MoneyGram International, Inc.
Q2 2018 Earnings Call Transcript

Published: 4 Aug 2018

[Operator:]

Good morning and welcome to the MoneyGram International, Inc. Second Quarter 2018 Earnings Release Conference Call. Today's conference is being recorded. At this time, all participants have been placed in a listen-only mode and the floor will be open for your questions following the presentation. It is now my pleasure to turn the floor over to your host, Michelle Buckalew, Head of Communication. Please go ahead.

[Michelle Buckalew:]

Hi. Good morning. Thank you. Welcome to our second quarter 2018 call. With me today are Alex Holmes, Chairman and Chief Executive Officer; and Larry Angelilli, our Chief Financial Officer. Our earnings release is available on our website at moneygram.com. Please note that today's call is being recorded, and some of the information you will hear contains forward looking statements. Actual results or trends could differ materially from our forecast or expectations. For more information, please refer to the risk factors discussed in our Form 10-K for 2017. MoneyGram assumes no obligation to update any forward-looking statements. Our presentation also includes certain non-GAAP financial measures to provide additional information to investors. All non-GAAP measures have been reconciled to their related GAAP measures in accordance with SEC rules. You will find reconciliation tables within our earnings release issued this morning and in the Form 8-K submitted to the SEC. And now, I will turn the call over the Alex.

[W. Alexander Holmes:]

Great. Thank you. Good morning, everyone and thank you very much for joining our call today. Our second quarter results were in line with expectations and reflect the anticipated impact of higher compliance standards, the roll-out of the Walmart2World service, and lower investment revenue as compared to 2017. At the same time, we executed against our plans to expand our digital capabilities, took steps to optimize our physical network, and implemented important operational improvements to our restructuring initiatives. On our first quarter call, we laid out for you the building blocks of our strategic vision for the future, a vision of a customer-centric company that will increasingly facilitate digital transactions and deploy digital capabilities to enhance and personalize interactions with our customers; a company that will capitalize on the unique strength of its physical network; a company whose operations are better structured to compete in a dynamic (00

[Lawrence Angelilli:]

Thanks, Alex. Total revenue for the quarter was $375 million. Money transfer revenue was $330 million, a decrease of 10% on a constant currency basis. As we anticipated, the most significant factor in this decline was the implementation of transaction limits and other compliance standards as the cornerstone of our effort to de-risk and improve the operations of our business. Also in the quarter, we felt the full impact of our new pricing at Walmart, combined with volume curtailments in certain Middle Eastern and African countries. The U.S. market also had a negative impact on (00

[W. Alexander Holmes:]

Thanks, Larry. In summary, it was an incredibly busy quarter and it's been a very busy year building and reshuffling the (00

[Operator:]

Thank you. We'll go first to (00

[Unknown Speaker:]

Good morning. Thanks for taking my questions. For the first half of the year, your constant currency revenue was down 8%. So what gives you confidence that in the back-half, things are going improve, you kept your revenue guide to be down 4% to 6%?

[Lawrence Angelilli:]

Part of it is what we saw in the second half last year. I think that comparing to the second half last year, we did see some weakness in the second half. The other thing is we do have new business coming online and so really the combination of the two. And part of it too is just the impact of the compliance rules. So I think as they settle in, I think it'll be a little more predictable in terms of the impact on revenue.

[Unknown Speaker:]

When do you expect revenue and EBITDA to grow again?

[Lawrence Angelilli:]

Well, I think 2019 is really our expectation. I don't think – we're not guiding towards it this year, and we think that return to growth, that happens next year.

[Unknown Speaker:]

Got it. And then you have $905 million of debt coming due in 2020, could you just discuss your plan how you plan on cutting that down or will you...?

[Lawrence Angelilli:]

Well, we expect to refinance it. Once we complete the DPA, we'll be refinancing our capital structure. So we expect that to be a fourth quarter item.

[Unknown Speaker:]

Understood. And just lastly, if you can just discuss your compliance for the quarter and your expectation for the back-half of the year?

[W. Alexander Holmes:]

Yeah, definitely. And for all of you on the call, I guess, we're having (00

[Unknown Speaker:]

Understood. If I could sneak one more in there, because you may have addressed this in your commentary, but could you just tell us how much of your revenue comes from digital and what your target is over the next year or two for digital revenue?

[W. Alexander Holmes:]

Yeah, digital revenue was 16% in the quarter. I don't have a specific target that I'm ready to share yet. I think because there's two kind of ways to look at it. One is the digital sends and the digital receives and then there's also another component which is really important to me which is the digital interaction. And so, we're really focused on two things at the moment. One is deploying digital capabilities on those at send side, so rolling out moneygram.com. We're in 11 markets and we're targeting to be in the high-20s, the 30 markets by the end of the year or at least into the first quarter of next year. We're also working quite dynamically on the receive side, trying to improve our digital wallet receive capabilities, obviously account (00

[Unknown Speaker:]

Thank you.

[W. Alexander Holmes:]

Thanks, (00

[Operator:]

Next, we'll move to David Scharf of JMP Securities.

[David M. Scharf:]

Hi. Good morning. Thanks for taking my questions. The few things Alex, on the restructuring side, you gave some detail, I wasn't writing down quick enough, but the 8% head count reduction, I mean, how much of that was actually sort of either agent's store-based, customer touching related versus what we would think of is more sort of fixed overhead related?

[Lawrence Angelilli:]

That's an interesting question, because it's a little bit of – it's a mix of both is, I'm sure you expected me to say. We literally restructured basically our global revenue organization and we did close a number of owned stores. We also took out a number of underperforming locations. We have quite a bit more to do on that end. And so we did sort of restructuring (00

[David M. Scharf:]

Got it. Got it. And it sounds like there's more to come there. Hey, may be switching to compliance questions. One, I wanted to follow-up on the last question in terms of the actual customer experience, can you maybe give us just in some real simple terms, 30 seconds, like, what is different about me walking into a, let's say, a U.S. agent location, if I'm sending abroad, just what's different about the experience now with your new standards versus six months ago, and the same question where if I go on to moneygram.com? Just trying to understand, because you'd mentioned that maybe there was even a little more off than you were expecting. Trying to understand whether it is an overreaction, as you mentioned, or whether on the margin, the experience is such that, it's going to be hard to win back those customers if other players aren't ultimately required to adopt the same compliance standards. So just literally the customer experience level, is it just I got to pull out my ID one more time or what's different?

[W. Alexander Holmes:]

Well, yeah, that's an interesting thought line there because I do think it's important what that customer is experiencing and I do think that there has been sort of some disruption as a result. I would say – this is not completely perfect because it did vary by market, but I would say that, and we've talked about before, in the United States, the send, in the MoneyGram network and I would say other players are quite comparable to send U.S. outbound transaction required effectively your name and some more information, but the data collection was inconsistent and there were really no standards around that. So we changed that so that we now (00

[David M. Scharf:]

Got it. And are these standards, are they in Walmarts as well?

[W. Alexander Holmes:]

Yep.

[David M. Scharf:]

Got it.

[W. Alexander Holmes:]

Yep, and they were, yeah, Walmart was – Walmart is (00

[David M. Scharf:]

Got it. And staying on the compliance front, did I hear correctly about final settlement with the DOJ is in a few weeks you said, the DPA is...?

[Lawrence Angelilli:]

Well, we're hopeful it is. I mean, we've been in dialogue for a while here. Our original DPA was supposed to expire last November and we've extended a number of times and I am...

[David M. Scharf:]

Right.

[Lawrence Angelilli:]

...I think I said was I'm hopeful that we can reach an agreeable outcome in the coming weeks, because it'd just be nice to get that buttoned up and move on to the next. But we have a lot of work to do as an organization. I understand the importance of the situation that we're in and we're very focused on it, and trying to be as cooperative as possible.

[David M. Scharf:]

Got it. Got it. And then – and last question is more strategically, obviously, last quarter was the first time [Technical Difficulty] (00

[Operator:]

Hey, Mr. Scharf, we're not hearing you, are you on mute? Hearing no response. We'll go ahead and we'll try our next participant, Jim Schneider with Goldman Sachs.

[James Schneider:]

Good morning. Thanks for taking my question. I was wondering if you can maybe talk a little bit about – well, I'm sorry, just maybe to finish up on the compliance, I wanted to clarify, going forward with all the changes you've made on transaction size limits and increased scrutiny on certain corridors, Alex, maybe just kind of discuss whether there's any interplay between the DPA and any of those limits, and whether there is any kind of negotiations or asking for additional restrictions to be put on that would be kind of further clamped on, on some of those volume – compliance-related volume declines you're seeing right now, or whether – or you feel confident that (00

[Operator:]

And I'm sorry, we're not hearing our speakers. Please stand by while we try to figure that out. All right, our speakers have rejoined, please go ahead.

[James Schneider:]

Okay.

[Lawrence Angelilli:]

Hi, thanks everybody.

[James Schneider:]

Hi.

[Lawrence Angelilli:]

Sorry about that. We just took a short break.

[James Schneider:]

Alex...

[W. Alexander Holmes:]

(00

[James Schneider:]

Yeah. Hi, Alex. How are you? So you hear me now. Okay, great. So the question I asked was basically just a follow up on the compliance thing, just to put that to bed hopefully. Is there any interplay between the DPA and the compliance restrictions on volumes. In other words, are the regulators asking for any more restrictions to be put on as part of the DPA negotiation process that would further kind of curtail the volume impact going to the back-half of the year or do you feel like all the restrictions in terms of compliance are now in the run rate right now?

[Lawrence Angelilli:]

Yeah. It's a good question because there's really sort of two ways to look at that. I think you can look at it as what are the standards and then what are the expectations or you can look at in terms of what are the expectations and what do you need to do to achieve that? And so, I would argue that the requirements of the DPA or any other regulator out there is to ensure that you're protecting consumers. So you know who consumers are, ensure you're doing the proper diligence work on all of your agents and agent locations, and that you're taking actions and taking steps as expected when issues arise, and that you're responsive to that. And for me – then I think for the industry, that means that you need to be gentle on the spot when issues come up. You need to understand who absolutely loyal customers are, you need to understand every transaction where it's going, what it's doing. You need to look at aggregation and you need to understand all those various aspects. And then you need to respond extremely quickly when you see anomalies in your business. And I would argue that if you don't have the requisite information about consumers, you're in a very difficult position to be responsive to those types of challenges. And so, I would say that the demands of whether it's our DPA or an FTC consensus order or regulatory exam finding or from a state regulator or whatever it may be, you have to have proper controls and systems in place to be responsive and do the things that they're expecting to find when they look at the exam findings. And that's actually – and the tough part there is it's different from what is sort of mandated and required on the face of it. They don't tell you how to do that. So you have to figure out your own way to do that. And obviously, we've been in the line of fire for a number of years with regulators and federal government. And, I don't want to be in that position anymore. And so, I think the improvements and changes you made to the business, I give my team a lot of credit for the work that they've done in the past year, in particular. And I like the position that we're in and I like where we're taking the business from a compliance standpoint. And it's different from what others are doing, but I think it's the right place to be and it's going to put us in the best position for success longer-term. So it's one of those, I think, a little bit of – it's unfortunate to be in that position. But on the other hand, you're sort of fortunate to be in that position because you know how to address it and what to do about it.

[James Schneider:]

Helpful color, thank you. And then maybe you talked about some new business coming on in the back-half that's going to impact you. And how do you think about the net effects of the Walmart2World program and OXXO. When OXXO actually comes into the numbers and then kind of how you think about the impact of Albertsons rolling off?

[W. Alexander Holmes:]

Yeah. Maybe think those kind of together. Listen, I think number one, the Walmart2World product has been, from our perspective, successful. I think that Walmart would probably tell you that they like to see more and more. And I think that's a good place to be vis-à-vis that product. I have not really heard any sort of negative reaction from our agent partners and market with respect to that product. And so I think that's a good place to be. When you think about someone like an OXXO coming on board, 16,000 locations. I think we've great partners in Mexico, but this was one of those opportunities to put ourselves in a location, in a service that's available on almost every street corner. It's well known and they have a very unique product that's in store where they try to drive not only remittance receives, but also good consumer interaction and try to get consumers to stay in the store and shop and it's very, very convenient. So I think that could have a very positive impact on receives in Mexico in our U.S. outbound growth, whether it's through our traditional channels or through Walmart2World type channel. With respect to Albertsons, that's an unfortunate situation there. I think, as it's been highlighted a couple of times in the last 24 hours, that was a 2015 merger with Safeway. (00

[James Schneider:]

That's great. Thanks. And then maybe just quickly for you, Larry, can you maybe (00

[Lawrence Angelilli:]

Yeah, we think it's going to be fairly consistent. No material change. Fourth quarter usually is just a little more seasonally better. But right now, we don't have any big cash event that we think would move the needle. So we think we're pretty much on schedule for the year to annualize the numbers is probably okay.

[James Schneider:]

Thank you very much.

[Operator:]

We'll go next to Kartik Mehta at Northcoast Research.

[Kartik Mehta:]

Hey, good morning, Alex and Larry. Alex, a lot of conversation about compliance, but one of the things you mentioned early on about this compliance was the ability to maybe eventually drive more revenue or engage with your customers more. And I'm wondering maybe it's too early, but I wanted to ask, if you've been able to take advantage of the other side of the compliance issue for you

[W. Alexander Holmes:]

Yeah. It's an interesting thing, right. So in a world of GDPR, you can't sort of just default all your customers into listening to you. But that capability to personalize a customer interaction, signing consumers up, creating profiles on them, and eventually rolling into a more dynamic loyalty program, you want to have that information about those customers, right. You want to know who they are, what they're doing, great profiles for them, allow them to have profiles on their transaction history and their receivers and this type of thing. And so, it really is that same subset of data. And so, obviously, there is a, you know, dynamic consumer interaction when you're talking about marketing to consumers or when you're operationalizing receipt and notifications about transactions. So, they kind of go hand-in-hand. So the good news is, is that higher data standards and collection points give you that data already and then you get the customers to sign up and opt in and create a better experience. I think it sort of begins to snowball on itself in terms of people understand, why we need that information, people volunteer the information. And its interesting, right, because as I've mentioned earlier (00

[Kartik Mehta:]

Thanks, hey, Alex and just to finally, your thoughts on pricing kind of where the market is, both here domestically, outbounds are in the U.S., but international as well?

[W. Alexander Holmes:]

Yeah, I think it's an interesting one. And U.S. is always interesting. I think it continues to be a lower-priced market, but it tends to come in different forms as either competitors focusing on lower fees and moving FX rates around and then there's others that are maintaining fees, but lowering FX rates, and then of course there's the ones that are no FX rate at all. And I think, as Larry pointed out, the U.S. market is one where there's been disruption from traditional players on lower prices and then we've also seen the no-fee/low-fee competitors come on-board. And I think collectively, that's really hurting the business. And so I think, we need not only look-alike products, but we also need to reposition our pricing to address that. And so it's something that we need to take on. When I look globally, I would say pricing is changing. And again, it's the same, you may hear that pricing is relatively stable and perhaps that's on sort of a global average, but when you look quarter-by-quarter or specific markets, prices are changing quite dramatically in a number of places. The smaller players are still attacking the markets with low introductory fees. Some of them are trying to come in with the best FX rates and I've seen across Asia, Africa, Middle East in particular and then parts of Europe as well, you've seen shifting prices, and I think that those are definitely having an impact on the business and something that we're tracking and something and we need to be prepared for it. I think in the first quarter I talked about we need to lower our costs and we need to change the way we operate, so that we can better compete in a world with lower prices and so we continue to prepare for that and we're working on it.

[Kartik Mehta:]

Thanks, Alex. I really appreciate it.

[W. Alexander Holmes:]

Thanks.

[Lawrence Angelilli:]

Thanks.

[Operator:]

We'll take our next question from James Faucette at Morgan Stanley.

[James E. Faucette:]

Thank you very much. I just wanted to follow-up on your pricing commentary there and kind of how dynamic individual corridors can be. Is that – from your perspective, is there increased activity now with the little bit more volatility in our tax rates or is this just the way that things have been for a while? Just trying to get a sense as to whether there's more pricing activity and changes now than in the past?

[W. Alexander Holmes:]

I think that the way I view it would be the responsiveness of larger players to some of the disruptive prices that was put in place by the smaller players I think is beginning to roll into the market. I think throughout the first quarter and into the second quarter, we've seen a lot of price changes and we've seen a lot of new competition really leading with price. And so, it is, I would argue, corridors specific, and that helps blended in a little bit. So it's not nearly as transparent. And I think the U.S. market is one where prices are little more consistent or a little more homogenous across this different states. But when you move to the UAE or you move to Singapore or the Philippines or Thailand, Korea, Saudi et cetera, a lot of it is corridor-specific, but some of those corridors are bigger than others. And so what we're seeing is either, again, prices coming down from be it at same charge, but then maybe they're putting a little bit more back into effect side of it. So it's kind of interesting because you sort of see this sort of cause and effect and a little bit of ebb and flow of that. You can lower your fees and increase your FX, but that may not be transparent for a little while, but then you may have to dial that back a little, depending on where the FX goes. But largely speaking, there's also big efforts being placed on sending money into accounts and account-based services tend to start with lower fees. And oftentimes, the FX can be lower, sometimes the FX can be a little higher. So, I think on average, (00

[James E. Faucette:]

And then, in historical perspective, it seemed like there was a lull for a couple of years. But 2018 seems to be more active than it had been in the past.

[W. Alexander Holmes:]

Yeah. (00

[James E. Faucette:]

And then, I wanted to ask as well, you recently announced new partnership with Visa. You kind of talked about that. It sounds interesting. Are there any particular markets where you see this product gaining traction earlier, faster, given that, as you said, a lot of (00

[W. Alexander Holmes:]

I think that, well, (00

[James E. Faucette:]

Great. And then just one last follow-up question on the international with DOJ. Has there been a notable change in tenor or topic of conversation that makes you to feel like you're getting closer there. Just wanted once again a little more color on how you're thinking about that timing and why?

[W. Alexander Holmes:]

So maybe it's not in my nature. I was trying to be optimistic, I guess. So, I don't know that there's – we've had a lot of discussions. I think the issues are known and the positions are quite well known. Clearly, it's not in anybody's interest to continue to extend and extend and extend. And so, I'd like to see us be able to get to an agreement. And I guess I'm being hopeful on that, because I think it's important for the business and for where we want to do and where we want to go with our company. So, we are trying to provide the right information, have the right dialogue and the right discussions. No, I can't really say that anything has accelerated or decelerated or anything materially different. It's just that I'm hopeful that we can push it to the end.

[James E. Faucette:]

That's great. Thank you very much for your comments.

[W. Alexander Holmes:]

Thank you.

[Operator:]

Next we'll move to Tien-Tsin Huang with JPMorgan.

[Tien-Tsin Huang:]

Hi. Thanks so much. Good morning. Just couple questions on the agent renewals. And so, I'm curious how the pricing (00

[W. Alexander Holmes:]

Oh, on the...

[Lawrence Angelilli:]

In terms of a commissions or contract terms?

[Tien-Tsin Huang:]

Yeah. I'm sorry, like on the commission side, either in terms of share or returns...

[Lawrence Angelilli:]

No, but – no, I mean, I think they were – they were good. I mean, they're sort of in line where they were or improved. So...

[Tien-Tsin Huang:]

Okay.

[Lawrence Angelilli:]

kind of very happy with that.

[Tien-Tsin Huang:]

No, that's great to hear. And then just I had a last one on the compliance, forgive me, just – have all the big changes been phased in at this point or is there still some that needs to be rolled in?

[W. Alexander Holmes:]

Well, I think the biggest of the changes has been rolled in. I do think that there are a few high fraud areas that we're going to continue to focus on, to ensure that those are materially de-risked, and there could be some more fallout from that. One of the challenges with compliance controls is that, if you push too hard on something you can have a negative effect which is to spread something out rather than able to target it. So targeting things is more surgically, can be very, very useful, but it can take a little bit more time because if you just try to slam things down, you can blend it back into the business and areas that you don't want it. So we're trying to be targetive. We're trying to be tactical on the end here. But I would say that the bulk of the heavy-lifting was done at least on the consumer-facing side of a lot of the rules and controls changes. We still have quite a bit of work to do on the back side in terms of back-end systems and technologies that we've been working on for a number of years. We still continue to work with our monitor on that, and we've engaged with Ernst and Young to help us guide to the end, and so that's all kind of ongoing.

[Tien-Tsin Huang:]

All right. Okay. That was the case, just wanted to make sure. Thanks, Alex.

[W. Alexander Holmes:]

Yeah. Thanks.

[Operator:]

Next we'll move to Mike Grondahl at Northland Securities. I'm sorry, he disconnected. We'll go to Matt O'Neill, Autonomous Research.

[Matt C. O'Neill:]

Yeah. Hi, thanks for taking my question. I hate to harp on all the compliance and DPA questions, but – and maybe it was covered when my call dropped earlier. But I was just curious if you could give us any more thoughts on, there's been so many extensions here I guess. What are the sticking points, is it dramatic change, so what's been accrued for a settlement or is it more around the ongoing kind of practices and rules that you'll have in place going forward? And then, do you view where you stand right now as basically being in a prolonged period of kind of an asymmetric competitive disadvantage versus your competitors? Or do you think eventually what you guys are putting in place will represent the new norm for the industry, and others will ultimately have to catch up to that? Thanks.

[W. Alexander Holmes:]

Yeah. Thanks, Matt. And it's good to talk to you. I don't want to get too much into the back and forth dialogue on the DOJ because it's honestly not really appropriate. What I can say is that, there is an aspect of all of this which relates to practices and standards. And again, I think some of this is regulation by enforcement and demands and requirements on the business to do things in a way that they feel are compliant or maybe better said leads to the best consumer protections available, because that at the end of the day is the primary focus, whether you're in the Department of Justice or the SEC or a state regulator item. And if you're trying to protect your consumers in those markets. And I think consumers getting the product. I think I said on the first quarter call, I mean if you haven't gotten a fake call from the IRS demanding you pay money, you're one of the lucky ones, because those calls are rampant. And fortunately from time to time consumers pick up those calls and think they need to send money to somebody they don't know, and that goes through your system. Companies like MoneyGram are being held accountable for that. I don't want to be held accountable for that. I want to have the right systems in place, so that I don't have to worry about that type of activity going to that business. And we are trying to put in place all of those things that are going to be industry leading to prevent that. And I think proof is in the pudding, and if you can put up the best metrics associated with that, you can show the government that you are doing everything in your hand possible to eliminate that you're working with your agents proactively, you're putting the right controls in place. I think there is a competitive disadvantage aspect, you have to think about from a business competitive disadvantage and then there's sort of a government disadvantage. And I certainly don't want to be in a position of the government disadvantage. And it's time for, you put yourself in a good position, you pick the issues that you have, and then the government can go look at somebody else. So that's what I'm trying to do.

[Matt C. O'Neill:]

Got it. Thanks so much.

[W. Alexander Holmes:]

Thank you.

[Operator:]

And we'll go back to Mike Grondahl at Northland.

[Mike Grondahl:]

Yeah. Good morning, guys. Hey. When you were talking about the digital transformation and you mentioned sort of closing some agents and location, can you know how many you've closed and how many do you kind of plan on closing in total?

[W. Alexander Holmes:]

Yeah, well, I'm not going to say how many we plan to close. At this point, we've closed about 3,000, and those are a combination of locations related to larger agents, and then also those are just specific smaller agents we have. We also did close a number of owned stores that we have. But those numbers aren't large, but obviously there is some costing, considerable cost there. So, yeah, that's about where we are and you know we're going to continue to look at that. I think we've highlighted that you know in the past, that we have a couple of different ways of looking at it. We're looking at compliance, we're looking at volumes, and then we have kind of what we call this agent tiering process, which takes into account both volumes and compliance activities, but also commitment to the business, we looked at, exclusive, non-exclusive we look at profitability, commission impact things and others and we're really trying to get rid of what we call the tier-4s which is the bottom tier, and then, begin to see if we can optimize the 2s and 3s and push everybody into the tier-1 bucket if we can. And then, it's also looking at what you need in market. And if you have agents that you've signed that are good for hanging up a banner that says I'm in ex-hundred thousand locations, but they're really not doing any volume. You know we want those out of the system because it's just not helpful to us. And obviously, also increases costs and create some risk. So, I think for us, the days of having locations for location sake are behind us and we're going to be very tactical on who we are and where we are them and we're going to try to reduce our costs and our risk by taking out those that aren't performing.

[Lawrence Angelilli:]

And, Mike, just to put into perspective this year, we're not really seeing any impact on revenue. We're not material from that – that really is taking out the underperformers. So you get uplift in your expenses that you don't really take our revenues.

[Mike Grondahl:]

Great. Is that geography can sort of spread out around the world?

[W. Alexander Holmes:]

Yes.

[Mike Grondahl:]

Okay.

[Lawrence Angelilli:]

There is no – there's no restrictions on which geography we're looking at.

[Mike Grondahl:]

Okay. Lastly, with the pressure from the compliance standards in Walmart to Walmart, how do we think about rest of the world or outside of the U.S. and how that piece of your business is doing?

[W. Alexander Holmes:]

Yeah. I know that's a good question. I think we had a very good quarter in Latin America. We had a reasonably good quarter across Europe. I'd say the areas where some of these compliance rules are hitting the hardest are in the U.S. and in Africa. And on Asia, it's a little bit of a mix. So there's some areas and Asia is obviously huge, but CIS has been good. And then, as you move into, kind of other markets, we've seen a little softness, but generally, generally okay. So the primary driver has really been kind of across the U.S. and parts of Africa. But even in those, there are good corridors, but just some of the larger impacts are, obviously, overweigh or outweigh the other.

[Mike Grondahl:]

Got it. Okay. Thanks, guys.

[W. Alexander Holmes:]

Thanks, Mike. I think, yeah, go ahead operator. I apologize.

[Operator:]

I was just going to turn it back to you. Please go ahead.

[W. Alexander Holmes:]

Okay. Great. Thank you. I apologize again for the disconnection and obviously for the disruption on the call. Hopefully it was clear enough. Before I end the call, I did want to let you know or remind you all in case you weren't aware that Suzanne Rosenberg who was our former Head of IR has recently left the company. She's taken a job in a different industry somewhere nearby. So we wish her well. Thus, anyway, the point is we're currently operating without a Head of Investor Relations. And so I just ask that you all be patient with us over the next few weeks. We are going to be as proactive as possible, but the instant hotline that was there before won't be around. So – anyway, again, thank you all for joining us today. I look forward to continue to report our progress to you and look forward to follow-up calls and talk to you soon. Thank you.

[Operator:]

And it does conclude today's conference. Again, thank you for your participation.