NewtekOne Inc (NEWT) 2009 Q4 法說會逐字稿

Good day and welcome to Newtek Business Services Incorporated Q4 2009 earnings conference call. At this time, all participants are in a listen-only mode. (Operator Instructions) I would now like to turn the conference over to your host today, Barry Sloane, President and CEO. Please begin, sir.

Good afternoon. Thank you , very much, and welcome to our fiscal year 2009 financial results conference call. I would like to suggest to all of you, if you're interested in following along, our Power Point presentation is in the Investor Relations section of our website at NewtekBusinessservices.com. I would not like to introduce Seth Cohen our Chief Financial Officer to introduce the Safe Harbor Statement.

Thank you Barry. Safe Harbor Statement. The statements in this slide presentation including statements regarding anticipated future financial performance, Newtek's beliefs, expectations, intentions or strategies for the future may be forward-looking statements and into the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the plans, intentions and expectations reflected in or suggested by the forward-looking statements.

Such risks and uncertainties include, among others intensified competition, operation problems and their impacts on revenues and profit margins, anticipated future business strategies and financial performance, anticipated future number of customers, business prospects, legislative developments and similar matters. Risk factors, cautionary statements and other conditions which could cause Newtek's actual results to differ from management's current expectations are contained in Newtek's filings with the Securities and Exchange Commission and available through www.SEC.gov. Also, we need to point out that our cash flow operate under a different set of rules in each of the eight jurisdictions and that these place varying requirements on the structure of our investments. In some cases, particularly in Louisiana or in certain situation in New York. We don't control the equity or management of the qualified business so that can't always be presented orally or in written presentation. Thank you.

Thank you, Seth. Okay. Let's go into the presentation, page 3. And go over 2009 financial highlights.

The company announced a 2009 post tax net loss of $429,000 versus a prior year loss of $10.5 million. Almost a $10 million swing in a positive direction. We also announced a 2009 pretax loss of $4 million versus guidance of $4.7 million lost to $5.1 million loss. So we beat guidance to the mid-point of the range by almost $1 million. Throughout 2009, we continued to focus on cost reduction measures and we reduced our corporate overhead expense by about $2 million. We reaffirmed our 2010 annual financial guidance with a range of $2.4 million pretax loss to $2.3 million pretax gain.

Looking at the mid-point we anticipate us coming in at break even which will be about a $4 million improvement over 2009. As we discussed previously. We had further further progress in our CAPCO business as our Wisconsin and Louisiana CAPCO notes matured. Their revenue trends in EPP and webhosting continue to grow in 2009 and exceeded 2008.

By comparisons we came in on the first date of platform as one of their fourth fastest growing ISO's in the country. Continuing on with 2009 financial highlights, we have recently announced the definitive agreement that is drafted to and has been agreed to with Capital One in principal to replace our GE commercial line of credit. This is just subject to SBA approval. The SBA lending business continues to go pretty well. We've had good government guaranteed pricing.

We've had excellent portfolio behavior. And a matter of fact, a little while ago, about an hour ago, the Senate passed HR bill 4213 which is a valuable bill for SBA lenders and for Newtek at large that basically would continue the 90% guarantee all the way through 12-31-2010. What's next is HR House bill 4213 would now go back to the House for consideration and along with the industry trade association, NAGEL, we're hopeful that that will be completed and signed into law prior to the March 28th expiration of the 90% guarantee which was recently put into an extended stimulus program.

Looking at the agenda today, we going to focus on primary corporate initiatives and strategy, financial results snapshots, developments and payment processing and webhosting. Looking towards various initiatives in hosting EPP and e-commerce, talk about the small business finance initiatives, focus on marketing. Go over a full financial review from Seth Cohen our CFO and 2010 outlook.

Moving forward to slide seven of the PowerPoint, when we look at our strategy and mission. Basically, Newtek is in the business of dealing with small, medium sized business market place. And what we offer our small, medium sized business client's is an opportunity to reduce their expenses, grow their revenue and reduce their risk. As many of you seem to become more and more aware. Newtek is positioning itself as the small business authority. A provider of business services and financial products to the small or medium sized business market. We do this through four core product offerings. Our goal this year, is to continue to cross sell and cross market the database by becoming an authority in each of the business segments.

As you look at Newtek, we's like you to think of it in developing its brand awareness. Such as Walmart has developed its brand for America Shops and Amazon.com which has developed its brand for shopping on line. People go to those institutions because they know they're going to be able to acquire products, services and effectively, they really are selling other people was stuff.

We look forward to small businesses coming to Newtek as the small business authority to buy our core products, service and offerings but also to get information on everything that is important to small business owners. Health issues, tax issues, what ever it might be. We know small business.

Looking at 2009 financial results as we previously reported, $429,000 net loss for 2009, a significant improvement over '08. I would like to add that if you look at the pretax loss of $4 million we had depreciation and amortization and noncash expense of about $5.8 million in 2009 so that you can see that the Company despite the fact that it reported a net gap loss is generating positive cash flow.

When you look at the significant break down on slide nine, the electronic payment processing segment was up 10% in revenue, hosting up about 4%, small business finance slightly down 1%.

When you look at the company's cash position and factor in an important asset called broker receivables, it pretty much was flat year-over-year. The issue with regarding broker receivables is when you're selling SBA loans at the end of the year, the government guarantees takes about 10 days to settle. So once that broker receivable comes back in and pays off as the government guarantees is liquidated for the market, we view it as similar to cash but obviously not identical to cash. So we wanted to deliver to the market a cash per share of $0.54. And if you put the broker receivable in there it would be approximately $0.72.

Also if you look at the operating statement on a GAAP basis, $3.1 million of net cash was provided by operating activities in 2009 versus negative $9.5 million of net cash using operating activities of 2008. A significant improvement. Focusing on the electronic payment processing segment. As we said, revenues were up over 10%. EBITDA margins declined slightly from 11.2% to 8.8%. We do anticipate significant margin improvement going forward into calendar year 2010. A lot of that is based upon cost reductions that we have had with various providers and suppliers as well as what we think is a better price elastistic market going forward in 2010.

We have seen a good trend with respect to merchant attrition beginning to slow as many of the small businesses have taken their pain over that last two years. Obviously the pain of processing business has a significant cash flowing business with a lot of operating leverage. And 2009 our EBITA came in at $6.1 million which is light for the higher end of the guidance that we had previously given. Our EPP segment does not have any debt. With an EPP segment, as we discussed previously, e-commerce is the most single most important corporate initiative particularly when it comes to driving result in EPP. Looking at the hosting segment. Our revenue came up 4%, our pretax net income came up 18% 2009 versus 2008.

Obviously, the two markets both hosting and EPP, extremely challenging businesses given the slow down in the economy, particularly with respect to the small business. I'm proud of the fact that we came in with up numbers and continue to focus and grow our market share and grab market share from our competitors. We've got excess capacity of real estate and our data center are only about 60% used. Our EBITDA came in at about $6.6 million which was slightly below the lower bands of $6.7 million to $6.8 million.

Moving on to slide 13. We talked about web hosting and EPP focus with a blend with respect to e-commerce. We view ourselves as one stop shop. Where you can come to Newtek and get a Newtek gateway, a Newtek hosting plan, Newtek merchant processing and a Newtek shopping cart. Everything you need in one place with respect to booking and binding and customer service issues.

We recently launched NEWT Pay and NEWT Pay Pro. We're very positive in these two particular products. We are excited about them. We believe that we have positioned this product versus Pay Pal. We have been very well received by merchants as a superior alternative to Pay Pal. We believe we are the better alternative for e-commerce merchants as a one stop shop for gateway, shopping cart, web design and payment processing.

Clearly not easy to go up against successful product that E Pay now owns such as Pay Pal which is biggest in this market but we're simply convinced that our product is the best value and will provide our small business clients with a superior alternative and shareholders with improved results. When you look at ay and NEWT Pay Pro, our pricing is better, we basically move money into client's accounts within two days versus five days. Our customer service is better.

Unless you are processing $1 million of payments a month, you can't get customer service individual on the phone. You must go through Pay Pal's website.

With Newtek, you get a US based citizen that can speak either English or Spanish 24/7 to help you out with any issues that you may have. Moving over to SBA lending, we talked about lending being a very important component of what we are doing. Obviously we've taken a contrarian position historically in lending and we believe it has paid off. With the focus from the administration, offering a 90% government guarantee up from 75% with reduced competition.

We are really doing a very nice job with -- in this particular market segment. We funded about $16.6 million in loans in 2009, mostly all of which came in, in Q4. We also began boarding loans for our FDIC contracts and other parties. That financial information should start to throw through our balance sheet and income statement in 2010. We take a look at slide 15 and you'll look at the economics of a 90% versus 75% government guarantee.

You can see the business is very compelling at 75%. Extraordinarily compelling at 90%. As we move forward in the small finance segment. We will have announcements with respect to activities of sub and nonperforming portfolios. SBA servicing and nonservicing contracts. We've had a terrific lending infrastructure that we plan on leveraging. As we discussed earlier, the agreement that we had on Capital One to take out GE subject to SBA approval, should reduce some of the uncertainty in the market that we have financing issues financing our existing book of SBA loans.

We also anticipate becoming a Standard and Poor's rated commercial servicer within the next few months. . We have applied, we have filled out an application, we are waiting for S&P to give us a final decision on this. However, if we do become a commercial sevicer it will allow us to do rated secured ovations as well as participate in other forms of commercial servicing away from just SBA government guaranteed seven day servicing.

We have had a very good year. If you look at growth and revenue of 7% at the holding company on a consolidated basis and our ability to reduce cost. Cost reduction equated to approximately $4.5 million in cash savings in 2009.

We plan to continue to review all segments to recognize addition cost reductions in 2010. Some of that will come from real estate and some of that will also come as did historically in 2009 from reduced salaries and benefits expense by approximately $3.5 million dollars in '09 versus '08.

As we've announced previously, our Brownsville facility which we view as a Newtek processing center is doing very well. We've got some of our better talented people obviously in Wisconsin, Arizona, West Hempstead, our New York City location and as well in Brownsville. We have begun to push the out bound initiatives and we're starting to increase the size of the referrals, the quality of the referrals and the closes that are coming in from our cross marketing and cross selling efforts. We look at the growth strategy going forward, where do we derive our growth from in a market and an economy that tends to be difficult.

Further emphasis on cross selling and cross marketing into the customer base which is currently what we are now doing. Continuing to grow the alliance channels as outsourcing of business services is very important for banks and credit unions. As you are well aware, we have announced previously an outbound campaign with direct focus on small businesses. Can be found as we have done advertising on WFIN and we're also looking at various television campaigns as well. Reduction of our CAPCO activities and cost and we're hopeful that we'll be able to decertify additional CAPCO's going forward. Were in 2009 we were able to decertify Wisconsin. We are hopeful that we'll be able to get to the 100% mark in more than two other CAPCO's going forward and reduce the cost there. With small amounts of leverage on our balance sheet, as acquisitions come up within a footprint we will seek to take advantage of that going forward. I wouldn't say that is going to be current activity with respect to merchant processing or hosting.

But we are going to look at this going forward as we think these market segments have become attractive. And we believe the economy in the future, not in the near future but in the future, will have a tendency to rebound. Lastly, we have recently hired the Reubenstein firm for public relations and we have gotten some pretty good press or publicity as we have been interviewed for the Wall Street Journal both print and radio. We've benn on Fox Business News and we believe that our success in getting our name out for public relations campaign will be very helpful and beneficial to the overall business.

I would like to move forward to slide number 22. Talking about the marketing focus. When we look at Newtek, what makes us unique, it is clearly the messaging. It is our relationship with the customer.

How we talked about how a Newtek customer or client or small business owner can look toward Newtek to increase sales, to reduce expenses and reduce risks. As a small business authority, we've got competency in each of the areas and we have AVP's and VP's that stand ready to help any business that's looking to accomplish these three primary goals. With respect to increasing sales, we can do that through providing capital and financing. We can do it through search engine optimization products as well as giving business owners e-commerce websites even to refreshen an old website or give them a new website.

Pretty much every one of our products is very cost effective and tends to reduce the expenses from a product that is provided by the servicer. And in the area as reduced risk, issues such as insurance coverage, making sure clients have the right property and casualty coverage. PESA compliance issues and going forward we plan on launching new and exciting products such as insured webhosting and insured merchant services.

Stay tuned. We are very excited about these opportunities as we are with NEWTPay and NEWT Pay Pro,.

Moving to slide number 24. Newtek university. We had a discussion about discussing our education effort and focus on this particular call. A lot of people have asked me why is it that you believe you will be successful this cross marketing and cross selling when others have failed. Clearly one of the reasons is just to eyeball the products and services under one umbrella in a coordinated function and working on one system with one goal and one initiative. The other reason why I believe we will be successful this is through education. We plan on making a significant investment in educating the employees of Newtek. Effectively when we look at our stakeholders, shareholders and creditors, and employees making a significant investment in employees is extremely important to us.

Keys to being able to cross sell is improved product knowledge at the individual level employee or associate level within Newtek. Providing consistent information delivered across the entire enterprise. Coaching and continuous reinforcement and working with our employees on a daily, weekly and monthly basis.

Most importantly, risk management oversight and measurement of our goals and objectives. We want it to be an exceptional cross seller. Our employees need to make regular offers. Lots of offers. Do it with frequency and convection. Doing it at work and and doing it away from work.

We need to make sure that all of customers in the marketplace are aware that for a small business owner, we can grow their sales, cut their costs and minimize their risk. The missing piece that we historically found. And think that other organizations have found is the ability to educate and train your employees that are delivering that message to your customer every single day. Within the EPP division we speak to 3,000 customers in a given month that call into our call center. In our webhosting division, that number is actually higher. And some months it upwards of 4,000 to 5,000. Those are tremendous opportunities after you've solved customer service issues, to be able to deliver a message to our customers and we can help them in the three key core aspects of their business.

As one company, we need to be consistent and accountable for the results. We need to give our employees the tools they need to execute on the objectives. A Newtek University will offer each employee a base level of product knowledge.

We plan on launching Newtek University internally within Newtek on March 15th. Our division heads will be acting as the SME to other division heads. Strategic market expert. We plan on paying our employees an incentive to successfully complete all the modules and pass exams. Modules will be broken down by product type. Payroll to workman's comp as practices for cross selling, EPP, design, commerce, lending and insurance.

The back up to the module will be selling and marketing techniques that help increase awareness and to get clients conversational in terms of how we can help them with their business. And the third segment within a given module it is the test. We want to instill product knowledge in our employees and associates and product knowledge will breed confidence. This is the missing piece. That is what will drive results.

We want our employees to make sure they can find the need of our customer and the opportunities are out there. We believe that a top down format is critical. In order for the training to be effective, it needs to be understood and reinforced on a daily and consistent way by all executive and managers in each office. In Phoenix, Bob [Shishon] will be delivering most of the training and education. Wisconsin it will be Derek [Decoy]. In Brownsville it will be Brian [Flax] and Larry Paul. In New York, it will be Peter Downs. On completion of each module there will be a test for every employee to take.

2010 is going to be our year. We are the small business developer. The role of marketing is to leverage Newtek's unique market position and capabilities and explore and implement strategic marketing product service and pricing initiatives. When you look at our mission statement, we want to be known as the small business authority to independent business owners across the globe.

We want to make sure that we can make offers of multiple products into many of our customers. We've increased the awareness and make offers to existing and potential clients. We look at three primary distribution channels, historically the alliance relationship has been terrific for Newtek. It's worked out extremely well.

One of the products that we plan on rolling out is what we refer to as ONBA which is open new business account. We actually have a waiting list of financial institutions that have lined up to be able to offer our ONBA product. Effectively, we're giving a free website for business owners for working with us.

If you go to slide 43, you will get a glimpse of that. We actually have many major institutions that are launching this and press releases will come out this shortly.

I would like to draw your introduce your attention to slide number 44. We talk about directive business which is obviously different than our alliance channel. We plan on doing a lot of radio broadcast and television broadcast. One segment in the market that we go after we refer to as DDR, designers, developers and resellers. We plan on going after that market place with our superior NEWT Pay and NEWT Pay Pro products.

Our Newtek ecommerce initiative, we are offering a free website. And giving resellers the opportunity to earn more commission if they resell our products to third parties. Through radio and television we also plan on going after the individual business owner by offering things such as Newtek's site center and NEWT Pay, NEWT Pay Pro and NEWT Pay Partners. Lastly, I'd like to focus briefly on financials before I turn the program over to Seth Cohen, when you look at our 2010 segment guidance going forward on a consolidated basis. Taking a look at our pretax net of negative $2.4 million to $2.3 million with the mid point being about a break even. That will be a significant improvement over $4 million loss that we achieved in 2009. And when you go to the next slide on page 46, I think this sums it up.

You can see that the annual pretax loss trend in the company is trending in a very, very good direction. I think this is based upon the fact that the company's focus, agenda, market plan and strategy is coming into its stride. We look forward to generating significant revenues, further cost reductions in 2010 and hopefully exceeding the forecast that we have here. I'd now like to turn the financial review over to Seth Cohen, our CFO.

Thank you, Barry. Thank you, Barry. I will now review our full year 2009 results. For year ending December 31, 2009, we recorded a pretax loss of $4 million as compared to a pretax loss of $13.1 million one year ago. We had a net loss of $429,000 or $0.01 per share in 2009 compared to net loss of $10.5 million or $0.29 per share in 2008. Reduction net loss benefited from improvements in operations as well as the attribution of losses to noncontrolling interest under new accounting rules which became effective in 2009.

In addition, based on current and future estimates, the company recorded an additional tax benefit in the release of a portion of it's tax valuation allowance. Revenue increased by $6.8 million or 6.9%, $205.7 million compared to prior year. This is primarily attributable to the growth in our electronic payment processing and webhosting segments.

Please turn to slide 50. We began the year with $16.9 million of unrestricted cash and cash equivalents and ended December 31, 2009 with $12.6 million a decrease of $4.3 million. For the 12 month ended December 31, 2009, we used cash on hand $30.1 million of net cash provided by operating activities and $3.4 million of net cash provided by investing activities primarily to reduce notes payable $9.7 million principally consisting of our lenders line of credit from GE. From $26 million to $16.3 million We also ended the year with a brokerage receivable and traded by not settled end of sales of guaranteed portions of SBA 7A loans to $6.4 million which converted to cash in early January. I would like to now review the performance by segments.

So, if you could turn your attention to slide 51 and the Power Point presentation, you will see the comparison of our full year 2009 results versus the full year of 2008. Electronic payment processing segment revenue increased by $6.3 million or 10% to $69.7 million in 2009.

Primarily due to organic revenue growth and our combination of growth in our merchant accounts and in increase in process volume per merchant. Pretax income remained virtually flat at $4.3 million for 2009 compared to 2008. This is principally due to the lower margin of revenue less electronic payment processing costs. Additional revenue is offset by greater processing cost including increased third party residual payments. This is partially offset by an overall reduction in costs other than electronic payment processing costs. Primarily depreciation and amortization for between years. Webhosting segment revenue increased by $770,000 or 4% in 2009 to $18.9 million from $18.1 million in 2008.

The increase is due to a combination of improved revenue received per plan and organic growth in virtual instances. Hosted dedicated servers and shared websites decreased period over period. Tax income increased 18% or $590,000 to $3.9 million for 2009 and $3.3 million in 2008. Improvement and profitability primarily resulted from the decrease in depreciation amortization, increases in other expenses offset some of that.

Small business finance segment revenues for 2009 decreased by $45,000. In 2008, or 1% to $7.3 million and primarily to a decrease of $1.1 million in interest income. Reflecting a decline in the prime rate upon which are loans interest rates are based as well as the size of our performing loan portfolio between periods. Offset by $1.2 million increase in premium earned from the sale of guaranteed portions.

2009 segment results reflect that the lender effectively ceased new loan origination for the first three quarters of the year, a good benefit from the 90% guarantee and firm secondary market pricing in the fourth quarter. Pretax laws decreased 63% or $3.9 million to a loss of $2.3 million for 2009. $3.9 million in year-over-year expense reductions including a $1.4 million decrease in salaries and benefits. $622,000 decrease in interest expense and $221,000 decrease in other general administrative costs primarily contributed to the improvement.

For 2009 the pretax loss in the CAPCO segment decreased to $3.7 million, a 49% decrease compared to $7.3 million in 2008. Reduction loss primarily reflects reduced management fee expense year-over-year. As well as $471,000 in returned insurance premiums on CAPCO policies that expired. For 2009, other segment improved $1.6 million to a pretax loss of $368,000 which compared to pretax loss of $2 million in 2008. Reduction loss primarily reflects reduction salaries and benefit expense of $947,000 year-over-year. As well as reduction in professional fees and other general administrative costs and $1 million recovery of investment previously written off.

In 2009, corporate activities which generates revenue primarily from management fee from the CAPCO segment, recorded revenue of $3.2 million a 45% decrease from $5.8 million one year ago. Decreases primarily due to the reduced management fees. Management fees are expected to continue to decline in the future with CAPCO insured and utilizer cash. Our efforts to reduce cost resulted in a $2 million decrease in total expenses compared to 2008. Corporate salaries and benefits decreased $1.7 million. However, as a rule the decrease in management fees, the corporate segment increased pretax loss $5.9 million compared to a loss of $5.3 million in 2008.

Finally, please turn to slide 53 which reflects that we are reaffirming our previously issued guidance for 2010. We are forecasting our range of consolidated revenues of $110.2 million to $115.8 million and a range of consolidated pretax net income from potential pretax loss of $2.4 million so potential pretax income of $2.3 million. Ranging of our forecast reflects to some degree, uncertainty regarding the effects a new accounting standard concerns the sale of financial assets may have on our financial statement.

The new standard may defer our ability to recognize premium income earned on the sale of guaranteed portions in the first quarter of 2010 and thereby reduce premium income for the year. I would now like to turn it back to Barry.

Thank you very much. Operator will take questions now.

Thank you, ladies and gentlemen, if you have a question at this time simply press star and then one on the touchdown telephone. (Operator Instructions) We will pause for a moment while the list is being compiled. One moment. Our first question comes from Keith Zorbak with National Securities.

Hi Barry. Last quarter, you went ahead and issued a $0.02 per share dividend. You said on the conference call that you would wind up deciding on any more dividends on a quarter by quarter basis. Just wanted to see if you at think at some point we might have another dividend coming.

Keith, I think the answer to that question is we were very happy to issue the dividend in the fourth quarter of of 2009. I should also state that that was viewed as a distribution. Seth, do I have that right?

That's right.

That was viewed as a distribution so not technically as a dividend which I believe is a nontaxable distribution. Our cash flows are coming in great. We have stated that we were cash flow positive last year. We anticipate being cash flow positive this year. As I meet with my board I review different objectives, different alternatives.

At this point, we have not done anything to address dividend. We'll probably have five board meetings between now and the end of the year. We have a lot of very interesting opportunities in the market place to utilize cash. And we want to be very judicious with respect to that cash. Particularly given that capital of near and dear. I think the dividend that we did in the fourth quarter of last year was very well received. We would like to do more of that but I can't comment on that at this point in time as to what we are going to do with respect to dividend policy.

Okay. All right. Thanks.

Thank you, Keith.

Our next question comes from Mark Silk with C. Silk and Sons.

Hey. How are you?

Good, Mark. How are you doing?

Doing well. Let's see, you answered a lot of my questions. But the news on the potential extended to the ends of the year on the 90% versus 75%, would you estimate a change of guidance if this does pass. Or are you kind of assumed that might happen?

Okay. Thank you, Mark. I think the extension of HR 4213, actually isn't talc related. It has to do with these part of the small business. I mean, it' called the Business Recovery Act. So, Obama's recovery act had the 90% guarantee in it so the issue of extending guarantee is not talc related and I wanted to make it clear.

We currently have our guidance situated with 90%. I will tell you, however. With the 90%, being extended to the end of the year. And if we finally put our Capital One line in position, our confidence level with respect to the financing of our business goes higher, that might incur more originations. But the current does include 90% guarantees.

Okay. So the Capital One comes into my next question. Is this Capital One just going to replace the GE and I know you have loans outstanding out there to different entities. Is this going to be more money so that you don't have to use your own capital for this?

No, it primarily will be a takeout of existing financing and that new originations will be financed primarily as capital.

Okay. And can you, the new pay sounds very exciting. It's nice to go against a 600-pound gorilla. What is your strategy? Obviously, the off rates you have are beneficial to people who are really do a lot of work with Pay Pal but what is your strategy to, you know, move people over and to get people interested?

It is a very simple message. And the message is, that we believe with a high degree of confidence like our customers did. Our product is superior. Our product is better and there are tons of merchants that take Pay Pal. And anybody as a merchant that takes Pay Pal account can open up a NEWT Pay account in a finger snap. The message is kept simple, and short both in the cross selling initiative by our employees if they're speaking to the thousands of customers every single month. And we promote these products in a simple manner.

I mean, when you look at advertising on a radio and TV, the messages have got to be short, sweet, simple, significant and attention getting. I think we will be very successful this rolling out Newt Pay and NEWT Pay Pro. If we don't do that, we will not be successful. So my message to you and all of our employees and managers that are listening in on this conference call is to get that message out. Beat the drum. It is a very simple message. We are better. We put the money in the account quicker and we service the customer.

So, how as investors are we going to be able to monitor the progress of NEWT Pay?

When you listen to our calls with 60 pages of information, no one can accuse us of not being transparent. I think that one of the issues of putting out so much information is people focus on various different items that is we have. I mean, I think what you really need to look at is, you know, the overall progress that we have made in hosting and EPP where a lot of our industry participants are negative for the year and we are still up. I don't see us breaking that out in the near term. Because I don't want to get myopically focused on this stuff. You know, when you do product development or growth in business, you know, everyone thinks it is linear. The fact of the matter is, it is not. It kind of moves along and all of a sudden it catches fire in hockey sticks, hopefully.

So, therefore, you know, I am not looking to put any additional pressure on Seth and myself. We're really just looking to put it on the operators. That's a joke, somewhat, to get that message out. Get it out on the marketing team. That message is so simple, it is so sweet and so good. We have to get that message pushed out. And, you know, it maybe something that we push out in the near future but right now, i think the importance of that is when you look at e-commerce, Pay Pal is a very important component of ecommerce. We're a major ecommerce player, that message has to get it out in the market. Thank you, Mark.

Again, ladies and gentlemen, if you have a question, you may simply press star then one on your touch-tone telephone. I am not showing any other questions at this time.

Okay. Thank you, operator. Thank you for attending the call. We appreciate it. See you at the end of the first quarter.

Everything all set, gentlemen.

Yes, all set.

All right. Thank you, ladies and gentlemen, thank you for your participation in today's conference. This does conclude the conference. You may now disconnect. Good day.