Earnings Call Transcript - BCO Q2 2024

Operator, Operator

Welcome to the Brink's Company's Second Quarter 2024 Earnings Call. This morning Brink's issued a press release detailing its second quarter 2024 results. The company also filed an 8-K that includes the release and the slides that will be used in today's call. The release and slides are available at the Investor Relations section of the company's website at investors.brinks.com. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the presentation. As a reminder, this conference is being recorded and will be available for replay. This call and the Q&A session will contain forward-looking statements. Actual results could differ materially from the projected or estimated results. Information regarding factors that could cause such differences are available in the footnotes of today's press release and in the company's most recent SEC filings. Information presented and discussed on this call is representative of today only. Brink's assumes no obligation to update any forward-looking statements. This call is copyrighted and may not be used without written permission from Brink's. I will now turn the conference over to your host, Jesse Jenkins, Vice President of Investor Relations. Mr. Jenkins you may begin.

Jesse Jenkins, Vice President of Investor Relations

Thanks and good morning. Joining me today are CEO, Mark Eubanks and CFO, Kurt McMacken. This morning Brink's reported second quarter 2024 results on a GAAP, non-GAAP and constant currency basis. Most of our comments today will be focused on our non-GAAP results, because we believe these results make it easier for investors to assess operating performance between periods. Reconciliations of non-GAAP results to their most comparable GAAP results are provided in the press release, the appendix of the presentation and in this morning's 8-K filing. I will now turn the call over to Brink's CEO, Mark Eubanks.

Mark Eubanks, CEO

Thanks, Jesse. Good morning and thank you for joining us. We'll start here on slide 3. We delivered total organic growth of 14%, accelerating sequentially over the first quarter. ATM Managed Services and Digital Retail Solutions or AMS DRS grew 26% organically and accelerated sequentially across all geographic segments. Cash and Valuables Management or CVM was up 10% organically with strong pricing discipline, offsetting continued cyclical market softness in our Global Services business. Adjusted EBITDA grew 16% to $226 million and margins expanded 200 basis points to 18%. Transformation initiatives led by North America drove labor and cost productivity throughout the P&L. Profit growth and the results of our share repurchase program drove a 31% increase in earnings per share to $1.67 per share. Free cash flow conversion remained strong with the flow-through of higher profits, margin expansion and working capital improvements. We continue to make meaningful progress executing against our strategy. DRS and AMS continue to grow as a percent of our total revenue, exceeding $1.1 billion of revenue on a trailing 12-month basis. Demand in these key business lines remained strong as evidenced by the 26% organic growth in the quarter. We continue to sell these innovative tech-enabled solutions to underserved and under-penetrated markets across all of our segments and are encouraged by building customer demand in our growing pipeline. Additionally, we see increased demand for our tech-enabled solutions from both existing CIT customers as well as new customers in both retail and banking verticals. This mix of higher margin revenue coupled with the benefits of the rollout of the Brink's business system drove our second consecutive quarter of mid-teens EBITDA growth as we progress towards our year-end targets. Notable is the continued margin expansion in North America, which improved 360 basis points year-over-year in Q2. This was the eighth consecutive quarter of at least 90 basis points of margin improvement in this segment. Our disciplined capital allocation framework is also creating value for shareholders. So far this year, we purchased 722,000 shares for just over $91 per share and have allocated $86 million in capital towards shareholder returns. This represents an increase of 133% over the first half of 2023. And as Kurt will discuss in a minute, we were able to increase liquidity, secure additional credit capacity and improve flexibility in our capital structure with a successful refinancing of our 2025 bonds. As part of this process, we also received a credit rating upgrade from S&P. With the strong first half completed, we remain on track to deliver low- to mid-teens organic revenue growth, double-digit EBITDA growth, earnings per share of between $7.30 and $8 and free cash flow between $415 million and $465 million. On to Slide 4. Starting on the left, organic growth of 14% was partially offset by an 11% impact from translational FX. Foreign currency degraded throughout the period and was a slight headwind in the quarter relative to our expectations and outlook from our earnings release back in May. Adjusted EBITDA grew $32 million year-over-year on a reported basis. As we discussed in the second quarter of 2023, there was a $12 million increase in security losses that impacted timing of expense recognition last year. Adjusting for the impact of this increase in the prior year, EBITDA margins increased 100 basis points slightly ahead of our full year expectations. Looking at revenue and EBITDA at the segment level all segments delivered accelerating organic growth in AMS and DRS, as we continue to add new customers across the globe. North America growth continued to accelerate, as we've now fully lapped the impact of prior year portfolio rationalization efforts we previously discussed. Latin America growth and margins continue to be impacted by currency fluctuations, mostly in Argentina, which are impacting our margins while our pricing efforts catch up to the large devaluation that occurred late last year. And finally, all segments are experiencing growth and margin headwinds related to continued cyclical market softness in our Global Services business. Earnings per share were up $0.40 driven by a 25% increase in net income and a 5% reduction in outstanding shares or 2.2 million total as well as the previously mentioned prior year security loss. Trailing 12-month free cash flow was down 7% versus the prior year. The decline was driven almost entirely by the seasonal timing of working capital primarily related to DSO on accounts receivable, as we lap a particularly strong prior year comparison. As we've already seen in July, this timing-related impact is expected to unwind over the back half of the year and we remain confident that we're on track to deliver our full year free cash flow targets. Turning now to Slide 5. I'd like to take a moment to highlight the progress we're making in North America. Since 2018, we've improved our EBITDA margins by 610 basis points and expect to continue the upward trajectory over the balance of 2024. Operationally, the team is focused on advancing our lean maturity by utilizing structured problem-solving, increasing the use of standard work and leveraging best practices across our footprint to streamline processes on everyday activities. A few areas where we've made progress recently include the money processing centers and routing and scheduling of our logistics network. In money processing, we've changed the layout of our facilities to maximize production and have rolled out standardized workflows in all of our branches. We're making technology investments in cash processing automation equipment to further automate processes and procedures. We're also investing to improve our IT systems, which allow us to use larger data sets and real-time information to improve route density and efficiency. While these activities began in North America, we've already started to scale some of these best practices globally and will continue to drive change in future periods. These process improvements are not going unnoticed by our customers. We continue to hear positive feedback about the improvements we're making in our execution and the increased visibility of funds throughout the cash value stream. We've also seen a corresponding improvement in safety-related incidents and preventable collisions in North America that should lead to further cost avoidance moving forward. We're encouraged by the success we've seen so far, but we continue to see an opportunity for future improvements in our business and we look forward to sharing that progress with you as we move forward. Turning now to Slide 6. I'll discuss the revenue by customer offering. Starting with Cash and Valuables Management CVM, our Q2 organic growth of 10% was a consecutive quarter of double-digit organic growth. Growth was driven by both volume increases and strong pricing above inflation, offset by conversion efforts as we've shifted customers to higher-margin DRS and AMS offerings and the continued market softness in our Global Services business that we mentioned across all segments. Despite the revenue mix on margins from our global services revenue, we drove productivity in the business as we continue to globally scale our OpEx initiatives through the Brink's business system, delivering record second quarter operating profit, EBITDA and earnings per share. We had a strong quarter of growth in DRS, delivering the fastest organic growth rate in the last six quarters. As we explained in prior quarters, sometimes in DRS, we see revenue growth that's derived from the sale of equipment at the start of certain customer relationships. We remain committed to sharing these fluctuations with investors in order to help explain trends both the headwinds and the tailwinds. In the second quarter, equipment sales contributed approximately an $8 million benefit in our Europe segment as we added a new large grocery store customer to our network. After adjusting for this benefit, AMS/DRS organic growth was 23% and DRS organic growth accelerated across all segments, with our value proposition continuing to resonate with customers. With several large customer wins late in the second quarter, we entered Q3 with a healthy backlog of orders that provides support for our ongoing outlook. AMS delivered sequential growth acceleration over Q1 with newly installed ATMs at retail locations driving increased transaction volumes in North America. We continue to improve our capabilities and visibility with potential customers in the AMS markets. We are engaged in discussions with many potential partners across the globe, as we educate retail and banking customers on the benefits of cost savings, extension of network useful life and the improved performance that come with the move to Brink's. I remain encouraged by the level of activity and the interest we're generating as we continue to work a large global pipeline of opportunities in both financial institutions and retail customers. In total, AMS/DRS grew to 22% of our trailing 12-month revenue and were up a combined 26% organically in Q2. We expect to continue double-digit organic growth in these offerings over the full year and are now targeting an increase as a percentage of the revenue towards the high end of our original 22% to 23% range. We remain in the early innings of our transition to AMS and DRS and I'm confident in our ability to continue to grow these global offerings above our base business for the next several years. Overall, organic revenue growth was in line with our expectations for the quarter and we achieved double-digit EBITDA growth as we continue to transform into a more consistent recurring revenue business. We are driving profitable organic growth in all lines of our business and are well positioned for the back half of the year and beyond. On Slide 7, you can see our organic growth and adjusted EBITDA performance over time. Historically, Brink's has been resilient in times of market disturbances. We have a broad distribution of customers both geographically and by end markets that provide stability to our organic growth profile. Our services are required to securely enable commerce, regardless of the broader economic volatility or, as we saw in the quarter, global IT systems outages. Our profitability is even more resilient. The large portion of our cost structure is variable in nature, which enables us to protect profit margins in times of changing volumes in the business. You can see in the chart that EBITDA margins were only down 10 basis points in 2020, despite the 7% organic revenue decline over the same period. While no business is completely immune from challenging economic cycles, we're confident that we can continue to drive improvements in the business in any cycle. We have a bright future here at Brink's, and I look forward to meeting the challenges in front of us head-on. And with that, I'll turn it over to Kurt, before I return with some closing thoughts before we open up the lines for Q&A.

Kurt McMaken, CFO

Thanks, Mark and good morning, everyone. Starting on Slide 8. $167 million of organic revenue increase represents 14% growth over the prior year. $100 million, or about 60% of the growth came from Cash and Valuables Management, with the remainder coming from AMS and DRS. As Mark mentioned, the US dollar strengthened over the second quarter and we ended the period with an 11% translational foreign exchange headwind. Through the first half of the year, we've had a $30 million revenue headwind against our original full year constant currency guidance. Total revenue growth of $37 million produced $32 million of adjusted EBITDA. EBITDA growth was impacted by restructuring activities in Latin America and Europe as we opportunistically right-size operations in certain countries. As Mark mentioned earlier, second quarter EBITDA growth was aided by the lapping of a $12 million increase in security losses from the prior year, primarily related to one large event in our BGS business. Normalizing for this $12 million, $37 million of revenue generated $20 million of EBITDA in the period for a 54% incremental margin. In total, adjusted EBITDA margins increased 200 basis points or normalized 100 basis points, driven by the realization of productivity, improved revenue mix and disciplined pricing. On Slide 9, I'll walk you from operating profit to adjusted EBITDA. Starting on the left, interest expense was up $6 million year-over-year to $57 million. The increase is related to higher interest rates and slightly higher debt from growth in provisional capital for our DRS customers. Tax expenses were $31 million in the quarter, a $7 million increase in the other category, primarily related to higher interest income on cash balances. Income from continuing operations was up 25% to $75 million. Through the effectiveness of our share repurchase program, our diluted share count was down 2.2 million shares or 5% year-over-year to $45.1 million. In total, record second quarter EPS was up 31% to $1.67 per share. Turning to the rest of the year, we expect to see a slight uptick in the quarterly interest expense run rate, as debt for provisional credit increases due to the strong growth we've delivered in DRS. We're forecasting a tax rate of approximately 28% in line with the second quarter, and we expect stock-based compensation to be roughly flat to 2023. In total, EBITDA was up $32 million to $226 million with margins that expanded 200 basis points to 18%. Before I get to the capital allocation framework, I thought it would be helpful to briefly discuss the refinancing we completed in the quarter on slide 10. The leverage-neutral transaction allowed us to eliminate the near-term maturity on our 2025 bonds while extending and diversifying our future maturities. As you can see in the maturity chart, we successfully refinanced our 2025 bonds with a new five-year bond maturing in 2029 at a rate of 6.5%. Concurrently, we were able to issue a new $400 million eight-year bond at 6.75% maturing in 2032, using the proceeds to pay down an existing balance on our revolving credit facility. The net result of the transaction increased our liquidity while having only a marginal effect on 2024 interest expense. With the completion of the transaction, S&P raised our corporate family credit rating to BB+. I'm pleased with the execution of the refinancing. We've maintained a strong capital structure with significant financial flexibility, ample liquidity and diversified maturity dates. Looking forward, we have the opportunity to continue to ladder our maturities and we'll look to be opportunistic when the market allows us the opportunity. Moving to slide 11. Our capital allocation framework and priorities remain unchanged. For the full year, we expect to generate between $415 million and $465 million in free cash flow with conversion from adjusted EBITDA of between 42% and 50% based on our guidance ranges. Compared to the prior year, we pulled forward some CapEx spend into the first half of the year to drive in-year operational improvements and purchase tech-enabled devices for planned AMS and DRS deployments in the third quarter. Working capital timing is following normal seasonal patterns at this time of the year. DSO continues to improve with a two-day reduction over the prior quarter and a five-day reduction over the same quarter last year. Moving to uses of cash. First, we continue to make investments in our operations to enable sustainable profitable growth. This includes investments in the North American cash processing and routing initiatives that Mark discussed, and investments in the Brink's business system that will help us scale these processes globally. These investments are largely OpEx-related and are managed in our broader profitability guidance. Second, with the completion of attractive refinancing in the quarter, we remain within our targeted leverage range at 2.9 times net debt-to-adjusted EBITDA. Remaining within the range increases flexibility to return capital to shareholders and complete accretive acquisitions. Third, we have more than doubled shareholder returns in the first half of the year. We returned $86 million year-to-date, including $66 million through our share repurchase program. We ended the period down 2.2 million shares or 5% compared to this time last year. The $434 million in remaining capacity in our program through the end of 2025, we plan to remain active as we increase free cash flow over the balance of the year. And finally, on the M&A side, we continue to target opportunities that have a strong strategic fit, attractive returns and align with our current leverage targets and capital allocation framework. We remain disciplined in our approach to capital allocation and believe our priorities will continue to drive shareholder value into the future. On slide 12, you can see our affirmed 2024 guidance. We expect total revenue growth to be in the mid-single digits. Full-year organic growth is expected in the low to mid-teens, offset by translational FX, primarily in Argentina. As a reminder, outside of Argentina, our FX guidance utilizes rates as of the end of the quarter and does not attempt to predict future movement in currencies. Given the strengthening of the U.S. dollar over the second quarter, if rates were to continue at June 30 levels, we would trend slightly below the midpoint of our revenue range due entirely to currency movements. Adjusted EBITDA is expected between $935 million and $985 million, representing double-digit growth over the prior year. Margins are expected to increase 80 basis points at the midpoint of the range. We expect free cash flow conversion from adjusted EBITDA of approximately 46% at the midpoint. EPS is still expected to be between $7.30 and $8 per share and contemplates an acceleration of our share repurchase program in the second half of the year. And with that, I'll turn it back over to Mark for some closing comments.

Mark Eubanks, CEO

Thanks, Kurt. In mid-June, we had our global leadership meeting with our top 150 leaders. We all came together during the week to discuss the potential of our strategy and how we begin to move Brink's forward as a company. Leaving the event, we aligned on the unique value creation opportunity that we have in front of us as we execute in the coming quarters and years. I want to thank our leadership team and our employees worldwide for their hard work to get us to this point. I'm encouraged about the future together, as we continue to transform the business by focusing on our four strategic pillars: growth in customer loyalty, innovation, operational excellence and our people and talent. I'm confident continued progress on the pillars of our strategy will position us to drive meaningful, consistent shareholder value for years to come. Operator, please open the line for questions.

Operator, Operator

We will now begin the question-and-answer session. The first question comes from George Tong with Goldman Sachs. Please go ahead.

George Tong, Analyst

Hi. Thanks. Good morning.

Mark Eubanks, CEO

Good morning, George.

George Tong, Analyst

You saw significant AMS and DRS organic growth of 26% in the quarter, which was still strong at 23%, even if you exclude the equipment sales benefit. Can you talk more about broader customer traction and receptivity you're seeing within AMS and DRS? And how sustainable current growth rates are?

Mark Eubanks, CEO

Yes, thank you, George. We had a strong quarter, which is a reflection of our teams not only executing well during the quarter but also developing a longer-term pipeline that has allowed us to reach this point. The 26% growth was slightly offset by around $8 million in equipment sales, but we're still seeing strong growth around 20% that we believe can continue into the foreseeable future. Across the regions, the growth was broad-based. In North America, we saw acceleration, particularly coming out of the fourth quarter with installations and pent-up demand, which continued into Q2 with solid progress. Similarly, in AMS in North America, we observed a reacceleration in our independent ATM network deployments. In Latin America, we experienced good growth, especially in Brazil, where we are focusing more on AMS than traditional CIT, and in many segments, we are only offering DRS. This trend is reflected in our numbers, showing growth not only in Brazil but also in Mexico and other Latin American regions. However, our Global Services business was a bit soft this quarter. Despite this, we've previously noted that it is a good business with solid margins and limited seasonality, primarily driven by financial end markets. We anticipate some recovery in the latter half of the year, although it did impact organic growth in the first quarter. Regarding Europe and other areas, Europe remains one of our most penetrated AMS/DRS markets, and we continue to see solid advancements. We highlighted a significant grocery store chain deployment signed in Q2, which we will execute in Q3. We’ve also undertaken some restructuring in Latin America, which affected our numbers but did not prevent progress in DRS/AMS growth and core productivity. Compared to our expectations for the quarter, AMS/DRS performed better than anticipated, while CVM posed some challenges. The BGS was weak, and we also faced impacts from the transition of CIT and retail customers to AMS and DRS. Additionally, we encountered more foreign exchange headwinds than expected, especially in June with the weakening of the Brazilian real and the Mexican peso. Argentina performed in line with our expectations.

George Tong, Analyst

Got it. That's very helpful color. Sticking with AMS and DRS, could you directionally parse out the growth in terms of which of the two grew stronger? Where was the growth really led by? And how much of the growth came from conversions of legacy traditional CIT services and Cash and Valuables Management versus new business wins of non-existing customers?

Mark Eubanks, CEO

Sure, I'll provide a general overview. I don’t have detailed segment breakdowns, but traditionally, we see the new business split into roughly one-third unvended customers, one-third conversions from our AMS/DRS, and one-third competitive wins. These competitive wins refer to new customers who were previously served by other DRS or CIT providers. So, we generally view it as one-third from each category. In the last quarter, we experienced strong growth, particularly in North America, and both AMS and DRS are showing balanced growth globally, with neither significantly outpacing the other. Additionally, our distribution between AMS and DRS is not exactly even; DRS is slightly larger, but it’s not as skewed as 60-40. It sits somewhere between a 50-50 and 60-40 split, with DRS currently ahead, and this trend continues to evolve at a consistent pace.

George Tong, Analyst

Got it. Very helpful. Thank you.

Mark Eubanks, CEO

Great. Thanks, George.

Operator, Operator

The next question is from Tim Mulrooney with William Blair. Please go ahead.

Tim Mulrooney, Analyst

Kurt, Mark good morning.

Mark Eubanks, CEO

Hey, Tim. Good morning. Welcome to the call. Glad to have you onboard.

Kurt McMaken, CFO

Hi, Tim.

Tim Mulrooney, Analyst

Glad to be here. Thank you very much. I have a couple of questions this morning. We noticed some nice improvements in North America's organic growth in the second quarter. I'm curious about how to think about the organic growth run rate as we approach the second half of the year. Is what we observed in the second quarter a good indicator for the upcoming months, or do you anticipate further growth as we move forward?

Mark Eubanks, CEO

Yes, Tim. We discussed about a year ago that the portfolio rationalization we executed in Q2 of last year has had some lingering effects this quarter. That presented some challenges for us. However, looking at the progression from Q4 last year to Q1 and now Q2, we anticipate an additional improvement as we approach Q3 and Q4. We expect to maintain a mid-single-digit growth rate as our exit rate for the year.

Tim Mulrooney, Analyst

Yes. That's exactly what I was wondering, Mark, that lapping the portfolio rationalization there was a little bit more there. So, thank you.

Mark Eubanks, CEO

Yes, Q3 will be our first full clean quarter on that. The underlying factor here is the global services business in the North America segment, which has been a bit soft. This is a significant business for us, but it's reflected in the CVM numbers.

Tim Mulrooney, Analyst

Got it. Okay. Thank you. And then shifting gears here from North America down to Latin America, I mean, it just looks like that FX headwind spiked quite a bit in Latin America. And you're able to get pricing offset most of that. But can you just like stepping back can you just help us understand a bit better how you're approaching this inflationary issue if there is an expectation for this elevated headwind to continue through the year? And any detail on how the Latin America segment is performing outside of these highly inflationary areas like Argentina?

Mark Eubanks, CEO

Sure, I'll address the situation in Argentina first. Argentina is largely performing as we expected for the year and hasn't significantly hindered us compared to our current position and outlook for the remainder of the year. We've experienced some margin compression due to catching up with the steep devaluation that happened at the end of last year. However, from a revenue standpoint, things look mostly fine. Our pricing strategy remains in place, and we believe we can maintain our approach going forward. The challenge we faced in the second quarter came from the Mexican peso and the Brazilian real due to an election in those regions. While they aren't considered highly inflationary markets, these are important and profitable businesses for us. We encountered some headwinds that we needed to navigate in the first half. Looking ahead, we anticipate that, based on current rates, revenue headwinds from those currencies could range between $50 million to $75 million. This isn't really an issue specific to Argentina. Our focus is on how we manage the business moving forward, whether that involves managing uncontrollable costs or enhancing productivity as we have been doing. We also undertook some restructuring efforts in the first half, particularly in Q2, which were related to margins in Latin America. Without that restructuring, we would have seen significant growth in Q2. While that restructuring is reflected in our numbers, we believe it was a necessary investment for the future to better align our operations in those markets. Kurt, do you have anything else to add?

Kurt McMaken, CFO

Tim, I would like to add that this was also a factor. We indicated that we faced about a $30 million challenge in the first half of the year, but we managed to enhance productivity and mix to improve profitability. We successfully addressed many of those challenges from the foreign exchange perspective. Additionally, I want to emphasize what Mark mentioned regarding the second half and how we plan to focus on other areas to counteract those challenges if those rates were to persist.

Mark Eubanks, CEO

And one last thing, the tough thing for us, Tim, obviously, we don't prognosticate on FX. I think this color is more about sort of current state at the end of the quarter. I mean, I looked this morning, the peso actually has strengthened this morning about 1.5%. So we've not traditionally seen the Mexican peso be volatile. And so obviously, the election down there in the second quarter was part of that. But also, frankly, it's really Central Bank interest rate policy. And so as the regimes are moving back towards cutting or not cutting, I think this is something we'll continue to watch and be fluid as we go through it.

Kurt McMaken, CFO

And organically, we're on track.

Tim Mulrooney, Analyst

Understood. Okay. Thanks very much and great quarter guys.

Mark Eubanks, CEO

Yeah. Thanks, Tim. You're welcome again.

Operator, Operator

The next question is from Tobey Sommer with Truist Securities. Please go ahead.

Jack Wilson, Analyst

Yeah. Hey, good morning, guys. This is Jack Wilson on for Toby. Maybe just to start out, can we really sort of maybe dig into sort of the long-term business mix and sort of how you see that developing with sort of AMS and DRS growing so quickly?

Mark Eubanks, CEO

Good morning, Jack. At the beginning of the year, we discussed expectations for growth rates in AMS/DRS ranging from the high teens to 20% for this year and likely for the coming years. We believe we can maintain that growth rate. As we progress, we'll see a mix of smaller and larger numbers. We're experiencing acceleration, and while large customers can be unpredictable, they do have a significant impact on our quarterly results. We still see 20% as a reasonable estimate for organic growth. If we project that over the next few years, it’s feasible to reach 30% penetration of our total portfolio within two to four years. We don't see any structural barriers to continued growth, especially considering the conversion potential in our portfolio and the considerable opportunity in the unvended space, particularly in DRS, as well as the trend of more banks globally outsourcing their networks to enhance productivity and efficiency.

Jack Wilson, Analyst

Okay. Great color there. And then just on the capital allocation front, so in the same vein, are there any sort of opportunities you see in the AMS/DRS space to sort of grow inorganically or to sort of add new technologies to the portfolio?

Kurt McMaken, CFO

Yes, Jack, this is Kurt. We have a solid pipeline of opportunities in AMS/DRS, and as we consider capital allocation, we look for attractive acquisitions that can advance our strategy. This is an ongoing assessment for us. When evaluating acquisitions, there are several criteria they must meet to make sense for our overall capital allocation. We also ensure that any potential acquisition aligns with our capital allocation philosophy. It must make strong strategic sense, and we constantly explore available opportunities.

Mark Eubanks, CEO

Let me clarify that we have previously discussed our positive view on our footprint and portfolio. We operate in a wide geography across 52 countries and over 100 locations. Any significant mergers and acquisitions we consider would be closely aligned with AMS and DRS, similar to our past acquisitions like PAI or NoteMachine in the UK. Recently, we have made a few small acquisitions in ATM networks, and our focus remains on opportunities in the hardware/software technology space related to DRS or AMS. The goal is to enhance our value proposition for customers, leveraging our existing network and customer base to provide greater value, whether through cost productivity or improved ATM network reliability. We continue to explore the outsourcing of bank infrastructure that makes use of our established network.

Jack Wilson, Analyst

Sounds good. Thanks. I’ll turn it over.

Mark Eubanks, CEO

Great.

Operator, Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Mark Eubanks for any closing remarks.

Mark Eubanks, CEO

Thank you all for joining us today. We appreciate all your support and look forward to speaking to you all soon. Thanks and have a great day.

Operator, Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.