Q4 2019 Earnings Call

Good day.

Come to the IBT corporations fourth quarter full fiscal year 2019 earnings call.

In today's presentation.

He's management will discuss.

<unk> financial and operational results for the three and 12 month periods ended July 31st 2019.

Well prepared remarks body Keyes, Chief Executive Officer small Jonas.

Okay, that's will be in listen only mode.

[laughter] need assistance, please no corporate specialist, but pressing the star Q4 by zero.

After the prepared remarks muscle Fisher, RBC Finance officer, well, it's one mr. Jonathan for culinary.

Yes. Good question you May proceed Star then one another touchtone phone.

Your question. Please press Star then too.

Any forward looking statements made during this conference call either in the prepared remarks on the Q and accessing well the general or specific in nature or subject to risks and uncertainties.

Cause actual results to differ materially from those what's the company anticipate.

These risks and uncertainties include but not limited to specific risk and uncertainties discussed in the reports that I didn't see files periodically with the FCC.

I think he assumes no obligation.

To update any forward looking statements.

I may have made or might make.

Or to update the factors that may cause actual results to differ materially from those that they forecast.

In the presentation on the queuing they that will follow I think Tees management may make reference.

To the non-GAAP measures, including adjusted EBITDA non-GAAP net income.

Got it yes.

It's scheduled provided.

The I'd P. earnings release reconciles adjusted EBITDA, non-GAAP net income and non-GAAP B P. S to the nearest corresponding GAAP measures.

Please note.

But the I didn't see earnings release is available on the Investor Relations page of the RBC Corporation website.

I'll be W. W Dot IBP dot net.

Earnings release.

Has also been filed.

Form 8-K, what the FCC.

I'll now turn the conference call over to Mr., Jonas Mr., John that's the floors or Sir.

Thank you operator, well can diabetes fourth quarter and full fiscal year 2019 earnings call covering results for the three in 12 month period ended July 31st 2019 for more detailed report on our results. Please read our earnings release filed earlier today, and our Form 10-K , which we will file with the FCC tomorrow.

I did she achieved fourth quarter results that were relatively consistent with trends from the first three quarters of the 2019 fiscal year.

Our growth initiatives that the phones, you cats offerings national retail solutions, and our boss Revolution International money transfer services continued their rapid expansions.

Net difference you cats business generated $70 million in revenue this quarter, 78% increase year over year growth isn't especially strong in our south American markets at the quarter close not reach the 100000 seat milestones.

And national retail solutions, our retail or Pos network increased revenue to $1.9 million up 72% from the year ago corridor, we continue to expand our retail network and now have over 8000 terminals actively processing transactions the growth in our network provides us with the scale to develop new opportunity.

It is for additional revenue generating services in the coming year.

Boss Revolution International money transfer revenue climbed to $6.9 million in the fourth quarter, a 42% increase year over year.

Direct to consumer channel sales again powered the growth increasing revenue, 88% year over year to $4.4 million.

Even though D to C has been the growth engine at this business for the last two plus years, we continue to work diligently on improving our retail channel offering.

That's an assay is beginning to pay off.

Also our retail channel, which declined throughout 2018 increase sequentially in the third and fourth quarters.

We believe that success at retail will allow us to compete more effectively online and at retail.

As expected revenue from our core carrier services in boss Revolution, calling offerings continue to decrease as a result industry wide headwinds in the paid minute communications market.

But the company wide margin impact was dampened by increased contributions from our growth initiatives consolidated revenue less direct cost of revenue has increased sequentially in each of the last three quarters.

Consolidated adjusted EBITDA was $7.4 million in the fourth quarter in the years ago quarter consolidated adjusted EBITDA was $16.8 million, but was a significant outlier to the upside as a result of changes to estimates for recognizing breakage revenue.

For the full fiscal year consolidated adjusted EBITDA was $30.8 million compared to $38.2 million in fiscal 2018.

Overall, the fourth quarter, Marta consistent and to a solid year I want to think everyone or a company for all their hard work Osisko 2020 gets underway, we're working from a strong position to vigorously pursue our exciting growth opportunities.

It's my comments on the quarter's results now we would be happy to take your questions.

Thank you Sir we will now begin the question answer session to ask a question. You May proceed Star then one on they cut some fraud.

He doesn't this speakerphone. Please pick a brand said before pressing the keys. If any type of question has been addressed you like to drive. Your question. Please press Star then to again this is Charlie and want to ask a question.

At this I'm wondering pause momentarily to assemble roster.

[noise] and the first question, we have will come from Amman Giuliani excuse me July .

The rally FBR. Please go ahead.

Hey, guys. Thanks for taking my question and a good to see that the growth initiatives are.

To wrap up so I guess my first question can you talk about any M&A opportunities that you might be seeing.

Specifically are you seeing the opportunities.

Within you know something that will expand your you Cas offering it's all your point zero point of sale offerings.

Okay.

You mean acquisition are you mean in terms like like maybe I could talk and or a bolt on that you can sort of you add on to acquire more customers into sort of get that business. Those two businesses going quicker or maybe get into other markets. You know is there anything that you might be looking at right now or.

That's something that you you're thinking about.

Sure Hi. This is my fellow no. We were very pleased with the way that did not to phone business and Ah 2019, we felt that reaching to 100000 seats.

Okay, well W with accomplishments putting dialed team.

Oh, yeah initiatives in.

Brazil, Oh pieces in Brazil, and Argentina, U.S., any and all position in Canada all grew.

Very nicely during the year and we just started operations in Mexico, and Colombia, well about the styles as well in Hong Kong, So we outgrowing geographically around the globe.

I just think died we are looking at a different acquisition opportunities in the space.

And.

They oh the week, no we up being presented with <unk>.

Both from the U.S. as well as outside of the U.S. and we are no evaluating no those additional opportunities as they come in.

Oh, we have some no nice aggressive.

Jeff Bewkes continue to grow seats, you just coming fiscal year.

Okay. Thank you that's helpful. Okay.

Okay, and I'm more under you catch business I'm, you know clearly Brazil and.

South America, South American markets, performing very well <unk> do you have any plants you know target any other markets, where you think that you can achieve similar.

Growth rates.

Well I mean, he asked I mean, we are looking to expand into other geographies, but no [laughter] even at current jumping to the and right. Now we are really just scratching the surface like in Brazil in Brazil alone, even though you'll see such a such a large growth. We are really just in the main CD.

Although a little bit some real Janeiro in Brazil, and all day, such a large opportunity. If you go to quit t., but I agree and been resolved now and Odyssey. This I.

Oh, stupor, Argentina, and we just entering Mexico, right now, which is a huge opportunity. So yes, well one one on one hand, Oh, we are looking to expanding to other countries as well, but there's just so much opportunity right. Now you can dig 50 countries. We're just going in so but do we go deep.

Current countries Oh, we go into other geographies. The you know as well, but that's probably like to do both but that's likely to do you continue I mean right now.

Thank you very helpful. Okay.

Moving onto your.

And our Es business.

Yeah, you're adding new terminals at a pretty at an accelerated rate, but I mean relative to last year, it's slow down a bit.

What's the reason for like the slowdown and the terminals that you're adding on your data almost like Dallas in a quarter last year I think it's come down to about 600. This year. So just trying to get a better feel of what what's going on there.

I think.

Two things have happened [noise].

One is that.

We've changed the pricing.

On on the terminal and we really did it mostly with the idea of being able to bring on more.

Merchant services accounts with with accounts that were going after rather than accounts that that don't do merchant services with us.

And that's what Oh, the slower sales and the first quarter, but better sales.

But I think that as the year progresses, we will we will do better both on sales and quality of sale to just took a little time to get a.

Sales channels are used to a higher price.

Got it Okay and just last question for me. So I think in your prepared remarks, you mentioned you know you could add.

Additional revenue opportunities. Once you started scaling that business did talk about those additional revenue opportunity all opportunities.

Yeah, when you get our big.

One that we've talked about a little bit publicly or you know ended data and then and then the advertising sales.

On on the data side, you know, there's a there's a big need for.

What I'll say the big Black hole of you know sales that happened in independent retailers and being that we're you know probably already the largest.

Point of sale.

No system and then the independent convenience stores, there's a lot of ER Newton need and desire for for our data.

So yeah, we we've been doing.

Pretty well already and we just hired a.

New Lady to lead that team and you know they have very very aggressive growth plans for the data side of the business.

On on the advertising side of the business. It's also done you know much much better you know of late.

And you know again, we're just really starting to.

Go after targeted ads and yeah. The person who's buying this you know marketing them, you know something else et cetera.

So we're I'm a big believer that.

The advertising is going to continue growing you know quite steadily.

Got it thank you I'll pass it on.

<unk>.

Again, as a reminder, feel like to participate on today's <unk>. Please press Star then one on the touched some phone again not a star then one to ask your question again, we would just pause momentarily to assemble roster.

Well as there are no more questions. This will conclude our question answer session.

Today's conference call again, we thank you all for attending today's presentation.

Tom you may disconnect. Your lines. Thank you get everyone take care and have a great day.