Q1 2020 Earnings Call
Ladies and gentlemen, today's conference is scheduled to begin shortly please continue to standby and thank you for your patience.
[music].
[noise], ladies and gentlemen, thank you for standing by and welcome to the BGC partners Inc. first quarter earnings.
Conference call.
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I'd now like to hand, the conference over to your Speaker today, Jason Magruder Group, That's group head of Investor Relations. Thank you and please go ahead.
Good morning, which should be she's first quarter 2020 financial results press release and accreditation summarizing the results. Early this morning, you can find even higher WD partners Dot com.
She spent up all the shares warm subsidy or do you log held by Bdcs and stockholders BBCN November 13 2018.
Because he could not only cherishes your work as of yearend.
Departures or not couldn't be because all the results presented that after the spin off unless otherwise stated results provide on today's call for only the first quarter 2020 with your earlier period, we'll be referring to our results on this call only on an adjusted earnings basis, unless otherwise stated you may also referred adjusted EBITDA the may refer to.
Quantity, which we can find a cash cash equivalents plus marketable securities that have not been finance.
Your first purchase agreements, if any and security jobs.
Securities laws.
Repurchase agreements.
We define total capital is would be more partnership interest total stockholders' equity or non controlling interests subsidiary.
See todays press release results under generally accepted accounting principles for gap. Please also see the relevant sections of the facts todays press release in the back today's press release, we upped your definition of any Dod gas terms reconciliation of these items the corresponding GAAP results and how when and why that that's true additional information with respect to our GAAP and non-GAAP results matter.
On today's call.
Available on our website is higher saki partner, so called an introductory presentation, which is next two restaurants on the website refer to the company's fully electronic this is it's funny these offerings crude or for talk books barbecues loved scale box here that software solution to post trade services also remind you designation regarding up answers on today's call that are not just awful.
Forward looking statements for the meaning of section 47, it's going to expediting 33, as maybe that's a 2.21, yes pretty straight gets back to pay for as many of these include statements about the effects of Cobot night team on the company's business results claims from additional liquidity at outlook any forward looking statements involving risks uncertainties.
So.
After the required by law.
Oh between I'm, sorry undertakes no obligation to update any forward looking statements.
Maybe I'll look in targets discussed on this call to no material acquisitions buyback extraordinary transaction transactions or meaningful changes to the company's darfresh for discussion of additional risks uncertainties, which could cause actual results to differ from those contained in the forward looking statements. She did you see actually see filings, including but not limited to the risk factors and special Donna.
We just haven't set forth in these filings in any uptick such risk factors, especially now on forward looking information Jane subsequent reports on form 10-K form 10-Q, four form 8-K, I now have to turn the call Alberta, how about Nick.
Chairman and CEO of the company.
Good morning, and thank you all for joining us for first quarter 2020 conference call. Joining me virtually for today's call. A beach is president Sean Lynn Chief Operating Officer, Sean when do yet Chief Financial Officer, Steve discussed.
Well, we talk about the company I would like to say that we did you see expressroute people's sympathy to those sort of experience loss of loved ones.
Economic hardship chain difficulties to to the aren't going to them.
We remain thankful for the health care professionals first responders another central workers were hoping to world go through this unprecedented Chris.
The company's states monumental challenged in the Paris, which we have overcome we implemented a business continuity plan. However, we never imagined implementing it globally all at the same time.
Bdcs employees have worked tirelessly over these past month and they remain focused on serving our clients. During these difficult circumstances, all employees and our technology or why we continue to operate effect.
We expect to be performance.
BG she's revenues improved by 10.7% for the first quarter 2020 as compared to last year.
Well, we benefited from generally higher industry volumes.
Partially offset by the dislocation faced by BG she's employees clients due to covert 19, but Steve disruptions, we believe that a revenue improvement would have been greater.
Looking forward, we expect her voice harbor didn't fully electronic brokerage business, Chris reaching credit to benefit from the unprecedented amount from global government corporate debt issuance.
Overtime, we believe this issuance will reach a previously unimaginable scale.
Is that supply will create significant long term opportunity for BGC.
The company continues to explore a possible conversion of its Apache partnership structure into more simple corporate structure. If the company determines execute such conversion. It of course would be subject to the approval of the board of directors and their relevant committees Beacon and it will be completed a were to be done no earlier than yours.
In 2020.
Any such transaction would be subject to tax counting regulatory and other considerations and approvals.
So with that I'll turn the call over to shortly.
Thank you.
Good morning, everyone.
I'd be just can be examined in three components.
Did you see and Phenix integrated voice Medtronic liquidity pool.
Thanks, Phil Electronic Monkey places.
And I'd like that connectivity software impose type businesses.
These categories.
Dynamics of our integrated voice Medtronic liquidity pool, what impact the most by the current crises.
Species brokerage revenues, excluding insured by 9% year on year in the cool.
Hi, much.
By more than twice piece right.
These reflect just actually hardly audience and volatility because every financial metric off in the last weeks of the quarter.
As we've said in the past.
During periods of market type units at clients, often baby insightful I broke his provide as a result.
<unk>, because I had more liquidity and market share over these past several months in many areas where clients and actually it's kinda liquidity equally bill at voice or electronics.
Based on any cogent, we've really was a temporary should find traders to own voice execution in many markets.
This would you have to extreme that was about a tendency across many asset classes as well as disruptive piece of coolant dislocations. Thanks, my approach because clients and customers Oh I'm sorry.
However.
Our connection indicates that the dislocations caused by country 19 have resulted in an even greater demand I have an electronic execution.
Drew I don't Beastie Mark is that best in class Maki liquidity only integrated global trends like BGC.
Bdcs platform I think 10 part of that class technology.
When they execute remotely assistance synchronize email time.
We expect a trend towards automation to improve our electronic brokerage revenues and profitability over time.
With respect to have 20 electronic market Lacey Act standalone platforms can actually strong improvements in the quarter.
Penny Qs T genomic substantial growth year over year.
Notional volumes up by more than 300 missing in the first quarter compared to 3% probably seen a body.
We believe it fenix U.S.T. has gained significant market share and extinguishing itself has a clear number two among central limit order book or crop trading platforms.
Morocco, Fenix fully electronic foreign exchange volumes increased by 23% compared with the.
At the markets continue to embrace electronic execution in this assay cost and as that foreign exchange offerings, such as Phoenix, FX mid FX and Phoenix direct gained further market share.
In addition have phenix options fully electronic trading platform well finish go confuse the successful rollout numerous record volume days. It was the leading broker for certain Eurostoxx 50 options contracts on Sunday during April.
Our data connectivity software and post trade services, including a large percentage of recurring and predictable revenue streams.
As a result, I take to self imposed trade because she's once again generated solid topline growth in the quarter.
He said.
With respect to at conductivity. So it's.
We acquired alchemy knowledge alchemy provides technology application buy side clients access to venues trading Counterparties and exchange.
The subscription software as a service or SAS improves their workflows and liquidity to data aggregation pre trade information analyses and execution sit attention.
We expect integrate this business without new Sandra SAS connectivity subscription service in order to provide data and execution capability directly between banks seamless and their buyside customers.
Well the ongoing crises slow to roll that because some of that new aesthetics offerings over the short to use the fiscal dislocations Ics baseball at brokers and clients. We do not expect a medium to longer term strategy with respect to these funding from technology businesses to be impact.
Turning to our insurance brokerage business.
This industry typically generate significant amounts of predictable revenues a specific times at the year different categories of clients sign when you policies.
Well I'm certain times, maybe facing financial how cheap or dislocation huge pandemic insurance brokerage industry. It Jim any performed well during college economic downtime.
We expect reduced insurance near term earnings because of the Sky doesn't recent new highs.
We anticipate this division second quarter be well below the second quarter 2019 and to improve in the third and fourth quarters.
We might just below breakeven.
We expect insurance brokerage operate profitably in 2021 and to reach 15% marching on profitability by 2022, including additional new highs.
We believe that insurance brokerage platform.
What maturity more and I investment in it.
Our goal is to maximize value for investors and we are exploring ways to do so with respect to this business.
With that I know how to turn the call up to speak this guy.
Thank you Sean Hello, everyone.
You could find details on a quarterly results in today's press release and Investor presentation.
I just wanted to touch on a few important items related to our financial positions.
Because we are not to capital intensive business. We have historically returned most of our earnings to shareholders rather than building up retained earnings.
This policy was designed for more ordinary economic conditions.
These past few months had been the most difficult and tumultuous mortgage anyone on the management team at beach is ever see.
There are probably the most uncertain markets any of our parents would have ever seen.
No one knows how long, it's actually been global congenital watch.
Therefore, we've taken steps designed to further strengthen our financial position.
These include reducing our quarterly dividend to come shareholders and distributions to unit holders.
We did some out of an abundance of caution due to the potential negative impact could be 19, my husband, our clients our industry. The overall economy and the world not due to any company specific concerned with respect to be juicy.
Well it revenues have improved year on year in March and April it is impossible to pursue current market conditions will contain words dependent my directly or indirectly impact any of our employees clients vendors were other market participants.
Addition, as Howard said, we think the massive amounts of debt issuance underway globally, reaching more read news for us over the medium and long term.
However, it is possible with a massive quantitative easing measures taken by global central banks lowered negative interest rates and the drop in commodity prices could temporarily lower industry volumes.
We believe that the right thing for the company to do given the global macroeconomic uncertainty is to prioritize our near term financial strength and fortified our balance sheet.
We expect the board your regular review on top of return policy as global conditions with respect to the tendency to ball and hopefully become clearer.
When the times right. We expect the board you consider what amount should be returns to stockholders.
During the quarter, we acted to reduce our compensation related costs. These and streamline our operations, which resulted in $22.7 billion with GAAP charges recorded in the first quarter.
This restructuring program is expected to reduce the company's GAAP compensation expenses over $35 million for the remainder of 2020.
With respect for Standalone fully electronic finished products such as Musarra incentive QST.
We expect to significantly grow revenues over the next two years and with our raw costs behind US we expect the overall expenses for these businesses to decline.
We anticipate the net investment cost for these businesses to be less than $40 million for full year 2020, and break even for full year 2021.
Turning to share count.
Our fully diluted weighted average count increased by 4.3% to 538.4 million under both GAAP and adjusted earnings in the first quarter of 2020.
As of March 31, 2020 or spots your account was 538.6 million.
This represents a 4.3% you're on your increase.
We expect to continue using relatively more cash with respect to compensation in order to minimize dilution.
Largely as a result of this we still expect or 2020 year end fully diluted share count to increase by approximately 4% to around 550 million.
With respect your balance sheet.
As of March 31, 2020, our liquidity was $512.3 million compared with $473.2 million as was your in 2019.
Notes payable another borrowings were 1 billion $368.2 million compared with 1 billion $142.7 million and total capital was $739.4 million compared with 706 or $7.4 million.
Well historically, the first quarter husband, our most profitable quarter. It was also the quarter, where we structural use the most cash.
The corporate balance sheet reflects wonder movements in working capital.
Cash paid with respect to annual employee bonuses.
<unk> and play really the toxins before mentioned restructuring program acquisitions, including earn out payments and investments in our newer clinics platforms and significant broker hires.
This cash taxes was offset by increased borrowing under our revolving credit facility.
The company has paid down $75 million other revolving credit facility since quarter end and we expect to continue to pay down evolve throughout the balance of year.
We believe that are kind of metrics cash generation and access to credit all remain strong.
You can see manager business Weve focused on are investment grade ratings.
Because we have received many questions regarding our operations over the last several weeks I would like to remind you of some she talks about our low risk brokerage business model.
It just seems brokerage business is designed to execute transactions that are either named give up match principal or clear with central Counterparties.
Our transactions are therefore, not balance sheet intensive.
And then give up transactions you match buyers and sellers in Georgia C.
In match principal transactions, we execute both sides and transaction simultaneously, which eliminates market risk.
A significant and growing percentage of our brokerage business, it's centrally cleared and therefore limit its counterparty risk for example, numerous transactions the buyer and seller or new data to central counterparty, such as LCH or ice clear.
Furthermore, we are not market makers, and we do not hold inventory.
Do not trade on the proprietary basis.
Don't have margin calls related to inventory.
The merger, we do place with clear or organizations is not material to our balance sheet.
We also do not issue loans or provide boards to clients nor do we rely on short term money markets, such as repos or commercial paper to fund or operations in short we already brokerage business.
With that I'm happy to turn the call back over in Charlotte.
Thank you Steve.
Turning to our outlook for the second quarter of 2020 compared with the earlier.
Peaches these revenues, excluding our insurance brokerage business increased by approximately 2% year on year. The first 21 trading days of the quota.
This reflects mixed global industry volumes, thus far in the quarter as well as continued dislocation compete she's brokers and that clients future covered 19.
Hi guidance assumes the industry volumes and a known insurance brokerage revenues are flat down slightly year on year for May and June.
In addition.
We expect to have insurance brokerage revenues to be relatively flat year on year in the quarter, but to generate accelerating growth throughout the balance of the year.
Due to the unpredictable nature of the continuing macroeconomic environment, we have a why the outlook range than normal.
We expect to generate total revenues between 525 and $575 million.
Compared with $551.2 million.
We anticipate pre tax adjusted earnings to be in the range of $89 million to $109 million.
Especially the $102.3 million.
It includes the impact that recent insurance brokerage highs, who all incurring costs and I'm not yet generating meaningful revenue.
This investment the midpoint of arranged would've been up.
Year over year.
<unk>.
Right at full year 2020, adjusted earnings tax rate to be in the range of 10% to 12%, especially is 11.4% the full year 2019.
We expect updated outlook towards the end of June.
Operator, we would now like to open the call for questions.
[noise] as a reminder to ask a question you want me to press Star one on your telephone to withdraw your question press the pound or hash key.
Please standby, while we compiled acuity roster.
And your first question comes from the line of Rich Repetto with Piper Sandler.
Yeah. Good morning, Howard Good morning, Sean in a steep hope everybody family you know your family are all a safe and healthier.
So.
The first question is on Pfenex on a fully electronic revenue and how would you you had sort of talked about this prior that in bought the volatile markets that you know.
Customer sort of go back to their old ways.
So the revenue was down 5% a year over year.
When I look, but I guess my question is when I looked at the notional volume are that you disclosed.
It was up 20% year over year without any big change in mix and without with each one each product category up in the high teens or above so I'm just trying to understand.
You know I do get the expert overall exploration, but how the numbers sorta support that I guess are.
Behind it.
Well, it's we actually hybrid show as we've seen in these volatile times and as Howard said and and that's probably from the policy that.
At busy gravitates directly towards or whether liquidity pool is where the experience has been which is where as a dislocation happened that boys focused on hand with with the technology to but they have an in depth knowledge. So therefore, there was some thoughts turnover that was that was happy.
By the voice brokers at this time, which.
Which is it was it was a slight headwind for electronic revenue. So many 20 platforms performed very well but.
And in a greater volatility markets such as Ah, It's like rights and credit we saw some we sort of what spoke has come to the full.
Brett it's rich still on operator.
You might have done them, yeah, yeah, yeah, sorry, sorry <unk>.
Can you hear me now.
Yes Hello.
Sorry, My my mistake you. So my next question is you paid down the revolver.
75 million I believe maybe after quarter end or towards quarter end.
And you know you know your guidance is reasonably certainly reasonable for the second quarter I guess the question is this all the indication that you're.
More comfortable with the scenario.
I I noted Steve sort of.
Cautionary tone as well, but I just feel no no big losses.
It seems like your cuts to customers that you didn't take any customer wash. So so what's the view Howard I guess on the business in general and I got one more follow up.
I, Richard Steve, Yes, we did pay down $75 million after quarter and our plan is to continue to use excess cash to pay down the revolver as well.
Under the circumstances as we continue to perform we did not suffer in any significant tier two questions. Specifically in Q1, no. We did not suffer any significant.
No material losses at all with regard to our client activity or brokerage activity.
Yes, we do plan should lead to pay down on the revolver.
And a richer your comment.
Yes. It if we could be assured that April was the future of depend Demick then of course, we we'd be more comfortable but since no. One can articulate what may and June will be a what will happen in the fall I think our view is we just want to be strong no. It maybe that.
You know we have been through a lot you know this management team has been through a lot and and and we just wanted to make sure that the company is.
Very strong 'cause it adds it heads into on certain times. So if it April is a future of course, we're more confident or to be payback as Steve just said, we've decided to pay back 75 million of the revolver that that clearly defines that do we expect to generate substantial cash going forward of course, we do do we expect to pay down the revolver.
The rest of the of course, we do so we feel much better we implemented our business continuity plan a lots of a brokers were very effective from home as they start to come back to the office they will become more and more effective weve reconfigured our offices were ready for them. You know we are we're looking forward to more.
Traditional times when our when our staff comes to the office and works together, but you know in the for the time being Oh, we wait for governments to tell us what we can do a way for our staff to be comfortable.
And and healthy and taking care of and <unk>.
But its April where the way yes.
We're comfortable and no as Steve said, there was nothing that happened to PGC.
Vis-a-vis just BDC, but we just don't know what's the trees as as nor does anybody.
Got it and we're all waiting for those returned to the normal times, how it for sure.
One last quick question as you look at the capital return policy overall.
You have a period right now again.
You know precaution and uncertainty you know you sort of put things in limbo.
If you continue to build up cash I guess, you know towards yearend you could either buy back shares a you know you get a different stock price now. So I guess the question is what is the buyback or excuse me as a capital return policy evolving to something to a shift or to something other than just a pure.
Our dividend policy.
Policy it if it isn't if it's still a dividend policy then why wouldn't you could you ever make a commitment you know to the dividend. Once you feel you got the all clear you know paying back you know dividends.
In a re or whatever whatever your earned but paying back some sort of percentage on what you deterrent to in these uncertain times.
I think.
The way said at the beginning sort of sounds right, which is the board will examine our dividend return policy.
When when we're feeling comfortable that that few churches, a more balanced and and more certainty. So we will do a capital return policy.
Review and we are going to continue to do that we are a capital return company and have historically been but as we entered this pandemic. We felt that we were going into uncharted territory and we felt we needed to fortify as Steve said fortified our balance sheet stay strong and be strong so that we could handle whatever.
Came our way.
Looking forward.
Might that be a share buybacks.
I'd be a Ah.
You know it reinstating a dividend policy, we're creating a new dividend policy I think I think I need to leave that open but you should understand that we are committed to capital return in our future that is that is where we plan to be a that is where we've been in the past, but I think through this period of time, we just need to be strong.
And we need to get shareholder value, we have great assets, we have our insurance business, which we think is a valuable asset.
And we just want to make sure that could be we act prudently and effectively for our shareholders and make sure. This company is very strong for long haul and I think we will make our shareholders.
Superb returns, but we just have to remain strong and focused.
Throughout these difficult periods to get.
Got it thank you and be safe.
Thanks Rich.
Your next question comes from the line of Patrick O'shaughnessy with Raymond James.
Hey, good morning.
How is employee morale holding up in light of the decline in there or the value of the partnership units and the reduced dividend.
Oh employee morale is is is obviously concerned with the overall pandemic, but very good in the sense that they've been able to go home inkling hone in up to work they've been able to look after that families they've been able to work from.
At BCP sight.
And some even still from their offices, where where possible there's going to now to talk right.
It's a worry in times of course for <unk> for the market as a whole lot rallies. Good spirits. Good obviously outperformance is being.
Sure.
Good relative to two what's been happening in the in the global World I promise you didn't I think that.
The biggest.
Back to I think that the shutting the light to employees. He is the strength of the company. This trend to that technology, just trying to buy infrastructure. The investments we've made over the years and that technology not to that phone system is not just that I telephone lines. If it's out execution platform that they can offer.
Right and still connector that clients electronically, whereas some.
Say smaller broke his would not be able to compete against us. So I think they feel comfortable in in the and then knowledge that they're working at a well I consider by company.
Got it appreciate that.
In your prepared comments you spoke about how this unprecedent amount of of debt issuance to be nice long term tailwind for the business. What did you guys see post a great financial crisis, where obviously, we had unprecedented the issuance or fall in that period, how did that impact the rates business.
Oh, it was a little little different the.
Volumes.
You know that the fed coming in and quantitative easing and all that sort of came in later, whereas in this case it came in straight away.
Early April.
Volumes were muted from what they otherwise would've been a but for the Central Bank you know scale of Central Bank intervention, which was massive an impressive. So I think you're going to have those two things sort of waiting on each of the massive issuance.
Massive a quantitative easing, but then again massive issuance by government all around the world and since we have a great reach business all around the world. A we think the government business will be the first to really dramatically change would be a tailwind for a company and then asked a cheaper.
Their purchases of corporate bonds, which which may you know when credit bonds, which maybe for awhile.
There may be buying them for a while I don't I surely don't know but.
As they taper that off the credit business will really dramatically improve because companies.
You know the companies were not performing as well as BGC.
They're going to have a period of time, where they just don't make the money that used to make a add or take losses and they're going to have to issue debt to cover those are covered those numbers and that that will remain outstanding for.
Decades, and decades, and that's just more raw materials for us to trade with so.
Think you'll see that governments I think you saw the volumes when there was the if you remember the taper tantrum two from it just remember that so I think these things will be with us for for the long long foreseeable future has the way you've described correctly as a tailwind, but there is the offsetting quantitative easing by the guy.
From instead of buying enormous enormous amounts of this and I think they bought more that has been issued a trying to keep the capital market stable.
That will start to change all these markets will start issue over the next period of time would maybe a year, maybe two years to scale of corporate issuance will be enormous and the scale of government bond issuance I mean imagined the U.S. government had a three trillion dollar deficit. This.
Corridor.
Yes.
It's on imaginable and scale from where we were before and that just means enormous issuance cross government agencies and that will be true around the world. So I think it's just enormous fundamental baseline with competing issues on any given quarter in any given period of time, but ultimately.
Great raw material for people in our industry.
Got it.
Want to circle back to some of the discussion on the Pfenex brokerage revenues I'm sure I kind of I understand what you're saying and yet you know we look at some of the other fully electronic venues that are out there market access had a really strong first quarter trade was volumes were really strong in the first quarter I think broker tech had a pretty strong first quarter. So what.
What's kind of I guess specific to the Phenix platforms, then maybe led to.
They're underperformance relative to some of those other call electronic platforms that I mentioned.
So I finished you essentially had a pretty strong I do wish on called finding Scott had a very strong quarter.
Made FX had a strong cool so we've had shown quotas in some of that fully electronic platforms.
As well I think what.
What is what is.
I've been a headwind for us compared to say among a competitor trees I. They don't have voiced brokers.
They have a very different offering.
I and that many folks something its client where mainly focused on peanuts Dana.
And.
When the markets of golf I mean in monkeys are being very very liquid.
At clients have been engaging that up.
Really from.
Mark <unk>, because we know with regards to the voice brokers and getting the inside liquidity and knowledge that I've been looking for so.
Got a positive for us, but obviously a negative for electronic number but a positive for the revenue turnover and and the voice component.
Yeah, I don't think rich just just to add just to add you think about right. You know the liquidity that we provide between Oh wholesale banks the market makers all customers have a choice they have a choice between voice in electronic and Oh, we have seen in as Sean said in his prepared remarks is our customers are customers.
Migrated towards voice, because they had that choice with the likes of with the likes to have.
Finished goods treasuries market access trade web that's electronic only I think what we what we do believe is as you've seen a previously with the with the growth of electronic conversion about voice electronic business. We think that we'll continue to grow over time in sort of more normalized market conditions.
And that will be an increase until profits over the medium and longer term.
I don't have any Patrick just to jump on that is that we we have a broad broad church. We are global company from Australia, all the way through in Canada. So one by some of the other competitors focus on a certain segments of the marketplace.
Yeah, right called could teach and so that coming from a very different starting point them and we.
2600 approach because and.
Many many different offices around the dog.
Yeah, and I appreciate that color with insurance brokerage business, you know you've spoken about trying to figure out how you can extract the most value out of that franchise and I think a potential option was selling that business.
Given current market conditions has a window to potentially sell that business closed for now.
I don't think so.
I think.
I think these businesses performed well and their counter cyclical meaning that a desire for insurance has probably reason.
People think about insurance more often now than before.
There are certain you know details were obviously if your clients that are in stress that's problematic, but there were more and more clients. We're going have to re examine their insurance needs and a purchase insurance so I.
I think generally the business is solid and I think the demand or where the opportunity for people to invest in that business I don't think has.
Has dissipated it it may be lower.
I mean, I can't I can't deny that [laughter] value baby, maybe different but I think we're going to examine what's the best way.
And the most value, we can get for our or investors <unk> and our shareholders stakeholders generally so I think.
You know, we're examining and but our business is doing well we've hired.
Strong ordinarily talented people and ER and those talented people who joined US you know in the first quarter in the second quarter.
The you know insurance brokers tend to be more productive a they tend to not be able to do business with their clients in the first year that he joined.
Good short maybe should add some color.
Just Patrick one other thing I think it's important to mention.
In this current in this kind of time that some we all are broken noted on the right.
Take risk and basically some of the stresses that you're seeing with somebody underwrites at the moment with indemnity insurance is affecting oversee underwriters not the park I tried to make that to a point clear.
Okay understood. Thanks, Thanks, and then last one I think for you Howard several years ago Gee, if I agree share price was coming in a lot of pressure and Magnum basically came forward with the take private offer and obviously you guys end up buying g., if I give so that did not take place but given.
Did you see his current valuation in the stock price.
Would you contemplate it take private deal or BDC partners or you know does this business just make much more sense as a publicly traded entity.
Okay, I think in ER and in early May have a two months into a pandemic and I think the answer is.
The one you've heard from my management team today it down.
Conservative.
Generate cash get your people back to the office.
Take care of your people make sure the safe make sure. They can operate effectively bring your balance sheets.
I look forward I think a those kind of thoughts are just not err on the menu currently.
I, just don't think pets, which I think about it in may two months into a pandemic said.
Someday in the future.
Uh huh.
I'm, not commenting one way or the other or anything about seven and frankly, we haven't thought about it at all I think our issues are strengthen our balance sheet generate cash take care from please make sure. They are healthy and protected make sure. We can bring them back to the offices when appropriate or around the world and take care of our clients as best we can.
Strengthen our technology moved to electronics had down focus on the steps in front of us and leave that that's just not on the menu without thinking about it we're not talking about it.
Stuff there.
Thank you for answering all my questions.
Again, ladies and gentlemen, if he would like to ask a question. Please press Star then the number one on your telephone keypad.
I'm showing no further questions at this time I would now like to turn the conference back to Howard Lutnick, Chairman and CEO of PTC partners.
Right I just want to thank everybody for spending time with us. This morning, I want to wish you all are health.
Have a positive time with your families and that you stay healthy stay protected.
And we really appreciate your time and a b I for one and my management team I know all of US tremendously proud of our employees I just want to finish by saying that we are completely completely indebted to our employees who have worked tirelessly.
To carry us through to this point and they have done an extraordinary charmer technology people are our operations people are here, Matt match and settling in clearing all these transactions are those last weeks of March and they if they have really been brilliant and ER and I think the culture, we have built commitment.
But they have to the company is second to none and I am I just want express my gratitude to my to my the team of BGC. They are a they're wonderful human beings, who care about each other and deeply care about your company.
So thank you won't be safe and we look forward speaking to export.
[music].
Ladies and gentlemen, this concludes today's conference call. Thank you for participating and you may now disconnect.
[music].