Mullen Automotive (MULN) 3 Apr 182017 Q4 Earnings call transcript

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Net Element 2017 Annual Financial Report and Business Update Conference Call.

During today’s presentation, all parties will be in a listen-only mode.

Following the presentation, the conference will be opened for questions. to may that are contain risks uncertainties. like management’s the subject I’d and remarks prepared forward-looking Instructions] remind during listeners call, to [Operator statements, which questions forward-looking response Management statements make additional to may your today. in Therefore, the Harbor statements Act in contained Reform under Private Litigation XXXX. for Securities forward-looking the of claims Company protection Safe with Actual results to discussed uncertainties more discussion detailed results the a risks in therefore, and and may today, differ the Company’s filings of from you we SEC. the refer the to include of X, assumes as Any as performance may change. XXXX, these future Company market projections by management update future Company’s estimates represented the in to today, April the no conditions projections as obligation and the and information The certain Investor call provided page. financial is the www.netelement.com recording during Relations on available at turn over like time, Oleg to would CEO. At this I the call to Firer, ahead go please Oleg,

this $XX.X an over year. of emphasis value-added business with of XX% Good American this in call to Transaction the increase compared like financial on an joining increased the were the small North revenues ended American listening of million morning, The organic Solutions our million, morning operational year everyone as is for you today’s during begin Net segment, to as increase accomplishments opportunity well growth demonstrated and Thank everyone. Revenues and North million segment $X.X I’d $XX.X to medium-sized for annual the million prior prior to net give of questions during organic our as those results prior XXXX call year. primarily fiscal our highlighting XX, $XX.X you for Transaction as ask growth discuss year. for continued to in increase by the in compared the net XX% due XXXX. offerings. revenues revenues XXXX merchants which to to Solutions XX% December segment session. Q&A in

over during segments Mobile a Transaction the year. the of XXXX, of $X.X prior International Online the XX% Solutions As Solutions Solutions consolidation a segment of revenues result million, and were for decrease

During organic free companies developments; institutional Deloitte’s affected Technology credit ranked continued Supported listing readers. point-of-sale continued merchants North of support Fast growing fastest have America with million blockchain-focused NASDAQ card mobile Irma compliance and requirements; on Florida’s XXXX, with and received $X.XX XXXX the ensured in we as XXX medium-sized by to investment small list; Hurricane one growth business

[ph] to We from us internationally, our several products both separate partnerships in to that and payment services completed have competition. United launch expand continued key States our acceptance value-added the and

the application payment expansion enabling platform, selected generation our routing of efficiency increase in to continued payment and continue that solutions and extensive opportunity acceptance and our greater enablement. intelligent all clients, competition segments, tools and value-added beyond. client differentiate ourselves of of next us will payments channels in digital we strong payment cross In market create of needs, as and client such to that Netevia, clients understanding in deepening our successful and margin, superior and product growth that new changing delivering of stakeholders, is provide value XXXX, ensure relations. all including acceptance We aim clients technologies results business sustainable and having in base strategy our our for the disruptive that for to our products for XXXX XXXX, continue to clients, their partner innovative a community, reach the markets, technology in achieve sales our key development improvement development We deep shareholders. developing by remains additional believe partners the potential research, to Going products of focus payment rapidly from launch new for distribution market, in development stickiness our retention, and for the creating on

launches product deepening new intelligence trials enhance advanced clients, and scale biometrics for partner includes hardware our to software, our point-of-sale of add of technologies, proposition, in that value mobile-based acceptance, will in and next-generation business extend and the payment the our payment to future continue around payment commence capabilities development will and emerging Internet technologies payment blockchain acceptance. Things in and enablement continue technologies which developments We

additional to During integrate and delivering relationships full XXXX, organic our we business also stronger plan to potential realize of growth with our the model technologies. by network delivering payments

we’ll or our investment opportunities and XXXX, distribution also acquisition keep deepen capabilities. During technological to

Financial New, who Jonathan, Jonathan financials. provide introduce proceed. will to on like Net Chief our comments Officer, I’d Now, Element’s

Oleg. you, Thank

walk Let’s results financial quarter. through the first for the

sheet of or as resultant to for year December million, loss per share our pleased going December balance a position to $XX.XX very at removed. $XX.X The compared concern have I’d of clean XX, a stockholders Element, $X to Net or to audit $X.XX million per Net $X.X million XXXX we’re million Element net the revenues, an an and of in for $X.X year-ended a to increase XXXX. and We opinion Eliminating loss or $X.XX First, compensation year-end in a to strong XXXX. guarantee, decrease to by non-GAAP share to have compared an expense, decrease due the stockholders say like amortization $X.X and with opinion XX, partially reported per non-GAAP value loss G&A. $X.XX per last stock XXXX and primarily adjusted this net reported year loss non-cash net we increase of PayOnline Inc. the adjusted share interest offset in million effects attributable of the depreciation, attributable share December to an or XX,

we Net $XX.X increase to in and year-ended XXXX, that with million primarily was million North value-added as non-GAAP for America the offset an XX, opposed as a that on December the Solutions the Transaction from reorganized for were offerings a GAAP group December again, year-ended due on $XX.X $X.X emphasis organic XXXX, the the in and XX, successfully. basis million to decrease growth loss. partially of International by decrease So, reduction revenues

of unit Online businesses Mobile our the there. one we of management ‘XX, consolidated Payment lot third and and into the During a changed fourth quarter and

much of compared as Gross running ended revenue stronger ended million to XX, operation the or internationally. $X.X the year XX, million a December net revenue So, or leaner XXXX net for for and XX.X% year December $X.X of was margin they’re XXXX. XX.X%

forward improve XXXX. XXXX proprietary operating slight at looking points a and margin; gross grow we funding, expenses our as decrease we to business in and margins full in speed we’re shift mix it’s North at day business shift Total margin, flat value-added had our reorganized due our primarily same and services, XX international value-added and in basis other services. So, to group POS December a in America were have American continues to million ahead. $XX.X through a North

cost but one-time expenses compensation, million primarily in payments exist transaction million that ‘XX. XXXX, and million increased depreciation that’s The bonus salaries, $X.X million of Again G&A expense. as CEO due last during compensation $X.X sales XXXX corporate interest North increased option expense compensation, and increases a and $X to $XXX,XXX compared versus year, stock did $XX.X not the were amortization, XXXX, executive million ‘XX contractor the were in million Non-cash and year. extent $X.X to non-cash ‘XX. salaries was bad in and $X.X For primarily existed debt Salaries, $X.X opposed grants costs increase were $XXX,XXX absence Solutions of to $X.X to and America to due salaries. incentives. employee Offsetting million for versus million gains that’s primarily due increase segment currency headcount to $X last general and Transaction and in lesser primarily and decreases administrative benefits million to in as an of and -- is lower due

million this last $X.X an year. Depreciation $X.X last was compared debt year. Our to year $X.X million amortization this $X.X million international charge-offs. was million bad improvement That due provision was year, to lower and

fully of and PayOnline we as merchant our for well and amortized have our during certain We amortized purchased of fully some portfolios costs that acquisition XXXX.

our better additional now depreciation lower other remarks. costs the see or that’s XXXX decrease $X.X to position. million amortization lower some to open last formal had Interest and year. just ended would I $X.X year, occurs. portfolio year from buy continue operator basically stronger and questions. for like call the will a We XX, we This million deals, was until financing the concludes expense to expense this ask for capital December we So,

first Our with Instructions] comes from Zacks Investment. question Lisa [Operator Thompson

there. Hi,

position, you’re as you’re a have this starting year great lot in you of So, cash.

was You’re portfolios any It strategy. you set I probably be year? long And differently the doing the in and wondering haven’t the at your bought year this you XX next this what months. the plan time. some least for of are aging as might far seems as What’s like

Hi.

great So, question. it’s a

resume before. starting at year this plan with acquisitions looking the we’re So, is portfolio off cash; the to that we did year we’re

agents. ability acquisition when remember, you these Unified If Portfolios portfolios our we to an acquire we from had launched

cash new a process those acquisitions, in on the forward increased with give basis. not agents only in a up We’re production of agents sign flow to negotiating the margins, go increase deal us for portfolio that’ll but also boost

Now in that we’ve resumed lining those process conversations afford we’re we the and it, can that up. of

to remember, our time. to focusing was program which as for -- sales base, margin will same at be agents existing value-added the and plan, on which which going us, client sales for increase resume increase the addition In into profitable that you was extremely we’re hopefully retention to the

So, -- up created. value-added services we a that line have good of we believe we we have

We’ll to hopefully be it, marketing an retention increase and as ability the have time margins Now base. to we’re been the same that we as are we and market have client those has been selling financially well adaptation. at has and the existing to going us of POS merchants. very launched terms products margins cheaper There new in before good for potential system, that is products which to

rollout through have we sales we to and -- system to So, independent channels. of the sales direct channels max do look

about plans talk I are over that’s international there? And the you assume you’ve could Where are I And consolidated; all you completed. what know operations? now?

So, what’s going forward? strategy the

Right.

consolidated and have business mobile So, online both we the business. an

product So, method to payments is now Mobile the online offering. Solutions

content down shut The capital providers. that advances intensive. the is the for we longer business no have capital We did

plan team. We focused the for have the is scale sales business. us to one centralized And

the to process business. are internationally international the the improvements growth -- be to XX to XX we next It’s agents in merchants integration scale We believe to see and in talking in partners going we of significant business. over will that larger months, and

have headcount Lisa, We there. significant also reduction,

to of cut on So, is XX%, and control. part rent footprint. big a of the XX% office team by the and new expense headcount, scale-back management of office decrease of real probably And that the expenses movement in focus story

Right.

shops, So, a exactly We we’d do. made than rather promised that focused team, multiple presences. the it a having we unit consolidated what single

great. right, All

margins to over there? upwards trend So, you expect

how Right. And it’s twofold the a to going system margins trend are on up.

to up to ways we the merchants, as of one That’s realize mature sign do gain. merchants need margin to First, it. the

right have believe which could take contribute now we we will is, significantly Another the improvement. which that significant volume that infrastructure margin more also have to we without any in than headcount

So, strong we internationally. have margins

what So, growth is and we those are the focused up driver in slightly. on the really rolling margins U.S.

real the of that’s that comment. focus So

product it, seen I Okay, here but sure into I use what good. payment that actually a to to have is you that of of is you’ve I the question that? blockchain you talk I been And how in Could physically your people know am really you fascinated do technology. that? haven’t implemented. know and at lot practical Can do a involved gotten about have everybody it integrate talk and about with. use does looking

Right.

will was we’re -- as year What platform. a integrating we will by that and to has decentralized Netevia of developers offer applications integrate able The application into to have to not So, phase. be Netevia in framework ecosystem. They decentralized the beginning development various these been would providers merge launched been yet. a all that that payments an called developed platform ecosystem. is launched our into They itself for our commercially the product in ecosystem centralized developers. the start

radars give system, more would decentralized operating ecosystem applications ultimately integrate application their other process ecosystem. that transaction of even including a and into them be developers The developers want because So, the those operating company, ecosystem blockchain companies access while providers as an our most our consumers development has will our been integrate new something and but to serve through is to we system simple I for will for we develop the reason merchants, any mentioned. innovators though around everybody’s to and into. system is And will in terms, as application like are applications stage on application will an our decentralized in why blockchain

the limit systems such, getting we look But Internet and decentralized dynamic are of way our definitely diligently as innovations one year. support technological systems is enable as change the going completely and all and to so are a I processing in a to statement, we’re not to biometrics and believe faster on innovative to on ledger, my track So than completed working And -- the something more going and mentioned is so to is are And and be opening on blockchain, just forth. this we other we traditional that’s Things and definitely for solutions secure. transactions it’s done. at which blockchain a

adding very are to platform disruptive the resources we on year. going once the marketplace. complete, And that we launched definitely expanding to we functionality So, which early it believe Netevia in product a be this it’s is

how any So, the is is or to benefit cost this there savings, customer the security just does work?

targeting merchants. merchants. consumer. we the get talk both, we’re and just consumers we’re targeting not to -- about savings Well, through consumers, We cost When security to

merchants products access implemented, to today. available gain this are them once will more foremost and that much first value-added to The

for So, are decentralized their that increase that with transactions applications, of gain view the the processes to applications centralized other and at marketplace. applications rewards to innovative access merchants applications could efficiencies we’ll way have and loyalty and beyond marketplace the and change the point sale they their a getting streamline

And issuing ecosystem be obviously the like consumers, the and the the able participate than transact transact they removing exist payment layers traditional lot faster a blockchain for of such. cheaper themselves, that today, because technologies will it’s be in ecosystem the using in will today cheaper. merchant blockchain to that token, are merchants the banks to consumers able the the For merchants same and will at

from merchants ultimately, said cheap down it’s it for and could using now, get all transactions So, a year blockchain. done, move very when to

investor. comes Our next private is [ph] question from David Daverden who

I you of Hi, update. a questions. for had couple guys, thank that

expecting One we sort to we’re a I we’re profitable. that of at get that this the be would It better profitability. just for feel seem that of And are why profitability. expecting was is and we things looking at to that. we’re I’m at doesn’t point, when trying close not is

And seems a pretty I I quarter a you be bonuses. It second need big job. like is The we’re profitable do some yet. in ride motivated had that your not company ride and just up. I that. long been a appreciate people. And all been same it is And for know stocks the to to about work time, as a it’s stockholders, going that’s do a was -- of great not time, bonuses, that the At again, long been we’ve giving and being for it’s

we control, like bit to would I’d doing people off about So, understand little cost laying about a internationally. talk

like little you the are doing bonuses and with that salaries, better Thank management, to I’d bit So, what about your to help -- cause. to own for you. understand a with guys stuff

you, Thank for David questions. those

to then too, and from step in side, profitability the on profit. go Oleg So, net you a loss can don’t net a

down whittling is quarter. that. what at our every successful doing net been we’re we’ve And actively So, loss

approach has and profitability. in moving given other and the of sustained of in But NASDAQ losses sequence Company to on size towards the that. being the past that continue that then So cost and and we’re to do things, the just we’re breakeven a into the going move

is of discretionary Board terms bonuses, compensation In at committee level. and there a the

So, there real increases today. has salaries where on fixed we for been of our things, no and side cost are executives that’s in dramatic

points like to to actually. I’d add both But

of in revenues our all nature. -- are revenues Our are recurring

and recurring. enterprise don’t that in an build want we -- recurring that as continue anymore, the decide fundamentals have that’s minute be is the to this So, to we package we revenue we it growing, and will be the nature that

and up, to the the have support we be what will an will and business to So, down that the will support sign mentioned, And accretive business now ultimately Jon to we infrastructure breakeven have and growth cash as that any which today. new we narrow losses profitability. reach

have On to the have compensation it in the stock a personally, contrary, which to, taken been and agreed I past As management been to taking on management compensation, I to team, stock. when of of have any of myself team. compensation I’ll my compensation of have lieu so. I and do speak Company, we I increased I member the portion acquired continue for entire not has the I’ll relates in and behalf joined speak

in I definitely money long-term I Company believer put So, mouth where a and the my am is. do my

that Is do your I before financed understand offset. like feel about should more what feel be No, or think And that -- that. for you another -- do after for on based forward-looking, that need I that, Yes. like next let’s was good is follow-up. year have year you financing do or that financing you mentioning you Lisa that? she you’re you thinks you your might -- do have say one the about pretty

At opportunities, a year, present over a the acquisitions whatever, at current themselves state, we those. better run at take rate, we good or look for but are if current for opportunities certainly will the other or financing

us But believe to of we so this past in and look in the that It’s looking conversation worked the for for mentioned acquired do the of past And for policy. something revenue will we’re that’s this question, is we we the and to when the my point, some us not we set. at continue what’s will Lisa, we we capital year. are your definitely point worked like in with streams

Okay, okay.

are So, your United statements majority your the your I’d that States in also I with take at guess, really you of from point and focusing revenues this growth?

has always It been.

day-to-day a the spending are in merchants in acquisition internationally, opportunistic we internationally, costs funding U.S.; are we very in to not any growth really money basis. bring where on the actively States are of United Majority Yes. and we

have internationally. We not so done

we’re organic generation. that cash has anything through been So, internationally doing

internationally time. a long for not have any We capital put

this to back questions call like remarks. time. I to would the am closing showing turn the Instructions] [Operator no I And management for at further

Again, follow-up Jon want Thank everyone. thank do any participating you everyone hesitate Please or to not our questions. to on today. myself I for call with contact

that Financial and Ladies Thank Conference gentlemen, Results you Call. does Net your participation. XXXX for conclude Annual Element and Business the Update

now may You disconnect.