer.
We held up the first an investor day and over a decade, where we shared our strategy with investors and provided them with an opportunity to learn about or exciting new segments and interact with each of the segment presents.
We had over 100, a 10 days that the events and the web cast have been viewed by hundreds more in the weeks since the event.
Now I want to move on to the longer term and how our strategy positions as well for the eventual other economic recovery.
Recall, we shifted to a sales driven growth model, which differ significantly from the past when virtually all growth came from acquisitions Sundance by increasing debt and leverage.
In January and February our new strategy delivered sales driven revenue growth of the first time and nearly a decade.
We want a three of the top 10 deals with the last decade, and two four and one the fourth deal into one.
Our sales momentum continues even with who've at 19.
Chris Thomas our Chief revenue Officer has also trained our sales team and all the deluxe has to offer and we're seeing the winds continue as a result.
As I mentioned earlier payments as a shining star and grew 18% in the first quarter.
And payments, we announce the joint venture with Echo health called M.P.X. or the medical payments exchange.
We've also farms the deluxe payment exchange, which utilizing the same core technology credit for M.P.X. to address nonrecurring payments were paper as currently the only solution.
And they expect to win new clients and Treasury management, who recognize the value of our financial strength.
Pair to some of our competitors.
I mean recently announced our relationship with Pfizer, which includes offer the Clover point of sale platform physical an online payment processing capabilities Giscard services and more to for our small business customers.
[noise] and clouds solutions were having meaningful conversations with banks to develop marketing programs planes plan for later in the year.
We've one new business and data to have a marketing and extended services, such as new mover and business lending marketing triggers the others.
We want five new deals with banks to use our bankers dashboard profitability solution and my Corporation launched a new E. notary solution.
In promotional solutions, we've identified new business opportunity selling P.P.E.
The new and existing customers and expect this business to bring in tens of millions of dollars of new revenue this year.
Our brand management business continues to add new customers and expand service for existing customers.
Our sales driven strategy is clearly working it's not just a theory.
Where winning and we have the new deals to prove it.
I think it's important to briefly touch on our capital allocation and cash <unk> surveillance strategy.
We took immediate actually remarks to further strengthen to expand our liquidity and we continue adjust our expense structure in line with revenue.
We believe where position in the company to take advantage of the inevitable opportunities and the market that will be created as the economy begins to recover later in the year.
And if Keith mentioned earlier, where closely monitoring the markets and may consider opportunities to enhance our capital structure, providing us more tools to seize opportunities presented by this dislocation.
We announced our first quarter did not on April 30th delivering the clearest message possible about our financial stability.
We told her earlier, we were suspending share repurchase isn't the second quarter.
In summary, we believe we delivered a solid first quarter and our strategy is working.
<unk> 19 crisis is putting extra light on the strength of our strategy and proving where on the right track in both good times and bad.
Despite the painful and packs of covert 19, and the challenging months ahead, we have the same aspirations for deluxe today that we had just 60 days ago.
Or transforming the company from a legacy check printer into a trusted business technology company.
And our progress is impressive.
While the pastor full economic recovery will obviously take time, we believe deluxe will accept this crisis a better.
Stronger and more resilient company with dynamic and growing payments and cloud business and a vibrant promo attracts business.
Our brand.
Our people the reliability of our service and the strength of our balance sheet will drive our acceleration it into the future.
I can't to include today without acknowledging again, the incredible leadership commitment and can do spirit of our fellow employee owners.
Our team is living our purpose of championing businesses so communities thrive.
Guided by our values of putting customers first.
Earning trust, creating what's next.
<unk> holders and getting it done.
My fellow deluxe, there's are accelerating our transformation, while simultaneously delivering for customers through this crisis.
Because of our team I'm more confident than ever.
Future of deluxe as exciting and very bright indeed.
Nazis AD and I will open up the call for questions.
Thank you, ladies and done anything like that question.
I didn't want all your best friend telephone.
Question to answer English <unk> <unk>.
On the question.
Our first question Charlie's father, yeah, Okay.
Good evening.
Hey, Charlie gave me, Okay, Hey, how are Ya.
You can sure. Good thanks, sorry, <unk> cushion is a little bit spotty here, but we get from studying that sometimes just you know appreciate all the the color you gave you know in terms of the.
The abridged outlook, if you will but the weather just kind of good sense from you. When you talk to you know, particularly your small business sense of the banking customers, what's the kind of the general such a bit about you know timeline of just eventual recovery and some of the code programs of the baking side of the defense exercise that you think might come back first.
I don't know that I can I have a crystal ball I wish I did.
But we believe that based on all the data we have and what we see.
<unk> early days in February.
The with it the likely shape or the recovery is most likely to life partner described or something like a Nike slow down and then back and gradually over some period of time, just how long that I know with what's your ASCII and I don't have a crystal ball they will tell you that.
But we believe as the as the economy reopens, obviously small businesses reopened et cetera.
We don't know how many businesses are close we suspect <unk> permanently we think and expect that a large number of businesses are simply and hibernation.
Full that they will restart their business and that as they get through this we're also hope one optimistic without the you know new business starts and were particularly well positioned helped new businesses incorporate and get a a lie that they go forward. So I don't <unk>.
For for you because I don't how for football, but we think that it won't be something that comes back steadily over over a period of time.
That's that's it does definitely fair and I appreciate that Barry and when you look at some of the the you know over the years the ability to take call. It started a business and it seems like it's continuing today about the digital lovers. You think you can pull on the costs side to you kind of you know help kinda right through the storm more so than you've already kind of laid out.
Absolutely. So you know one of the hallmarks of our company is the ability.
In its production.
These with great efficiency, that's one of the things. The company is then great ask for a long time.
That's all we certainly exercise that at the end up to three and going in and the other two one going into two two and of course will do that <unk> before I think one of the more interesting things here that they talk about the responsibility of our company in our management team as soon as we saw that the market with.
Could it have the hype a challenge we acted immediately and we know that we moved earlier, we want to first businesses to move as aggressively as we did the controller car.
And we expect to do that going forward not specifically other other places we can go I've told you as long as a done with the company, which is the you know this about 16 or 17 months.
Continually to look at the structural efficiencies that we can get out of out of our organization. We think there's opportunity for savings and real estate you know if they take it back in our technology and we think that can give us a booth and then of course, all the things we're doing on the plastic outside of our business you know the company for a long time with the operator.
<unk> company with a series of silos and this is the first quarter, what our operating in our new segments with a <unk> a unified go to market strategy, which is about one to a lot. So we think that they're continue to be structural thing that can be had as well as all the great things are already in place of elaborately and Paul.
That are volume.
Pretty much everyone to be safe.
You too thanks.
Thank you for next question comes equipped and again it.
[noise] afternoon, Thanks to segment questions and.
A nice quarter and I Hope you guys are all safe and.
Families are as well.
Thanks to kind of continuing the.
Just to continue in that vein I, you know I think you'll be expectation was margin pressure in the beginning of the year because.
Vestments to support the growth and and a nice job and I I'm. Just wondering you know I think the expectation was that those would come down a little bit as we went through the remainder of the year is that still expected given the difficulties you know the challenges from covert 19.
You know let me let me answer the first part of this and then I'll, let you stuff in it and give you more color.
We are still very optimistic about the long term, but opportunities at our company to deliver you know bars and expansion.
For a long time that we are playing in the company to be a bit singles <unk> with margins in the low to mid twenties.
I believe that is our targets and an achievable target for company. Obviously covert is going to have some is hats on us in the near farms.
Don't think that that you know, it's going to prevent us from getting to our you know or intermediate term part. If there you know thing and the funny now is that going to impact you too I think absolutely as well, but it does not.
Office over the longer farm.
I will.
Add something on that for for more precise.
<unk>, so when you're looking at the information that we provide you we've given you some some insight as to what we're saying we don't have a perfect.
Visibility on how that's going to translate them with the rest of the year.
But as you're looking at Christmas or at the back end of March when we indicated that there was about 16 million impact on the revenue that that was.
That translates to about 120 basis points.
Margin on the quarter.
So if you if if if you extrapolate that out.
Pretty good indication about what the impact is on our on our profit.
<unk>, obviously, that's coming out it it less than water gross profit <unk> and that takes into account all the area just described.
Very aggressive after so we've taken to take costs out of R.S.G.N.A. functions as well. So we're probably scaling the business <unk> above aligned in the in in our costs of goods as well as in R.S.G.N.A.
Right now I appreciate that.
So and so.
Maybe just touching on on the top line and some of the categories. During one of the things. You. You mentioned is is we get into the year. I mean came inside you know I think the later in the your maybe said yeah.
Talking about growth, maybe slowing a little bit I don't know if that was the correct term, but but wouldn't temper. The expectation since are so strong right now you know in the economy to slow those times.
Oh, it's a bit clearer.
Back then, but I you know what I said was that we.
Famous business.
You know materially out hey, what's happening in the broader calm.
And the reason for that is several phone first of all with new products that I tried that are helping bring up a new markets as digitizing existing pathways and we can get a far more efficient way of that's what the M.T.F. program is all about digitizing health care.
We also.
A very large number of customers in our <unk>.
Management solution and the reason for that is a really good at it.
Yeah.
Facility is very attractive to have our filler.
And sort of looking for a partner for a long time.
So it's a great example, the fact that our company is so strong that our balance sheet and the strength of our product is solution.
So we can city to see opportunities for new products, we see opportunities for growth in our product. We sold a number of feels that we expected to see to come on over the course of the here.
But it's difficult to say exactly what that number for the v.
Remain very optimistic about that that growth for for the rest for Ya.
Okay.
And then just on the cloud side, you know the number look pretty strong up until seemingly up until a mark what was that growing.
Was that seeing organic growth as well up until it's over.
You know the cloud business has many different elements.
Forming differently, we were performing well within our expectation that we've talked about that and after day.
You know we are pleased for somewhere where the cloud physicists who are collectively going into covert obviously those is impacted as a result, so we're particularly optimistic about.
In the data.
<unk>.
<unk>.
Almost two since about their recovery Murphy program.
And we see finance and wants to see some planning to see a aggressive.
<unk>.
The crisis save.
Things that that will see very good for our data business as they come out of that.
Thank you know other businesses there will recover you know more naturally with the recovery autonomy.
<unk>.
Okay.
I guess this <unk> you know <unk>.
<unk> been here for a little bit I know, it's still early in terms of of having the economy, but how do you change maybe some go to market strategy to kind of you talked about you Gotta strong balance sheet, you know maybe stronger than some other composers. How are you <unk> you know contacting you know kind of new customers at this point to to maybe take some more share. The you know given a disruptive.
The marketplace.
So we have good news on two sides.
One is really for the first time, our company has fully integrated go to market strategy, where we can talk to a customer.
About the range of solution, that's a lot since a liver to our customers.
So instead of having is huge sales people that are very deep on one particular products. We have hundreds of sales people that can go to the <unk> and go to customers and talk about the rain.
I need to go longer or something more specifically, we have sex unless I can do that.
But Chris promise as our D.C.R.O. me think it's the first time this companies had a fear row and at least 10 years, that's as far back if we can see.
It's pulling together the entirety of the sales organization. So that they can have that you.
One of the comments on it earlier was that we had our first.
Sales kick off meeting packaging anyway. So we have all of the sales and all of the sales people together in one place hearing these higher.
Sorry.
People left that stuff.
Fire just going to tell our whole school people were learning about the <unk> solutions that we've had for years, but they never knew even existed.
So we're facing our story to the market place in a holistic way. So we're just having much broader conversations with existing customers than we ever had before.
Now the other side of this is also a good position that we're getting in bounce Hall.
Some of our competitor customers that are concerned about the building.
And look at our ballot.
Some statements and you understand the history of our company is being financially sound for and you know for a lifetime, it's pretty clear why customer would want to come to the safety not only.
She is strong and a password was good but we just have we have a superior products in the marketplace. So we think where the beneficiary on both levels here first of all.
Marcus.
From experience senior sales leader and <unk>, an integrated whole story the ones on my story about all of our business is not <unk> then the size of our company crafting customers that are worry about some of his car survive. It's actually an incredibly good story and you know.
I I bet you heard it I hope.
The fact that we are close before.
I don't laugh.
In the last quarter.
Four of the top 10 deal.
We close into quarters, and we have more either really operating on the new segments.
<unk>.
Just gives us an enormous amount of confidence about our.
Around the right path.
Yes, we're dealing with <unk>, we got out first we move quickly we're going to handle.
I'm a physician in the company to come out of the other side.
Wrong and you know we just have to win for prove that there are the excitement and enthusiasm then I think.
<unk>.
Emails now daily about when I think I got three today before the fall so it's.
Exciting time for so long to be out.
Sizes services.
Physician our segments help a lot.
Oh Hell.
One of our site really I think <unk>.
I appreciate that color and and figure out some of the wins and also good quarter. That's all I have but stay safe and I'll talk to <unk>, they're looking to to.
Right, but you I think you want us to provide a little more clarity on a couple of the points that are on the slide back into your palm.
Craig very think Saudi helpful. As you could on flights 17.
The clear that the total covered related noncash asking impairment charges totaled $85.3 million in the quarter and that did include 63.3 as a partial impairment of goodwill in the promotional social segment and for the cloud solutions, we're really talking about web.
Posted that reporting unit was full impair by $4.3 million certain intangible assets totally $17.7 million.
And then add if you could on flight 18 point, we're trying to make here is that while we drove down our credit facility.
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Increase about $20 million in the quarter, but we are currently holding a strong cash position in the 300 million area and so net that really remains largely unchanged from the end of March and that really was the highlight of of our of our focus here.
Thanks.
You know what for why don't I think that's back.
Right place for me to.
To start the carpet conclusion.
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I see take away.
He was making one of them there first.
Naturally scroll, we've taken the necessary steps to secure a future.
Second we deliver to file it first core despite coping impacts.
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Strategy isn't working.
January February <unk>, we delivered sales driven grow for the first part in a decade.
Say it again, we delivered sales driven grow for the first on in a decade.
Our payments business screwing impressive 18%.
We think this is clear evidence our strategy is working.
Four.
While we're experiencing.
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Q to.
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Caliber and grow over time.
Importantly, we have the financial wherewithal to sustain our business and get to the other side of this temporary downturn.
Finally.
Over a crowd hundred five year history accompanies left or multiple crises.
Yeah, that's the Great Depression, two world Wars and more every one of these crises our company has grown stronger and better in this kind of no difference.
Yeah, we have a strong balance sheet and ample cash reserves.
What makes the luck so special as the character of my thought was a <unk>.
Finding a way to me to customers knees in good times and bad that are deluxe character and winning attitude shining through.
Writing, our halfway to even greater future success.
Now, we'll turn the call back to address for some finals huh.
Thanks, Barry before we conclude the color the I, just like remind clothing conferences and the second quarter, where management will be participating.
20th will be participating in the virtual meet them technology medium from a media conference and on June 3rd and fourth will be at the bare Twentytwenty global consumer technology and services conferences. These comforter this will be virtual from from what I'm told if there are near the questions or if an investor has has so question.
They want to talk to to me Barry Keith. Please call. Please email I know without travel schedule is right now it's tough to get a hold of us maybe but we will absolutely make as much time as possible to to speak with you on any topic short talk about.
That's it thanks for joining us and and that includes the deluxe first quarter 2020, or and it's called Thank you all right.
Oh, Thank you ladies as I'm into that because they topic. Thanks <unk>.
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