Good afternoon and welcome to the Usio Earnings Conference Call for the Fourth Quarter Ended December 31st, 2019. All participants will be in listen-only mode. After today’s presentation, there will be an opportunity to ask questions.

[Operator Instructions] Participants of this call are advised that the audio of this conference call is being broadcast live over the Internet and is also being recorded for playback purposes. A replay will available shortly after the end of call through April 13th, 2020. I would now like to turn the conference over to Joe Hassett, Investor Relations.

Please go ahead, sir..

Thanks Haile and thank you everyone for participating today. Welcome to Usio’s fourth quarter and financial year end 2019 financial results conference call. The earnings release, which Usio issued earlier this afternoon, is available on the company’s Investor Relations website at usio.com/investor under News.

On the call today are Louis Hoch, President and CEO; Vaden Landers, EVP and Chief Revenue Officer; Tom Jewell, Senior Vice President and Chief Financial Officer; and Houston Frost, Senior Vice President of Prepaid Services. Management will provide prepared remarks and then we will open the call to your questions.

Before we begin, please remember that comments on today’s call include forward-looking statements. Forward-looking statements can be identified by the use of such words as estimate, anticipate, expect, believe, intend, may, will, should, seek, approximate, or plan or the negative of these words, and other similar words and phrases.

Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts, and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements, including risks related to the COVID-19 pandemic and its effect on the economy, the realization and the opportunities from the Singular acquisition; management of the company’s growth; the loss of key resellers; relationships with the Automated Clearinghouse network, bank sponsors, third-party card processing providers, and merchants; the volatility of stock price, the loss of key personnel, growing competition in the electronic commerce market, the security of the company’s software, hardware and information; compliance with complex federal, state and local laws and regulations; and other risks detailed in the company’s filings with the SEC.

These forward-looking statements speak only as of the date of this conference call and should not be relied upon as predictions of future events.

Usio expressly disclaims any obligations or undertaking to update or revise any forward-looking statements made today to reflect any change in Usio’s expectations with regard thereto or any other changes in the events, conditions, or circumstances on which any such statement is based, except as required by law.

Please refer to the company’s SEC filings on its Investor Relations website for additional information. With that, I would now like to turn the call over to Louis.

Louis?.

Thank you, Joe and welcome everyone. 2019 was another record year for Usio, our third consecutive year of record revenues and transaction processing volumes.

Our continued success reflects our strategy to capitalize on the growing demand for a comprehensive electronics payment solution that provides access to issuing, acquiring, and ACH enablement technologies, all from Usio. And we continue to invest in our strategy, a technology company that facilitates payments.

It was also historic year for Usio in other ways. In July, we celebrate the introduction of our new corporate name of Usio by ringing the NASDAQ closing bell in Times Square in New York. This year, we also opened a new office in Austin, Texas to capitalize on the region's rich pool of technology talent.

Some of that talent, as well as other experienced and accomplished individuals in San Antonio and Nashville from another number of other fields have joined Usio to give us the depth and the breadth of resources needed to accelerate our growth. We feel really good about what we accomplished in 2019.

We grew our total processing dollar volume by 5% to a record $3.54 billion and in our two largest businesses; ACH volume was up 8% and credit card dollar volume was up 12%. Prepaid load volume increased by 74% and transaction volume increased by 91%, both off a somewhat lower base.

This drove a 13% increase in total revenue for the year, which is top -- at the top end of our 12% to 13% range we forecasted last quarter. And we ended the year on a very strong note.

Revenue growth accelerated to 15% in the fourth quarter as compared to the same quarter in 2018, the fastest orderly growth rate of the year on the strength of significant increase at PayFac transaction processing volumes.

Vaden will take you through this in more detail, but in the fourth quarter PayFac volume increased 134% compared to -- compared sequentially to the third quarter. I'm very pleased to see that our continued support and nurturing of our PayFac businesses now being rewarded with outstanding growth and unlimited potential.

ACH continues to grow with strong margins and cash flow providing the resources we're investing in our growth initiatives. We are seeing nice growth with our Remote Check Capture Service that we introduced to our existing ACH clients.

And more recently, we became a Tier 1 processor by now having direct access to the Federal Reserve via our own federal -- our own Fed Terminal and associated bank routing number.

Both of these tools provide a competitive advantage in our ACH business and these competitive advantages have led us to board over 20 new accounts for ACH and ACH-related services in just the last two weeks. We're expected to see steady continued growth of our ACH business, a market that is already growing at healthy single -- mid-single-digit clip.

Our goal is to gain share and exceed the industry growth rate and generate attractive margins and cash flow. As with our Remote Check Capture and the Fed Terminal, our success is driven by our ability to develop new innovative technology that meets the increasing complex needs of the growing market.

In our Prepaid business, after more than doubling in the third quarter, card load and transaction volumes had another strong performance in the fourth quarter, so that for the year, Prepaid was up 75%.

New programs such as our corporate expense solution and new features such as constantly improving functionality, illustrate our ability to offer an integrated card, ACH prepaid issuing solutions that meet all of our clients' electronic transaction processing needs.

This focus on technology has enabled us to continue to add to our prestigious list of prepaid customers, which already includes the University Fancards, Pfizer, Medtronic, Eli Lilly, OpenTable, and a list of -- a long list of others.

In addition to the organic growth, we feel we're well-positioned to opportunistically capitalize on the consolidation transpiring at all levels of our industry. Acquisitions would have -- have to have -- provides incremental growth in cash flow as well as complimentary resources, such as people or technology.

In summary, the fourth quarter was a solid to a great year providing strong momentum heading into 2020 as we continue to develop innovative and proprietary technology that is hitting the bull's eye with our target market.

We anticipate revenues to continue to grow in the first quarter as compared to the fourth quarter of 2019 and we expect this to be another growth year.

We are committed to our strategy to continue to invest in our growth initiatives with the expectation that incremental growth from our PayFac and Prepaid businesses will begin to reach a point that makes them self-sustaining. Of course, our expectations are tempered by the COVID-19 coronavirus, which has become a threat to our economic growth.

Our first concern, of course, is for the safety of our employees as well as our customers. Fortunately, we have a very limited retail exposure or face-to-face businesses that are believed to be at greatest risk.

And because of our positioning, we're hopeful that any decrease in our card processing volume participated by COVID-19 team can be mitigated by the expected increase in ACH and other non-face-to-face processing volumes that COVID-19 might create. But we remain uncertain.

All of our offices have been closed for some time and we've been operating with no issues. We believe we can continue to operate remotely as needed and are thrilled that we continue to be very active in closing and implementing customers during these times.

With that said, I'd like to conclude my opening remarks and turn the call over Tom Jewell, our Senior Vice President and Chief Financial Officer to discuss our financial results in more detail.

Tom?.

Thank you, Louis and welcome everyone. Thanks for joining our call today and your interest in Usio. I'm going to provide a brief review of our financial results before turning the call over to Vaden. We continue to have a strong balance sheet with cash of $2.1 million and no debt.

Looking at Q4 2019 operating results first; revenues in the fourth quarter were $7.4 million, up 15% compared to $6.4 million in the same period last year. The increase was primarily due to strong growth in our Card businesses, including both legacy processing and PayFac growth initiatives.

Total card processing volumes were up 27% year-over-year in the quarter. As Louis mentioned, PayFac volumes were up 134% sequentially from the third quarter. The fourth quarter revenue growth is a good indicator of the ongoing growth in our PayFac business. Gross profits in the quarter were $1.5 million, about the same as last year.

Gross margins were down in the quarter due to the lower relative margins of these faster-growing businesses that Louis discussed. Selling, general, and administrative expenses for the quarter were $2.1 million, consistent with our recent run rate.

The expense level is attributable to our ongoing expenditures in support of our growth initiatives and principally our PayFac and Prepaid growth initiatives. The fourth quarter included a one-time $100,000 expense ride-off related to a note receivable.

The operating loss for the quarter was $1.5 million, up from the operating loss of a year ago, due primarily to the additional personnel and related expenses as we grow the businesses. The adjusted EBITDA loss was approximately $600,000 compared to adjusted EBITDA loss of $83,000 in the same period a year ago.

The net loss for the fourth quarter was $1.5 million or $0.12 per share compared to a net loss of $876,000 or $0.07 share for the fourth quarter of last year. Looking at full year operating results, on an annual basis, 2019 revenues were up 13% to $28 million with growth in all of our businesses; ACH, Prepaid, and PayFac.

Gross margins were down about 120 basis points due to a higher mix of revenues from the lower margin Credit Card and Prepaid businesses. Gross profit dollars were up from proximately $300,000. SG&A expenses increased to $7.7 million from $6.2 million in 2018.

The incremental expenses are again primarily attributable to the incremental salary and related expenses associated with our revenue growth initiatives and principally in support of our payment facilitation and prepaid growth initiatives.

For the year, adjusted EBITDA, net income, and earnings per share all reflect the incremental expenses associated with our revenue growth initiatives versus 2018 expense levels. We believe the double-digit revenue growth achieved this year is indicative of the strength of our strategy.

As you heard Louis mention, we expect first quarter revenues to increase compared to fourth quarter of 2019 revenues. As we continue to make progress with our growth initiatives, our ongoing revenue growth initiatives should help improve our overall financial health and cash flows. At this time, I'd like to turn the call over Vaden.

Vaden?.

Thank you, Louis, Tom, and welcome everybody. Building on the progress we discussed during our last quarterly earnings call, we have entered into the scale phase of our PayFac business.

After sequentially increasing 24% in the third quarter over the second quarter, PayFac volume increased 134% in the fourth quarter compared sequentially to the third quarter. On our third quarter earnings call, we mentioned that we expected to see a significant ramp in volume in the fourth quarter as well as in the foreseeable future.

We're very pleased to have delivered on this guidance. In fact, with the first quarter of 2020 drawing to a close, we expect volume in the quarter to show another significant increase up to 50%.

While we are hopeful we can sustain the volume momentum we have built in the Card business, we know that the coronavirus impact -- coronavirus pandemic will impact segments of the healthcare verticals we serve, such as dentists, vets, and optometrist within our legacy Singular portfolio.

And we simply don't have the clarity needed at this time to provide any guidance as to how our growth may be impacted beyond the first quarter. The inflection in PayFac volumes that we've seen over the last few quarters is a natural result of the various sales, marketing, and technology initiatives we've executed over the last 24 plus months.

Furthermore, we continue to focus on overcoming the two primary issues most affecting the speed at which we're able to scale that being the pace of implementations, including the customer onboarding process as well as the prioritization ISVs have generally afforded these implementations.

In addition to the changes made last year that we believe have been instrumental to the growth we are starting to experience, we are now implementing additional actions such as offering a license option, incorporating success metrics, and setting minimum thresholds.

The initial results of these aggressive new actions have been encouraging and we believe that can potentially lead to future volumes, much as previous actions have impacted our current volumes.

The goal, as always, is to form a true partnership where we can assist ISVs in monetizing the payment volume that is already there, pulling across their software and whatever arrangement might be the most appropriate for each individual partner. All along, we've been making improvements that will help accelerate our ability to scale in the near-term.

From the beginning, we've had confidence in our PayFac model and the opportunity because it is one of the most versatile, technologically advanced payment platforms in the market. Most importantly, it also represents the shortest and clearest path to substantive meaningful revenue for our partners.

The volume that it's starting to ramp is now illustrating that the market agrees in the future is extremely bright for Usio. At this time, we'd like to open up the call to questions.

Operator?.

We will now begin the question-and-answer session. [Operator Instructions] And our first question will come from Gary Prestopino with Barrington Research..

Hey, good afternoon, everyone. Couple of questions.

And can you guys hear me?.

Yes. Yes, go ahead..

When you talk about what could possibly happen in Q2 because of this whole issue, do you have any visibility into which of the clients that you're serving through the ISVs are still operating on the medical side versus whether they're closed or not.

I mean how much direct contact you have with these offices that -- so you could -- you have any visibility into the quarter at all?.

Well, I'll answer the first part and Vaden will answer the question about ISVs. We have very little retail exposure that we talked about in our press release. We see some of our competitors like shift for [ph] that is highly into the service industry, restaurants, and hotels and they're experiencing 70% 80% drop in volume.

We haven't come close to any of that and we only had two weeks to really look at and some of that volume which can be real-time, some of it, we don't, but we -- we're -- we have some exposure like Vaden talked about in his notes that dentists -- that's and -- he'll talk some more about -- and he'll talk some more about in the ISVs.

But other parts of our business, we expected some increases might occur during this time period. So, we really want to get into a few more weeks before we are able to tell exactly what's going on with each industry segment. We think consumer lending will go up during this time period and we'll have a big footprint in that industry, financial services.

And so Vaden, do you want to talk about some ISVs that Gary was asking about..

Yes, sure. Hey, Gary, excuse..

Hi..

Specifically address your question as it relates to healthcare ISVs that we're working with today, none of the current software partners in the healthcare segment have been impacted from our view in terms of what's going on. In fact, if anything, they are probably doing a little bit better than then you might expect.

And then one of the reasons that we're kind of seeing some of that is that we have a partner in the telemedicine side of the business who is really seeing strong growth during this time in terms of their business.

They've had a lot of recent wins and even the veterinary industry is starting to do a lot of telemedicine or at least adopt that as an approach during this time where it's difficult to get in front of folks.

So, we haven't seen any drop-off as of yet in the in the healthcare IVSs as Louis mentioned, if we were going to have any impact on our legacy acquiring books of business, it will be in the dental that and optometry space where most of those healthcare professionals aren't seeing patients unless it's an emergency. I hope that has been answered..

Are those big verticals for you at this point or--.

The vast majority of our legacy card portfolio which was the Singular portfolio that was acquired as part of the transaction in September 2017 sin comprised of healthcare professionals in those segments..

Okay..

I say about 70%-plus..

Okay. And then I would assume that new business development over the last couple of weeks has been very hard to accomplish as well, is that kind of a correct assumption here? Things are just on hold--.

That's an incorrect. We've been closing deals like crazy this last two weeks. In fact, we actually not only closed, but we implemented 30 new -- over 30 new accounts during this two weeks. Now, when it comes to the larger ISV deals, I'll let Vaden tell you about the sales there, but I think we're seeing a lot of activity..

Okay, great..

Yes, just to follow-up on that we've had probably five or six new ISV contract signings in the last two weeks. I will tell you that it's been a little bit harder to get meetings and a little bit harder to get people on the phone relative to moving things down the pipe in terms of getting to a contract.

But we did sign, I believe, it was four or five, I don't have the exact number in front of me, new contracts in the last two weeks. And we're excited about the fact that we've been able to maintain some momentum in a time when most everybody else in our business is effectively on hold or maybe even to some degree out of business..

Right. It's what I'm getting at is it for what you're doing and what the ISV is doing, you're basically it's more or less conquest business. There's not a lot of touch points at somebody's office or whatever on the ISV side.

Just winning the ISV and then having the ISV convert, right? So, there's no, no pushback where you have -- you're not going into an office to get anything completed..

That's right..

Okay, great. Thanks..

Sure. Thank you..

Our next question comes from Brian Kinstlinger with Alliance Global Partners..

Great. Thanks so much for taking my questions.

Following up to those questions, you have visibility and are you able to talk about how credit card processing volumes as well as ACH volumes have changed over the last two to three weeks?.

Some of that we see real-time, some of it we don't, we see delayed and we don't have a lot of data. I can tell you that the quarter was really, really strong and so it's -- the results that we have can be mitigated by the strength that we saw. But, again, it's too early for us to see if we've gotten any major downturn.

So, we don't believe we will because we don't have face-to-face transactions, very little..

Okay.

And Vaden, can you talk about with revenue up 100 -- I think sorry, processing volumes up 134%, can you give us a rough estimation of what that revenue and volume was in the fourth quarter?.

Well, again, holding true to the policy that we have not done any segment reporting in terms of revenues, Brian, but we're going to change that as we move forward and we're committed to doing that. I don't -- we can't talk specifically about the revenues that came from a particular line of business during the quarter..

I think it's still below 5% of revenue roughly?.

You would be right about that..

And can you tell us maybe how many customers you and ISVs have onboarded?.

Its north of 2,000. I think we probably -- and I don't have the exact number, so I don't want to guesstimate, but it's between 2,000 and 3,000 have been onboarded since April of 2019 when we launched the platform in a commercial state..

And that means 2,000 to 3,000, 2,000 to 3,000 somewhere in that range customers are using PayFac to process payments, that right?.

Yes. Yes, sir..

Yes. Okay. And then you in the last couple of quarters have talked about the two large healthcare systems that have 134 facilities.

And guess I asked specifically this because it speaks to how the sales cycle and how things are progressing with customers of this size, can you give us an update how have you penetrated 134 -- 143 facilities?.

Well, we get onboard all of those locations that we talked about and we're actually in the processes.

I think I've maybe mentioned in prior calls of adding terminals into some of those facilities as the opportunity to accept payments inside those healthcare facilities has grown beyond a basic portal experience and now has an application for face-to-face transactions.

For example, in the in a long-term care space, you have people who prior to this pandemic breaking out would go to visit their loved ones in rehab centers or nursing home, long-term care facilities, and they would eat with them and they'd have to pay for that meal or they'd pay to get their mother or father or grandparents haircut or what have you.

And those things are sort of pay at the time of transaction opportunity. So, we started to place terminals in some of these sites and seen some growth as a result of that.

And we've obviously seen -- we haven't seen the kind of volume from those two particular entities or groups that we installed in the healthcare space because they're primarily industries, one being long-term care, and the other one being an addiction treatment facilities that have forever avoided electronic bill delivery or electronic payment collection mechanisms.

And so we're -- to some degree or actually to a great degree, we're dragging them into the 21st century, if you will, in terms of how they think about payments, collecting payments in a more cost effective and efficient manner.

And so the real opportunity there while we're seeing volume from those installations, the real opportunity is in continuing to work those client accounts and continue to drive more and more volume as they become more educated and more comfortable with making that transition..

Okay, great. Last question I had--.

Hey Brian, let me go back to your first question about the volume it is -- it's north of 5% the revenue..

Thanks for clarifying.

The last question I have is in terms of installing the technology, is there any need for the ISV or someone from Usio to get to the facility to do an installation or can everything be done remotely and get them onboarded?.

Yes, everything can be done remotely.

Some of the installations involve a card reader or chip enabled device, in order for the transactions to take place in a face-to-face environment and some of them are limited to portal payments or non-face-to-face transactions, but the ones that involve a point of sale device of some manner, those are typically shipped with instructions.

And when you open the box, the first thing you see is an instruction sheet that tells you what to do. And once you plug it in, it's really plug and play. You just plug it into the system and the next transaction you run that needs a swipe or a chip read can be accomplished very easily..

Great. Thanks so much..

Thank you..

Our next question comes from Barry Sine with Spartan Capital Securities..

Hey, good afternoon gentlemen. It's nice to see PayFac is really taking off after all years of work in making I know. I want to go back to some comments you made that new business development activities is doing very well. 30 new accounts, five or six new ISVs. I'm a little surprised by that, I wanted to ask why.

For a lot of businesses with all the dislocations, with all the uncertainty, they're taking a wait and see approach on things like signing up new vendors.

So, if presumably, there's something about this crisis that is increasing the attractiveness of your offerings that are benefiting you, why are you doing so well during crisis and signing up new customers?.

Well, I'll talk to you about the direct accounts and Vaden can talk to you about ISVs. But what we experienced this last few weeks and it was surprising, its great news to us. We're very busy on the sales front and the implementation front.

And it's coming from mortgage industries, municipalities that are trying to get live before taxes or fees and fines push. And a big part of it has to do with some enhancements with pin-less debit, which is unique product. There's not many players in the marketplace.

And because of that, we're getting mortgage clients and collections accounts and -- that are very much interested in that product line. The other thing is we're just pushing hard in the first quarter. So, we've had great success. So, anybody tell us -- have -- haven't had anybody tell us that they were going to wait.

And we've been closing ACH deals, pin-less debit deals really well then just last two weeks, and it's still continuing..

Yes, Barry--.

Vaden--.

Yes. On the PayFac side, I think it's less about the technology, although it's great and has broad application. It's more about the industries I think we focus on when we're targeting with the system.

Again we've long said that we are heavily focused on bill-centric verticals where there is the opportunity for lots of transactions, lots of recurring transactions, high average tickets, and that tends to lend itself well to environments such as the one we find ourselves in. I mean given that a large percentage of our business today is healthcare.

These healthcare professionals are busier than they've ever been and it's psychiatrist included. So, in a time like this, not to make light of it, but those guys find themselves very, very busy. But I think it's more industry specific than it is anything else.

I mean, if you look at the industries where we're focusing our energies and our efforts and where we've seen our recent signings, property management, legal, those are those are all industries that will sustain and/or potentially grow in situations like one we find ourselves in..

Okay. I also wanted to zero-in on return check transaction. In the second half of the year, you had lighter volumes. I believe if I recall correctly that's a relatively lucrative business for you.

And I'm guessing, but I'd like to hear your views that if the economy weakens, it looks like it may, that we may see an uptick in return transactions and that may benefit you positively from a financial standpoint?.

We've made a lot of money off of return check processing. So, we like to have that number up. We don't like to have it up crazy even though so it's a balancing act when it comes to return checks. We want it to be about 10% to 12% of our volume.

And so if there's financial crisis that hits our industry segment then yes, we're going to see more, but we've also been adding a lot of mortgage clients and insurance clients, which typically don't have a lot of return checks. So, there's a possibility that that could go up Barry..

Okay, last question, got to wrap it all together, maybe for Tom.

If I try to think about where this business can go over the next year or so from an EBITDA standpoint, I know you don't give guidance, but you're pretty close already, to breakeven EBITDA, we've got very good topline growth; sounds like you're starting the year with a good continued momentum of the margin.

The gross margin is a bit lighter because the faster growing businesses are lighter margin SG&A; you've elevated spending to support these businesses.

But it looks to me as if, if revenue keeps growing, that you may be able to have revenue exceed cash expenses and get closer to breakeven or positive EBITDA within the next year or so? Is that fair?.

Yes, I mean, I think that's certainly what we're targeting. But at the same time, we recognize that we've got to really grow the business to get to where we want it to be. So, it's always a balancing act, but that's certainly in the direction we're headed..

Do you have planned to increase SG&A further to support the growth businesses pay back in Prepaid or are we kind of at a level where it's high enough that can support what you're saying?.

We're -- I think we're pretty close to where we need to be right now. There'll be a little bit of uptick from where we are but not to the extent that what we've had in the last -- in the last 12 months..

Okay, great. Thank you very much gentlemen..

Thanks Barry..

Thanks Barry..

And as a follow-up from Gary Prestopino with Barrington Research.

Yes, I was kind of scribbling downloads while you were talking.

Did you say you implemented 30 new deals -- 30 new accounts just in the last couple of weeks or is that for the quarter?.

Just the last two weeks, Gary?.

Okay, so last two weeks of the quarter. Okay..

Yes, pretty much when all the corona stuff started getting crazy. We were extremely busy and continued to be busy to this day..

Okay..

Hey, Gary just make sure that that you guys are on the same page, last two weeks of this quarter not last quarter..

Yeah, Q1..

Right, Q1..

Yes, just want to make sure -- I just want to make sure you guys are saying the same thing..

So, can we extrapolate there that as far as new account signings, you guys had kind of a banner quarter, or this just all hit the last two weeks?.

We already said in our notes that Q1 is going to beat Q4. So, you'll continue to see growth in Q1..

And I think on those ACH accounts that that Louis is referencing, we had attended a conference and had really good sort of following there. We had a lot of -- left with a lot of leads and our guys have done a great job of really closing up some of those transactions, onboarding them to the extent that they could become impactful in the near-term..

Okay. And then the last question I had for you, I know you said you opened up an office in Austin, Texas. What is the purpose of that office? Because I mean, you're rather small company, you've got an office in San Antonio, you've got one in -- outside of Nashville.

Why open an office in Austin? With that overhead when it's heat up from point-to-point wherever you're going in Texas pretty easily..

Yes, well, first thing is Gary, I don't know how much time you spend in Texas, but Austin is different than San Antonio. It has a bigger focus on technology. So, the make up in San Antonio is that San Antonio is so resistant to any type of downturn in the economy.

That -- before all this fun happened, our unemployment rate was just barely 2%, we can't find the technology people, we had to go fight. In Austin, there's more and more people available. So, we went out and we got one of the temporary, where it's two months type of commitment. It's a shared space.

And we're pretty much piloting what's going on there and seeing if it works, but we're able to hire some really talented people in Austin. And so it's close enough that we can collaborate, but that it's far enough that we can get some resources that will help us meet our goals..

So, it's a lot of a lot of coding, things like that, technology issues being taken care of there?.

It's a 100% development there..

Okay. I was just curious. Thanks..

Our next question is a follow-up from Brian Kinstlinger with Alliance Global Partners..

Great, thanks so much. I think Vaden; I think you responded to one of the questions 70% of Singular's revenue was for professionals such as dentists, optometrists, and similar professionals if I understood it correctly.

Can you remind us how much revenue is Singular -- sorry?.

Brian its volume..

70% of volume? Yes.

Can you remind us how much revenue Singular generated annually at the time of the acquisition? And then can you also remind us the geographies they were focused on at that time?.

It's the same basic mix. And we haven't really done anything to grow our legacy book of business, that's not a core growth focus. Obviously, you guys know what that is. It's PayFac and it's Prepaid. Our goal and mission in life is to maintain that book of business and the revenue streams associated with it.

I think when we close the acquisition, it was high 11% in terms of revenue, and I believe Tom can correct me if I'm wrong, but I think last year was just north of 12%..

Yes. So, I guess what I'm trying to make sure I understand supposing these types of offices remain closed through April and May, a lot of them depending on what region they are in.

Is it -- is there any reason we should believe your volumes will not be sequentially lower in 2Q at least temporarily until things get back to normal?.

Well, look, I think there's going to be an impact in volumes. It'll be in those industries, it will be in Q2 and potentially into Q3, that that is the real risk.

And the opportunity is that the industries that we're focused on, specifically the healthcare verticals and other verticals that we're focused on, on the PayFac side we'll -- should serve to help offset some of that, as should some of the other activities that we're anticipating on the ACH and other pin-less debit and other products side..

Can you remind us one more thing, why does ACH react? Why do you expect it to perform much better in this time, then say other businesses in the processing space? Not necessarily, obviously, professionals for dentists and optometrists, but just in general, why does ACH perform well in this kind of time?.

Well, ACH is all electronic, right. It's never face-to-face for us. It has -- we have a lot of churches that the giving actually goes up during time periods like this. We have -- I mean, we just have tons of industry segments. We're big in the finance space, financial services, which the activity there should increase during this time period.

We have businesses that are just kind of on cruise control. We have a lot of government, municipalities, fees and fines and taxes. They're going to continue to operate. So, all those transactions are, again, not face-to-face. They're not retail, they're not servicer industries and during these time periods like this, we see consumer lending going up.

And we think we'll get some other people, other segments that will go up during that time period..

Thanks for the color. Appreciate it..

People are still giving the money to their churches and we have a church software platform we're working with and we've seen some good growth in that business over the last few weeks also.

So, it's -- Louis' point, those electronic non-face-to-face transactions in industries where payments are likely to happen, in the worst of times are where you'll find most of the ACH volumes coming from..

Okay, thanks so much..

You're welcome..

This will conclude our question-and-answer session as well as today's conference call. Thank you for attending today's presentation. You may now disconnect..