Currency Exchange International, Corp.

Good morning, ladies and gentlemen, and welcome to the Currency Exchange International 2024 Q4 and Cisco Year-End Financial Results Conference call. At this time, note that all participant lines are in a listen-only mode. Following the presentation, we will conduct a -and-answer session. And if at any time during this call you require immediate assistance, please press star zero for the operator. Also note that this call is being recorded on January 23, 2025. And I would like to turn the conference over to Bill Metoulos, Investor Relations. Please go ahead, sir.

Thank you, Sylvie. Good morning, everyone. Welcome to the Currency Exchange International Conference call to discuss the financial results for the 2024 fourth quarter and fiscal year-end. Thanks for joining us. With us today are President and CEO Randolph Pina and Group CFO Gerhard Barnard. Gerhard will provide an overview of CXI's financial results and his latest perspective on the company's operations. Randolph will then provide his commentary on CXI's strategic initiatives, sales efforts, and business activity, 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 the 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 statement and MD&A. Please note that this conference call will include forward-looking information, which is based on a number of assumptions and can actually result that 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 Gerhard. Gerhard, please go ahead.

Thank you, Bo, and thank you everyone for joining today's call. These results are presented in U.S. dollars. My overview of the company CXI will also incorporate the results of our wholly-owned subsidiary, Exchange Bank of Canada. The company continues to invest in our people through in-house training, mentorship programs, and coaching initiatives. CXI and EBC combined have 298 full-time and 92 part-time employees as at October 31, 2024, a decrease from roughly 410 a year ago as our technology platforms continue to remain a strategic focus and their continued enhancement and additional system implementations are creating planned operational efficiencies. Cariba, our treasury management system, and Alisa, AML-compliant software, are operational. Our IT team continues to leverage the power of cloud computing to enhance integration capabilities, improve scalability, performance, and resilience. These initiatives and investments, among others, support the more efficient future growth of the company. Let's look at the consolidated performance for the three months ended October 31, 2024 compared to the previous three months ending October 31, 2023. But before we go into details, I would like to note that the company measures and evaluates its performance using a number of financial metrics and measures, some of which do not have standardized meanings under general accepted accounting principles or GAAP and may not be comparable to other companies. We call these measures non-GAAP financial measures and or adjusted results. The company's management believes that these measures are more reflective of its operating results and provides a better understanding of management's perspective on the performance of the company. These measures enhance the comparability of our financial performance for the current year and period with the corresponding year and previous period in 2023. Management included the full reconciliation of the key performance and non-GAAP financial measures on page 22 of the management discussion and analysis that was published on CEDAW. When we refer to reported results, we refer to the audited financial statements based on IFRS. When we refer to adjusted results, such as adjusted net income, we refer to performance non-GAAP measures. Now the company reported a net loss of 2.8 million for the current quarter compared to the reported net income of 2.3 million for the same period last year, primarily due to several non-recurring items in Canada in the current period. The adjusted net income based on non-GAAP measures grew by 477,000 or 21% to 2.78 million and it is comprised of an adjusted net income of 3.35 million for the United States and an adjusted net loss of roughly 570,000 in Canada. Now this compares to an adjusted net income of 2.3 million for the prior period, which comprised of an adjusted net income of 3.3 million in the United States and an adjusted net loss of 1.25 million in Canada. Importantly, adjusted EBITDA and adjusted EBITDA margin for the current period were 5.9 million or 26% compared to roughly 5.95 million or also 26%, indicating a flat EBITDA over the prior period. The company generated revenue of 23 million for the same period ended October 31, 2024, a 1% increase from the same period in the prior year, largely driven by growth in the payments and the -to-consumer banknotes product lines, in particular via the online FX platform in the United States. The growth in revenue was primarily due to growth in the payments product line of 704,000, followed by growth in -to-consumer business of 220,000, partially offset by a decline in the wholesale banknotes product line of 660,000. Revenue in Canada increased by roughly 550,000 or 14% over last year, while in the United States it declined by 285,000 or 2%. Operating expenses increased by 3.2 million or 19%, and it was impacted, as mentioned, by a number of non-recurring items in Canada at year-end, which will be discussed in more detail under the yearly review. Now, comparing the third quarter of 2024, revenue in the fourth quarter decreased by 944,000 or 4%, as demand for foreign currency decreased consistently with seasonality and the company's cyclical pattern. This quarterly decline is in line with the same periods of last year, when revenue decreased in the fourth quarter by roughly 800,000 or 4%. The top five currencies for this quarter were US dollar, euro, Canadian dollar, British pound sterling, and Mexican peso. The company's adjusted return on equity, ROE, for the current year was 12% compared to 14% for the prior year. The following is a highlight of the revenue by product line for the three months ended October 31, 2024, compared to the previous three months ending October 2023. Revenue in the bank notes product line decreased by 440,000 or 2%. Despite the strong customer consumer demand for foreign currencies during the year, volumes in the current quarter declined. Between August 24 and October 2024, approximately 228 million travelers passed through TSA checkpoints in the United States. That is 14 million or 6% more compared to the prior year. Direct to consumer bank notes revenue increased by 220,000 or 3%. As the company continued to capitalize on its market share through its diversified delivery channels that include the online FX platform, company owned branches, and agent relationships. Growth in the current quarter was primarily led by online FX revenue. With the company's recent expansion, the online FX platform can now serve 44 states, including the District of Columbia. Now with four additional states compared to the same time last year. Direct to consumer unit in the fourth quarter grew despite having two active company owned branches in Florida, slightly impacted by the two hurricanes, which forced closure for several days. Nonetheless, the company maintained revenue levels via its third main channel, agent relationships. As these relationships continue to drive revenue growth from the increased demand for travel currencies, in particular the euro currency during the current quarter. Business trading volumes based on direct to consumer bank notes revenue was about 123 million compared to 120 million for the quarter prior. Overall direct to consumer bank notes revenue remained a growing business with its diversified delivery channels. The company has successfully opened two new locations in the United States, one in the state of Massachusetts and one in Georgia during the current quarter and now operates a total of 40 company owned branches throughout the US. Direct to consumer revenue represented 34% of the total revenue of the current three month period compared to 33% of the prior period. Now let's look at wholesale bank notes revenue decreased by 660,000 or 6%. Business trading volumes for wholesale bank notes revenue was 1.88 billion compared to 2., closely 2.06 billion from the prior period as a result of reduced volumes for certain key customers in the United States whose volumes tend to be sporadic in nature. Whereas revenue from domestic and international financial institutions as well as MSBs or money service businesses remained flat relative to the prior year. In Canada also bank notes grew due to strong domestic demand despite being partially offset by declining international revenue due to the declining volumes from existing clients and lower than expected volumes from new customers. Overall the bank notes product line accounted for 47% of total revenue in the current three month period compared to 51% in the previous period. Revenue in the payments product line increased by about 700,000 or 20% and this is all for the three month period primarily driven by volume growth and increased activity in the United States and net gains from settlement timing differences in Canada. Business trading volumes based on payments revenue for the company were closely 2 billion dollars compared to 1.44 billion for the prior quarter. Payments revenue represented 19% of the total revenue compared to last period 16%. Now revenue by geographic location for the three month period is as follows. Revenue in the United States remained around the same level compared to last year with a slight decline in the fourth quarter as mentioned despite growth achieved in payments and direct to consumer bank notes product lines. There were volume driven declines from certain key customers in the bank notes product which drove the overall decline in the United States during the quarter. Payments growth of roughly 442,000 or 20% and bank notes direct to consumer remain strong with growth of 220,000 or 2%. The decline in wholesale bank notes of 946,000 or 11% led to a decline in revenue for the current quarter of roughly 300,000 dollars or 2%. Revenue in the United States accounted for 80% of the total revenue by geographic location in the quarter compared to 82% in the same period last year. Revenue in Canada increased by 14% in the fourth quarter compared to the same period last year in both payments and bank notes. Payments revenue when excluding the impact of net gains from settlement timing differences remained flat compared to the same period last year and in bank notes growth of 286,000 or 11% was driven by an increase in domestic revenue from both financial institutions and money services businesses as demand for travel currencies increased as mentioned in particular the euro and the Mexican peso. This growth was partially offset by a decline in transactional volumes of domestic FIs. Revenue in Canada represented 20% share of the total revenue by geographic location in the current three months period compared to 18% in the same period in 2023. Now the company believes that providing adjusted results enhances comparability with the prior year and this is especially true for expenses in the fourth quarter in EBC. As such the results for the fourth quarter were adjusted for the following non-recurring specific items in Canada totaling 5.6 million in the fourth quarter. The first one was an impairment loss of roughly 2.6 million related to the company's long-term assets in its wholly owned subsidiary Exchange Bank of Canada as the carrying amounts of long-term assets has been assessed to be lower than the recoverable amount based on estimated future cash flows. An administrative monetary penalty imposed on EBC of 1.17 million and related third-party regulatory compliance advisory costs of roughly 630,000 and a non-recurring tax charges of 1.2 million for Quebec compensation taxes and harmonized sales tax related to Canadian tax reporting. This was adjusted in the third quarter as mentioned. Now let's look at the year's results comparing 31st of October 2024 to the prior year. So these results are the yearly results as mentioned. The company reported net income of 2.5 million for the year ended October 31st 2024, 7.7 million or 76% lower than the prior year. This 2024 reported net income reflected 13.3 million net income in the United States and a net loss of 10.8 million in Canada. These year's results included several non-recurring items in Canada totaling 7.7 million and that's for the year. Excluding these items, adjusted net income remained flat compared to the prior year and adjusted diluted earnings per share or EPS was 3% higher at $1.56 compared to the prior year's $1.52. The company's revenue of 85.25 or 85.25 million was 4% higher than the prior year reflecting overall growth of which 7% was achieved in the United States while revenue in Canada was 6% lower than the prior year. Revenue in the United States represented 81%, previously 79%, while Canada represented 19%, previously 21%. The company's capital position remains robust and liquidity was strong with 79.4 million total equity and close to 74 million in net working capital as at October 31, 2024. Now let's review revenue by product lines for the year ended October 31, 2024 compared to the previous year. Direct to consumer bank notes grew by 1.35 million or 5% and wholesale bank notes had marginal growth of roughly a quarter of a million or 1%. Revenue from bank notes represented 81% of the total revenue compared to 83% in the prior year. Whereas payments increased by 12% in the current year driven by 2.5 million or 32% growth in partially offset by a decline in Canada's corporate payments of 835,000 or 13%. Revenue from payments represented 19% of total revenue in the current year compared to 17% in the previous year.

Revenue

by geographic location for the year comparing current 2024 to 2023. As mentioned, revenue in the United States grew 7%. Payments revenue had a significant 2.5 million or 32% growth, while bank notes growth in bank notes revenue was 1.8 million with direct to consumers making 1.35 million or 5% of the growth and wholesale bank notes growing by about half a million or 2%. As mentioned, the payments growth was mostly the result of the company's investment in integrations with core banking platforms that expanded the onboarding of new customers during the year in addition to increased activity from existing financial institution customers. Bank notes revenue growth including direct to consumer was largely driven by increased demand for both travel and investment currencies complemented by growth across several branch locations and through the company's proprietary online FX platform. Revenue in the United States accounted for 81% compared to 79% in the prior year. Revenue in Canada declined by 6% primarily due to reduced transactional volumes from certain key clients in the corporate payments business and lower transacted volumes in US dollars with international clients. While domestic bank notes, revenue remains relatively consistent compared to the prior year. Payments revenue declined by 835,000 or 13% while bank notes revenue declined by a quarter of a million or 2% compared to the prior year. As mentioned, revenue in Canada represented 19% compared to the previous 21%. Below is a summary of the annual adjusted numbers based on non-GAAP metrics. I would like to reiterate that the company believes that providing these adjusted results enhances comparability with the prior year's results. The reported results for the current year ended October 31, 2024 were adjusted for the following specific items totaling 7.7 million. Now these items have been mentioned in the quarterly reports but there's one that we added. So to reiterate again, we had the impairment loss of 2.6 million, we had the administrative monetary penalty imposed on EBC of 1.8 million dollars and related third party advisory cost of 728,000, the non-recurring tax charges and then in the yearly results, the reversal of a reserve for deferred tax assets, deferred tax asset benefit related to the unused EBC loss carry forwards of 1.43 million for the fiscal years prior to 2023 deemed to be unrecoverable. So that last one got added in the yearly results. Now reported operating expenses increased 10% for the year. During the year ended October 31, 2024, the company's operating expenses increased 10% compared to the prior year. Operating expenses grew faster than revenues 4% growth due to declining revenue and non-recurring items in Canada in the fourth quarter. Variable costs within operating expenses represented by postage, shipping, banking fee, sales commission, incentive compensation totalled 19.3 million compared to 21.2 in the prior year. This represents a 9% decrease from last year that was primarily driven by a significant decrease in postage and shipping expenses of roughly 2 million dollars as a result of the company's cost management initiatives as illustrated further below in the discussions. The ratio comparing total operating expenses to total revenue for the year was 82 compared to 77% in the prior year. However, when adjusting operating expenses for non-recurring items in Canada, as mentioned above, adjusted operating expenses grew 4% in line with revenue growth of 4%. The following is a summary of the main operating expenses trending items during the year. Losses and shortages typically represented shipment loss, shipments lost in transit that the company self-insures in addition to several other losses incurred in the normal course of business. In the prior year, the company had a write-off of non-recurring stale dated items while during the current quarter, the company accrued the remainder of the regulatory compliance charges. The company had accrued an initial provision of $613,000 in the third quarter before the final charges were confirmed and then accrued the difference of $1.17 million in the fourth quarter. Postage and shipping had a 16% decrease compared to last year despite the growth in back notes volume. This reflects the outcome of cost management initiatives as mentioned, implemented by the company in the second quarter of 2023. Stock-based compensation increased from the prior year primarily related to the share price movement. We saw the Mexican peso again being the largest driver of foreign exchange aging costs for the quarter. Income tax expense reflected the statutory tax rate adjusted for permanent items, R&D credits and other non-deductible differences, including as mentioned, the reversal of an allowance for deferred tax assets in Canada and the amount of $1.43 million. The amount reflects the reversal of several allowances for deferred tax assets as discussed. Let us review the balance sheet at year end. At 31st of October 2024, the company remained well capitalized at $79.5 million. The company had $5 million drawn on its lines of credit with $45.3 million available. This compares to roughly $15 million drawn a year ago and $35.7 million available. Interest expense declined in the current year due to results of a notable decline in the average borrowings as mentioned. The average outstanding borrowings by the company amounted to roughly $6.6 million during the current year compared to $13 million during the prior year, which led to a significant reduction in interest rates. The average interest rate on borrowings was .7% for the current period compared to .6% for the same period last year. Now on November 28, 2024, the Toronto Stock Exchange accepted the company's notice of intention to make a normal course issuer back, NCIB or share buyback as it stands, and an automated securities purchase plan to purchase for cancellation a maximum of 316,646 common shares of the company, representing 5% of the companies issued and outstanding common shares. Purchase under the NCIB commenced on December 2, 2024, and will terminate on December 1, 2025. For such earlier date in the event that the maximum number of shares sought in the NCIB has been repurchased. Under the previous bid, the company repurchased 149,070 common shares at a volume-weight average price of $25.3 Canadian dollars through the facilities of the TSX, as well as on alternative Canadian trading systems at prevailing market rates. Management believes that the underlying value of the group may not reflect the market price of its common shares from time to time, and that, at appropriate times, repurchasing its shares through the NCIB may represent good use of the group's resources, as such action can protect and enhance shareholder value when opportunities or volatility arise. Therefore, the Board of Directors has determined that the NCIB is in the best interest of the groups and its shareholders. On January 7, 2025, CXI announced the formation of a special committee of independent directors to consider a range of strategic options for its wholly-owned subsidiary, Exchange Bank of Canada. The strategic review is exploring and considering several different opportunities to maximize long-term value for shareholders and focus the company's resources towards its profitable US operations. The Board of Directors and Management are focused on assessing stakeholder interests and evaluating the optimal path forward for EBC on an orderly basis. Further announcements will be made. CXI emphasizes that there is no assurance the strategic review will result in any specific transaction. The company remains committed to ensuring minimal disruption to its customers and employees through this process. It is important to preserve the confidentiality necessary for this review. We are not providing any additional details. A public announcement will be made as the strategic review process progresses. Now, at this time, I would like to hand the call over to Randolph Finner, our CEO, for his perspective.

Thank you, Harard, and thank you all for the call. I appreciate your time. To begin with, I usually talk about Exchange Bank of Canada, but as you just heard in Harard's detailed presentation, the conclusion was there's not anything that I can really say except to confirm that the strategic committee is active. They have engaged in for financial, a well-known investment banking company here in Toronto, to guide us through this process, and the process is well underway. As you know, we are exploring several different options for Exchange Bank of Canada, but I confirm it is business as usual, ensuring that we continue to operate fully as we have always done here in Canada. We will update you as we know more information. Moving to CXI, as you've seen, the payment business is one of the top focuses of the CXI group. It is very well along on its integrations with additional systems. The most notable is the FedNow integration. CXI has a relationship with the Federal Reserve Bank in America, which is not a part of Exchange Bank of Canada's relationship with the Federal Reserve Bank of New York for cash. This is focused strictly on payments. What's most exciting and looking forward is great for our group, is that the FedNow relationship has us not processing actual cash transactions or payment transactions. Our connectivity with the Federal Reserve to what's called FedNow and our customer banks allows our banks to utilize in our automated fashion our software to do domestic payment processing. We do not move money. We are only a software provider to our financial institution customers, connecting them in an automated way to the Federal Reserve. We already have three clients on our pilot and our pipeline is quite full on this. This integration does allow us to have a full relationship with the US Bank and enables us to not only get income, you know, software as a service fee income for our software usage, but it also enables us to get extra income by providing international services like foreign which we do process as well as potential bank note activity. So that remains a top focus for CXI and our payment unit to continue to grow with financial institutions utilizing integrations such as this. Our core business, as you know, is bank notes. So this is not ever going to be forgotten for our group at bank note sales, both for financial institutions, select money service businesses, unique businesses, potentially cruise lines or other travel type companies, as well as our agent business. With our own company stores, we have selectively been adding locations because the key to a successful store besides having a good manager and staff is to get the right spot at the right price. So we are selective in our expansion on our retail stores as there's great locations, but many of them are too expensive and therefore we will continue to grow in our core markets of Florida, New York, California, Hawaii, and possibly some new select states that we see opportunity in. Our agent model is the most, is the biggest focus of our bank note unit. The partnership with good retailers utilizing their staff and their locations that they pay the rent enables a true -win-win situation for the retailer adding a new revenue source and an attraction to their core customers. Those customers who currently don't have the ability to get their currency exchange from their commonly used retailer, it provides a win-win for them. And for us, we have another location similar to our own company stores that allow us to have a service offering in places we currently don't have without the rent and payroll associated with us opening our own stores. We are working on a very large national agent relationship and I hope to be able to announce that partnership soon. Lastly, our online store. As you see, we're selectively going state by state ensuring there's a business case for the cost associated to be licensed in each state and ultimately we do have a goal to be licensed in all states, although we will not go into a state like Alaska until we have a business case showing the, you know, the investment relative to the rewards and when that is large enough, we will continue to grow. So again, our bank note business is a top focus while our diversification and payments and automation and integrations is key to our overall group's success. We have a focus on our capital and the return on capital deployed and this remains a top focus because not only cost control is important but ensuring revenues relative to their potential risks that are there and the costs associated to that, it remains a focus for our group. Lastly, while we have a lot going on both in the US and Canada, I want to confirm that the eye of CFO and CEO of our group remains also on creative potential transactions. We do still pursue, are pursuing a large bank note opportunity in the United States. While that is a very big transaction, hence it takes a lot of time, that is a focus of mine on a daily basis. We are also because of our core software focus as a group looking at a potential software transaction that would enhance our currency exchange offering, further strengthening our fintech focus. So that's all I have as the CEO for a high level report from me and I would like to open up the floor to questions as I imagine there are a few. So thank you again for your time and we look forward to answering your questions.

Thank you sir. Ladies and gentlemen, should you have any questions, please press star followed by 1 on your touchtone phone. You will then hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by 2. If you're using a speakerphone, please lift the handset first before pressing any keys. And out of consideration to other callers on the line today, we ask that you please limit yourself to one question and one follow up. Thank you. And your first question will be from Jim Byrne at Acumen. Please go ahead.

Good morning guys. We appreciate all the callers around some of the unusual items here in Canada. Maybe just talk about the expense efforts and cost controls that you implemented last year. Certainly looked like it took effect on postage and shipping and losses. Is there more room to come on some of those efforts for 2025?

I don't know if Herard wants to do it. He's more focused on the cost. But I can say at a high level, sorry Herard I'll just take one bit and then I'll turn it to you. At a high level we are always focused on improving our costs. One of the shipping measures that in the US was implemented is now been implemented in Canada and we have seen a reduction in the last few months that will help our continued focus profitability here as well in Canada. Go ahead Herard.

Thank you. Thanks for the question Jim. Yes, there is continued focus on expense management. As you saw, we are continuing to focus on shipping and postage, which is a major expense for us. We are reviewing various commission structures and compensation that we go through. We have renegotiated certain of our leases and it continues to be a top focus for us. Bank charges are under review at this point in time so we really take each one of those major items, review it, analyze it and see if we can renegotiate it.

Okay, that's great. Then maybe just on the IT spend, the implementation of a number of programs that you guys have been working on, where do we sit on that implementation and how does the spend look for 2025?

Thank you for that. I think it's very important to just reiterate how proud we are of our treasury team that implemented Garibah, of our compliance team that implemented the LSAR. Now that we have those systems in place, we can further manage our headcount. As you saw, we were roughly 409 people a year ago. We're closer to 390 at this point in time. Operational efficiencies are coming through these systems,

doing

additional and enhanced volumes with faster turnaround times. In 2025, as I mentioned, our IT team is focused on the migration into the web or that whole AWS and web services that we're working on as well as finishing one or two other larger system implementations.

And Jim, if I could add to that, what I think Harard was implying, it may not have been What I was saying earlier was that the Alessa project and the Garibah project, which was a lot of IT spend in the 24 year, have concluded. And so the NetSuite implementation, the Garibah implementation and the Alessa implementation have been completed. And so those costs will not be recurring. However, as I told you, we are focused on additional integrations and the one department our whole group that is at our board and I fully support growing the team is in our IT division. And we have some very strong people there. And we will continue to ensure that we are a fintech focused company utilizing technology, the cloud, AI, and enabling us to further strengthen our software stance on the foreign exchange market.

Okay, that's great. And if I could maybe just squeeze in one more on the vault operations. I know there had been talks about consolidating some of the vault operations down in the US. Maybe just an update there Randolph.

Yeah, so I'm very happy that our Louisville facility is processing the majority of our outbound orders. We still do maintain our Miami and LA facilities. Miami has been repositioned more as an inbound because we do get a lot of shipments that are naturally have always been going there. And but the automation in the Louisville facility is outbound. As we experienced this last week, this huge cold front that hit America actually crippled the Louisville facility for a day or two. And so having the two other facilities certainly was a nice relief to be able to not drop any packet, drop any orders, miss any transactions. So we are properly structured, but the actual cash usage of having three inventories has been reviewed and we are ideally going to improve the amount of cash in each facility. So to maximize return on the cash deployed.

OK, that's great. I'll pass the mic. Thanks. Thank you.

Next question will be from Peter Rebover at Artco Capital. Please go ahead.

Hey guys, how are you? Maybe I'll take the questions in the other direction and I just want to be clear, I'm not asking for guidance or anything like that. And I'm thinking through like, you know, not maybe next year, but the next three years. And obviously, I know you're thinking you're doing a candidate transaction and you've mentioned you're looking at some other transactions. So with that in mind, I'm curious if you could tell us some buckets of growth that you're seeing for your business in the next few years. I know this year was about roughly three to four percent growth overall with puts and takes. And I'm curious where you see, you know, increasing that growth in your, you know, bank notes, wholesale, retail, software, et cetera, with external internal growth. Would love to hear that.

Thank you. Yes, that's a very good question. And as I said in my quick intro here, we are continuing to have a growth in both our payments business. You've seen we had a significant growth in the 24 year. We expect that to continue because of our integrations to existing flows of payments that is going to be further enhanced because we have a strong team focused on enabling our software to be used as a service, which will allow this software income without us having the compliance and manual labor involved with moving the funds because our software in those situations are just enabling the connectivity of a smaller bank to the Federal Reserve utilizing our proven platform. So that will continue to fuel payment revenue growth at CXI. Our core business, as I said in my little brief update, what is our bank notes business? So we will continue to expand our store selectively. We have some marketing programs that we think are going to improve our profitability of our retail store, as well as Herard mentioned, we have been aggressive with our landlords to ensure that the price we pay is reasonable and that they don't keep charging more and more. And then lastly is our agents business. Again, I'm working on a large national client that could generate well over a million dollars on that one agent relationship, but because of the size and opportunities that exist with retailers across the United States, we see that as a continued focus. Our online store is continuing to be enhanced to allow for faster checkout and all of the little features that do improve sales. We even have a callback process for abandoned carts and so forth that is proving successful. And even our call center is ensuring that inbound calls actually crystallize into transactions by placing reservations at the stores and so forth. So we will be focused on both payment growth and banknote growth, which doesn't include any strategic accretive transaction that are being pursued by us in terms of an acquisition. And so that will enable us over the next three years to get back into double digit growth as we've always had for the last 10 years.

Maybe to complement that point, we have also now that we've got better visibility on all the various business lines, we've also realigned and increased our marketing spend to these focus areas that Randolph has mentioned.

OK, thanks. That's great. I mean, I have a tough follow up and I know you're going to wiff at this question, but I would really like to hear you call it. Like, look, Canada is a country like relative to the United States, just, you know, last 20 years economically has been left behind. I mean, looking at your buyback, you're severely limited by the Canadian Stock Exchange, you've clearly gotten a severe penalty from the banking regulatory thing. I mean, what are the reasoning to even in your 80 percent revenue company in the United States? Can you just I know you're making a review for the bank, but maybe this review should include your whole relationship with Canada. It sounds like this is really holding you back in a lot of areas. And I guess I would just like to hear your your thoughts on between the stock and the bank and, you know, your business in Canada, what you know, what your thoughts on reasoning for remaining there.

Again, the strategic review cannot be commented on. There are lots of different considerations being done by the board of directors, so I'd like to please part that. I do want to confirm the interest of our stock buyback as the largest shareholder of our group. I'm keen and I believe that our stock is undervalued and therefore is a good return for the capital deployed on the buyback. We do have restrictions because of the OSCE and the TSX, but we are allowed to do blocks. And so we are continuing to remain an active buyer of our stock. And I think that answered your questions or no?

No, I mean, I think my question is why? Like, I don't think it makes sense to be in Canada in general. I think you're really hurting yourself between this business and bank and the stock exchange. You know, I don't, that's what I'm asking. Like, why stick with Canada? It seems to be hurting you in almost every direction.

Again, the business that we do in Canada is under review. We, again, our default is we continue to run our bank as we have. As I said, we've been seeing improved profitability of the banks, putting aside this regulatory dispute, but as far as listing in the Toronto Stock Exchange, it's been a good market. Canada has been a good area for us, but NASDAQ is not ruled out. But right now we have a lot more important priorities than our stock exchange. If that's what you were talking about, exiting Canada's stock exchange. So we intend for the next year or so, for sure, to be a TSX listed company. Our business in Canada is being focused on so that it begins, you know, our investment will help our shareholding position.

Okay, well, I think you know how I feel. I think Canada in general was hurting, severely hurting you as a shareholder. And I would recommend exiting the country in almost every way you can. But I'll let somebody else take the questions.

Thank you, Peter, for your feedback.

Thanks, Peter.

Again, ladies and gentlemen, a reminder to please press star one if you do have any questions. And we also ask that you limit yourself to one question and one follow up. Thank you. Next question will be from Robert VanBors at Vanitoch Capital. Please go ahead.

Hey, good morning, guys. Thanks for taking the questions. I think Peter asked some of my questions, but I'm just curious specifically on the US payments business. And I just would like to understand how does EBC fit into the US payments business? Are those related or?

That is correct. No, no. The current relationship between EBC and CXI towards the US payment business is that CXI utilizes Exchange Bank of Canada as its primary payment rail. It's not the exclusive payment provider to CXI. And so that is an inter-company relationship. And therefore, CXI, this review is considering all of the benefits of EBC to CXI that may not be seen visibly. So while we see a cost of a loss of running the bank, we also see the benefit of getting inter-bank pricing. Because as a bank dealing with other banks, they get what's called inter-bank pricing as opposed to corporate pricing. And the group enjoys the benefit of having that preferred pricing model. Exchange Bank of Canada has really grown our overall group and has enabled our total volumes to increase, which we believe allows CXI to be able to stand on its own should that be a step it takes. However, right now, the biggest dependency on the US payment business is the fact that Exchange Bank is a primary processor of the foreign wires being sent.

Okay. Got it. That's helpful. And my second question, maybe this is more for Gerhard, but just on the HST, the tax item for EBC, my understanding is that is basically a catch up from previously not having paid the estimated tax for previous transactions. But I guess what I'm more interested in is does that mean that expenses will be higher going forward because now the new tax expenses would be higher because they were previously being misestimated? Is that correct?

That is a fair assumption, although it's an immaterial increase. Okay. There is some intercompany charges between CXI and EBC that needs to be self-assessed for HST purposes. And it is a it's definitely an immaterial dollar amount. Okay. Yes, it will be higher,

but. Oh, sorry.

Go ahead. It's a small amount.

And I guess just as a clarification to that Gerhard, do you know, are you allowed to tell us like how long of a catch up period was that? Was that a catch up for transactions that had occurred over like 10 years or last year?

I'm

just curious about that.

Yeah, it's normally CRA has various abilities to go black between three and six years. And that is all I would like to say on the matter.

Got it. Okay. That's fine. I'll pass it to the next person.

Thank you. And at this time, gentlemen, it appears we have no further questions. Please proceed.

Okay. Well, I thank all of you for your time on our calls this morning. If we can, we'd be happy to have a separate call. Should there be any specific question that we are able to answer? We'd be happy to do so. I am in Canada today and fully booked. I've received about five requests for a meeting today. I personally am not available today, but Gerhard may be. And we will be happy to field any additional calls should that be of interest. And we are able to answer them. So I thank you again for your support and appreciate your time.

Thank you very much. Enjoy the day.

Thank you. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we ask that you please disconnect your lines. Enjoy the rest of your day.