Q1 2020 Earnings Call
Good day and welcome to the first quarter earnings Conference call. Today's conference is being recorded at the start I would like to turn the conference over to Energy Davis. Please go ahead.
Thanks.
Good morning, everyone welcome to like DHL support Oh.
Culturally and I think first quarter 2020, or anything else that issued 30 minutes ago.
Well. He is also available on <unk> website.
W. W got your jobs jobs.
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Our headquarters I think for four or.
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Okay.
Joining us on the call today, Nike CEO, Harry Herington, Oh, you called them and acting Chief Financial Officer.
We didn't have a cautionary statement regarding forward looking information.
<unk> CFO.
Yeah, the March and will open for questions.
Any statements made during this call that you've got wheelchair shortfall caught facts constitute forward looking statements each other's optum does the company potential financial performance for the 2020 fiscal year feature that's 12 years after net objection.
Okay, all right Tom statements relating to the company several players objectives, all expected operating results statements relating to potential new contracts to overhaul statements relating to the company of if such an effective tax rate came enjoying the possible future dividends and share repurchase page channel choice.
After the public content that other possible feature that including potential acquisitions any assumptions upon which the catch up.
Okay.
So I thought applications and assumptions that are subject trouble eventually jeeves, which may cause actual results.
Well each on the phone business.
In both chemical but did you know national business political economic competitive social and market conditions.
Including damage from nationwide to the company that's partners the ability of the company should I mean, it's such a contracts and whole oncology I just I apologize.
All state and local government agency gets impacted potential information technology cyber security, Okay. That's a trend, but you're going after that the company's ability to identify and acquire suitable acquisition candidates eclipse actually break and here I think Uh huh.
At the public Nike and pandemic they have all demands a topic each other kids of all of it. So I'm not interested partners. It's what just won't bother taught you should not rely on in Poland double check addiction, okay actually about the future of each of discussion of risks and uncertainties that could cause actual results could differ materially such forward looking statements.
We've been a section titled what's factored all cautions about 4 billion okay.
The company's actually <unk> form 10-K.
Hi, that's what's probably they ask you see these filings are available.
I'm, sorry, www dot dot dot any forward looking statements made during this call people only as of today. This call except as may be required by applicable law. The company undertakes no obligation to update or by how this will make forward looking statements what else was ultimately information future events or otherwise.
Okay, the black hogs, you're changing its Cherry Canyon.
And acting Chief Executive Officer in Chairman of the Board.
Thank you Andrew and thanks, everyone joining us for today's call.
As you probably already predicted [laughter] knocking on your NAXI inorganic growth assisting our government partners with their response well she's a great deal.
Got you this afternoon.
Any our investors know I'm not very straight forward individual.
He has a long history right corporate transparency.
And strategy and it's cold.
The costs and I work right.
Operational and financial results first quarter of 20 point. However, a lot occurred in the final quarter. That's covered 19 crisis worked our nation Needless to say.
Irene quickly ball [laughter] partner for spot.
First and then.
Again, I want to reflect the tremendous job government has done navigating through the cover 19 pandemic.
First time in history.
The nation reports to close agency offers entrants fishing almost all government operations online.
In addition, this occurred during the critical car once [laughter] needed access to governments your information guidance and services amongst the challenges or government takes forever.
And many of the agency and actually support for certain strategies to keep your operating including transitioning many of their services online that's branch offices reports.
I would also like <unk> and I see nearly 1000 imports have gone above and beyond walking unbelievable hours.
And keep it operations running smoothly and then I think quickly transition into a completely worked for workforce and delivering central services target partner and communities. During this natural pandemic, it's Chris that's absolutely brought out the baskin in actually imports and their incredible effort have taken many steps from our tech.
Changed rapidly, adding hosting kept capacity in order to date night to ensure that covered that senior restaurant websites could withstand truck spike.
At times in excess of 2000% mobile traffic.
Sure application specialists.
She may receive a phone call late Monday with request from the governmental and the work nonstop Tonight to deliver testing solution there big launch to coincide with the government's personnel.
That's an area I just described countless times during past few weeks and illustrate our commitment to there aren't that sport government agencies picture [laughter]. They serve every day.
He works like side by side of our government partners, we've launched more than 130 coming back in specific services since mid March that's what it's done informational website.
She started using the epic primary communication channel.
Here are some of the examples are essential solution and I see quickly report.
In Louisiana, or King digitized and manual triplicate and process. It covered 19 testing teams in the field are required to complete and transition.
[laughter] single use online submission.
The service was so successful that is now being used and more than to have been tested and subject to take work, including dr. locations.
Our team in West, Virginia, recalling it committed good strength technology and watch a similar solution works gifting occasions.
Kansas in Rhode Island, working design and watch your personal protective equipment marketplace, but a lot suppliers to fast track, making personal protective equipment available connector health care established.
Virginia, we provided a suite of services to naval distinct directly process, an unprecedented number unemployment claims like quickly adding call center functionality at that point I'm only premise solution for rent that's why we took place electronically.
In the first week simplification launched more than 53000 Virginians use its mobile service just forget unimportant bio.
The second time, we had more than 2500 people use their application simultaneously.
We're proud of the central services and I see teams have provided government during this crisis and our thankful for the trust they placed in us during this critical time.
Well I'm also didn't national covert 19 response evergreen additional investments increased bandwidth and expand our technical and operational capacity <unk> digital government open for business.
On anticipated near term investments went direct response to pandemic support and we're not playing for yeah as gonna Central Serous rider to government and it's part of our value proposition. We made the decision to do what was necessary to keep our digital solutions function under unprecedented demand.
Well these investments might have a modest negative near term impact through a bottom line. We are confident if that's correct decision granting because it was the right thing to do four communities.
Well, no company, including and I'd say, it's immune to the financial impact of token Nat King we do believe that because of conducting history. The confidence place that our government partners and the strength of our business model innocuous remained strong throughout this crisis and beyond.
Okay. So a potential long term carried at reduced tax revenues.
Expanded recovery payments and tremendous competition for having you speech budget dollars.
Thanks, [laughter] transaction based model threats government with the confidence that their digital services will continue to serve and expand if necessary and will not be another girl on their limited agency budget.
In recent days the media and government leaders have focused on reopening netcom and businesses returning to work.
An important realized and I say never left.
Prior to and during the covered 19 or spar and I could continues to secured new long term contracts and deliver operational wins.
To date this year, we've continued our 2019 momentum that secured several contract venture.
These include Rebids or extensions for enterprise businesses in Alabama, Kentucky, Louisiana, New Jersey, Mexico, and the Department of Transportation Spring employment screening program, which are more fully described in our earnings release.
We have maintained a nominal long term relationships with all these partners and we thank them for continued placing their trust and they might see.
And I see also secured a significant wins with our current portfolio on the same day that main issue there stay in place order in March the state awarded NRC, a five year contract for ARX <unk> platform become in the third stake or sign up for ARX <unk> solution to manage prescription drug monitoring.
In addition, I am pleased to announce we recently finalized implementation of our cannabis licensing solution and the state of Missouri and the state has contract for additional molecule, which actually will be deploying over the next several months.
Agreement in Missouri runs through mid 2024 with renewal option that the stake may exercise in mid 2026.
I would like to personally thank Missouri, and our long term partner in Maine, forgiveness privilege deployed or industry, leading vertical solutions and your stake.
Finally, there is tremendous concerns surrounding the I know in economic impact October 19 on our country. However, I would remind everyone for the past 28 years and I see is coordinate this has remained stable.
Good economic times, and bear weird debt free and we continue to generate consistent cash flows which provides us significant financial flexibility and confident in these uncertain times.
Financial flexibility enabled us to repurchase over 241000 shares under our $25 million repurchase program at highly attractive prices dropped five day period in mid March when the market first started that negatively react to the corporate banking crisis.
We executed a tenbfive one automatic trading plan how to our recent opening trading window that commenced when the tricking window closed on March 16, however, despite the strength of our balance sheet and the confidence we have in our business. We cancel the plan on March 22nd.
We felt it was prudent given the uncertainty over the pandemic on a broader economy.
As I said in an uncertain tax cash is king and that was a guiding principle with our decision.
To this end I will close my remarks on a positive note and former everyone that after careful consideration a board of directors renewed their commitment to continue our regular quarterly cash dividends now more than ever we feel is important to support our economy very attorney much needed cash directly to our individual an institutional stockholders and into.
Great to their various investment in mutual funds for one k. plant and other retirement accounts.
I am please turn call over to Energys, Chief Financial Officer, Steve crossing.
Thank you Gary.
The first quarter of 2020, we earned 18 cents per share compared to 17 cents the prior year quarter.
Before we move onto the core results for the quarter the housekeeping item beginning in the first quarter. This year, we reclassified the Texas payment processing contracts our income statement.
Hey, enterprise category to the software and services category, both current and prior year quarters, given that our business in Texas is limited to payment processing like the other payment related contracts in our software and services category.
And is not a traditional enterprise contract developed managed mutual government services can handle payment processing.
Also included a supplemental schedule in the Investor Relations section of our Dot com side that lays out the reclassification on a quarterly and annual basis, beginning with a third quarter of 2018, when the Texas payment processing contract commit.
Moving on to core results for the quarter same state enterprise revenues grew 7% year over year, we had a very strong start to the quarter before the nation's full mitigation response, because the 19 kicked it towards the latter half March.
Results are same state for the quarter was modestly below our internal expectations.
Collecting a partial month impact of covert 19 on certain Parsabiv enterprise services, most notably driver history records into a lesser extent interactive government services. In addition to certain bark software and services businesses, including Federal Preemployment screening program and Mr.
Total recreation Dot Gov service.
Which will speak to more in a moment.
But first I'll break down the major components of saving state enterprise growth quarter.
Same state transaction days driver history records or DHR revenues were down 4% year over year for the month of March 2nd stage DHR revenues were down 8% compared to March 2019.
Clearly impacted by the epidemic as we had never seen monthly same state DHR revenues declined to this expense in our company's history.
As we've discussed in the past, we don't have IPO transparency into what drives DHR colleagues overtime.
Situation is no different however, speaking with our various contacts industry, including data resellers based on media reports, we suspect lower DHL our volumes could be the result of several factors that seem reasonable to us at this point.
First.
Temporary pause in second half in March for both government and industry participants to adjust to stay at home orders and work from home arrangements could have led to record cold like data resellers insurance carriers.
As an example, one of our government partners was not able to update bulk DHR records for a two week period, starting in late March due to work from home staffing challenges.
Fortunately the stake is able to resume updating records the second week of April.
Second.
Several large auto insurers announced they will be sending refunds to customers. That's insurance claims volume due to fewer drivers on the road, which could be leading to fewer DHR holes.
I also want unfortunate across the country machine fewer citations for driving violations in response to social distance in guidelines, which could also be contributing to lower DHL volumes.
Third auto and home sales, which have historically prompted DHR record pools are at a standstill and could be contributing to the softness as well finally, the company's hiring fewer employees. During this sudden economic downturn, particularly in the retail travel restaurants entertainment industries companies are conducting tier.
Background checks, which could be contributing to fewer DHR goals.
While it's difficult to predict the magnitude and duration of the pandemics in back on DHR volumes with any precision.
I expect the softness will be most pronounced in the second quarter.
Most of the country on full walk down in the broader in Colombia and sharp decline in.
And potentially to a lesser extent in third and fourth quarters, and we hope the country any economy start to slowly open back up.
Next same state transaction days interactive government services, Brian, Yes revenues were up a solid 13% for the quarter driven by higher payment processing revenues in certain states, most notably in New Jersey revenues from the new auto tightening and registration system in Wisconsin, which launched in the second half of last year.
Higher hunting and fishing licensing revenues in certain states as well as higher revenues and several other online services across our state enterprise business.
For the month of March same state by Gs revenues were up 8% compared to March 2019.
Over the last several later this month, we saw brick and mortar government offices close in several of our enterprise stage to comply with stay at homeowners stemming from the cover 19 pandemic and saw several Dnbi also allow citizens 60 to 90 day extensions to review auto registrations driver's licenses, which contributed to lower.
Hi, Gs revenues in certain of our stage on the flip side, we saw substantial increase in volumes from several online services across our seat enterprise businesses as transactions previously conducted in government offices moved online.
While it's difficult to predict impacted because of 19 pandemic I guess revenues for the rest of year with precision given only a partial pumping results under our belts.
Remember most of our idea services are not discretionary and as a result, we believe most I guess transactions will ultimately occur this year, but pushing them be deferred to future periods.
Furthermore.
Many point of sale services, managing brick and mortar government offices or payment processing related for which we expect revenue declines were partially offset by an increase in online transactions for the same services or partially offset by a corresponding decline in merchant processing costs, which could approximately.
60% of point of sale revenues.
One last area I want to touch on before I move to our software and services businesses.
Ongoing efforts on the outdoor recreation from Pennsylvania, Illinois.
For the quarter, we incurred about $900000 and state enterprise cost.
Our outdoor recreation platform in Pennsylvania, Illinois.
From about $500000 in the prior year quarter.
And your exclusively focused on Pennsylvania.
Earlier this year, when we announced our 2020 guidance, we expected to launch, Pennsylvania around the midpoint. This year. However, because of the lack of state resources during the call. Good 19 pandemic, including the ability to work with point of sale agents out in the field during walk down.
The Pennsylvania recently requested we need to launch date in September which given the circumstances is entirely reasonable Unfortunately for us that pushes the launch out of a busy season for hunting and fishing in reduces the revenues. We currently expect to generate in 2022 around 600000 beds.
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Down from our previous estimate of $2.4 million.
However, because of adjustments we have made to our project timeline in development resources. We expect the operating income impact will be less than the revenue impact somewhere in the neighborhood of only $1 million for the year, which we had incorporated into our forecast for the year, which I will discuss shortly.
However, there is a silver lining coming from this situation in that because of the delay we negotiated an extra year to our contract, which now extends to 12 years and total.
Very much appreciate your state partnership and look forward to a successful launch into solution later this year.
Pretty on software and services revenues were up $1.4 million were 9% over the prior year quarter, driven mainly by revenues from our Hearts go prescription drug monitoring business and recently acquired and I see licensing solutions business, which contributed a combined $800000 revenue during the quarter.
And it works from the Texas payment processing contract.
I will now touch on our two largest federal contracts preemployment screening program for P.S.P., which we operate on behalf in the federal Motor carrier Safety administration.
And the recreation Dot Gov outdoor recreation service, we operate in a subcontractor with these Allen Hamilton.
I'll address the P.S.P. firsts for the quarter PSP revenue growth was flat large part because of 5% decline in revenues for the month of March.
Speaking with our government counterparts based on trade publications and communications from the American Trucking Association. We currently anticipate continued softening in PSP volumes coming months as a result in several factors, which I will touch on briefly.
Before I view as a reminder, the P.S.P. it not a mandatory service familiar carriers and other companies associated with the trucking industry. However, the good news is that the trucking industry. It's critically central during the cold had 19 pandemic and we expect trucking companies will continue to higher drivers.
Yes, Paul P.S.P. records, albeit at a slower pace over the next several months following reasons.
First because of the rapid deterioration in the broader economy from the cobot 19 pandemic starting mostly in the second half of March we suspect driver turnover is decreasing as truckers are holding onto their jobs, which could be contributing to pure PSP record goals.
Second.
The fmcs eight temporarily lifted their hours of service regulation you did the coated 19 pandemic. So truckers are spending more time on the road, which reduces the need to have as many drivers falling staff. Furthermore, because the nation's roadways or less congested truckers are completing routes in less time.
Which also necessitates fewer drivers.
Third while the movement of no nondurable goods remains relatively strong trucking companies that deliver raw goods to manufacturers are cutting pay reducing hours for truckers and pulling back spending as an initial demand for consumer products gives way to the national economic downturn, which could also be contributing to lower PSP volumes.
Finally, and to a lesser extent motor coach industry, including such companies as Greyhound lines is highly tourism base in nearly all must travel has ceased use the proven 19 paying back while the motor coach industry very small portion of the overall motor carrier industry to could be contributing to fuel.
Sure PST record Poles.
As evidence of softening PSP revenues to the first three weeks of April PSP volumes are down around 25% year over year.
We expect the softness to be most pronounced in the second quarter men hopefully moderate in the back half of the year the country in economies start to slow the open back up.
Next I'll cover recreation Dot Gov.
For the quarter record revenues were up 5%.
First to most of the year wrecked that got revenues were up over 25%, but then in March we saw a downturn of over 20% less popular iconic national parks and sites such as Yellowstone Yosemite in the Washington money and began to close the last several days in the month to eliminate crowds force social distancing.
Furthermore, the U.S. Forest service recently closed most campgrounds, which are likely to me closed at least through there.
We expect this revenue softness to continue through much of the second quarter, then hopefully improve in the back half of the year, when our national Parks and recreation area start to slowly open back up and positive note our outdoor recreation activity at the state level, specifically opinion fishing licensing was strong for the first quarter ended March.
We're going to operating expenses depreciation and amortization expense increased by approximately $1.1 million or 44% for the prior year quarter, driven mainly by intangible asset amortization from the Rx dogs asset acquisition, which totaled approximately $800000 for the quarter.
$500000 in the prior year quarter.
And for me and I see licensing solutions acquisition, which closed on Masers to 29 team and totaled approximately $250000 for the quarter.
Operating income for the quarter increased 2%, resulting in an operating income margin of 17% down from 18% in the prior year quarter.
All that selling and administrative expenses in the prior year quarter reflect executive severance costs totaling $2.6 million, which reduced EPS by four cents. Excluding these costs the operating income margin in the prior year quarter would've been approximately 21%.
The decline in the operating margin in the current quarter, mainly reflects the Apple mentioned decline in high margin change our revenues for the quarter incremental cost to implement our comprehensive outdoor recreation solution in Pennsylvania in Illinois, and modest dilution from the company's recently acquired Rx stuff and then I see licensing solutions businesses, including higher amortization expense.
Yes.
To conclude my comments on our quarterly results interest income was $400000 down from $600000 in the first quarter of 2019 due mainly to a decrease in interest we earned on our average investable cash balance following the federal reserve emergency cuts to the federal funds rate made in March 2020.
In response to because the 19th pandemic lowering rates to essentially zero.
As a result, we expect interest income if any for the remainder of the year to be insignificant recall that our previously issued EPS guidance for 2020 reflects approximately two cents from interest income.
We expect fall well short of that and we'll sort of the three cents in interest income we earned 20 like team.
Turning now to our guidance, we have tried our best to evaluate the impact coated 19 may potentially have Warner business for the rest of year.
You have endeavor to be conservative getting directionally accurate from a guidance standpoint, given what we know today.
Taking into consideration you had only a partial month results.
Hi, good 19 pandemic.
No the full effect until future periods.
That being said.
For full year 2020.
Currently expect to come in at the low end of our previously issued guidance for total revenues, which was $380.5 million.
At the low end of our previously issued adjusted EBITDA guidance, which was $88.5 million.
And at the low end of our previously issued EPS guidance of 76 cents.
Our current forecast for 2020 assumes we will offset a portion of the revenue softness I just covered in my prepared remarks with a combination of lower variable credit card interchange fees, resulting from lower I guess revenues and stringent cost controls over discretionary spending.
Focusing on critical investments, including open positions.
Furthermore, we expect to encourage significantly lower companywide travel costs at our current forecast assumes the country will remain on locked down through much of the second quarter gradually start to open in the back half of the year.
We currently expect our effective tax rate before any discrete items to be between 25, 26%. In 2020. However, if we were to ultimately recognized potential discrete tax items due to the expiration of statute of limitations, our effective tax rate could be closer to 24% in 2000.
20.
Our previous guidance for capital expenditures and capitalized software development costs for 2020 remains unchanged with capital expenditure is currently expected to range from $6 million to $7 million and capitalized internal use software development costs to range from $9 million to $10 million.
In conclusion, despite some unprecedented revenue softness in our business, resulting from the cause of 19 band then it and I see it was a strong essential company, helping and government remain open for business.
Company has built 28 years ago to enable businesses and citizen interact with government online instead of in line that government offices, social discouraging due to the pandemic is pushing more businesses and citizens to interact with government digitally, including many who didnt before in our hope is they find experienced easy and convenient and continued.
To do so after the pandemic ends.
The more consistent cash flow.
Debt free balance sheet.
Cash surplus devices financial strength in comfort during these uncertain times, while we're not immune to the financial impacts Macoupin 19, pandemic, we believe will be resilient and changed fared better than many companies throughout the crisis in the country go slide into an extended recessionary period, I believe our value proposition and business.
Model will resonate with government, even more so during tough economic times as we continue to help government reduce their financial and technology risks.
Increased their operational efficiencies and avoid significant costs, while providing businesses and citizens a safer faster more convenient more cost effective means to interact with government.
This is our time to shine in our industry and I could not be pattern and I am now to be the CFO of Nic.
Wraps up my prepared remarks today, so I'll turn the call back over to Harry.
Thank you Steve we're in the midst of unprecedented times and although our business what's impacting the first quarter I'm extremely pleased with the Nazis overall performance.
As stated earlier, we are financially stable every company that continues to generate consistent cash flows we have a proven business model designed to perform in any economic situation strong relationships with our government partners and a team of dedicated employees across the country, where more than written to occasion during this crisis.
While it is true seem to know how this health crisis when in fact, our lives and our economy. The remainder of 2020 I invite temperament, an optimist with an appetite for innovation and I believe and I Kid, Bob is well positioned at any company could be at this moment.
With that operator, we're now going to calc questions.
Thank you, Sir ladies and gentlemen, if you wish to ask a question about the scientists to go up by pressing star one on your telephone keypad.
If you wish to council of your request, please signaled by pressing star too.
Both for just a moment set up every one that opportunity to signal for a question.
Well now take our first question from <unk> Pistorino from Barrington Research. Please go ahead.
Good morning, everyone.
Hey, Gary good morning.
Steve who I just asked you.
You went through some things pretty quickly related to the Pennsylvania contract when the Illinois contract terms, which puts and takes but.
When you gave your guidance you basically said it would be incremental up the walk from 3.1 billion. This year with revenues offset by expenses.
Has that increase now I think you said something about a million dollar impact I'm just trying to get an idea of what the total impact with this is going to be this year.
And then calls right Gary.
Yeah, that's right so.
Our expected revenues from Pennsylvania will be down about $1.8 million this year with the shift to the September launch.
But the bottom line impact from that shift is not $1.8 million. It sounds like it's about a million dollars. So yes to your point is an extra million dollars in bottom line impact from both Pennsylvania in Illinois for the year because of the shift in and in any project timeline.
Okay.
And then yeah. It's good to see that you know the whole online part of your business model was really.
Through here.
Market carry do you think that even this what's going on here. That's it's just really sets a great example for why more states should really move to your model over time and how can you capitalize on this.
You know Gary I would agree with that state I think the stakes and government as a whole you know are gonna be moving more towards the provide as many services they can't from a digital standpoint.
And of course my teams are laser focused on that right now and educating you got a couple of different things you know number one you know I like some people somebody in a sense is not lost and agencies and government personnel realized they have to find a way to provide access to information online at the mine out not in the past and it goes beyond just the citizens in the business.
Yes, there's also concerned on the government officers of interacting with individuals coming in and trying to do social distance and you know I know, let's say an opportunity here first and foremost so we're going to focus on helping them get through that discovered 19 crisis that they're facing.
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Okay, and I would assume that most of your your sales and marketing activity and just totally shut down at this point.
You know I would say the majority I mean, it would permit integrity standpoint. This isn't the time to go knocking on doors and Santa here I've got a solution for you at the same time. There are we launched a couple of services. During the last month I'm. There are some things and you just starting to talk about Maine, where as they were in the process of shutting down and center it but it's Gotta go home.
They got that contract side, we've got a couple of extension signed yeah within the past weeks of government has to continue to function.
And we are going to be very respectful, we're going to work with them as we identify them and you heard me and my remarks, some opportunities although the majority where we give us comfort 19 did not generate any revenue because that's the right thing to do for communities for a partners. There were some opportunities that do that's where we're working on those but I would say my entire team is engaged in this.
Engage has the right way number one short term how do we take care of our employees how do we take care of our government partners over the long term what does this mean for stockholders what does this mean for a company I'm.
Steve said, a great he's never been prouder sample I've never been prouder as CEO of this company and where everybody is headed.
Okay, and then lastly, any comments on the largely department financial services payment contract is that still obviously is that still under protest.
Yeah, and you know we have a policy, but I'll give you just a little bit and it's obvious Amit is under protest. Unfortunately. It also all slowed down due to the I covered 19, and you know they they stopped all the administrative hearings basically until they sort through this.
Okay. Thank you very much.
Right.
No well, even though most our next question from Peter Heckmann from D.A. Davidson. Please go ahead.
Hey, good morning, everyone. Thanks for the incremental detail I was wondering as regards the federal and state tax deadlines being forced to July from April.
In the way of property tax payments are either your consumers or businesses that were just thinking over the second quarter. We can see maybe a little bit of foot further course into the third quarter.
Yeah, I absolutely great that is one of their so we do a work throughout the country with a different partners from there it's interesting theres different stories coming out on that we're watching it very closely you know where you've seen a push from federal standpoint. There are some of the states that have not yet signaled even though they are income tax from property.
Next.
That they're going to push that out so we're watching it you know that the property tax payments fund a lot of the local emergency services and no such thing so it's an interesting to watch.
So yeah and can you just as a follow on to that you know.
Yes, while that while that may happen, we expected to be more of an issue really you know just deferred to future period as opposed to completely lost for the year.
Yeah, Yeah, Yeah, just trying to think about in terms of just kind of getting the second quarter.
Right addition, and then within cannabis licensing congratulations on wizardry.
Hi, this is up four or.
How do you think you working with on that solution, though.
So we are we are in I think five that makes five states in tantalum now with that with the came actually I think it's it's six I take that back as we because of the.
We acquired a completely as they were working for our enterprise States and then we launched our West Virginia service and now, Missouri, So that makes six.
Okay.
And then anything to think about with the new contract in Louisiana, any notable terms and conditions there should be thinking about or it's just that.
Acquired a new contract for some sort of everything.
That's correct business as usual and Louisiana for us.
Right all right. Thank you very much.
That's great.
As a reminder to ask a question at this time the civil by pressing star one.
Well the novel Sevenx cushion from response for from Sidoti and company. Please.
Hi, good morning, gentlemen.
A couple of questions for me a first of all you know the.
In terms of the Florida payment processing gone Bears a you know you briefly touched on the higher you spend up to get like pushed into a few quarters argument to resolution doing of some sort of middle East you you said that there's some hearings.
Yeah, I again, it's hard for me to really predict what's going to happen when you're in the mid to this and we don't really go that far down the path I well, what I will say government has has.
We weren't this correctly government is working really hard to make sure. They continue to function in every area and board is no different you know this was just sort of a temporary pause as they went through and determine what is the best way to deal with everybody working remotely include the courts, where you've seen that throughout the country. You know the agency for core to everyone a step ups in art.
We've got to continue for it so I expected follow its normal progression in other words have this little bit of upon.
Got it very helpful. Okay, and you know how are you a you know.
And your remarks, you briefly touched on Virginia, and I mean.
On a blown brushes and gleams I'd do you expect to do some more of that and that it does not have very high revenue generating service do you is it.
Well, that's probably one question first I'll start on the unemployment, we don't do a lot of unemployment throughout the country for which we would look start there there's been as you know and in the media and government. These are very strong cystitis or they weren't designed for the impacts are getting right now and in Virginia, we were able to step in assess where talk.
And with a few of our other partners to see if there is areas on which we can bring similar solutions, where that's to assist with you know some of the call centers some of the the.
Entry points into some file in the services things like that I'd like to see from Yeah, I guess I would say at this point in time is FOC, we will be monetizing that work that we're doing in Virginia, but what will hold off until.
Future periods to kinda provide provide color there until until we have a little bit more clarity.
Got it okay and.
Lastly on the you know a you know a Steve you gave a lot of color on on the beach or so.
In terms of.
Obviously Q2 is gonna be you know, although on the low and don't just what you've seen previously you expect some of up to come back led by the end of Q do or how you guys thinking of it internally for your own planning purposes.
Well you know just just general generally speaking when when we're thinking about our forecast yeah, certainly going to be most pronounced.
In the second quarter and our hope is that there's some pent up demand in that as the as a country and the economy start to slowly open back up which were actually starting to see now probably a little sooner.
We expect it.
So.
On a part of the year. So yeah, we expect that the moderate in there there could be some some pent up demand there from from from data resellers.
And insurance companies I should say.
Yep.
Got it thank you guys.
Thank you.
Thank you and up because of final reminder, to ask a question. Please people are pressing star one repos with Justin Let me spend about your other pitching it used to signal quick question.
There are no public question since the Q I would like circle back to our speakers for any additional or closing remarks.
Thank you Sir Guy and thank you, everyone, who joined US. This morning, I sincerely hope eateries stay safe and remain healthy and you need to recognize social discussing does not mean you need to be socially isolated I tell my employees all the time we need.
Each other now more than ever so don't forget to reach out to your family of brands, but an email text or a phone call. During this time also I look forward to speaking with you again at or virtual annual stockholder meeting at 11 am central today with that thank you and stay healthy.
Thank you can feel to those conference call. Thank you for your participation ladies and gentlemen, you may now disconnect.