Currency Exchange International, Corp.

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Currency Exchange International 2023 Q1 Financial Results Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. A reminder that this call is being recorded today, Thursday, March the 16th, 2023. I would now like to turn the conference over to Bill Matulis, Investor Relations Manager with CXI. Please go ahead, sir.

Thank you, Michelle. Good morning, everyone. Welcome to the Currency Exchange International Conference call to discuss the financial results for the first quarter of the 2023 fiscal year. Thanks for joining us. With us today are President and CEO Randolph Pinna, Group Chief Financial Officer Gerhard Barnard, and Chief Financial Officer of Exchange Bank of Canada, Alan Stratton. Alan will begin with his brief comments on EBC's first quarter performance, followed by Gerhard will provide an overview of CXI's financial results and his latest perspectives on the company's operations. Randolph will then provide his commentary on CXI's strategic initiatives, sales efforts, and business activities, after which we'll open it up for your questions. Today's conference call is open to shareholders, prospective shareholders, members of the investment community, including media. For those of you who may happen to leave our call before its conclusion, please be advised that this conference call will be recorded and then uploaded to CXI's Investor Relations website page. along with the financial statements in MD&A. Please note that this conference call will include forward-looking information, which is based on a number of assumptions, and actual results could differ materially. Please refer to our financial statements and MD&A reports for more information about the factors that could cause these different results and the assumptions that we have made. With that, I'll turn the call over to Alan. Alan, please go ahead.

Thank you, Bill, and good morning, everyone. It's my pleasure to provide you with a brief update on Exchange Bank of Canada's financial performance in Q1. The bank generated revenue of $4.9 million in Q1 2023, a 50% increase over Q1 2022. In the bank's functional currency, the Canadian dollar revenue in Q1 was $6.6 million versus $4.5 million in Q1 2022. I'll be referring to the bank's results in Canadian dollars herein to avoid the confusion that can be caused by the impact of foreign currency translation. The payment segment represented 34% of revenue in Q1 and grew by 83% over the prior year. That growth was generated primarily through new clients acquired over the past year. Total volumes were up by 70% from $840 million to $1.4 billion. The bank generated 82% of its revenue from spot FX trades in Q1, up from 74% in the prior year. Turning over to the bank note segment, the bank generated 4.4 million Canadian in revenue, an increase of 34% over the prior year. Domestic clients accounted for 59% of our revenue, an increase of 48% over the prior year. And this was largely driven by the improvement in demand for international travel as the prior year was impacted by the Omicron variant of the COVID-19 virus. The top three currencies in demand were the U.S. dollar, Mexican peso, and the euro. Banknote revenue from international clients increased 19% year over year. While ABC completed its first trade with a new client during the first quarter, most of the increase was with existing clients that saw fit to increase their volumes with us. The U.S. dollar accounts for 98% of the bank's revenue with international clients. The bank's operating leverage was flat in Q1 relative to the prior year at 14%. Fixed and semi-fixed operating expenses increased by 26%, primarily driven by increased personnel costs as the bank's employee population grew from 58 at the end of Q1 2022 to 82 at the end of Q1 2023. Variable costs grew by 57%, driven by shipping and third-party processing fees. As a result of the continued impact of inflation on these costs, we have recently made some adjustments to pricing with some clients and are currently reviewing it with others. The bank generated a net income margin of 5%, which was an increase from 3.5% in the prior year. Overall, we are pleased with the bank's performance in the quarter and its progress against its strategic plans. I'll now turn it over to Gerard Bernard to discuss the group's financial performance. Gerard?