Q1 2020 Earnings Call

Good afternoon, everyone and thank you for joining us today for a first-quarter earnings call with me today are Ron Clark our chairman and CEO and CFO following comments from Boca Raton. And the operator will ensure opportunity to get you to the queue for Q&A session is only then that the key will open for questions. Please note our earnings release in supplement can be found under the investor relations section of our website. Throughout this call. We will be presenting non-gaap financial information including adjusted revenues adjusted net income and adjusted net income per diluted share. This information is not calculated in accordance with gaap and make sure the differently than on depth information that other companies.

Reconciliations of historical non-gaap financial information to the most directly comparable gaap information appeared today's press release and on our website as previously described.

Now before we begin our formal remarks, I need to remind everybody that part of our discussion today will include forward-looking statements that include forward-looking statements about new products and see initiatives and expectations regarding business and Acquisitions. They are not guarantees of future performance. And therefore you should not put undue Reliance upon them. These results are subject to numerous risks and uncertainties, which could cause actual results to differ materially from Overland.

Some of those risks are mentioned in today's press release on form 8-k in our annual report on form 10-K filed with the Securities machine commission. These documents are available on our website and at www.sec.gov with that out of the way. I would like to turn the call over to Ron Clark our chairman and CEO. Good afternoon everyone and thanks for joining. Our first quarter earnings call sucked out plan to cover for subjects at the opening here first. I'll comment on covid-19.

many companies we

Taking a number of actions over the last couple of months safety. So first to ensure the safety of our eight thousand plus World wage employees. We quickly transitioned the majority of our employees to work from home. I'd say that we're working our way through the The New National model trying to establish a new Cadence for running the company more teleconferences more zoom or general employee Communications really re looking at people Ortiz second thing we focused on business continuity to assure our systems and payment products continue to work through this. I am pleased to report that in q1. We deliver the highest system uptime and fewest client incidents in quite some time. So good job.

Their third we focused on in in short up our liquidity. We Consolidated cash. We raised a bridge loan and we've taken our liquidity to about 1.5 billion and lastly credit. We tightened credit lines and payment terms. We shut down and active lines reduced unused line capacity selectively reduced payment terms for distressed with clients or Industries and we've repurposed staff to step up our collections intensity. So in this initial response phase we've had some success managing the situation and learning how to operate within it. Okay. Let me let me shift gears and and talk a bit about our q1 results birth.

So we reported q1 revenue of $661 million up 6% in cash EPS of $3 up 12% off our q1 Revenue finished about ten million lower than our expectations as our businesses began to contract and the second half of March when the shelter-in-place orders took effect January revenue grew 8% February Revenue 8% and a March Revenue 3% off leading to overall print Revenue growth of 6% for the quarter in terms of organic Revenue growth or what we call light for like Revenue growth q1 finished at 5% overall inside of that fuel coming in at 2% Corporate Pig.

quite good at

Percent I told at 10% and lodging at 5% All of our businesses were impacted by the the sudden volume declines in late March bringing our growth rates for the quarter below Target despite the the softer slightly softer Revenue in the quarter of profits actually came in at the high end of our expectations help there by a lower tax rate and fewer outstanding shares operating a trend in q1 also affected by covid-19.

But thankfully our client retention remained stable at 91% So look given that given everything a pretty a pretty good Financial print for q1 a good start in January and February helped us. Hold on to the q1 performance. Okay. Let me let me make a choice turn to the trends or seeing in April and run through each of our businesses and the the covid-19 packed on each. So first up is fuel. So he's not here in North America are our fuel volumes are twenty to twenty-five percent behind last year in April trucking business holding up a bit better than our local because many of our North America fuel businesses are essential Services. It looks like our volume declines are dead.

Leveling off our North America fuel. Revenue will be helped quite a bit by spreads in April as a fuel margins remain very wide wage International fuel car business volume weaker than it is here business is down 25 to 50% depending on a particular Market mostly because the Europe a shutdown was earlier than here in the US and also because in the UK in particular, there's a greater proportion of White Collar card holders who have been more more impacted by shelter-in-place orders. Generally, we inspect both North America and international fuel Revenue in April to be a bit better than the volumes and that's because birth

fuel revenues or

See some of them are fixed in nature think you know card fees. Um, which tends to have Revenue be be a bit better than volume. Okay, next up corporate life. So in corporate pay our virtual card volumes off about 20% in April versus prior year again, we're expecting probably volt to level off there as lots of our client is is fixed some good news with our full service. And Outsourcing business, which we expect to be up in April the remote capability the ability to process a p outside of the office. It's resonating and our cross-border business continuing to hold up and grow a bit in April mostly due to the ongoing, correct.

Volatility we did take a extraordinary loss credit loss, um in the cross Board of business which Eric would cover in some detail in his remarks attorney to our lodging business. We expect our core Workforce business to be down about 25% versus prior year in April. Our rail truckers construction workers continue to need rooms even in this environment and and just as a reminder of our Workforce lodging Travelers drive to their hotels. They don't fly to their hotels are new travel Alliance Airline or crew lodging business will be way down in April somewhere in the seventy-five percent plus range as Airlines cancelled off.

You know most of their flights fortunately a a much much smaller part of our lodging business Brazil Brazil told a bright spot for us. So despite told transactions being down in April, we expect total revenue to be roughly flat or even slightly up and that's primarily because toll revenues are subscription-based lastly our gift card business expected to be down about 50% in April as many of our brick-and-mortar retail clients are temporarily closed moving much of the activity and that business to digital Redemption. So so a few conclusions here with our April volume and revenue impacts vary quite a bit by business. So some of our business not impacted much summer.

acted in the the

I'm 25% range in some impacted down to the 50% or 50% plus range. Fortunately. The business is most effective most impacted by covid-19.

So good news that that it can come back on the other side and the lastly we're 50% even a business so we can continue to make money off and generate cash, even if these distressed levels of volume.

Okay, let me transition over to the company's priorities and and how we're framing things. So we've we've waged basically looked at a reset here a priorities based on the the changing environment. So so phase one the response phase which I outlined earlier we've taken again for actions already safety business continuity liquidity and credit initially. He had to respond to the situation and and again, I think we've had decent success and and Report, you know, we're we're well underway here phase to the the shutdown Faith the the place right now, we're volumes are down and and all of us are learning new behaviors the priorities in in this phase our expenses, so we're dead.

We're working to get our expenses down and better a line to current volumes. We're cutting where where we can where it makes sense but not acting particularly the the selling system and Technology capabilities that will need when we come out the other side selling. We're changing modifying how we bought cell targeting different prospects surgeon histories, moving almost exclusively to digital contact repositioning our message. So lots of work to to progress selling projects were were re-evaluating our project work off pushing projects that that we can control and that makes sense while delaying other projects that rely on others to a different day.

We we look forward to a future to a phase where businesses, you know, begin to reopen and things begin to recover. So message here is this is will be ready and that phase the recovery phase will plan to chase Acquisitions that maybe you know, just just maybe weren't there before we also may get some benefit from covid-19 behaviors that we can take advantage of on the other side. So for example, the emphasis on on Craig's List transactions, um think electronic tolls versus cash think distressed passenger mobile applications vs. Um, visiting gate agents. I think payroll cards versus paper payroll checks and then even remote working think about rapl.

Automation and Outsourcing service to pay bills when you're outside of the office. So the hope is that we may be better positioned in some of our businesses when we get to the to the recovery side. So look in closing we've we've never been in a place like this before we're consistently to operate the business, um, and to serve our essential clients many of which continue to to work through the crisis. We're in process of replanting things are priorities are expense levels are project plans our sales and go-to-market approaches in an effort to make the best of the situation like you were or hopeful that the gradual reopening will bring our clients back and that our business will return to at least some sense of normal as we progress.

and then lastly

The year, but I can tell you we will be ready. So with that, let me turn the call back over to Eric to provide some additional details on the quarter page Eric. Thank you. I'll be going through my regular remarks for the first quarter resolved as quickly as I can to allow for some additional discussion about the second quarter expectations off and your Q&A. So the first quarter of two thousand and twenty-three reported revenue of 661.1 million up 6% compared to 621.8 million in the first quarter of 2019 gaap. Net income decreased 15% to 147.1 million from 172.1 months and gaap net income per diluted share decreased 14% to a dollar sixty seven cents from a dollar ninety-three in the first quarter of 2019.

included in the first quarter

2020 results was the impact of a 90.1 million or $0.74 per diluted share one-time loss related to a customer receivable in our faith currency trading business.

You would be extraordinary impact of the covid-19 pandemic are Cambridge business experienced a very large one off bad debt loss in the first quarter resulting from a large crack in the agricultural Commodities space entering voluntary liquidation. The details are in the earnings supplement. So I won't go through all of that again here.

I'd remind you that approximately 30% of our Revenue comes from hedging or as approximately 70% comes from making international payments.

I'd also note that Cambridge does not take FX risk our books and or positions are covered by back-to-back offsetting transactions with banks. This is a credit loss due to a customer bankruptcy and inability to cover their AP margin calls while we do believe there was a chance of some recovery to the liquidation process. We have determined that appropriate to take a provision for the oil pan get lost of ninety million on the customer due to uncertainty of any future recovery.

We view this as truly a one-off event as its business has experienced less than 1.5% bad debt loss as a percentage of revenue for as far back as we have data off including. Prior to our acquisition of Cambridge and the third quarter of 2017.

Please see our earnings supplement for a detailed overview of this one-time loss.

Also included in the first quarter of 2019 was the impact of a 15.7 million or $0.17 per diluted share impairment charge related to our main office investment in a telematics business.

Excluding the impact of the one-time customer loss and impairment charge net income increased 13% and net income per diluted share increased 15% in the first quarter of 2020 versus the first quarter of 2019.

Non-gaap Financial metrics. They will be discussing our adjusted net income and adjusted net income per diluted share and the reconciliation. The Gap numbers is provided an exhibit one of our press release.

Adjusted net income for the first quarter of 2020 increased 11% to 264.5 million compared to 238.4 Million. Last year and adjusted net income per diluted share increased 12% the $3 compared to $2.67 and adjusted net income per diluted share the same quarter of 2019.

First quarter of 2020 results reflected negative year-over-year impact from the macroeconomic environment that approximately six million in Revenue.

But negative macro was driven mostly by lower foreign exchange rates specifically the Brazilian real in UK pound when compared with the first quarter of 2019. I believe affect negatively impacted Revenue by approximately 21 million fuel prices were down slightly year-over-year for the full quarter and although we cannot precisely calculate the the back of these changes. We believe it was mostly neutral to the quarter and finally fuel spread said about a fifteen million dollar favorable impact in the quarter.

On the income statement excluding the impact of the one-time loss in our foreign currency trading business total operating expenses were up 10% for the first quarter of 2028 to 370.1 million compared with 337.6 million in the first quarter of 2019.

The increase was primarily due to Acquisitions and bad debt expense.

As a percentage of total revenues operating expenses, excluding the one-time loss were approximately 56% compared to 54.3% in the first quarter of 2019.

Excluding the impact of a one-time customer loss bad debt expense in the first quarter of 2020 was 27.7 million or 9 basis points compared to twenty two point two million for eight basis points in the first quarter of 2019.

Included in the first quarter was a reserve of ten million associated with expected additional credit losses around the world due to the impact of covid-19.

Depreciation and amortization expense decreased 4% 64.5 million in the first quarter of 2020 from sixty seven point four million in the first quarter of 2019.

The decrease was primarily due to the impact of foreign exchange rates.

Interest expense decreased 9% to 35.7 million compared to 39.1 million in the first quarter of 2019.

Decrease in interest expense was due primarily to decreases in Libor related to the unhedged portion of our debt partially offset by the impact of additional borrowing for share BuyBacks off.

Our effective tax rate for the first quarter of 2020 was 14.6% compared to 24.9% for the first quarter of 2019. The one time customer loss and the impact of the impairment charge and the first quarter of 2019. Our effective tax rate was 18.9% for the first quarter of 2020 compared to 23.3% in the first quarter of 2019.

The decrease in the effective tax rate was due primarily to additional compensation expense look for tax purposes on stock option exercises.

Now turning to the balance sheet. We ended the quarter with 1552000000 in total cash. Approximately 482 million is restricted, but it's just primarily of customer deposits. We also have approximately 352 million of undrawn availability on our revolver and closed on a 250 million Bridgestone April in order to maximize the company's liquidity. So in total and we believe we have adequate liquidity to whether the code would storm as of March 31st, 2028. We had 4323000000 outstanding on our credit facilities and 819 million in our securitization facility.

You purchased approximately two million shares in the first quarter for $530 million at an average price of $263. We have approximately 326 million and repurchase capacity remaining under our current authorization as of March 31st, 2020. Our leverage ratio was 2.75 time either ta which is well below our covenant level of four times either PA is calculated under our credit agreement.

Finally we spent approximately 18 million on capex during the first quarter of 2020.

Not turning to the outlook for the second quarter and down to the year first. I want to remind everyone that Although our businesses are very resilient. Our businesses have all been impacted by covid-19 some more than others as a reminder. Our business models are primarily recurring Revenue in nature. We have a very broad customer base and diversified businesses across industry and geographies.

Second we are suspending our full-year guidance. There is simply too much uncertainty regarding the resumption of business activity around the world to accurately predict. Our volumes could be in a second quarter and rest of the year.

Celebrity printing data for the first quarter in April are as follows.

Revenues in January and February we're tracking for ahead of our expectations before the impact of covid-19 in March do the first two months of the year. Revenue was approximately 8% and 8% off prior year respectively in March are volumes were impacted mid-month and as a result, March Revenue was only up approximately 3% versus prior year off. And for the quarter Revenue was 6% ahead of Prior year.

Our expectations are for volume to hit their respective floors in April and begin to recover gradually as the world starts to reopen.

April revenue is expected to be down approximately 20% versus prior year.

We expected the second quarter will be the lowest in terms of volume and revenue and as the economy starts to recover volume should build throughout the year resulting in higher revenue and earnings per share in the third and fourth quarters with that said operator will open it up for questions.

Thank you, sir. And if you would like to ask a question, you may signal by pressing the star one on your telephone keypad. If you are using a speaker phone, please make sure your vehicle option is turned off to allow them to reach our equipment. We ask that you please limit yourself to one question and one follow-up again, that is star one. If you would like to ask a question will now take a thing with JPMorgan take it afternoon. Thanks for for all the info and do a lot to digest here. I'll start off asking on the expense outlook here and what you can control what you thinking about Believers on the cost side that that you might do here to protect the bottom line from the the macro pressures. You called out.

Hey, it's it's Ron. I say.

probably a target of about 5% and it would be on you know, volume related things things reflects off, you know selling system or or taxing probably also click the capital plan and you know, you know, you can't save your way to possibility our profits turn on revenues and so we're going to be quite careful to not you know, not over tile that

Yeah, I respect that. And then you you mentioned m&a world changing valuations, maybe opens up the opportunity to set a little bit just your appetite log onto to do deals here. Are we going to we going to wait and see move mode or are you willing to pull the trigger on Sunday to Thursday is a game-changer know you heard our complaints on calling the last few years about, you know people to space driving up prices and sell her expectations and free money and stuff. I think lots of companies or companies that have access to more interested in. You know, I think to be some impact obviously to valuations. I think dead people that compete with us for details will have more problems on the credit side. So I'd say to you probably as high as a really long time and we're sending home.

I'm I'll call kind of do Dil thinking there's there's five or six assets that we've counted it for some period of time that I personally think may have such an opening song. I would say hi.

Got it. Thank you. Stay welcome.

Well now take our next question from Brian with his Bank of America. Hi guys. Appreciate you taking my question. I hope you're well a little bit found a missed across age or more on the volume variable side rather than the investment side to you still planning on the step up and sales Nike expensive. Do you just sell for last quarter? I think you call that expectations for an incremental thousand two hundred plus million issue range in 20 20 with that still on track.

So that's the plan to try to grow sales production 15% off sale was fast a little slower call if you have cash 12% So yeah, we built the plan to do that. Some of it takes care of itself by the people don't reach the production goals you get somebody back in the form of lower commissions and also say we pull back on some kinds of marketing, you know, when we had a lot of help physical trade shows and stuff like that. But but with that said I think will be in super cautious on the headcount side takes a long time to build, you know, really good feel really good sales group. And so I think we're quite will locked into

Yeah.

That and honestly not to even kind of refill replace as we move through the year. So we're we're clearly trying to play the long game on selling.

Got it. And can you tell me what some of the trends you sounded for business in the quarter? I was surprised they organic growth slowed to 10% Is there anything particular calling out you say. Growth of new organ Trail users in the quarter actually.

Yes boss is not you know close to the mid-teens accomplices first, the transactions did soften and we do get paid a bit on spend particularly on a month to offer some free tags to build our tag line at the end of the year to compete with the banks. And so we have will be rolling off kind of the next Thursday. We probably have another couple percent free tags sitting in our q1 results. So those would be kind of a to Dick's on the on the Dead.

Anything about the controls and a quarter or just that you're seeing?

I apologize anything around the new Urban tag tool users to the quarter or any metrics around usage their wage. I don't have that. I think some kind of you know, but I'll have to get back. I don't have it.

Great. Thanks for taking my questions.

Well now take our next question from a Sanjay sakhrani with KBW.

Thanks, appreciate all the disclosures and I'm glad you guys are well. I guess the first question is on the comments on the second quarter being a week is Ron you mentioned wage up some defensive mix up businesses inside of the of your business. You just talk about how much of the volume is from these defensive areas versus the most more cyclical stuff off and you know, what gives you the confidence that we're going to reflect in the second quarter.

Yeah, I think I think the analysis off. So I think from from what we put in the supplement. It appears to us that virtually all of our businesses are are planing bottoming. If you will receive point in life, you know, we got another week. I think we should be able to you yesterday. So I think would you guys haven't seen anything we're starting a business Rome and and I think probably the Muslim and he better than what we said in April I can go today go around 20% off of the prior-year. So if in fact the pickup is happening and clearly birth.

Piccolo reopens will

Will be better so our best guess is the worst.

Okay, and and you also mentioned Ron like the health of the portfolio is pretty strong. Even the defensive make speeches talk about you know about how you feel about the General Health. I mean, do you feel that certain areas of your portfolio? It might be at risk if there is a prolonged economic downturn.

I think we try to get into the half life, you know follow summer, you know and a lot and and I think that's the same thing inside the week or portfolio. And so we have off on that page that we think of the weakest and and probably would have the longest drop. So for example, and again that patient running but we called out our box office fundamentally relies on the planes flying and and proof line so that things off I don't know 75% and you know, if you don't offer a while and then the gift card business would be dead.

You know working more retail stays closed or some of those some of those those girls couple of months I think would be weakest. But the other ones I think I would like to sleep out one message today is the impact is softness. So it's you know, if you'll Carfax client with an drivers, you know driving two-thirds of what they used to cross versus he's fired. And so the abyss, you know for the thing to kind of come back if the clients kind of come back we come back and so I say the rest of the business is obviously computer in the green that they're kind of happy days off and we've got, you know, the left of the kind of sitting there waiting for the clients to get healthy. So I think all of them a couple that I call out that I say have a longer, correct.

To kind of come back up. I think it should be, you know all their way back because of the essential, you know service nature of our Workforce.

Great. Thank you.

Well now take our next question from Trevor Williams with Jeffries.

All right. Thanks. Good afternoon guys corporate payments. I wanted to ask for on the sales side. But Ron you alluded to in your prepared remarks just with most people working remotely. Now, I'm wondering how that's impacted the selling process and that business. Um, cuz my assumption and please correct me if I'm wrong is that these are fairly long sales cycles and implementation. So as we talk about you guys pre-booking a lot of next year's Revenue growth in the prior-year just how much of that we should be expecting to come from new customer signed anything twenty twenty and just and let the progress looks like there.

Yeah.

Right on on car. I think we called out before that in the corporate paid business particularly in the the the core virtual Private Business most of the revenue off. So when your second question I'd say we're still finding our way to sing surprised all of us and we have a marketing and sales plan and closing down and um and it got changed right you can trade shows and we're not missing wires. We have like we used to so I'd say it has been a you know, a repositioning age to sell what marketing you do how to contact people and I say anything to receptivity seems high wage.

Well, I think it's still unclear as can. We close like we're calling 30 days into this and have more time on their hands or just being kind or in these guys, but but the contact rates are kind of okay, so I say probably in 60 days will have a fix on whether sales can kind of be where we thought she's gone in a different way or whether sales are going to be, you know, we just don't know yet.

Okay. No that's really helpful, and then just on credit Eric appreciate your your comments in your prepared remarks, but was just hoping to get some more color on how crash ended in April maybe once a day whether that's either delinquencies or actual losses starting to come through more in Earnest just as we think about where we may need to expect losses to flex up too long as we work through the trough and Q2, and then just wondering if you've seen any change in payment patterns after the PTP loan set, especially with some of the smaller Fleet customers. Thanks.

Took away. So when it's saying you can't you can't imagine we did student body right to to work a lot of credit and liquidity Collections. And so we thought we got a monitoring system that looks at trip where you know people going to Laughlin and then roll rates, you know aging and so I say that it's so we have Benchmark all of our businesses, but it's not up in any kind of meaningful way. So too early to call that. Hey we got through Thursday between the stimulus money and and stock cable going to kind of be okay, but if you said to me now, how does it look sand if it's the Phoenix thing it ma'am.

Pretty good. And the last point on it is?

Jack from the lower volumes and the lower price than the fact that spans and effectively is are dropping off. It makes the collections. I'm in smaller the in the Predator smaller. So I think this one stands the Phoenix thing so far so good can travel just to add to that page, see where you know, when you take a look at the Aging very closely and track it week to week to see exactly what the progress is some of these Asian buckets and Enron indicated. I'm surprised that I really haven't changed a whole lot. We see a little bit of dick up and and some of the Aging buckets particularly and the fuel category in the US Bank, so we get a little worse and we seen a little bit of pick up in Brazil as well kind of a little worse. But again, nothing dramatic nothing wage.

I'm trying to the magnitude that we thought it was going to be look at our AR balances a lot. I mean if you look at our a our Pals at the end of the year, we had about two point six billion and a r which route to about 2.5. I don't know two point 1 billion any kind of at the end of March and then at the end of April, we're down to about one point. So the risk profile of remaining they are is also getting better just because of the amount of the outstanding we have so all I can work pretty good shape. I think we were pretty conservative to take you know, a bit of the reserve that we did the first quarter and we're keeping a close eye on it, you know, we've changed a lot of practices and and and reducing things that done some things to collect solve our money off. So I'm in a place in terms of other people dead.

I'm in this company to compete on on products and on the on the tech on the convenience of the products. And so we have tons of daily daily tons of short terms, you know weekly in Europe. We have half of our block I think is in short. So a waiting car through we have tons of internationally on Direct debit collect when we make the money and so in those cases you've got in the in the 2% range very very small guys of delinquency. So when we study wage intently, you know a month ago and this start I think we feel pretty good structurally of how we got something set up.

No, it's really helpful. Thank you guys. Appreciate the color.

Well now take our next question from Steven involved with Morgan Stanley. Yeah, thanks for taking my question and good evening. Let me just a high level starting with the corporate office around you talked about, you know, never been higher in terms of watching for opportunities in the in the m&a side here. But if we start in court payments, maybe you could expand this out to some of the other areas. Could you maybe talk about as you're looking at opportunities red, you're looking at your own offering today and watching the experience of this downturn and disruptions and what you can solve for what sort of changed or anything does change at all in terms of where you want to be in the landscape of you know, the corporate payments be to be opportunity since you know, we caught up three months ago and maybe you could expand it out to the other areas. Are there any areas that you age or across your offerings that you made me feel less inclined to be in actively or expanding?

No, it's a good question. I mean in the context of coding and Sheltering and and

The trend that we might expect over the next year or two. This is payable or corporate payments business. It's a great place. And and the reason is that you know, lots of lots of extended fixed and I think you know Lisa's or contracts and stuff. And so, you know, we'll have to get paid or Services get turned off. And so am I saying anything, you know, we we like this corporate a business or five years and we we built a bunch of stuff and added to it and invested it. I say it anything else like it even more. I think it's probably a little bit, you know more defensive going forward, you know versus the kind of the mobility stuff, you know, maybe Mobility these days, you know to press the issue is kind of these days where it is. So I'd say I say anything you probably know that that sick that you cannot charge, of course.

Understood maybe just in terms of the quick follow-up. I was looking through your slide. I think it's like eight you got to talk about the corporate payments growth bouncing back to 20%. Thank you also disclosed the pulled the payroll card segment out of there. And that was the area that you called that last quarter was a little bit of trouble from the prior from last year's, you know disruption to Services would the growth wage like X those adjustments? It doesn't I don't know if you restate of that product in the prior quarters or not.

Yeah, I'm I'm looking for that month 30% down in volume for April 2nd on that wage and I think the the 20% numbers of Revenue number. I don't I don't have the the payroll probably, you know, I know the first quarter. Okay, great. Thank you.

Well now take our next question from Christensen, Webb City.

You guys good to hear from you and thanks for the great slide that fantastic job. They're completely different company ten plus years ago, but at least from the the the small Fleet side. I was just wondering if you could share some of the experiences that you had back in the last term and in terms of I guess attrition and perhaps credit on the small plates on it. Just it'll be helpful.

This is Eric home business, which is mostly what we have that done. So, you know what we were into that down sir. And we did see, you know volumes saman pretty pretty significantly. So we saw Shack same store sales. So I'll just kind of in the mid single-digit. So it was pretty high felt bad that it kind of sweet up a little bit be kind of ran again. I don't remember the exact numbers, but probably the wage but basis point standpoint since then and it is escalated to you know, probably enough forty forty five basis points range and it's dead in two thousand eight and nine so volumes down Drive in the high single digits, you know, kind of

I think that's helpful and then the gift card business. It's been a couple of high-profile retailers filing.

Lately, can you can you walk us through what happens if if you have a partner that does that there are changes in like breakage or availability of funds anything of that could be helpful.

Faith system that you will vote for retailers and a program manager. So the one place where there's there's credit risk in that and then carships. So if you're in town, you know Macy's or Dick's Sporting Goods and we you give us a car and order and we we go to the car maker and and take the stock and make it for you click on it and then send it to you. That would be the one place right if we shipped it to you whatever, you know, March 15th, and it ends on March 1st, you don't and so the good news on that is our guy that runs that language changed all that stuff really hard when this thing hits. So right now we have birth.

Very very little exposure fortunately and I put him on notice that were were not doing any of those kind of things again. When I do a lot of cars shipments to uh, you know challenged retail hours at least not short-term. So I'd say we're probably in a pretty good place there.

Okay. Thanks.

And we'll take our next question from Ramsey Clark, please thanks for taking my question this evening. Look across the business today given everything that's going on. Are you are you reassessing or thinking through where you'll invest in the future are there are there this crisis kind of teaching any walk-ins in terms of changing priorities that you might have in terms of business investment. That could be product line. That could be geography. I know it's very broad question. But do you feel sort of like it's just time to hunker down with what we have to offer and he'll come out of the other end relatively intact where there are some more longer-term changes that we might kind of contemplate in terms of where you place your bets in the in the marketplace.

Now that's a really good question Ramsey. I say yes, I think like all of us, you know, what what a future could be look like, you know and three months six months, but for sure I think you know changes. So on the portfolio side, I'd say Thursday, we're super happy with the the kind of the 4 categories that we've had the three, you know, employing car things, you know, if you'll watching until we like to payable Thursday. There's nothing in the for businesses where we go. I can't go like a little like those left on my, I think some of those categories will actually be held by nursing home. I says is a lot of changes are going to be on the functional side and what I mean by that is our constructs are polishing.

Around like credit or approaches around selling.

Um, our approach is around, you know, part-time full-time. I think we're go through all kinds of thinking now of if this world stays is way off some things we learned in this world that we might stick with even if the world go back to the way it was I think it was going to be a lot of I'd say it's still early. If you've asked me that question again in ninety days, I think we'll have a better answer but for sure it will be a bunch of stuff we do different for sure.

Okay, and I was wondering also and and forgive me if I missed this before but could you parse out a little bit of the same store sales performer just in terms of sometimes you can give us incremental caller on underlying verticals within some of your businesses on the same floor salesman.

Turn off data that we we show. I want to just prepare people and this is what I'm taking our volume down. So you're going to hear a much different number off off a little bit soft probably came in, you know, three three four percent soft overall and watching overall was a bit soft, but don't forget that includes the whole business as well that was kind of an afford to 5% range. It was offset by no strength that we saw in our corporate payments business, which was actually up and also strengthen our dead.

That's kind of where you thought it would be as well.

That's perfect. Thanks so much guys be well.

And we'll take our next question from David with evercore is I thank you. And thanks for squeezing me in I appreciate it. Ron the page customer Revenue retention historically of ninety-one to ninety-two percent has been a strength of the business. You're closed the first quarter at 90.7% you know, as you look into cubes to which you've called as the likely trapped, can you maintain a customer Revenue retention in the ninety to ninety 2% range?

It's a good question. I say, you know, we don't know. I think it's going to be a function of bit of the of the appliance package with the casualty rate is speaking rate, you know among our client base and so, you know, a lot of the retention hanger is not responsive mix we have businesses in a very different kinds of retention rates, you know, based on size Enterprise versus small and then even type of business like payable grows to spend Rosa clients. So I don't know the answer. I guess it'll probably be lower because we're likely have more casualties in our client base with a businesses go out of business, which he's already represent and then credit. So again, if you simplistically said, hey, we lose nine or ten per-cent of our of our Revenue per year, you know third half-dead.

That is the business getting back to business gets weak business clothing business, you know.

So, you know, my guess is that probably going to want to go up some work now and once you get to that pace, you know get through this thing cuz there's a structural that concerns me that we take us lower.

I see understood. I just as a quick final question, and I apologize if you were dressed this earlier, but looking at Capital allocation priorities you bought back $530 of stock in the first quarter of a very active you have 326 million left and repurchase authorization, you know, will you be deploying cash towards share repurchase in this environment possibly looking more of a position to seller expectations come down or will you be more in the mode of husbanding capital?

Yep, you're in a precaution. We want the maximum liquidity. We want a company that's got all kinds of push it in to a we see the other side of this is either heartbeat on the other side so that we will not be buying back shares, you know over the next four or two on the other side. I think all the deals I have like I said, there's something unique that comes out of the trigger a little bit sooner, you know the later but I'd say we'll probably you know in a bit of a whole pattern for a while.

Understood. Thanks and stay safe and healthy.

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there are no further telephone questions at this time. I'd like to turn the conference back over to our presenters for any additional or closing remarks.

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