Q1 2020 Earnings Call
Welcome to the Cardtronics first quarter 2020, <unk> earnings conference call.
At this time, all participants' lines are in listen only mode.
After the speakers presentation, there will be a question and answer session. The asked the question during the session you'll need to press Star then one of your telephone.
Please be advised today's conference maybe recorded if you require any further assistance. Please press Star then zero.
I would now like to hand, the conference over to your speaker today, Mr., Brett Conrad Treasurer, and head of Investor Relations. Sir you may begin.
Thank you good morning, and welcome to Cardtronics first quarter.
2020 conference call on the call today, we have had west Chief Executive Officer, and Gary Ferrera, Chief Financial Officer.
Let's start with prepared remarks, and then take questions.
Before we begin a cautionary statement regarding forward looking information during the course of this call will make certain forward looking statements regarding future events results or performance.
Any forward looking statements made on this call are subject to risks and uncertainties, including but not limited to events market conditions and other risks and uncertainties that could cause actual results to differ materially.
Please refer to our earnings release in our reports filed with the FCC, including our form 10-K for the year ended December 30, Onest 2019 as updated by our form 10-Q for the quarter ended March 30, Onest 2020.
I just described forward looking statements and risk factors and other events that could impact future results and other factors that could impact our business.
The statements on this car made as of the data this call and are based on current information and maybe outdated at the time of any replay of this call. We assume no obligation to update any forward looking statements made today to reflect events that occur or circumstances that exist. After the date on which they are made in.
In addition, during the course of this call will reference certain non-GAAP financial performance measures.
Our opinion regarding the usefulness of such measures together with a reconciliation of such measures to the nearest GAAP measures is included in the earnings release issued this at this morning.
Available on our website.
We have also posted supplemental investor materials regarding the quarterly results along with additional information, including recent performance information since the end of the first quarter on the Investor Relations Relations page of our web site at Cardtronics Dotcom with that I will turn the call overhead.
Thank you Brad.
Hi, everyone and thank you for dialing into our first quarter call today first I would like to say that we're humbled by truly grateful for the actions and sacrifices a first responders in health care professionals across the world, who continue to protect and care for all of us.
We're also extremely grateful for employees, who continued to provide essential services around the world and I've been inspired by the resolved and commitment demonstrated by our team during this unprecedented time.
Today, I will touch on our Q1 results and focus my comments on the impact that we have seen on our business. The actions were taken as a result to the pandemic into longer term implications for our company.
In a crisis, it's important to have a plan a committed team and be able to adapt quickly I could not be prouder of our team and our company as we navigate this challenging period, we have to come we'll continue to protect the well being our employees.
Like nearly every other business in a world we have faced challenges from this pandemic and we have learned a lot about our business our strategy values and business continuity planning have served us well, we haven't missed a beat operationally we continue to earn new business as we look forward to being on the other side of this pandemic anat.
Comic walk down we can see opportunities that may emerge from this crisis.
I'd like to convey the following key messages today first we're managing the business for the long term.
As we navigate through the challenges caused by the coded and Devon.
I believe this period of time will serve as an inflection point from which Cardtronics will emerge a better company and poised to gain transaction share and grow revenues and profits.
This crisis will likely accelerate the trend of bank branch transformation that we have been discussing on previous calls an outline last year.
The pressure on cost savings that at five cents dramatically increase as a result endemic we're also advancing our software and cash and cash out capabilities as we build on our network of mobile enabled digital to physical access points.
Second point. This crisis has highlighted the strength the resiliency of our ATM network. The geographic dispersion of our footprint the diversity of retailer locations in a broad spectrum of end users that we serve has allowed us to mitigate the unprecedented economic ramifications caused by this pandemic.
And third Cardtronics provides are critical and valuable cash infrastructure for the communities, which we serve consumers value access safety and security and crisis situations and we play an important role in insurance fundamental economic activity is available for all citizens irrespective of their associate back.
In Onyx status cash reserves privacy and increasingly important in rare quality in today's society. It is also a meaningful payment of choice that is enduring and vital for many communities that we serve and lastly, the company is in good shape and well position financially we will continue to focus on a strong.
Balance sheet free cash flow revenue and earnings growth.
Before we get into the Q1 results I'd like to take you back to roughly a year ago, when we outlined our strategic direction and longer term guidance at our Investor day.
I indicated that we believe there would be a burgeoning opportunity for common infrastructure or utility operator in the cash distribution area due to branch transformation Accordingly, we announced a new direction for the company, including an artist focus on leveraging our surcharge free network increased investments in technology skill.
Sales and solutions for our retail went up by partners.
Rolling out all point, plus the first retail based deposit network and focusing on and creating digital and physical access points to handle our broader array of user driven and mobile enabled transaction types.
All of this was to be achieved by developing our own leading software on our proprietary platform and operating within a disciplined mindset to drive organic growth increase free cash flow and pay down debt I'm pleased to report that a year later, we saw strong momentum in the first quarter as a result of our actions over the past.
Couple of years for the month of January and February we had constant currency revenue growth of 6% and solid double digit adjusted EBITDA growth on a consolidated basis revenue growth was led by an 8% increase in North America.
In fact, our U.S. same store withdrawal transactions were up 6% through mid March higher than any quarter throughout 2019 across the globe. We started to be impacted by the endemic in the early part of March and same store transactions began to soften and then by mid March when most of our market.
It's run shelter in place status, we saw further transaction declines despite the transaction fall off during March we grew margin earnings and cash flow during the quarter first quarter.
Let me I'll talk a little bit about what we have been seen with our transactions across our markets since mid March and through today first places that are heavily reliant on travel tourism and recreation have been as you would expect the most adversely impacted Fortunately these represent a small portion of our ATM.
And revenues to put this category into perspective. These ATM locations accounted for approximately 10% of total revenues in 2019 casinos in theme parks for example transactions have gone to zero, but we believe that that will be temporary as another example transactions are down over 95.
In Spain, which is also heavily tourist dependent but it accounts for 1% of our total revenues on the other hand, the staple of our business across our segments. Our ATM located mostly a well known convenience grocery pharmacy and big box retailers approximately 95%.
Out of our ATM in these location types in the U.S. have remained operational through the pandemic, providing critical cash to access to the citizens within the markets that we serve we have seen varying degrees of impact across our geographic segments, but across all geographies, our core convenience pharmacy and grocery located.
I wouldn't have mostly remained open and had been the most resilient with respect to transaction volumes.
In the UK, our second largest market our same store transactions have been down approximately 55% since mid March and is similar to the transaction volume declines that can be seen across the banks in ATM operators in this market.
We have seen a consistent improvement to this trend in the UK over the last few weeks DCC revenues in the UK, our largest DCC market have been impacted due to the travel restrictions.
In the U.S., our largest market our same store transactions have been more resilient down approximately 25% since mid March across our entire ATM fleet and actually trending more favorable sense. The earlier low point you will see the transactions at these locations were down about 15.
About 15% over the last seven days.
I refer you to pages six and seven of the Investor supplement posted on our website for some additional detail on recent transaction performance within the U.S.
As you would expect within the U.S., we have seen the most significant impact on our ATM and the metropolitan areas that have been highly impacted by the Kobin 19 virus and under strict shelter in place orders for example, same store transactions at our ATM in New York are down over 40% since mid may.
March interestingly, and perhaps somewhat surprising to some and why did the certain views that the contact was payments rollout on New York Subways may.
Significantly alter cash usage is the fact that our New York ATM had same store transactions in the first quarter through mid March that were higher than what we saw across the whole country. Our same store transactions in New York had been growing over the past several quarters. Another testament to the executed.
On our strategic plans, while New York is the largest city in the U.S. and certainly an important market to us it is less than 5% of our transactions and ATM counts.
And this brings us to an important point about the value of our network one of the more powerful aspects of our states is its geographic dispersion.
Top 20 metro areas in the U.S. account for approximately 40% of our total transactions in the country with no single Metro area counting for even 5% of our transactions. We operate in all 50 states and the majority of our transactions take place at locations outside.
Slide of the top 20 metro areas.
These less densely populated areas headroom have been performing better on the whole compared to our ATM and the top 20 metro areas since mid March.
A second pointed resiliency is the diversity of our customer base, our frontline consumers range from customers as some of the largest buys in the U.S. via branding arrangements to customers of over 1000 at buys via access to the Allpoint network. In addition, prepaid payroll stay.
And federal aid programs also participate via Allpoint and of course convenient locations played a large role when it comes to convenience or surcharge transactions.
This crisis is also highlighted the strength of our network reflected by the diversity of our retail locations in the us.
Looking at our Us ATM and stated another way through the lens of location type we can see how our network has performed across different types of retailers I refer you to page eight in investor supplement.
You will see our pharmacy and grocery 18 pounds in the US overall same store transactions have been down less than 20% since mid March these ATM to account for almost 50% of our ATM.
To summarize the vast majority of our USA teams are located at everyday locations most of which had been designated as essential businesses by the U.S. government.
While the transactions in the us are down given the extent the nationwide shutdown. We're encouraged by the resilience of our fleet and while our transactions have been impacted by the shelter in place orders enacted in most states. We can clearly see that cash matters to many people things could change, but we have recently seen some solid.
Signs of stabilization and improvement.
As the economic stimulus measures and unemployment funding starting to be distributed in the us around mid April we saw nearly 50% week over week improvement and volumes and we expect that transaction volumes will continue to improve to a certain extent as shelter in place protocols are lifted for example dirt.
During the three days leading into this past weekend, we just first over $350 million from our company owned retail base ATM in the us up as compared to same weekend last year.
Although same store transactions have been down for the entire entirety or the period since mid March we have witnessed days was significant year over year increases in same store transactions as well.
We're also seeing a double digit increase in the amount of cash being withdrawn per withdrawal for example in the UK, while the number of transactions have been down around 55% since mid March the average withdrawal amount has gone up by nearly 25%.
This highlights at cash matters to most people and second the impact of transactions is more about shelter in place directives and people not going out versus an unfounded fear of cash.
To illustrate the point same store transactions were down about 23% for the month of April in the US while total cash dispersed was only down 11%.
Our transaction volumes declines are fairly consistent with the decreases in recent consumer spending trends for comparative purposes, various network and processor data reflects consumer transaction declines is declines in ranges comparable to what we have seen across our us ATM network in fact credit card.
At present data suggests even higher reductions to credit card transactions.
I think it's also important to highlight some of the things that we've been doing operationally over the past couple of months.
Most companies of our size, we had a business continuity plan that we had tested and were able to implement swiftly and seamlessly most of our employees across our geographies had been working remotely since mid March and I'm pleased to report that the work from home transition has been seamless.
Our employees have been equipped with the tools that they need to carry out their day to day activities in our operations overall have not been impacted.
We also were prepared to have plenty of cash available for our ATM, ensuring limited service disruption.
It's been a priority for us to ensure the health and safety of our employees, while we deliver on our mission and make sure the right locations around the world had sufficient levels of cash so that local communities or serve these logistical challenges have led to some elevated cost in the second quarter as we move cash around and increased levels.
At a central locations.
Early in April we made an announcement regarding actions we've taken to mitigate the impact to the pandemic.
And reduce cost to preserve financial flexibility and cash flows.
These were significant cost savings measures, including salary reductions furloughs professional fees and various discretionary reductions as well as reductions to capital expenditures anticipated cost savings are in excess of $30 million from a cash flow perspective in Q2.
During this period as we navigate through the impacts of the shelter in place directives, we continue to bring in new business and have accelerated some of our product initiatives.
We entered into several new important relationships with retailers and financial institution partners. During the first quarter on the retail side, we announced a new agreement with Casey's General stores, a fortune 500 company with over 2100 convenience store locations in the US we're now the exclusive ATM partner.
Hey season have already commenced installing our 80 comes at their store locations, we're thrilled to add Casey's to our list a premier retail partners on the Fi side, we expanded our branding relationships with Citi and two other top 25 banks during the quarter.
On the Allpoint front, we signed 27, new five partners during the quarter, including several of which also joined our Allpoint plus deposit network.
Hi isn't fintechs of all sizes continue to value and trust, our Allpoint network as a convenient ATM solution for their customers. We also expanded our managed services business, signing new and expanded agreements with 27 different five partners in the quarter. We are increasingly the partner of choice for for.
Financial institutions of all sizes to manage their customers cash distribution needs via ATM.
I would also point out that many of these agreements with financial institutions were signed during the month of March which suggest even in these extraordinary times partners see the value in our services.
Last quarter I spoke about a new software and our ATM that we have developed in house and why this is a pivotal development for us this software coupled with enhanced mobile capabilities and a growing number of cash except in ATM continues to drive new business opportunities. Despite the numerous challenges presented by this.
Pandemic, we continue to deploy the software across our fleet and continue to roll out cash accepting ATM.
Our time's a crisis often produce innovative solutions earlier this week in the United Kingdom, We launched an innovative new mobile cash service in association with pen for US based Fintech. This service is the first of its kind in the United Kingdom, and we'll utilize our country wide network of ATM to provide soon.
This ends with the access to cash sent to them via SMS to their mobile phones. Our teams were able to deliver this capability.
From concept to market pilot within five weeks the functionality is already getting significant interest from a wide range of potential partners, including Fies charities in government agencies.
So in spite of the worldwide slowdown caused by the pandemic, we continued to execute on our strategy during the first quarter growing enhancing and demonstrating the value of our network.
Let me now I'll turn the call over to Gary to talk about the first quarter results the balance sheet and some directional guidance on the financials in the near term.
Thank you Ed I will start with a quick recap of our financial performance in the first quarter and then talk about the balance sheet and liquidity before moving into what we are experiencing during and how we are adapting to cobot 19.
First the results for Q1 were solid and we've been quite strong and would have been quite strong had the pandemic not come into play across all our segments in mid March.
In spite of the challenges related to covert 19, we grew adjusted EBITDA by 6% on a constant currency basis for the full quarter, delivering 160 basis points of EBITDA margin expansion.
Revenues were down 2.5% constant currency for the quarter, but were up 6% through the end of February.
EBITDA growth in the first quarter came from our Europe and Africa segment as we lap the second interchange rate cut in UK had strong EBITDA growth across South African Spain and Germany.
Our North America business with continuing to show solid growth into early March and then came the mid March downturn in transactions due to cobot 19.
In addition, we had made investments in both personnel and product during the quarter to help accelerate growth.
Even after considering these investments and impact of Cobot 19, we still ended up just about flat from the prior year on both the top and bottom line for the segment.
Some additional color for this segment is that our US business was quite strong through February and adjusted EBITDA on US was still up for the quarter as a whole.
Canada business, which had the good size casino component was hit, especially hard during the month of March.
Adjusted EPS of 42 cents was up 20% from the prior year, reflecting the EBITDA growth along with lower depreciation interest expense and a lower share count.
Adjusted free cash flow for the quarter was solid at 22.6 million up 11% from 20.4 million in Q1 2019.
Before the Cobot 19 pandemic began to impact our business, we repurchased over 500000 shares during the quarter from 16.8 million.
As you can see from the numbers, we create we clearly had strong momentum heading into this crisis.
Let me now turn to the balance sheet as many of you know one of the thanks, Ed and I have been consistent about the detaining conservative leverage levels and balancing capital allocation priorities. We spent the last few years very focused on growing free cash flows and paying down debt. So we entered this prices in a good quite from a leverage perspective.
At the end of the first quarter, we had total gross debt outstanding of 1.3 billion and had unrestricted cash of 614 million.
Net debt outstanding with $720 million.
Our net leverage ratio was 2.4 times EBITDA flat from what we reported at year end.
Leverage covenant in our credit facility as foreigner quarter times. So we currently have significant headroom.
And an abundance of caution in late March we do the entirety of available capacity under the $750 million revolving credit facility.
Primarily to address forthcoming convertible debt obligations.
We have 288 million of convertible notes that are due on December onest and as we have planned for several quarters now we intend to retire these notes using the proceeds from our revolving credit facility.
The incremental interest expense associated with the fully drawn revolver borrowings will add approximately $8 million to $9 million above the 2020 outlook previously provided.
Due to the unprecedented situation with coded 19 virus, we withdrew our 2020 outlook on April Onest and are obviously not positioned to offer a detailed financial outlook in the near term.
However, we feel is important to provide some color to assist you had better understanding how we performed recently during the period of Lockdowns across our geographic footprint and how we might perform as circumstances evolve over the coming months.
Particularly in the U.S.
While it is different very difficult to predict whether that improvement will continue over the coming months. We feel we have successfully managed through what should be some of the most difficult weeks.
While it varies widely across geography is a good part of our Cosby is variable.
We estimate on a consolidated basis that are variable costs are approximately 55%.
Some portion of the approximately 45% of our costs structure that we are classifying a six or only fixed in the short term pecan b. and are being reduced.
One example would be where we remove or hibernate a longer no longer profitable H.T.M. that has some recurring cost components, such as rent communication lines maintenance contracts et cetera.
We've been working towards increasing the percentage of our costs that are are variable both prior to his during the crisis.
In early May we've seen continued stability and improvements in volumes across most jurisdictions. However, we are mindful that late may and June would typically be a time, when we would see more travel and tourism and accompanying D.C.C. revenues and some of our more tourist based geography.
While transaction tied to travel and tourism not or not a large part of our business. We do have some degree of exposure and as we previously mentioned during the 2019 D.C.C. revenues are approximately 4% of our total remedies.
We do not believe it is prudent to assume any significant recovery and travel and tourism in the near term.
All that being said we were even positive in April which is what we as a team believe should be the worst month. This crisis as every single geography, we operate in was on lockdown.
The U.S.R. largest market performed the best during April.
Seen trend stabilizing and slightly improving over the last couple of weeks and we expect continued positive even to include too.
Based on what we experienced in April as well as recent transaction trends, we would expect to see Choo Choo adjusted EBITDA margins in the mid teens generating about half of the 64 million and adjusted even that we reported into one.
Even including elevated interest payments in our second in fourth quarter is related to semi annual interest on our bonds is key to adjusted EBITDA. Our results should drive positive free cash flow during the quarter.
We would expect us to be the lowest free cash flow a quarter of the year.
We would also expect to continue generating positive free cash flow for the remainder of the year.
Even in scenarios, where there were the minimal recovery and transactions.
We expect you to to be the lowest either dot quarter, and we would anticipate sequential quarterly improvement for the rest of the year.
I should also mentioned that are 2020, and Q2 results will likely be adversely impacted by unfavorable exchange rates as a dollar has strengthened versus all of the currency and the countries, where we operate this will result in additional near term headwinds on as reported basis.
Moving on to capital expenditures were already starting the year at a lower level of cap x. than in Q1, 2019, with 18 million down 11 million or 37% from the prior year.
Additionally.
Order to maximize cashflows, we or wherever possible significantly reduced future capital spending and should we not see any significant improvements and transaction volumes of the year Progressive. We believe we can bring full year cap x. down to about half of our initial 2020 outlook of approximately 140 million.
However, I'd like to know that we will be monitoring cap x. very closely and we'll adjust quickly as me navigate through these headwins.
We spoke with many of you what our first Investor day, a little over a year ago, where we laid out a strategy for longer term gross and expected growth rates for revenues and adjusted even though.
Our growth rates will of course be impacted this year because of the pandemic.
That said heading into this pandemic I think we we're ahead of schedule in terms of where we thought we could be at this time of year ago.
I think the company can still achieve the medium term growth rates, we set forth.
I believe that the market dynamics as base and consumers adapt and the post pandemic environment could provide additional fuel for growth.
These market dynamics, coupled with the company strategic positioning and continued execution give his confidence as we look further ahead.
Let me conclude by saying, we're very well positioned both financially and strategically to whether this pandemic.
I'm excited for the future of this company and based on the business success, we experienced immediately preceding and which we continued to experience. During coven 19, we believe we will be even better position when this pandemic subsides.
Now, let me turn it back to Ed for some final thoughts.
Thank you Gary.
Concluding remarks today with some thoughts on how the pandemic may impact us over the longer term.
First let me start with a question some of race or consumers usual less cash in the post and then a girl we believe cashes in percentage were transactions at the point of sale will continue to decline, but as previously stated we think this will lead to branch transformation and allow us to grow transactions share. We also believe consumers.
Continue to exercise freedom of choice when it comes to payment options cashes in during it a secure it cannot be hat is reliable. It works in any situation and it is private and increasingly important attribute in today's networked world.
Petra <unk> director payments at the Dutch Central Bank, probably put it best cash provides trust.
This pandemic is driving new and different payments.
Orange for sure, but we believe cash will remain highly relevant and the role of an H.T.M. will expand as an important user driven digital physical access point.
The shift is now opening up.
Up to a broader sense a transaction types that can leverage mobile enabled cash in cash out capabilities. An example of this is the announcement, we made last quarter with Amazon cash, allowing cardless cash and transactions to your Amazon account at our all point plus locations.
I believe we will look back at this time as an inflection point and also a catalyst that accelerates France transformation.
F eyes will likely be looking for new and expanded partnerships as they pull back on their costly infrastructures. We believe we have the network the Brett to scale in the expertise financial institutions want to serve their customers now and into the foreseeable future.
And we're ready to capitalize on the opportunity and more significant ways than before offering but low cost on demand common emphasis crusher and technology solutions.
Many leading retail banks of clothes significant portions of their branch footprint as a result to this crisis, while it's unclear what what is going to happen in the future all f. five we'll need to lower their costs and it's unlikely that all of these branches will reopen.
At the same time consumer still need cash access in our utility H.T.M. platform provides a convenient national cash infrastructure to help fill the void last by branch closures and enable banks to maintain a branded presence in these markets <unk>.
<unk> capitalize on this growing opportunity in the U.S. by partnering with F. five of all sizes to leverage our convenient surcharge free network via all point and high value branding locations.
Additionally for those that buys you prefer to maintain a dedicated flee they can outsourcer H.T.M. fleet my partnering with the most experienced operator in the world via our managed services solution.
With respect to our retail partners, we're providing valuable and increasingly diversified services to their customers. Additionally, with our expansive and growing financial institution Partnerless, we helped drive traffic to their stores as consumers see convenient and fee free access to cash.
Retailers also will increasingly want to partner with a safe reliable value driving an innovative partner, we check all the boxes.
Retailer in F.I. partnerships have grown during this recent period and we expect that to continue.
With vast branch closures across the globe consumers will need to fine alternative access points for cash transactions close cash in cash out our retail footprint located in essential businesses provides this cash infrastructure to the communities that we serve trust is critical and trust is earned and we expect that.
Tronics will continue to be viewed as an important interested partners.
So in conclusion, let me a wrap up with the following cardtronics as well positioned financially and strategically.
The pandemic will likely accelerate branch transformation in drive more transactions to our network.
R.H.T.M. network and platform have proven to be resilient and strong importantly, we have geographic and retailer diversity.
Convenient locations that customers trust in an unmatched level that high partnerships through branding and are all point network, all supported by exceptional operations and capabilities.
In spite of the challenge is presented by this crisis or underlined network continues to expand with new and renewed partnerships and we continue to make progress on rolling out new products solutions and functionality across our platform of user driven in mobile enabled digital the physical access points.
And lastly, most importantly, we're taking care of our employees and partners, who will continue to serve our communities with a valuable and essential service I would like to say a special additional thank you to all of our employees continue to ensure caches conveniently available in the communities that we serve.
Employs resolve dedication and commitment has been very inspiring for that I. Thank you operator, we're now trying to call over for questions and answers.
Phone call.
And I'm Gonna if you have across my <unk>.
<unk> followed by the number one key on your club storm telephone.
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<unk> question <unk> <unk>.
I profess question comes from Peter <unk> from Global Dixon line Okay.
Good morning, everyone that says lexis on trips heat I Hope you and then please I think safe and Wow.
Very good yeah. Thank you watch this morning.
Morning, So, let's just wanted to start on the subject of this likely driving B.F.I. digital transformation I'm wondering if you've actually been seeing any optek any interest in 18 outsourcing specifically given more financial pressure on small banks and credit unions.
Well you know as way I went through am I prepared remarks, we actually had a a terrific quarter during during the first quarter in many of these relationships that we close actually occurred also during the month of March which I think it's a true Testament two that interests and values that are F.I. partner C. and.
In our solutions, we <unk> 27, new all point relationships and either expanded or added new partners totaling about 27 during the quarter for managed services solutions, which is that outsourcing solution.
It's just natural to think that based when everything that's been happening in the market and the relentless focus on it cost that f. eyes around the world are going to be seen and experiencing with where interest rates have gone changes in a in habits and other places around the world that we believe that this will be a an accelerating point.
As I mentioned earlier, essentially an inflection point for this area of the business and we're very unique and this because of our abroad Sweetest solutions that we have to offer into partner with a financial institution.
Managed services side of the outsourcing is just one part of it that's just for those who might want to keep a dedicated fleet, but even bigger opportunity if to leverage our common infrastructure, which is our surcharge free network.
And then the United States, we bring that together through all point in branded Ah relationships with financial institutions to offer a very large surcharge free network in common infrastructure for the country.
That's definitely makes sense and I appreciate the clarification on some of those being closed in March months. So then moving over could we get a timeline sure that key sees roll out and then more broadly I have you see how are you expecting to see any delays to implementation for new customers.
The [noise] the roll out with cases, which is just a terrific operator, the Midwest over 2000 locations [noise]. So we're on her to have the relationship there and add them to [noise].
Valuable suite of of convenience operators, Oh, that's underway right now I mean, we're rolling that out as we speak with supply that's an income in N.A.T.M.S, new new A.T. owns and we have not seen a any a significant implications to the supply chain today.
Okay. Thank you and then just one more if I could I could you comment on any progress on moving units and sorry, I missed us and you're prepared remarks, but moving units to pay to use in the U.K. The links data looks like in about 50 per cent are now pay to use.
[noise], we you over the last year, we we did make some significant changes because of other cuts that the Lincoln made to the interchange rate some time ago, and unfortunately, those tkacz impacted or all operators into market, which had implications and obviously just based on economics.
There we saw a lower volumes, we had to change to to free to use so yes aren't ratio now with a with Haiti use excuse me with our ratio would pay to use has gone up in that and you know we see volume on on all whether it's free to use a or a to use we haven't made any.
Again changes to that that's been relatively stable for the last couple of quarters and actually I would say just because of the changes in the marketplace and the reductions were seen other you know operators some others have pulled out a capacity.
In the marketplace and a and actually more recently some signs of improving just kinda steady improvement you'll see a an investor supplement where you know each seven day period has gotten a little bit better and that's continued on through actually yesterday.
Have a nice steady improvement in today are ratio is a little greater on the pay to use side than a than free to use in terms of number of H.T.M.
Okay. That's helpful information. Thank you guys.
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Next question come from Bob Napoleon from William Blair Airlines, Okay.
Good morning.
Everybody I get to hear from you.
Just on the L.D. outsourcing one's curious 71 said an acquisition.
Oh, then outsourcing company and the U.S. a bike competitor is that something the white and obviously this is a difficult time for me.
Capital perspective, but is that something you would've been interested in are you interested in making acquisitions of in that space.
Good morning, <unk> [noise], a couple of things on on the <unk> acquisition, let's just start with the latter part of that you know, we've all along and looked at different opportunities where we saw.
Value, we've actually done [noise], some smaller a acquisitions, but what we saw significant value achieved the high hurdle right inadequate return on those so we'll continue to look at things, where we think it makes a strong economic sense, but as you know and as we outlined a year ago our.
Arden focus has been on driving organic growth and continue to build out our network and really pleased with the performance and you know as I think is reflected you saw that in the last couple of quarters and including the first quarter, where we had a nice organic wrote eight per cent growth frankly in a month or.
January and February in the U.S. alone.
[noise] on the first part of the question just going back to that particular acquisition, you're referring to I think it's great. It's further validates the market and the opportunity that we see a in the space that was a small off operator, you know roughly a thousand or so A.T.M.S. We think it's great to have a more sales people in the market and trying to kick off and.
<unk> opportunities and educating the market. It makes a lot of sense and I think that's a that's a very positive.
Would also say just showing and working on a a single source around out for us in H.T.M. is very different than bringing forth. What I've talked about earlier abroad. Sweetest solutions that encourage includes the retail base surcharge free network, which in these highly convenient you know 40000 convenient low.
Stations across the nation to offer you are the f. five to their customers, but branding opportunity getting their brand out there for better presence better services surcharge free network is abroad or more comprehensive solution with outsourcing just being one of those.
Clunky and then the expense cuts that you made or how much that is that could be permanent versus a temporary and and for the current environment. How much of it was salary versus other costs.
Well I'll turn over to Gary you know and about talking about some of the things that were implemented during this past a core.
How about yeah. It was about 50, and it's about 50 50 between top economic than that 30, and and just to be clear those were action taken versus what would typically just be in that variable fixed balance. So you know part quite a bit of it can be held for awhile.
But.
While the specificity I think I'm comfortable given at the time.
Okay. Then this last question, we need to down your.
Entire credit line over to understandably, but what what you need to see to to a understand that.
Hang up convertible notes December 1st <unk>, but at what point would you.
You know pay back a big chunk of that credit line and reduce your interesting home and interest expense.
Yeah, I think we'd like to to get through two two or some part of you to to get a feel for where things are as we mentioned it was <unk> out of an abundance of caution at that point in time those of US who lived through the last.
<unk>, Oh, seven or eight timeframe just made sure that we we had liquidity. There. So we went ahead and drew and we'll just keep an eye on every day.
Okay. Thank you appreciate it.
<unk>.
Oh I'm Kim our next question comes from 10, where you from Wells Fargo airline is okay. Okay. Thank you in the morning, Gary <unk>.
Too quick question, who aren't as you mentioned 10 score in the U.K. somewhat familiar with them and some other solutions, but could you talk about what you're doing with them there.
The the sort of value add type of product and just sort of any thoughts about other opportunities you're so I'm from people that want to leverage your distribution for some products or services.
Across the A.T.M. network, if there's anything else that it's sort of we should be thinking about longer term in that respect.
Yeah. Good morning that town, Yeah, we're excited about that partnering with them as I mentioned on my previous remarks. This is a new and unique in a in the U.K. and overtime <unk> have this enabled across a the fleet.
We're in pilot phase out now with them and and a enrolling that outfit as allow a a sender to send funds to direct to consumers using an S.M. <unk> going to other mobile phone and and be able to go to the A.T.M. and take out the cash with a a with.
Code.
So we're we're excited to do that there's been a lot of interests and it there and frankly that was a accelerated during this period because of the need to get Cardless access out in areas in particular by cinders, who didn't have a card up portfolio a with customers are there since so now.
Now this is a way to leverage that and the technology that we have also with the and it really goes back to that other part as the strategy that we outline last March.
And I've talked about further you know today were one side, we have ongoing opportunity. We believe drove on a branch transformation front, but it's also really building out that digital and physical access point, that's mobile enable and allow a broader set of transactions in as we're rolling out now in the United States cash.
<unk> capabilities that two allows us to open up to more and more different types of transactions versus just a historical history of around just cast dispense. An example of that thinking a little bit differently is what we announced last quarter with Amazon cash and be able to put cash into your Amazon account.
Just simply and that's that as a card less transaction. So that's going to be the first there'll be more to come more different types of relationships I think just some of the changes that are happy in the market right now that'll open up to new opportunities for us and being a digital the physical access point.
That that we have because our locations are so unique.
Great and then my follow on what sort of around a competitive environment. So.
You know I guess I think about the U.S. in particular right. There. There are I guess, you could take a lack or better description almost H.T.M.
Everywhere, you turn, especially in the metropolitan areas appreciating that as you pointed out those who are probably a minority it overall volume it's still March.
Right. So I guess, when I think about competitively and a lot of restaurants retail or <unk> shut down or having little snow traffic and those independent ATM to players that are your competitors, probably don't have the financial.
<unk>.
<unk>.
You think there's a possibility that you know <unk>.
The U.S. could actually shrink and therefore, reducing alternatives for consumers just things come back, but then as you pointed out your location. So <unk>. It helps accelerate that share shift that you have long talk about.
We do that's why as we sit here today and what we see that I think there will be less capacity.
Overtime, not just in the U.S., but many markets a a round around the world. It may look a little different.
But that infrastructure and was so valuable for us is that convenient infrastructure that we have in those convenient locations is a is very very exciting as I say here today, you know, we outline a year ago are or longer term plans <unk>.
Long-term opportunities and objectives on what we thought that would look like financially from a growth standpoint as I see here today I'm more confident more excited about what's ahead that I was standing invested a a little over a year ago and why because we see what we've we've developed and rolled out you know those were all we are.
Talking about this was gonna be coming out there know out in the marketplace now we're now signing up.
Partnerships like like an Amazon for signing up additional partnerships with the biggest banks in the country in many countries around the world and we see this has happened it's now real and we believe our early on right now, but we believe that it could likely accelerate as a result of.
Of of this pandemic and that's why you know I I'm I'm more optimistic today that was even a year ago.
Great. Thanks, very much for the time appreciate it.
Phone kill our next question comes from quite taken apart from North Coast Research Feline is open.
Good morning.
Gary Okay, you talked about some opportunities you could have on the outsourcing side or branch transformation, how do how will you managed out with maybe some of the capital requirements.
That might beautiful.
I bet you might need it if you do get some a large opportunities to convert some come machines.
Well, let me, let me start on that and I'll turn over to to Gary a as well so in terms of partnering with financial institutions, we feel the the the very highly the most majority of that will be done partnering with leveraging our surcharge for your network that networks already out there. It's out there now will continue to and.
<unk> and make changes to that over time, but that's that's out there and that is probably the most effective way for financial institution to leverage the common infrastructure in the lowest cost as I said in my prepared comments are also a institutions who'd want to keep a dedicated fleet. We can do that with managed services and.
We've had that in our cap Ah cap X. plans and outlook that we've shared with you all before so I'll turn it over to Gary to talk a little bit more about that latter point.
Yeah, No I agree with everything that I think that the difference carded get you know, we'll we'll watch is very closely obviously, if they you know fantastic opportunity comes out we will we will rejigger, we'd come back to you and let you know you know cap x. might be higher but that's something we just got to watch month to month.
And I I wouldn't depending on what size. The deal is would would probably still fit in the guy or <unk> outlook. So I'm not worried about that and again, if something real big opportunity came up we would come back to the market, but you know.
And then just on D.C.C. I think you've said most of that is it from the U.K. and I'm wondering if you could just I I think this is probably in the cube. It I'm not 100% sure just sizing does impact from D.C.C.N.
What do you anticipate from that this year, especially with potentially unlimited travel in the summer.
Carry you want to touch on that I think you had on your comments sure sure Yep Cardica. It's four it was 4% of our 2019 revenues Ah, Yes, U.K. in Spain, et cetera, or the the larger markets for that and that's why we pointed that out as a as an area could be we we're not expecting towards them to come back in some major.
Over two two and two three which are big travel months. So obviously, we love it if it did but in our plans were not planning for that.
Perfect. Thank you very much a really appreciate it.
<unk>.
Thank you.
Next question comes from Reggie Smith from J.P. Morgan lines open.
Yeah, you. Good morning, gentlemen, Thank you taking my question [noise] wanted to ask so it sounds like.
Same store transactions are up 6%. The first two months of the year I was hoping to get a little more color about that.
And then I was curious pretty stupid disclosure about April then the week to week trends was there any appreciable difference and.
Volume from say, a your search <unk> network versus surcharge like is 80 anything appreciable they are where the trains generally similar for both for both buckets.
Sure Good morning, <unk>, the going into the first horror who talked about actually you know, we we put a fair amount of information detail and our supplement if you look on a page seven really shows you how that distributions card around the around the country.
You you reference to 6% that's obviously the same store in the United States. That's 6% is going through a mid through mid March.
Yeah, before things really and the shelter and place really started kicking in so we shall very strong performance during that period of time.
And frankly was the best period that we've seen it over a year in terms of same store and that's just really a lot of effort from the different initiatives that we put on your way over the last couple of years.
Traditional branding arrangements are more all point relationships with partners around the country and more those things coming together and some more and more people going to our locations and interestingly as I said to my comments earlier, one of the stronger cities markets that we had seen that was actually had been.
Accelerated in terms of the growth has been New York and and from the performance I just gets back to that the Testament about working closely with our T.F.I. partner seem more and more traffic to those locations.
And then I would come back to a your other point around or whether surcharge surcharge free we've actually seen a fairly uniform change cross our locations that those changes to train up and down and really moved in tandem throughout throughout the period of time [noise] and I think also.
Highlights I want one last point on page six where you can see we we kind of hit the lower point of a declines in the U.S. you know during the early or early April period, and that's just you know continued to improve weekend week out and then when we look at the last seven days to that's the rolling seven days most recent.
Where we continue to show improved levels were now down about about 15% and I I, one last point a color here.
Which I really.
Feel strongly about from what we've seen the big impact is or from that why we were doing you know around 6%. We felt like that would have continued on in during the period <unk> wants to shelter in place orders wanting to place. That's when we saw it come off and now as you start.
Seen some of those shelter and <unk> in place orders starting to back off were seen that change us citizens get out get out in their communities. For example cities like Jacksonville, Florida cities like Atlanta, Dallas, Houston, or some of our markets that have been per.
Forming better since the easy no the of the shelter and place orders inshore best improvement since the worst periods.
God. That's helpful. No. It was it was nice to see that 6% figure in in <unk> I was kinda Oh somewhat surprised at how nicely snap back is April kinda progressed.
I'm not sure. If this is covered on the call but.
<unk>.
Do you think about revenue in light of these withdrawal transistor, a fair proxy or starting point, but to think about revenue in April.
Tracking kind of withdrawals.
Well I'll I'll I'll start and then turned over to to Gary I think we provided some you know fairly explicit thinking about you know what you know what we're saying are thinking for for the second quarter, then backing into a tomorrow and it's.
I I wouldn't tell you if you have a direct correlation back to revenues are so much of play 'cause yeah, well, we may have a higher revenues from certain arrangements, but it's very low margin for us. So for example in places that are really closed down like a casino where those are essentially zero right now.
But those are high volume locations, which tend to be high high revenue drivers.
<unk> it won't track exactly with transactions also because of what we've done over the last a couple of years of more arrangements, where this man services all point branding relationships in other areas that have more fixed <unk> elements and components.
To our to our revenue Stranger revenue, Gary any further thoughts on that.
<unk> Yeah, no I think it's exactly what you said you know there's got to be some revenue that'll that'll be gone for a short time, but it's lower margin and.
I'd mentioned, what we thought Q2 would do which would be about half of Q1 and that <unk>. So that should give you a general idea of where we think revenues coming up.
<unk>, obviously, she said here today, no one knows where where things are going to go but the good news is [noise] were seen consistent <unk>.
A week on week out not just in the U.S. been in in frankly also in the United Kingdom in other markets in the world as they begin to to open up and we're seeing that improvement which is very encouraging.
Right and last question for me you kind of talk goodbye about when to give you kind of platform to speak about a little bit more well one thing we heard for the last week and a half or so from different ER paint it processes networks et cetera is that they see this pandemic of sconnix celebrating the movement away from cash.
Sounds like you have a a.
Different approaching I've heard people talk about you know cash is dirty or.
And the people are shining cash doesn't sound like that's what you're seeing and hearing a one or two yes, let you kind of respond to to that because that's definitely something to be heard a lot in the last week or so.
Yeah. Thanks for asking I mean, obviously, we feel strongly about cash, but we're not the only ones billions of people around the world feel very strongly about it including hundreds of millions of citizens United States and the United Kingdom in other countries.
Ah that's in which we operate and feel very very strongly about why because cash matters to to their lives. You know you you you mentioned about the the Dirty part you know I think it's important look at the facts. The facts are medical experts government agencies University researchers all indicate that there's no.
Scientific evidence that cash represents any particular or significant risk what you'd do here is that several people who are pushing their own digital agenda in their own a digital payments are putting out an agenda. The world Health organization, whose indicator on their website, there's no evidence of that.
Frankly, <unk>, Yeah European Central Bank actually went and commission studies, because some we're questioning they commissioned studies.
And found that plastic glass and metal services are tend to 100 times worse than a poor service of light cotton and Lennon, which is what the U.S. dollars made so the actual facts and what the agency's put out a is contrary to that other agenda and we feel strongly and.
Our mission to support these communities around the world who desire access.
Just by the amount of cash that we see that goes out of our out of our machines, which is in the billions of dollars of cash and and then can go out very rapidly when people are looking for for convenient access that would say a one last element, which is why it's also so important about the communities that we serve.
Oh, there's a big portion of a of our population in the United States, 25% of the households in the United States are either unbanked or under bank in the majority of their transactions are with cash I think it's important.
Support is there and who desire to use that and the one last element.
And it was around a three point of secure reliable and private and we feel like privacy is going to continue to get more and more focus and attention. So we're we're strong advocates and and and we'll continue to be.
Perfect. Thank you.
Thank you <unk>.
<unk> <unk> <unk> from Barclays Caroline telephone.
Hi, guys. Thanks, so much for taking my question today I want to ask about a couple or external factors in the environment right now and and trying to get your perspective on the impact on the business. One is of course, the stimulus payments I'm presuming a lot of that that there's a cash.
Cash out depending on the channel or.
Consumer of receiving the stimulus.
Runways taxis and then the impact on the businesses that deferral and when the Cox hiring day I think that's probably also season, where you have some liquidity that make it shifted around a bit.
If you could kind of comment on how you see those two things that you know maybe stimulus having already impacted the volume is that you showed plus maybe what we should could expect kinda later taxis or whether that's a a factor at all.
Yeah, a good morning, <unk> <unk> those guys I put a in in my comments as I said earlier, we do see like on the latter part around whether it's stimulus or unemployment.
Other state aid programs, where many states look for efficient low cost surcharge free networks, and providing access or one of the duties. We do there's also a serving those communities and have access to to cash there as I pointed out.
Earlier, we have seen some increases as a result to that [noise].
Unfortunately.
With unemployment levels now at you know for the highest that we've seen in our lifetimes, that's not going to be changing unfortunately anytime soon and aid programs will will continue continue on the you know Moreover, we think also communities well.
Began doping back up.
And people will you start getting back out shopping getting out going around their various areas, where they live and we'll see transactions naturally pick up from from there.
I I do feel that though we come back to the overarching point is around that infrastructure that cash will always be around it'll continue to be used but you know realistically in as we've talked about for years at the point of sale. It will continue to climb, but that's because the number of transactions for the <unk> more over.
Is going up.
Cash in circulation continues to go up both the fed as well as the central European Central Bank, just pointed out cash was up and significant levels in turns out in circulation through into a into April. So the facts are is still out there, but it's also and and highly used.
We have growing populations, we feel strongly that we can become that infrastructure inefficient inconvenient channel for citizens in the country's out which are.
Okay and.
This kind of does tales under the congressmen you dismayed, but <unk> remind US you trust person your slide presentation Super helpful. By the way can you remind us about the kind of prior performance or the typical performance that Cardtronics basically you know <unk> <unk> during and.
Sort of Recession's, the kind of counter cyclical.
You know <unk>.
Trends in the business.
At the end of the day last time around I think you had some you know coming out of a lot downturn is I recalled I remember hearing a lot about it you know increased share transactions from prepaid card due to sort of a proxy has some of these benefits flying and as well as you know reloadable prepaid cards. It on bank and everything for using sort of long term I boost in essence that the the company was.
Getting from primary kind of recessionary trends can use kind of remind us what happened last time kind of what you might expect this time, if if anything were different.
Sure a great question and you know, we we thought about this and so we included in our our supplement on page 18 [noise].
Hey, how you know how did the company perform last time, there was a significant economic impact and through the last recession and and what are the company a witness during that period of time, and obviously any kind of situation like this is going to be different since we're not saying this exactly how it would occur this time, but the fact is during the.
Session of the company actually did see transactions go up saw cash usage go up and why because it's a great planning and budgeting tool it provides security.
And also unfortunately during a recession.
You know consumers have last access to credit. Unfortunately, now we've seen unemployment levels go up that's likely to impact a access to credit cash could be used become more of a a stronger use a tool that is what happened back during the last recession Ah.
We're prepared to support that to the extent a we see the same.
As I mentioned earlier, the on and Underbanked population and the lower middle income areas.
Which you know, there's about 25% of households that a or either on or Underbanked. Unfortunately, that's you know could go off because of the love of unemployment an implication in a in our society. So this is what happened last time and will be here prepared to support you know through through.
This recession.
Great and let me just pick one crooklyn last morning.
Email address this in your remarks, I apologize I didn't catch up at Wigan was the U.K. is performance worse than the U.S. was that just sort of like an urban rural mixed issue or they're locked down more severe or why was new clothes performance. So so rough versus neither.
Yeah, I know, it's a a it's a great question I think you know the locked down once that was done it was a significant countrywide a shelter in place or and it was not you know there's just went in place you know right there across the country, but we have seen yeah I think.
The worst thing that went down and you know roughly around or seven day basis rough around 60% and just sending a a slow steady improvement and even more so even going into the last seven days.
In a few days in contrast to that the U.S. really think the U.S. It really comes back to our abroad Sweetest solutions and the partnerships that we have and when you have all point you had to branding locations you have the awareness were in those critical and essential locations across the country in which were honored to be.
To serve in places some pharmacy locations grocery stores convenient locations that of all you know for the most part nine I think I said earlier like 95%. These places have stayed open and been operational and so we've been a <unk> a key element to help.
Support those communities. So that may have been also a little bit of a different driver relative to the U.K.
Got it makes perfect sense. Thanks for taking my questions. Thank you.
Phone killed My next question comes from Andrew Jeffrey from from Trap Caroline Open.
Hi, guys good morning.
Another question.
Yeah, I haven't heard any mention on this call. It maybe it's gonna wrapped up in the F.I. commentary about B.O. bank, saying signed several to the Allpoint network I Wonder if that's you know sort of building on Randy's question about stimulus is how do you think about that at the potential.
Driver and then he's banks become more relevant.
Might need for for all points volume overtime.
Yeah, No that's a great great point, Andrew you know we've been Fortunately to really have a lot of a lot of relationships on the offend tech side and the Neo bank in a continued to expand Ah that Ah you know it through this this quarter, a as well and.
Interestingly.
You know me those something that didn't focused on more of a <unk> under bank a community as well in some of those key partnerships. We've seen actually continued month in month outgrowth. During this period of time as they've continued to grow.
And their engagement with all point has continued to grow so some of those that have been very focused I've actually had had some very nice performance in a in that area. So we think that's a key area for us. Unfortunately, we we have a great value proposition.
For them a nationwide access surcharge free access with all point cash in an cash out capabilities now with all point, plus where you know they can take since they don't have the branches Oh, we can be a a great distribution partner for those I think it also exhibit the opportunity.
D with other digital providers as we talked about thinking about us in our locations of the digital physical access point mobile enabled to be able to now have cash in cash out locations as we further roll out all point plus.
So to your your your point, that's actually been several of those we seen as a a bright spot in some of the performance.
Okay I appreciate that and then call it's getting a little long I might just ask on.
On on gross margin Gary can you just help US understand you mentioned the cost Takeouts came up and sort of gross but gross margin trends might look like and how much.
<unk> you're costing <unk>.
<unk> Yeah, we didn't we haven't really provided anything on gross margin. We were very focused on on the button number that that probably the everybody's top of mind, but when you think about the the six first variable awed, obviously a lot of those variable expenses are are part of the the gross margin calculation 'cause that less of the S.G.N.A.
So, it's probably a little bit higher on average score. The variable then when you go all the way the bottom line any but.
Thanks, a lot.
Thank you.
Thank you and our next question comes from Gary pressed Pitino from Barrington Research Caroline Okay, Hi, a good morning, and I'll be quick because the calls going really long, but Gary did I get this right did you say you're free cash flow was 22 million in the first quarter.
But yeah adjusted free cash flow was 22.6 million. Okay 22.6, <unk>. Okay. Thank you and then where do you guys stand on a deposit taking A.T.M.S in terms of your North American Please can you.
And you give us a number.
Yes, we've good morning, Gary we've continued to a role that out as we put in our plans. This year, we expect that that will nearly double in size. This year that we will be you know I <unk> 1800 to a couple thousand.
Locations by an engineer. So that's continued a on you know barring any other significant changes that happened in the market or supply chain, but so far continues on.
And we see a a increasing a interests in that as well and I think based on what's happened here I think it's going to be a that much more more valuable and again going back to the branch transformation a a point here I'm Rolling and then.
Great. Thanks, and then real quickly some of the questions that I've been getting you know have dealt around that your business model was permanently impaired.
And again these are things we have to deflect is analysts, but you know we talked about cash being dirty and all that but a lot of investors will come back to me and said people don't even want to touch these A.T.M.S to get cash out in terms of mobile unable bent or just being able to tap your card to an A.T.M. where.
<unk>, where do you stand there across your North American sleep.
Well, that's a that's some of the newer A.T.M.S ever rolling out do have a the capabilities of being a card less than a an airfield on that so that's on a new or a newer basis as rolling out <unk>.
If you look at the the facts and the results the results that they were reporting or out today, what we saw this past quarter, what we see right now going day in day out that's just not the case with the cash interest cashew she's using R.A.T.M.S to the tune into millions.
Into actions.
<unk> all over the world. So that that's just not the case, if I understand that people put out certain agendas because they have their messages good to have a different agenda.
But you know, we we see the contrary to that and I I think is most citizens well as well as they get back out a into a into the market.
So.
Okay. Thank you. Thank you.
<unk>.
Include the question and answer session for take conference Alright, the turn of the conference Makeover <unk>.
Okay, well. Thank you all very much and I was gone on a little bit longer but thought a helpful. Just go through everything there were seen a in the business and I encouraged about how the progress of results. This past quarter and look forward to US speaking to you next quarter have a have a great. Thank you.
Well, ladies and gentlemen, thank you for participating in case conference before concludes the programming email discount.
Wonderful.
[music].