Q2 2020 International Money Express Inc Earnings Call
Second quarter 2020 earnings conference call at this time, all participants are in listen only mode.
Brief question and answer session will follow the formal presentation.
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Good evening before we begin.
This conference call include forward looking statements, including our third quarter guidance.
Actual results may differ materially some expectation.
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You should not rely on our forward looking statements as predictions that feature of that.
All forward looking statements that may make on this call based on assumptions and beliefs ads out today.
I refer you to slide two of our presentation or description.
Certain forward looking statements.
We undertake no obligation to update such information, except as required by applicable wall.
This conference call. We also have a discussion certain non-GAAP financial measure.
Information required by Reg G. I did the Securities and Exchange Act with respect to such non-GAAP financial measures is included in the presentation slides for this call.
These slides can be obtained at the Investor section of our website.
<unk> online dotcom.
I also refer you to slide 13 through 17 on the slide presentation.
A reconciliation of certain non-GAAP financial measures to the appropriate GAAP measure.
On today's call I'm joined by our Chairman Chief Executive Officer, and President, Bob, Let's see and Chief Financial Officer, Tony Lauro, Let me I'll turn the call over to Bob.
Good evening, Thank you tour analyst and investors for your participation that tonight's earnings call.
Before before I begin my final remarks, I would like to offer my continued thanks to our dedicated and hardworking employees, our agent retailers and of course, our loyal customers I'm extremely proud of the resolved and dedication display did intermix every day, especially amid a challenging times, we have all experienced last few months.
We hope everyone is well and we can all emerge from this crisis in the near future.
Well start on slide three by highlighting the record financial performance that Tony will speak about in greater detail later.
We were able to grow revenue by 3% year over year.
More impressively, we grew our net income by 27% to $9 million.
As a result of our fish in a durable business model, we grew EBITDA by 7% versus last year.
Adjusted net income increased 30% compared to last year. It helped drive free cash up over 16% to $10 million compared with the prior year quarter.
We are proud of these strong results when you consider that significant irets of the country, where essentially closed down for much of the quarter.
Let's go to the next slide to talk about some of the keys to our ongoing success.
As you heard me say many times in the past Intermix has been built at the house or brick. We believe that that fact is a key aspect of our story and the key reason why we're able to consistently deliver strong results.
This philosophy is ingrained and everything we do and we believed that it sets us apart from my money remittance industry overall.
Most importantly, interconnection, it's always taken an approach that drives profitable and sustainable growth. We have executed this strategy and our legacy markets and it will guide us as we look towards delivering.
Okay.
The pursued a profitable and sustainable growth isn't able to interconnect to build a differentiated business model that is proven to be resilient through difficult in challenging times.
We leveraged our profitability to invest in industry, leading customer service and technology, which are critical components to our winning Formula Intermix also takes great pride in our unique approach to each of recruitment well many competitors focus on ubiquity and exclusivity we focus on the agent productivity and ultimately profitability.
Highly targeted and metrically based strategy recruits and activates agents imprecise geographies down to the ZIP code level, where our customers live.
Approached the agent recruitment feeds directly into our profitable and sustainable growth philosophy. It has proven its ability to deliver strong results regardless of market conditions.
Our state of the our technology enables agents to process transactions faster with greater ease and efficiency.
This is a critical differentiator given that the majority of the agent business occurs during the peak times on Friday through Sunday.
It's creates faster and more efficient process for both the customer in the huge and retailers.
The customer focus is also apparent in our customer care.
We averaged a whole time of just 3.4 seconds, which is an incredible versus the competition and even across the industry other industries.
The other very important related components for Hollister brick philosophy is that our model creates exceptional liquidity and superior free cash generation.
This liquidity and cash flow contributes to our reputation for customer reliability.
And in times of stress and volatility it's a significant differentiator.
Throughout the current crisis, we've heard from some of our payers that a number of the smaller competitors have had liquidity shortfalls, resulting in the receiver not receiving their funds in a timely fashion.
Those issues of reliability and an ability to pay out remittances timely you're not occurred interconnects.
And we expect expect our reputation as a highly reliable provider will continue to drive our success in aggregate market share.
Ours is a powerful capitalization model, which is critically important in times of uncertainty and we have continued to generate cash throughout this crisis.
Tony will detail our cash later in the call, but I will simply stayed up front that intermix does not only possess more than ample capital to fund our business as we navigate the upcoming quarters, but we have continued to generate significant amounts of cash.
Let's turn to slide five to look at some of our growth drivers for the quarter.
I think this quarter when much of the country Woodson significantly shut down is a great example of how our approach to differentiated business leads to proven resiliency intermixed increased our customer 6% to 2.1 million and increased our remittances transactions by 3% to 7.6.
<unk> compared with the second quarter last year, if you look at specific months April's down 7%.
As we started to open back up certain states may quickly rebounded with transaction growth of 7%. This positive trend continue would transactions up 8% in June and 13% in July. It's a great example of the resiliency and strength of our focused business model, we continue to experience dramatic growth in our mobile app.
With our customer usage up 600% and our transactions, creating more than 880% compared to prior year period again, our differentiated and focused approach to critical service that allows us to perform at this level.
Let's move to slide six and I were further expand.
Online and other growth initiatives are expansions into Canada as an outbound market in Africa, It's an inbound market continued to grow rapidly as to our online white label and card products. In fact front first quarter to second quarter. These products have combined revenue growth of 78%.
In addition to these new products and channels, we want to share with you impressive growth and what we call our tier three markets in like that.
These are markets for us that are not yet has developed as our tier one markets of Mexico in Guatemala, or tier two Honduras and El Salvador that these emerging corridors grew revenue by 17% from Q1 to cure too.
These growth initiatives are expanding rapidly and are meaningful <unk> overall performance and now representing over 7% of our total revenue.
The company strong financial performance is the direct result of our house or brick mentality.
The underlying appeal of our business model with superior customer service in a highly productive agent network allow us to continue to outperform the broader market regardless of the market conditions remain confident that our philosophy and dedication to profitability and sustainable growth will drive a significant competitive edge for interim.
[laughter] during these uncertain times and beyond.
With that I will turn the call over to Tony.
Thanks, Bob and good evening to our analyst and investors on todays call.
Turning now to slide seven let's walk through our second quarter results in a little bit more detail.
Transactions in volume grew 2.7% and 5.3% respectively at higher spend amounts were primarily a result of increasing mix of transactions to Mexico.
Revenues of 85.1 million represent growth year over year, 3% driven by the growth in customers and transactions the Bob mentioned.
[noise] growing the top line year over year. During this crisis is impressive enough, but its tremendous achievement. When you realize we had to grow over an exceptional quarter in 2019, where we delivered 17.5% year over year growth as compared to 2018.
Adjusted EBITDA growth of 6.8% outpaced revenue as we continue to get leverage from migrating to lower cost deposits services and negotiated payer fee reductions I.
Adjusted EBITDA margin for the quarter top 20% exceptional for a public company our size.
Additionally, we delivered record net income was $9 million, an increase of 27% compared to the prior year period.
Driving this increase was the adjusted EBITDA growth I, just noted coupled with lower depreciation and amortization and interest expense.
Well continue to see lower amortization as the intangible assets recorded in 2017 run off on an accelerated schedule.
Let's now look at our superior liquidity in free cash position key aspects of our house at brick approach.
Slide eight you'll see that we generate a $10 million in free cash this quarter, 16.4% increase over the same quarter last year.
These figures reflect the conversion of adjusted EBITDA free cash of 58% after taxes investments and debt servicing.
Our business model, which combined strong margins kind of variable cost structure, where 80% of our costs vary with transaction volume has proven itself throughout the crisis and throws off capital even in times of slower growth.
Turning to slide nine let's look at the efficiency of our adjusted EBITDA conversion to free cash.
In Q2 of this year, we converted close to 50% of our adjusted EBITDA free cash which are extremely proud of.
This represents growth of close to five percentage points to the conversion rate over the same period last year.
We feel that our profitability and free cash generation, our differentiators and strategically positioning.
Fuel future growth in the quarters in years ahead.
Let's turn to page 11 for our final prepared comments.
Well the covert 19 environment is definitely created uncertainty in our future results. We currently expect to generate third quarter revenue of $88 million to $91 million and adjusted EBITDA of $17 million to $18 million. This assumes you did not see a significant worsening of the pandemic.
In closing I'd like to say, how proud I am to be a part of this community our employees and agents continue to bravely work to provide a service. It is so essential to our customers who are just as bravely working in industries that are keeping America fat and keeping the economy going. Thank you all with that let me turn the call back to the operator for questions.
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One moment, please wildly poll for questions.
Thank you. Our first question is from David Scharf JMP Securities. Please go ahead.
Hi, good afternoon.
Thanks for taking my questions hope everybody is a well instincts safe.
HM.
I was wondering.
Obviously.
The results were exceptionally strong I mean, we're seeing a very resilient consumer can you give us an update on how the pandemic.
Is.
Impacting the ability to open new agent locations in kind of in obviously, we can't predict.
Precisely how severe it's going to get but maybe if you can give us a little bit of a update about how you potentially see the next 12 months unfolding in terms of expanding them out.
Okay, well I'll begin to answer that question and then I'll turn it over to Randy Who's joined Us on.
On the call as well today are Randy Nelson, our Chief revenue officer. So.
Obviously, it's not as easy to activate age and retailers from a headquarters or from our sales reps homes as would be if they were out in the field I want to first point out that are most of our sales team and that's really with few exceptions are back in the field there are certain areas and hot spots, where our sales reps are not working these days, but for the.
Most part in areas that are.
Not terribly affected by the pandemic, they're back out and working and making retail calls.
But even during the worst of the pandemic, even a days when our sales team were inside we're still able to activate new agents in a significant numbers certainly not at the levels, we would like to not at the levels that we've done previously, but it's significant numbers and we did that because we have a third party shipping a company that ships the equipment out we're able to do.
You all the training basically over the phone we've been able to really keep the business really active in working telephonically with most jobs that are portable sales jobs being probably the one of the lease portable jobs well, we continue to activate agents that we look over the next 12 months, we expect if things continue as they are today that were virtually.
Back to our regular process of adding age and retailers and its things begin to get better than we expect to be able to even do better and continue to make new hires and continue to add to our sales group with that I'll again, we're not going to talk about specifics Pablo let Randy paint a little bit more color and how it's going over the we're basically inside I believe Randy incorrect.
Me, but about two months.
Plus months, what our sales team, where they weren't making outside calls so I'll turn it to Randy for a little more color.
Thanks, Thank Bob Hi, Dave Yeah.
For the.
Good the last two weeks of March the month of April and most the first two weeks of May we have almost all of our sales team working from the home offices. Since then as Bob mentioned almost all of our sales team had been out working making in person calls in the field from time to time like.
States like Florida, Georgia, where things get hot and the cases are indexing, particularly high will pull them in for a week or two until things slow down a little bit but.
With the exception of April we really did stay the course pretty well with respect to our agent Activations and I need to really call out our northeast region for the for the second quarter. They came in at a 123% their age inactivation targets and as you know New York, New Jersey were the ones that were.
Really working from home for most of that time period, and they found a way to continue to activate agents just following up on agent that were in their pipeline as well as working the phones doing telesales. So really proud of the sales team working from home to still activate agents, but the short answer to your question David.
We expect as Bob said, if things stay the same as they are now to be right on right on course activating agents as we normally would have.
Thank God I know the that's very helpful. I mean, certainly.
Well salespeople are in the field, maybe just one follow up.
Get back in queue obviously.
The last two reporting periods.
There's been much more discussion and disclosure not surprisingly by public competitors as well on the trends and.
Digital and mobile I I guess, it's a two part question one Bob is whether or not.
You know typically the lower average price point on.
Digital transactions is impacting.
Core doors at all and then more broadly if you can just expand on.
Whether or not there been any evolution in your sort of take on.
Whether the a Mexican and Guatemalan inbound markets.
May become more amenable to digital.
[noise] processing than they have an okay sure.
[noise] excuse me I think the first part of the question was that there was up in effect on pricing from the increase in online I think that there's a pretty bright line between the online pricing in the retail pricing.
There are two very different customers now to kinda talk about to customers in some cases move from brick and mortar to online and stay there permanently I'm sure that happens at times and there are people that move back and forth between but I don't believe the reflection of what online pricing is can really good projected onto the brick and mortar price.
And so from our perspective, we're not seeing greater pricing pressures on the brick and mortar side of the house than we've seen before and in some cases, because I think that these times it put a little bit more stress on certain companies that are our competitors and those aren't the big guys that you know if not the public companies, but the smaller.
Hi, sipping quite competitive at retail they probably have been less prevalent in terms of aggressive pricing at retail than they were prior to the pandemic I remember you know you've got some slowing Mexico, we haven't seen great slowing as you know, but in some countries like El Salvador, Honduras and others.
Tamala, even countries like Colombia in Dominican Republic, depending on where people's percentage of business wise, we've seen dramatic you know double digit twentys and Thirtys for a couple of months there that really put the companies that were less stable financially into difficult spots because they need pretty much every wire because there really struggle so from.
My perspective, no from the perspective of Guatemalans and Mexicans I think we saw a surge as an industry overall and then we saw a surge.
The leveling of people that converted to online processing and doing their wires that way at the outset, a pandemic, we haven't continued to see that surging.
Relative to what we think we could attribute to the pandemic because we're doing work in growing that business, we recognize that overtime, but the business will move more and more to on mine. We just disagree with maybe some of the extreme percentages I think that today, you know we could be 15% to 20% of the you know.
Countries like Mexico in Guatemala could be online low end, probably 15 high end, 20%, but we think that will continue to grow we think it's a long time before the brick and mortar is a smaller percentage of the overall business matter of fact, I don't know what that foreseeable future is that could be five to 10 years down the road now having said that as you know we continue to work.
Really diligently on our online product what we don't do is is is really try to convert people for brick and mortar who are happy at brick and mortar Twond line at great expense, but we continue to recruit new people to our brick and mortar I'm sorry to our online business that we feel is in great competition with all the other people that are online and we think that again.
And with Mexico, Guatemala, and other countries, where we have great know how well we have call centers that are situated in the right countries with the right language capabilities and our cultural capabilities that we become a threat to other people's online more than the online is a threat to our brick and mortar overtime. So we like our position we think were.
Given the fact that the online has been continuing to do grow we think we continue to take even a bigger and bigger share of the brick and mortar. We think we'll continue to do that as we continue to grow our online separately from that.
Got it very helpful. Appreciate it thank you.
Welcome.
Our next question comes from George My House with Cowen. Please go ahead.
Hi, everyone. This is still up on for George.
I was wondering so the Mexico market looks like it grew about 3% take on based on the <unk> Banco de Mexico data and historically intermix has outgrown the Mexican remittance market in terms of transactions games talk about the puts and takes from this quarter and do you expect to return top performing the Mexican market on a go forward.
Basis. Thanks.
Well, we did outperform the Mexico market on the quarterly basis. It wasn't by large measure, but when you start to get it you know big months that were negative early in the quarter, then you'll see that those those numbers will be smaller in terms of their deviants, but from a quarter perspective, we did outperform slightly the market to Mexico and.
By a couple of percentage about wanting to 5% and we expect that to continue we expect to continue to outperform the market.
Okay, great. Thanks, and then did you.
Historically, you've talked about did you see volatility in the Mexican pesos that tend to see a pull forward and what and wire is coming through did you happen to see that this quarter with the volatility going on in the pay so thanks.
No I mean, we did not not the kind of volatility that happened you know that volatility usually tracks relatively closely to.
The U.S. economy in particularly the stock market and when we saw the peso with great variances was in late late March in in early April when we saw these big swings in terms of the market in day to day announcements about cobot shutdowns, whether it would you know what the death toll is going to be with every announcement there seem to be.
Oh reverberation into stock market and when that happened there seem to be a greater reverberation into Mexico market.
For the last you know couple of months, it's been relatively theres been some movement, but nothing like I mean, we never saw movement in the peso in percentage wise that certainly not in absolute dollars pesos per dollar but in percentage wise like we saw in late March in early April and sometimes where overnight.
It wasn't fluctuating centavos actually fluctuating in terms of pesos and that's really not being the case over this most of this quarter, it's been relatively normal fluctuations day to day.
[laughter] once again, if you have a question. Please press Star then one.
Our next question comes from Mike.
Well with Northland Securities. Please go ahead.
Hey, guys congratulations on growth in the quarter, a that's pretty key.
And pretty pretty successful.
He March April timeframe, I think you said, 95% in your agents were open.
Have you gotten all of them open or just kind of curious how that trended.
And then maybe secondly.
States the regions to call out that you that kind of just outperformed.
Yeah, I mean I'll, let other Randy answer the agents piece first Randy I mean, what are your thoughts in terms of agents.
Yeah, Mike Wood.
When we compare.
April and May and June two marches level of agents open.
Brazil was significantly down as you noted about 95% of March is active agents.
May we jumped back to almost 100% about 99% in June we were actually performing at about 101% of March is active agent. So we were we have more agents actively selling in June than March.
Got it that.
And then it went up Mike Mike I think as far as areas. I mean, we don't want to talk about states, but you know I think people can understand how hard hit certain areas of the country were and the northeast we think as Randy called out earlier recovered remarkably well, we really haven't seen that kind of you know we've seen.
And from time to time little disruptions in California, Little disruptions and other areas, but you know count the northeast, particularly centered around New York. We saw you know our business down quite a bit in that beginning of the pandemic, but it recovered quite quickly.
And even as far down as it was it was remarkable the amount of business that we retained even in the worst days I think we were maybe down 25, 30%, but when you looked at New York at the time in the level of shutdown. It was really attribute to I think the dedication of our agents the resiliency of our customers and the quality of our brand and all those three things kind of held.
<unk> up throughout and it recovered I think quicker now I think the northeast has been probably one of our strongest regions, but we haven't really had you know big problems in any given area. There has been other areas of the country that have been relatively on shaken by the pandemic I mean, and when I say that I mean relatively that.
It really haven't had much much I think was slow down but generally speaking we've been pretty solid throughout the country I just wanted to take a minutes it to clarify too.
The Mexico numbers I looked at in for the quarter.
For the quarter I think that we ended up a little bit better than than the the.
The the Mexico numbers reported for June was 11% growth, but they had a minus two this is the country number and it plus 3.5. So I think it in you know she said for the quarters about a 3% growth and we're a little bit better. The math overall, we were about a close little over a 4% growth for the quarter I'm. So we did outpace the mark.
But our early July of course, we don't know what the numbers look like in.
In the industry, but we continue to see stronger numbers coming back and all other countries and our overall growth in July looks like you know excessive 13%. So we're seeing every month getting better and we talked about little bit about that in the the text earlier that we went from a minus seven this is overall in April.
All the way to a plus seven a plus eight and now the July numbers were a plus 13, and we think August actually has an opportunity to be even better than that so were or clawing back little by little to get back to that you know 20% growth number year over year that were really comfortable with.
That's great Hey, Thanks, a lot guys.
Our next question comes from Josh Beck with Keybanc. Please go ahead.
Hi, This is Alex my grass Entre Josh Thanks for that question just as it relates to some of the operating levers that you saw this quarter can you just kind of I know a few drivers were touched on but just kind of what was most notable and then looking forward.
How much of that Leverages is onetime in nature, how much how much of it lasting.
I think some let is evident in the guide, but if you could just elaborate that'd be helpful. I'll, let Tony get into specifics, but I mean, the first part that I want to touch on is that you know over the.
The previous quarters, sometimes we get a little bit of.
You know little bit of I guess disappointment from some folks that maybe our growth wasn't where they thought it would be and we've always talked about the growing faster is not difficult, but the one thing that we build our business on is sustainable and profitable growth and what we did through the pandemic and what we've been able to produce over the.
Last several months, it's been as much attributed to the way we built the business and it has been to what we did over the last several months so to answer that question without saying that really won't take into account all the facts because it isn't about us going in shopping a bunch of expenses for one time to make a number if was that easy then you know.
Our competitors would do the same thing right in and we're not necessarily seeing the same results. There. So it is it is the fact that this business has been built in a very stable foundation that has not really doesn't have a lot of.
On sustainable and profitable growth and because of that you know when things change and things go down a bit we're not highly leveraged as a company and we're still able to sustain those growth numbers. You know, we got a little bit more efficient and and I don't know Theres a lot we want to call out I'll turn it over to Tony to talk about that but I think a lot of it is more.
Really is a it is really significant from a standpoint of what kind of business, we built than what we did in the quarter or what we did in Q1, because you know it's an ongoing thing right. So can't be effort onetime in Q1, we had 23% EBITDA growth versus I think a competitive field that didnt do nearly as well.
In Q2, we have 7% EBITDA growth in the height of the pandemic against a fuel that didnt do nearly as well. So it's already not a one time, but Tony I don't know if you want to add to that a little bit.
I do I do so there are I'll call out a four areas of efficiency or cost savings two of them are a direct result of of our ongoing efforts to be a more efficient business and those are the ones that are well listed in the in the presentation. So one is our our banking fees are dips.
<unk> costs and you know those group those are driven by by volume like dollars limited and they grew at about 2% and our dollars permitted grew at over 5% those kinds of savings because we migrate agents to lower cost deposit methods will continue to go on in the future until you know you're jumping over the same year.
After you have migrated the agent.
The second is on paper costs, where you know one we actively or negotiating with our payers on a monthly and quarterly basis to get better rates and.
Help our customers moved to a bank deposits, which are cheaper for us when when somebody gets deposited into account persons cash pick up.
And you know as we continue to grow and get bigger and move up the league tables, we get more pricing power on those so those will continue and those are the two most material.
[noise] separately you know, it's the nature of the pandemic in the second quarter, particularly the beginning of the second quarter, we weren't able to higher perhaps as quickly as as you would've expected are budgeted for us to do so salaries.
We're down that will slowly catch up to where we thought a lot of excessive hiring in the last couple of months and that will slowly catch back up from a run rate perspective, but the savings that we realize will be you know in the bag. Similarly travel as we shutdown as Randy mentioned was shutdown the field from traveling.
For the first month and a half almost two months.
We read travel savings now travel isn't exactly back to normal or like for example, Bob and I are not flying around two investor conferences and things like that so we will have we were run travel at a lower run rate, but it won't be a you know shut down the way it wasn't in March and April. So those are the thing I'm happy to call out.
I will say like you know we continue to deliver these efficiency initiatives to help fuel investments in future growth and well continue to do that.
Okay, great. Thank you very helpful comments.
Once again, if you have a question. Please press star one on your telephone keypad.
We have one more question from Daniel Bella Hudson with Columbia Threadneedle. Please go ahead.
Hi, guys I hope, you're both well I really appreciate the little bit of color you shared about the hyper local focus and expanding upon that I think it's really misunderstood driving a competitive advantages here.
Most interested in how you guys can use this time to set the business up over the long term, particularly around share gains and how much share is up for grabs you've spoken in the past about some of the aggressive price discounters on the brink of failure is now the time to put your foot under GAAP.
Yes, I had some of that part of the industry played out the way that you expected.
And similarly from the field work, we've done you really created that local kind of community effort, that's driving the agent network how much of the value proposition is in that local approach and the strong relationships that the new agents, creating the communities.
Of course, driven by the incentives that you and the managers lay out for them. It kind of hampered by Covidien and is there are ways. You can continue the playbook and allow you to continue expanding the agent network. The way you normally would or are things kind of put on hold at the moment to some extent just given what that playbook, usually look like in the feed.
On the ground that are required.
Okay. That's a long question I want to make sure I answered properly I think the first part that I really grasping I think was maybe the lead part of that is we are spending a lot of time.
On positioning ourselves for the future and that doesn't just include.
Our.
Presence at brick and mortar or how we go about brick and mortar. We think that were doing really really well at brick and mortar. We think that when you think about the fact that we're growing.
Faster than the market in every one of our key countries.
And significantly in many of them, while there's business still migrating and that you know most of the most of the marketplace. Even some of the key competitors that are.
The Lee players in the public market recognize that most if not all of their growth is coming from online we recognize that a brick and mortar we're continuing to take share every day, but that's not enough for us because we recognize that we don't want to continue to be a bigger and bigger player in a smaller market as a percentage of the over market that overall.
Overall market than it was the previous day, so along with that we've also grown our online business significantly and we continue to to spend time positioning that with both quality related to our quality of service with our online product. What I mean is really the front end technology of it the backroom.
Quality of service is the same which we believe its industry, leading a relative to our customer service on the back end, but the front end to that along with our going after and in tackling greater market shares online and we've been positioning ourselves with that as well as you know may or may not know about our our card product, which we believe.
It's also a differentiator in its a new vertical for us that kind of bridge is a bit of the gap between brick and mortar in online where we're actually empowering.
Creating the opportunity for previously Unbanked consumers that have been really get it only to retail brick and mortar to have the opportunity to go down mine if they like to we spent considerable time in the last three or four months positioning knows we're in the process of bringing in quality hires. We just made a hired two up a person with significant.
Background and the online business that will be joining us relatively soon we're not ready to make an announcement yet, but we believe we've come to.
The agreement for that person to come onboard we're investing into recruiting a online marketer that can help us build that business, we've been investing heavily into our card product doing all these things in these investments at the same time that we're continuing to invest really strongly in brick and mortar.
Because we do recognize the weakness and we don't want to call out any competitors, but we know of some quite large competitors that have struggled through this process struggled because of some cases liquidity issues, where you know this drop off in business is presented them with less cash flow. My normally have so it's harder for them to make payments on time and therefore.
Payors are either ending their relationship where consumers are just not using them because they're not as reliable, but all of that has allowed us to continue to take share there, but as I said, that's not enough, we're really positioning and spending our time and that knowing that you know the future a part of the future. There's a big part of the future that's brick and mortar I know some.
I'm times people don't want to hear that but there is but there's also a big part of the future that's online and we're preparing an actively participating in that as well and I think this time, we've used to do that we've used those time to also take a look at our you know as any company, even though we're a smaller company over time Theres inefficiencies that get created I mean, sometimes.
You know analysts and investors think well once you get to the efficiencies and it's a onetime thing no. It's an ongoing thing because inefficiencies get recreated you know it's like a spine. It gets back out of out of sync and it needs. A good you know a good lineup and so we continue to do that on an ongoing basis, we really started out in our objective on this one cobot star.
Got it was to say we want to make the turn of the here. The first half of year, we want to make that turn more profitable than we did it in 2019 and what we ended up doing is making that turn I think it about 13% up in EBIT da attorney and an up dramatic relatively dramatically compared to considering there's oh.
Pandemic out there in terms of revenue. So our objective was to continue to excel take shares brick and mortar and then prepare for use this time to prepare to be even be stronger and better with our new products and new verticals. We've even during this time it looked at and nothing's materialize, because we're not going to force things don't make sense, where we looked at two or three acquisitions.
And you know, we still think there might be great ways for us to acquire new verticals that will add to our business that will be you know verticals that are not unrelated to what we do but are different enough that will be very would be very good mix for our current business. So we're actively looking at all that building our team bringing quality people.
And focused on the future as well as understanding that we've got a great opportunity to take share at brick and mortar today.
That's really helpful and Bob on the online portion of the business is the hyper local focus that's been such a compelling part of the customer needs and value proposition as relevant when you guys think about what the online business will look like not just today, but down the road.
You know we were looking at things that we can make.
Some other relevant sees present, it's not at the same because it really is generally one price online so, whereas it's down to that Sip code leveling sometimes is the the corner of the street level in terms of pricing that doesn't really exist. So it does relative to country differences, but we all know that so it'll be a little different.
I think you know our objective is to make sure. We've got out online product that works well our business has grown dramatically, but we feel that are our brick and mortar offering with its speed. Its reliability. It's easy to ease of use is state of the arc and that's what our objective is with our online business. So we continue to reform sort of refine that and build that.
To be better in smoother and faster and you'll see us continuing to invest in that in ways that will be different than than than brick and mortar, but in the same way that we want to have the very best offering possible.
Got it very helpful. Thank you guys always welcome.
There are no further questions at this time I.
I would now like to turn the floor back over to Bob's lissy for closing comments.
Yes, we like to thank all of you investors and analysts for joining us on the called help everyone stay safe I do like to take my hat off my my hat off to three groups of people.
First of all our employees, we've done a tremendous job through difficult times, many of them and jobs that have never been previously portable and done a great job in the portability their jobs and continued to make sure that we put our customer at the utmost our sales reps who are back out in the field and are working with our agents very closely.
And I'm doing a tremendous job.
But also our engine retailers many of which like we said, 95%. The remained open as essential services and really where the conduit to so many people here working in the U.S. send money back home to their families.
And then of course, our customers, who you know I can have more respect for the resilience of that customer and in many times you know.
Really supplying for all of US critical services with agriculture.
You know product refinement plants, all the types of things that we need is critical services. So one of the think those three constituents and it's been a great quarter. We hope you all stay safe and well talk to you. All soon thank you very much.
This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
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