Q1 2025 Currency Exchange International Corp Earnings Call

March 13, 2025

Speaker Change: [music].

Good morning, ladies and gentlemen, and welcome to currency Exchange International first quarter 2025 financial results Conference call.

At this time.

Lines are in a listen only mode.

Following the presentation, we will conduct a question and answer session.

No one has any difficulties hearing the conference.

Crestor is yeager for operator assistance at any time.

Bill Mitchell: I would now like to turn the conference call over to Bill Mitchell US Investor Relations. Please go ahead.

Thank you Jenny and good morning, everyone.

Bill Mitchell: Welcome to the currency Exchange International Conference call.

Bill Mitchell: To discuss the financial results for the first quarter.

Bill Mitchell: Of the 2025 fiscal here.

Speaker Change: Would you for joining us.

With us today are president and CEO, Randolph pillar and group CFO Gerhard Barnard.

Speaker Change: We provide.

US with an overview of financial results in his latest perspective on the company's operations.

Randolph: Randolph will then provide his commentary on strategic initiatives sales efforts and business activities.

Speaker Change: To which we'll open it up for your questions.

Today's conference call is open to shareholders prospective shareholders members of the investment community, including the media.

Speaker Change: For those of you might happen to leave on a call before its conclusion.

Speaker Change: Please be advised that this conference call will be recorded and then uploaded to see Exxon's Investor Relations website page along with the financial statements and MD&A.

Speaker Change: Please note that this conference call will include forward looking information.

Speaker Change: Based on a number of assumptions and actual results could differ materially.

Speaker Change: Please refer to our financial statements and MD&A reports for more information about the factors that could cause these different results and the assumptions that we've made.

Gerhard Gerhard: With that I'll turn the call over to Gerhard Gerhard. Please go ahead.

Gerhard Gerhard: Thank you Bo and thank you everyone for joining today's call.

Gerhard Gerhard: These results are presented in U S dollars and my overview of the company CX I will also incorporate the results of our wholly owned subsidiary.

Gerhard Gerhard: Exchange Bank of Canada.

Gerhard Gerhard: On February 18th 2025.

Gerhard Gerhard: Group announced its decision to cease the operations of its wholly owned subsidiary <unk>.

Gerhard Gerhard: Exchange Bank of Canada.

Gerhard Gerhard: This strategic decision and operational painful restructuring well communicated to all staff of exchange Bank of Canada.

Gerhard Gerhard: On February 1920 25.

Gerhard Gerhard: Following the cessation of operation.

Gerhard Gerhard: Bank and things like it administers finance in Canada to discontinue from the bank.

Gerhard Gerhard: The voluntary discontinuance is expected to be completed in the fourth quarter of 2020 times.

Gerhard Gerhard: Subject to the receipt of all major theory to regulatory approvals.

Following the group's decision management, that's the main implementation of the restructuring and planned discontinuance of Ulster Bank.

Gerhard Gerhard: Information on the bank's discontinuance, it's based on various assumptions and unknowns.

Gerhard Gerhard: As a result management is currently assessing the full financial impact after discontinuing and estimate that the exit from Canada may lead to a positive impact on the overall group results.

Now I can't deem as recently migrated its core transaction.

Gerhard Gerhard: Pro staking and client facing systems.

Gerhard Gerhard: In cloud computing environment, where it will be able to leverage modern scaling and automation capabilities. These initiatives any basements, among others support a more sustainable and efficient future growth.

Gerhard Gerhard: The company and we've made with bad about Nike teams moved there.

Gerhard Gerhard: Now, let's look at the consolidated performance of the three months ended January 31st 2025.

Gerhard Gerhard: After the previous three months ending January 31st 'twenty 'twenty four.

Gerhard Gerhard: Before we go into details I'd like to note that the company measure and evaluate its performance using a number of financial matrix and dangerous some of which do not have standardized meanings.

Gerhard Gerhard: And the general expectation.

Gerhard Gerhard: Accounting principles or GAAP.

Gerhard Gerhard: And may not be comparable to other companies.

Gerhard Gerhard: We called these measures non-GAAP financial measures or adjusted results.

Gerhard Gerhard: The company's management believes that these measures are more reflective of its operating performance and results and provides a better understanding of management's perspective.

Gerhard Gerhard: On the performance these measures enhance the comparability of our financial performance for the current theory with the corresponding period in 2024.

Now management included the full reconciliation of the key performance and non-GAAP financial measures in the MD&A.

Gerhard Gerhard: When we refer to reported results.

Gerhard Gerhard: We refer to the financial statements based on I E. R E.

Gerhard Gerhard: When you meet with voting adjusted results such as suggested make income.

Gerhard Gerhard: We refer to performance based.

Gerhard Gerhard: Based non-GAAP measures.

Gerhard Gerhard: Please note that the MD&A starting this quarter shows decaux taken mate it with 14 for each of the business lines within CX I E D C.

Gerhard Gerhard: As promised our improved reporting from Oracle nature now allows management.

Gerhard Gerhard: Third information you do present and compare it gets reporting in more detail on our business segments.

Gerhard Gerhard: The company reported a net income of 812000 for the current quarter.

Gerhard Gerhard: Compared to net income of roughly 850000 for the same period last year.

Company at 10% revenue growth.

Gerhard Gerhard: 32% net operating income growth.

Gerhard Gerhard: While the net operating income before tax increased 54%.

Gerhard Gerhard: However, net income was lower by 4% than last year due to the tax impact of the decline sure Klaus on stock option awards during the current quarter as well as their regulatory compliance charges in Canada.

Gerhard Gerhard: Adjusted net income grew by 242022, 9% compared to the same period last year to $1.1 million in the current quarter comp.

Comprising 166 million.

Gerhard Gerhard: Adjusted net income in the United States.

Gerhard Gerhard: And about 572000 of adjusted loss in Canada.

Gerhard Gerhard: Now this compares to an adjusted net income of 850000 in the prior quarter.

Gerhard Gerhard: Which comprised of 2 million of adjusted net income in the United States.

Gerhard Gerhard: And nearly 1.2 million of adjusted net loss in Canada.

Gerhard Gerhard: Adjusted EBITDA and adjusted EBITDA margin percentage for the current period was $3 4 million.

Gerhard Gerhard: 17%.

Compared to roughly $2 3 million and 13%.

Gerhard Gerhard: Indicating a positive improvement period over period.

Gerhard Gerhard: The company generated revenue of close to 20 million for the three months period ended January 31 2025.

Gerhard Gerhard: As mentioned, a 10% increase from the same period prior year.

Gerhard Gerhard: The revenue increase.

Gerhard Gerhard: Here it was driven by growth in both product lines across the United States and Canada, primarily due to the addition of new customers.

Gerhard Gerhard: Proof pricing and an increased demand for it basically guarantees during the current quarter.

Gerhard Gerhard: The mentioned 10% growth in revenue.

Gerhard Gerhard: Primarily due to the growth in the wholesale bank notes business of roughly 1 million.

Gerhard Gerhard: Followed by growth in the payments business.

Gerhard Gerhard: <unk> hundred 50000.

Gerhard Gerhard: Direct to consumer business growth of 327000.

Gerhard Gerhard: Revenue in the United States increased by $1 3 million or.

Gerhard Gerhard: Four 9% over last year right.

Gerhard Gerhard: Revenue in Canada decreased by 512000 or 13%.

Gerhard Gerhard: Operating expenses increased by $1 1 billion or 7%.

Gerhard Gerhard: The company reported net operating income of nearly $3 million in the current quarter.

32% higher than.

Gerhard Gerhard: And 2.25 million reported last year.

Gerhard Gerhard: Out of revenue growth, surpassing the increase in operating results.

Gerhard Gerhard: The top five currencies by raising even in the quarter.

Gerhard Gerhard: Were euro.

Gerhard Gerhard: U S dollar Mexican peso.

Gerhard Gerhard: Iraqi Denari.

Gerhard Gerhard: And Canadian dollar.

Gerhard Gerhard: The company's adjusted annualized return on equity or our own E.

Gerhard Gerhard: 12% the same as the prior period.

Gerhard Gerhard: Now the following as a highlight on the revenue by product line for the three months ended January 2025, compared to the previous three months ending January 31st 2024.

Revenue in banknotes.

In both wholesale and direct to consumer business lines and as I say it increased by $1 3 million in the first quarter due to strong consumer demand for foreign currencies.

Gerhard Gerhard: As international travel levels remained strong with in the United States.

Gerhard Gerhard: November 'twenty 'twenty four and January 2025.

Gerhard Gerhard: Approximately 215 million travelers fast three D as a checkpoint in the United States airports.

Gerhard Gerhard: 14 million or 7% more compared to last year.

Gerhard Gerhard: Management is closely monitoring devil numbers and the effect of various trade policies and their impact on the international growth.

Gerhard Gerhard: In economic economic growth international travel and the demand for bank notes.

Gerhard Gerhard: Direct to consumer back in us revenue increased by 327000 or 5%.

Speaker Change: As the company continued to capitalize on its market shares through its diversified delivery channels. It Judy.

Gerhard Gerhard: The online ethics platform.

Speaker Change: Any owned branches and agent relationships.

Gerhard Gerhard: Growth in the current quarter was primarily driven by online.

Gerhard Gerhard: <unk>, which continues to grow with the company's recent network expansion.

Gerhard Gerhard: During the first quarter of 2025, the company added the state of Nebraska to its network and the online ethics platform can now service 45 states.

Gerhard Gerhard: Including the district of Columbia for additional states compared to same time last year.

Gerhard Gerhard: The company owned branches continue to grow.

The new locations, all maturing and contributed to a little growth over the last year.

Gerhard Gerhard: Overall direct to consumer banking is waving the remainder growing business with its diversified delivery channels during the current quarter.

Gerhard Gerhard: Direct to consumer revenue represented 32% of the total revenue in the current three months compared to 34 prior three months.

Gerhard Gerhard: Our wholesale bank notes revenue by 1 million or 12%.

Gerhard Gerhard: His business trading volume grew with increased volumes from domestic and international financial institution customers as well as many services businesses.

Gerhard Gerhard: Overall also banknotes accounted for 47% of total revenue in the current three months period compared to 45.

Speaker Change: Brian Perry Ellis.

Speaker Change: Now, let's focus on revenue and payments.

Speaker Change: This product line increased 453000 or 12% in the three months period ended January 31st 2025.

Speaker Change: Compared to the prior period.

Speaker Change: 40th by an increase of 33% in trading volume activity.

Speaker Change: From existing financing institution customers.

Speaker Change: Onboarding of new customers in both regions.

Speaker Change: Payments represented a 21% of the total revenue.

Speaker Change: Both current and prior periods.

Speaker Change: Now revenue by geographic location for the three months ended January 31st 2025.

Speaker Change: Compared to the previous three months ending January 31 2024.

Let's focus on the United States.

Speaker Change: Revenue increased $1 3 million or 9%.

Speaker Change: Compared to the prior period, primarily due to growth in both bank notes and payments businesses.

Speaker Change: As I mentioned wholesale banknotes in the United States grew by 530000 from 9%.

Speaker Change: Followed by 415000 or 18% growth in payments.

Speaker Change: And 327000 or 5% growth direct to consumer banknotes.

The increase in wholesale bank notes was driven by both domestic and international financial institution customers.

Speaker Change: Although majority of the growth was attributed to domestic financial institution customers.

Speaker Change: Payments revenue continued to grow in the current quarter as business trading volumes grew 40% over the same period last year.

Speaker Change: Like Crazy.

Speaker Change: Which reflected increased activity in both existing and new customers.

Speaker Change: Direct to consumer revenue growth was primarily driven by an increase in customer demand swing based on currency.

Speaker Change: Throughout online FX platform.

Speaker Change: Revenue in the United States accounted for 77%.

Kevin: Kevin you by geographic location in the current quarter compared to 78% in the previous quarter.

Kevin: Revenue in Canada increased 13% in the first quarter compared to the prior.

Kevin: Period.

Kevin: Even by 475% or 19% gross banknotes revenue and 38000 or 3% growth in payments revenue.

Kevin: The banknotes business experienced a 27% increase in trading volumes evidenced by significant rise in activity.

Speaker Change: That's Canadian Bank notes clients.

Kevin: Demand for travel currency, Greece during the quarter.

Kevin: Due to the increased travel levels in Mexico, and the Caribbean destinations around the holidays.

Kevin: Further international customer volumes grew due to strengthening of the U S dollars.

Kevin: The payments business at 871 active customers during the first quarter.

Kevin: And to them and after 2025 compared to 809 active customers in the prior period.

Kevin: Overall, the revenue in Canada represented 23% of the total revenue by geographic location and the current three months compared to roughly 22% in the prior period.

Kevin: As mentioned the company believes that providing adjusted results.

Kevin: Enhances comparability with the prior period and this is true for expenses in the first quarter in EDC as such the results for the first quarter when adjusted for third Party advisory cost of roughly 280000 related to regulatory compliance costs imposed.

Kevin: On a b C.

Kevin: These costs we will.

Kevin: Were included within our legal and professional fees within the operating expenses.

Kevin: During the three months period ended January 31 2025.

Kevin: The Companys operating expenses increased by roughly 1.1 million or 7%.

Kevin: Compared to the same period last year.

Kevin: Variable costs within operating expenses represented by posting and shipping Bank services.

Kevin: Service charges jealous commission and incentive compensation totaled $4 3 million in the quarter compared to $4 2 million in the prior period ended January 31 2025.

A slight increase of 3% attributed attributable to shipping costs and banking service charges.

Kevin: With both increase commensurate with the growth in revenue.

Kevin: Look at that high revenue growth, 8% cost growth in shipping and bank geology.

Kevin: The ratio comparing total operating expenses to total revenue for the three months period ended January three 2025 improve.

Kevin: Improved to 85% compared to 88% in the previous period.

Kevin: However, when adjusting operating expenses for the nonrecurring items in Canada.

Kevin: As mentioned the above operating expenses only grew 5%.

Kevin: The following is a summary of the main operating expenses trending items, including for the period.

Kevin: Salaries and benefits expense decreased when compared to the prior year, mostly driven by a decline in unit count in Canada.

Kevin: The group's eighth count decreased from 406.

Kevin: Roughly 390.

Kevin: Seven.

Kevin: At January 31 2025.

Kevin: Legal and professional expenses increased primarily due to legal and advisory costs as mentioned associated with regulatory compliance requirements and discontinuance planning costs.

Kevin: Bank services charges charges, primarily reflects the increase in the number of payments checks as.

Kevin: As we said the company proceeds for P&L thousands payment transaction.

Kevin: Compared to roughly 30500.

Kevin: Payment transactions in the prior year.

Kevin: And exchange losses and gains.

Kevin: At present, the net result of foreign exchange.

Kevin: Foreign currency exchange transactions.

Kevin: After considering.

Kevin: <unk>.

Kevin: The risks and I guess the inherent risk.

Kevin: In the company's exposure to foreign exchange, thereby minimizing volatility in earnings.

Kevin: Mexican peso volatility was the largest contributor to net foreign exchange losses for the three months period ended January 31st 2025.

Kevin: The area was affected by game.

Speaker Change: H guys.

Kevin: So stock based comp.

Kevin: In the current quarter.

Kevin: Email, Okay 70.

Kevin: 70000.

Kevin: Related to outstanding teams and our HQ Awards.

Kevin: The decline in the stock price.

Kevin: This compares to an expense of.

Kevin: Fiber at six Southeast U R E.

Kevin: Period.

Kevin: So each week.

Kevin: It <unk>. The result of an increase in average borrowings utilized to find anything short term working capital needs.

Kevin: The average outstanding borrowings.

Kevin: Amounted to $6 2 million during the first quarter compared to roughly $5 5 million during the same period last year.

Kevin: The average interest rate on borrowings was eight 7%.

Kevin: Compared to $8 six <unk>.

Kevin: Brian.

Speaker Change: Income tax expense in the current quarter is related to the United States region.

Speaker Change: It reflects an in fit and effective tax rate of 41%, where the majority of the increased expense above the statutory rate of 26, 5% was related to a deferred tax asset adjustment for.

Speaker Change: For stock options.

Speaker Change: Due to a decline in the share price during the quarter and this accounted for 11% of the effective tax rate increase.

Speaker Change: The increase was related to permanent items as well as other non deductible differences.

Speaker Change: Okay.

Speaker Change: And the three month period.

Speaker Change: 25 resulted in an outflow of 74 1 million compared to an inflow of $23 4 million during the prior period.

Exclude changes working capital and cash.

Speaker Change: Flow generated by commission she gum yardstick for expenses wasn't go up roughly $2 8 million three months.

Speaker Change: Versus.

Speaker Change: More or less the same inflow of $2 9 million for the prior period.

Speaker Change: Now, let us review the balance sheet.

Speaker Change: On January 31st 2025, the company at net working capital of $73 6 million almost the same as the prior period.

Speaker Change: The company had available unused lines of credit amounting to 41, $45 1 million at January 31st 2025 compared to <unk>.

Speaker Change: Through a year end balance by roughly $45 3 million pets. The unused lines of credit now on November 28 2024.

Speaker Change: D S X, except that the company's notice of intention to make another in CIB and automatic share purchase plan to purchase for cancellation to maximum amount of 316000 common shares of the company, representing 5% of the company's issued and outstanding common shares.

Purchases under the N CIB commenced on December the second 2024.

Speaker Change: Looked at emanate understand but if the first 2025.

Speaker Change: Or such earlier date in the event that the maximum number of shares sold in the NCI or buyback has been repurchased.

Speaker Change: During the three months period.

Speaker Change: This quarter the company purchased for cancellation 35100 common shares.

Normal market prices trading on the T S X for roughly 500.

Speaker Change: $62000. These shares were immediately canceled and removed from treasury by the company.

Randall: At this time I would like to turn over the call to Randall, but now our CEO to provide his perspective.

Speaker Change: Good morning. Thank you her art. Thank you everybody for joining as the group C. E O. As you can imagine I'm very focused on several things first of course is the execution of our discontinued its plan or exit plan as we've called it.

Randall: As well as ensuring that the group continues to operate.

Randall: As best we can this year and most importantly, ensuring that we have the correct structure of CSI along with an updated strategic plan for the years ahead I'd like to start with E. B C.

Randall: As you've heard we have made this decision in the second quarter and there will be more information in our second quarter reporting as we finish our assessment.

Randall: The discontinuance or exit plan.

Randall: Had us, giving notifications to customers and all employees and we are following that notification process as we speak or a discontinuance this year.

Randall: We are seeking a referral agreement for the banknote business and possibly separately a referral agreement for the payment business. There are several interested qualified Canadian based businesses that are in these advanced discussions.

Randall: Moving over to CSI.

Randall: As I said without a bank we are focused on the correct to optimal structure of the group of CSI and <unk> and the strategy that we will follow going forward.

Randall: It does of course include our number one product, which is bank notes as you know the bank notes are broken down into two parts of the company.

Randall: Each run by its own managing director.

Randall: Consumer unit well it had a 5% growth we see a lot of potential for even bigger growth in the consumer unit through the online expansion through company owned selective stores in key markets as well as agents. We have several good agent opportunities that are very warm.

And we will continue to focus on careful growth within the consumer unit.

Randall: Wholesale bank notes as you saw is continuing to grow and our focus with wholesale is remaining with financial institutions in the United States.

Randall: While we seek to sell bank notes, we've been very successful to also sell the payment business our payment.

Randall: Operations is continuing to improve and it's hard to automation as her art mentioned, we've updated upgraded to a cloud environment for all of our activity here in CX side, which enables us to be even more efficient and scale and with demand.

Randall: Our payment product line of course is focused on foreign exchange payments international payments, but we also do process U S dollar payments for a fee.

Randall: And we have spent a lot of time, giving you an update so I just want to go ahead and open it up just give everybody time to answer questions or ask questions. So we can answer them, but before I get to the questions I do want to remind everybody that our annual shareholder meeting is this march 24th at three P. M at the KPMG headquarters there.

Randall: Our downtown Toronto on Bay Street as it has been in years.

Randall: Yes, it will be an in person meeting as we have done many times and we hope you can make it buy at three o'clock I do ask if you are not there in person devote that you do find your control number and vote CSI Ishares online in advance of the annual shareholder meeting so.

Randall: So thank you again for your support and I open up the floor to questions write off if I can make a correction.

Randall: AGM is actually on March 25th.

Randall: As I say 24, sorry, 'twenty sorry.

Randall: Thank you.

Ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press the star followed by the one on your Touchtone phone should you wish to cancel your request. Please press the star followed by the tails.

Speaker Change: Using a speaker phone please lift the handset before pressing.

Speaker Change: Also we ask that you please limit yourself to ask two questions. If you have any further questions blindly rejoin the queue. Once again that is star one should you wish to ask a question.

Speaker Change: And we have a question from Robin Cornwell from catalyst Research. Your line is now open.

Robin Cornwell: Thank you and good morning.

Robin Cornwell: I guess the first a quick question is have you seen any impact from the tariffs slash trade core.

Robin Cornwell: That's taking over the world.

Robin Cornwell: Sure.

Robin Cornwell: The volume of your currency transactions to date.

We have seen a slight decline in the inbound traffic.

Robin Cornwell: Don't know, if it's going to get worse or not.

Robin Cornwell: Luckily it has been offset mostly by an increased outbound as you may know.

Robin Cornwell: The U S dollar is quite strong on a global level.

Robin Cornwell: Flights are quite cheap nowadays and so we are seeing a very strong outbound.

Robin Cornwell: Demand and we have seen a softening.

Robin Cornwell: Two the inbound due to people like in Canada, not wanting to come to the states anytime soon due to the.

Robin Cornwell: Political situation.

Speaker Change: Okay. That's interesting thank you.

Second question is kind of like two parts. The first is that you reported in 'twenty to 'twenty four.

Speaker Change: That your after tax U S income was $13 3 million.

Speaker Change: On revenues of about $69 million that gives me an after tax margin for the year up 19, 3%.

Speaker Change: No.

Speaker Change: We're kind of skipping over 25 in a way are recording going into 'twenty six or.

Speaker Change: Or do you expect that kind of a margin on your U S operation.

Speaker Change: To continue.

Speaker Change: Berard.

Speaker Change: Hi, Robin it is a very challenging for us to make or concern any future looking statements as you know.

Speaker Change: Alright.

Speaker Change: That.

Speaker Change: That would be the comment you know for us to declare into the future and answer those questions.

Speaker Change: So.

Speaker Change: Okay.

Speaker Change: So your business going forward I guess part of the question is.

Speaker Change: Do you expect I'm not really clear on how much revenue retention, you're going to have on the Canadian business. So if you just took.

Speaker Change: Your current revenue generation in Canada.

Speaker Change: Are you expecting to retain any of that.

Speaker Change: Business or is it basically all going to be moved off to other providers.

Robin Cornwell: It's robin.

Speaker Change: Go ahead, sorry here right now.

Robin Cornwell: We are we are discontinuing.

Robin Cornwell: The bank's activity in Canada, and moving most of that wave and you over to potential referral agreements.

Robin Cornwell: Okay.

Robin Cornwell: Okay. That's that's the clarification.

Robin Cornwell: You're looking for.

And basically going forward in your U S operations, you're you're basically.

Robin Cornwell: Driving the <unk>.

Robin Cornwell: Existing business and your your new visitors as Randolph said, so the expectation would be that it's.

Robin Cornwell: Going to be similar to.

Robin Cornwell: Your history, so I'm talking about margins again as Terry Theres no anticipation that your margins are going to go.

Robin Cornwell: Necessarily decline in the U S.

Okay.

Robin Cornwell: I got it.

Robin Cornwell: Yes, we are focusing on managing costs driving Raymond Yu.

Robin Cornwell: On a constant basis.

Robin Cornwell: Okay. Okay.

Robin Cornwell: Okay. Thank you I'll I'll re queue. Thanks.

Robin Cornwell: Yeah.

Speaker Change: Thank you once again that is star one should you wish to ask a question.

And your next question is from Peter <unk> from Arc.

Speaker Change: Okay.

Speaker Change: I will now open.

Yeah.

Speaker Change: Hey, guys you hear me.

Speaker Change: Yes, good morning, Peter.

Speaker Change: Good morning.

Speaker Change: One I wanted to make a statement first and then I had a couple of questions, but I think you know I've spoken to a few shareholders and I think.

Speaker Change: It was like a little misunderstanding about the difficulty of the decision that went into taking you know, making this bank.

Speaker Change: Canada exit and I and I think.

Speaker Change: Alright, I think my statement here is I would hope shareholders, either as a positive bold move from a management, but able to recognize.

Speaker Change: No.

Speaker Change: <unk> is not a high return on capital function and it's time to turn it off and making a bold decision.

Speaker Change: So I'm sort of bad investment I, just want to say I'm frankly, very happy that you're doing this from my perspective.

Speaker Change: I think that's a good thing and I hope the other shareholders.

Speaker Change: So one of my questions. One is for Randolph I would just love to hear your thoughts about <unk>.

Speaker Change: This will improve return on capital.

Speaker Change: And or Guerard Oh.

Speaker Change: What was what is the current balance of the intercompany loan that would be potentially receive an affiliate transaction at this point I would love to hear both of those.

Speaker Change: Well, absolutely we feel that.

Speaker Change: Topping.

Speaker Change: To use what others stopped the bleeding because he is a medical doctor.

Will be beneficial to the group not only just from a cash flow point of view of of having those losses every year go away.

Speaker Change: But more importantly, it allows <unk> to be 100% focused on the big opportunities that we see in the United States.

And then for me as the leader.

It will allow me to be more focused on strategic growth and allowing the management team to focus on the efficiency and the continued sales growth as we anticipate I'll turn it over to her art for the technical question I'm not sure that loan account goes up and down on a daily basis, but oh see what her.

Speaker Change: Yeah.

Speaker Change: I'd just like.

Speaker Change: To hear what the number is right now.

Speaker Change: Yeah, So Peter that the number that we report in our financial statements or let me say in all honesty.

Speaker Change: As Randall same ranges.

Speaker Change: <unk> and 15 million Canadian dollars on any given day.

Speaker Change: Okay.

Speaker Change: Honestly.

What do you think your expectation and shutting down or either light or in a transaction that whatever way you are thinking about it but there would be potential to realize this value.

Peter: Peter what I can tell you is at the end of January 31, 2025, the intercompany loan balance as reported was 16 million Canadian.

Speaker Change: Great. Thank.

Speaker Change: Thank you.

Speaker Change: Really appreciate you, calling me and I'll jump back in the queue and again.

Speaker Change: Publication, and I'm glad you guys are making.

Speaker Change: Thank you Peter we appreciate that.

Speaker Change: Thank you once again that is star one.

Speaker Change: Question and your next question is from Mark <unk> with private Investor. Your line is now open.

Speaker Change: Hi, Good morning, I think my my last question concerning the sort of $16 million was kind of answered, but I suppose the follow on would be you know.

Speaker Change: With that additional capital will be coming available.

Speaker Change: How is their attention too.

Speaker Change: The increase in Saudi from 5% to 10%, possibly a substantial issuer bid.

Speaker Change: And I guess for the last few quarters you've discussed a.

Speaker Change: A couple of M&A targets being kind of more advanced is there something more near term or.

How do you view M&A right now.

Speaker Change: The CFO Herbert and I are always looking at opportunities we have been.

Speaker Change: Identified a few opportunities both in bank notes and in payments, but theres nothing in an advanced stage nothing to be reported at this time, but yes the capital.

And the fact that we don't have to keep lending money to.

Speaker Change: A b C will provide additional capital for transactions like that or potentially an increased share buyback, which I personally I'm in favor of <unk>.

Speaker Change: However, we do have to weigh the balance of that purchase versus the potential capital need of all of our good transaction. So that is a discussion the board and the senior management have every quarter.

Speaker Change: And so we are.

Speaker Change: Assessing the best use of our capital to ensure the highest return of capital employed.

Speaker Change: For our shareholders.

Speaker Change: Yes.

Speaker Change: Thank you Oh, sorry go ahead Ed.

Ed: I think it's important to note that we are currently in a blackout.

And we could do to deferral agreements and so forth to remain in a blackout and during this period. According to the <unk> X will allowed to purchase a thousand shares on the buyback or the in CIB on a daily basis, we're not allowed to do any block purchases while in blackout. So.

Ed: And as Randall said these are subject to the th ex the board and certain financial covenant requirements that can be ads.

Ed: Okay. That's a great great answer to my question must appreciate it good job.

Thank you.

Ed: Thank you. Your next question is from Yale.

Speaker Change: Y H AMC investments your line is now open.

Speaker Change: Good morning, guys.

Speaker Change: Where Nokia scared me, where you are when you, but with the wrong date those were kind of throughput.

Speaker Change: Sorry about that.

Speaker Change: No worries.

Speaker Change: Just a few questions number one could you.

Speaker Change: Confirm that the.

Speaker Change: Supply agreement.

Speaker Change: Agreement at our Vegas International Airport.

Speaker Change: That's existing I noticed that the.

Speaker Change: Affiliate theirs is open and then.

Q1 2025 Currency Exchange International Corp Earnings Call

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