Christopher J. Mammone - Vice President-Investor Relations Steven W. Streit - Chairman, President & Chief Executive Officer Grace T. Wang - SVP, Corporate Finance/Business Intelligence Mark Shifke - Acting CFO Jess Unruh - Chief Accounting Officer.

Ramsey El-Assal - Jefferies LLC George Mihalos - Credit Suisse Securities (USA) LLC (Broker) Mike J. Grondahl - Piper Jaffray & Co (Broker) Tulu Yunus - Nomura Securities International, Inc. Tien-tsin Huang - JPMorgan Securities LLC Smittipon Srethapramote - Morgan Stanley & Co. LLC Ashwin Shirvaikar - Citigroup Global Markets, Inc.

(Broker) Andrew Jeffrey - SunTrust Robinson Humphrey, Inc..

Welcome to the Green Dot Corporation First Quarter 2015 Earnings Conference Call and Webcast. Please note this event is being recorded. I would now like to turn the conference over to Mr. Christopher Mammone, Vice President of Investor Relations for Green Dot. Please go ahead..

Thank you and good afternoon everyone. On today's call, we will discuss 2015 first quarter performance and updated thoughts regarding our 2015 outlook. Following these remarks, we will open the call for questions.

For those of you that have not yet accessed the earnings press release and the slide presentation that accompanies this call and webcast, they can be found at ir.greendot.com. Additional operational data have been provided in the supplemental table within our press release.

As a reminder, our comments include forward-looking statements about, among other things, our expectations regarding future results and performance.

Please refer to the cautionary language in the earnings release and in Green Dot's filings with the Securities and Exchange Commission, including the 2014 Form 10-K that we filed on March 2, 2015 for additional information concerning factors that could cause actual results to differ materially from the forward-looking statements.

During this call, we will make references to financial measures that do not conform to Generally Accepted Accounting Principles. This information may be calculated differently than similar non-GAAP data presented by other companies.

Quantitative reconciliations of our non-GAAP financial information to their most directly comparable GAAP financial information appears in today's press release and in the appendix of the presentation that accompanies the call. The content of this call is property of Green Dot Corporation and subject to copyright protection.

Now, I'd like to turn the call over to Steve..

Thank you, Chris, and welcome everyone and let's get into the call. For the first quarter of 2015, Green Dot reported growth of 43% year-over-year in non-GAAP total operating revenues to approximately $231 million and growth of 120% in adjusted EBITDA to $83 million.

Green Dot also reported $0.86 in non-GAAP diluted earnings per share, representing growth of 105% year-over-year. These positive results represent our first full quarter of the new consolidated Green Dot, inclusive of our acquisition of TPG and two smaller prepaid program managers, AccountNow and AchieveCard.

Additionally, quarterly revenues were negatively impacted by approximately $12 million, resulting from fewer reload transactions attributed to the discontinuation of MoneyPak and approximately $7 million in lower-than-expected revenue from our tax refund processing subsidiary, TPG.

Despite these headwinds, we posted significant revenue and adjusted EBITDA growth during the period as a result of both the incremental revenue and EBITDA contribution from our new acquisitions and better-than-expected performance in Green Dot's organic branded and private label account business.

Adjusted EBITDA in the quarter exceeded our expectations due to lower-than-expected operating expenses and the deferral of approximately $9 million of expenses at TPG that will occur later in the year.

We are clearly pleased with the performance of our business in Q1, but we continue to be cautious of our full-year revenue forecast in light of the lower number of reload transactions in the quarter, the implied pacing of reload transactions throughout the remainder of the year and how those fewer reload transactions may ultimately impact the overall performance of our card portfolio ecosystem.

We still feel confident in our adjusted EBITDA and non-GAAP EPS forecast for the year because the cost savings being generated from the discontinuation of MoneyPak, the efficiencies being generated from the integration of our recent acquisitions and the lower operating cost being realized across the enterprise as a result of a number of efficiency initiatives, are all coming together to more than offset the additional revenue headwinds expected for the full year.

So, now that we had the high-level results, I thought it might be helpful to provide more information about our organic business results, talk about the specific performance of our recent acquisitions and share some more information about our processing division, which includes both our reload network business and our TPG tax refund processing business.

We are really quite pleased with how well our organic branded and private label account business performed in Q1 versus plan. Based on the MoneyPak headwind forecast, actual results were better than plan.

So, we were higher, for example, than what we had forecast for the total number of active cards and actual results were better than what we had assumed for the average economics of those active cards.

So, we had more active cards than we thought and we had better revenue per active card and lower expenses per active card in reality than what our model had predicted. So, the organic business was a key reason for our better-than-expected overall performance in Q1.

We'll have more color on these metrics for the organic portfolios in the financial section of the call.

On our recent acquisitions, our teams have come a long way with the integration of AccountNow and AchieveCard into the larger Green Dot infrastructure, with the revenue and EBITDA being generated by those entities generally in line with our forecast so far.

We're really pleased with the leadership team we inherited, along with those acquisitions, including Dave Petrini and Sam Reed who are just doing a fabulous job for us.

On TPG, we came up around $7 million short versus revenue plan in the quarter, which means we're now forecasting the full-year revenue result to be $70 million instead of the $77 million originally forecast.

On adjusted EBITDA, TPG is performing closer to plan where we forecast $46 million and TPG is now on track to deliver $44 million for the full year.

The reason for the revenue misforecast is a mixed shift of business going from higher net revenue channels to lower net revenue channels although total refund transactions for the full year are expected to be up around 3% year-over-year. Now, let's talk about the reload business and the impact of the discontinuation of MoneyPak.

As you heard in my opening remarks, the discontinuation of MoneyPak is proving very difficult to forecast. When we developed our model for 2015, we attempted to take into account the full potential ecosystem impact from the discontinuation of MoneyPak, which includes a complex set of variables.

For example, MoneyPak was used to load money to prepaid cards, but it was also used to send money to a PayPal account or to pay a bill or some other non-prepaid card use. So, as part of the model, we assumed we would lose a certain number of MoneyPak sales for any purpose, well supplied by the average fee per MoneyPak.

But, we also had assumptions for how fewer reload transactions could impact our total number of active cards and the revenue-generating components of those active cards.

In other words, if you lose X million reload transactions, it stands to reason that your active card base could suffer from fewer reloads, leading to lower GDV and lower interchange and so on. We also made an assumption for how the sale of new cards could be impacted based on MoneyPak going away, leading to fewer active cards over time.

For example, in the legitimate use case, will a parent no longer buy a Green Dot card to give to a child in college for the purpose of providing money on the card through the use of a MoneyPak? Or in the illegitimate use case, will a con artist no longer buy a card to be used to facilitate some type of scam involving the use of MoneyPak? Will the long-term customer who has used MoneyPak for years adapt to a new method of reloading via SwIT? And will the cashier who, for years, has known how to ring up a MoneyPak, learn how to now reload a customer's card with a swipe instead? Based on the pacing of actual cash reload behavior in Q1 versus our assumptions, we now believe that the full-year impact resulting from the discontinuation of MoneyPak could be considerably higher when you take the current run rate on lower reload sales for the full year and then extrapolate what that lower reload rate could mean to the total ecosystem of our active card base over the remainder of the year.

We did see some of this ecosystem impact on our organic portfolios in Q1, but it was much less pronounced than we had forecast. And so, that favorable variance to plan is one of the reasons why we did so well in the quarter.

But we believe that based on the pacing of the total number of lost reload transactions for the full year and pacing for active card counts, we could see an incremental full-year revenue headwind as much as $25 million on top of the forecasted $40 million high-end range.

I want to be clear that we don't know for sure, but this new estimate reflects our current modeling. The actual outcome could be better or worse.

So, this revised model, combined with the expected $7 million full-year revenue shortfall at TPG, is why we're lowering the top end of our full-year revenue guidance from the current $720 million to $780 million range, down to a new range of $720 million to $740 million.

The sad truth is that we're losing a large amount of legitimate business from good customers who used to regularly use MoneyPak to pay bills, load cash to PayPal, reload their prepaid cards and so on. It's painful to lose good business.

But on the positive side, with the discontinuation of MoneyPak, we have in fact eliminated the potential for that product to be used as a means to commit fraud.

The only way to now reload money to your Green Dot Bank-issued card is either by swiping your actual debit card at a retailer, by loading money through a bank-to-bank ACH transaction or by loading money through direct deposit.

So, we would expect that the vast majority of reloading customers who now use our products are true, honest customers who are using a Green Dot Bank account, whether a prepaid card or a GoBank checking account as their bank account of choice.

If the better-than-planned active card financial metrics we're seeing Q1 continue to show similar results in successive quarters, it may be that we end up being a somewhat smaller revenue but higher margin company with a more stable and committed customer base, relying on our products for legitimate everyday use.

If that turns out to be the case, I think that would be a terrific outcome and only time will tell.

Our long-term mission is to reinvent personal banking for the masses, and in so doing, become a big sustainable brand name, branchless bank, serving millions of Americans with modern feature-rich bank accounts so they can get right from their neighborhood store, online or their favorite app store, all with the Green Dot Bank promise of no overdraft fees or penalty fees of any kind ever.

While the elimination of MoneyPak is clearly frustrating our revenue modeling efforts, make no mistake that we believe the decision to discontinue MoneyPak was the right decision and that our company will ultimately be better positioned to achieve our long-term goals as a result. Now, we'll move to the financial section of the call.

But before we begin, I want to let you all know that we have made some changes in our finance team in an effort to increase bandwidth in light of all the recent acquisitions, to increase our data and analytics capabilities and to ensure that we have the right skill sets in place to facilitate our future growth plan.

As part of these changes, I want to announce that our current CFO, Grace Wang, who is here with me in the studio, is transitioning to a new role at Green Dot as SVP Corporate Finance, focused on Business Intelligence.

In this role, Grace will help drive the foundation for a much stronger BI function within our finance and accounting platforms, using her strength in financial operations to help the team improve that important capability..

Thanks, Steve. I look forward to continuing to help drive this company forward..

Thanks, Grace. And I greatly appreciate all your efforts as we all do in your time as CFO. We've retained Korn/Ferry to conduct a search for a new CFO and we'll let you know when that search is culminated in a new hire. Next, I'm pleased to announce the promotion of two long-time veterans of our finance team to new leadership positions.

Jess Unruh, our long-time VP of Financial Reporting and six-year Green Dot veteran, has been promoted to the role of Chief Accounting Officer, and 10-year Green Dot finance veteran and VP of FP&A, Paul Farina has been promoted to the role of SVP of Finance, leading the company's FP&A function and other finance duties.

Lastly, I'm pleased to let you know that Mark Shifke, current SVP of Corporate Strategy and Head of M&A, has been appointed Acting CFO. Mark is a four-year Green Dot veteran and a richly credential legal, business and finance executive who, among other things, led the TPG, AccountNow and Achieve acquisitions.

I'm appreciative of Mark stepping in to work with Grace on the transition and to serve as Acting CFO while we conduct the search. Jess, Paul and Mark are also here in the studio with us and I want to thank them all for working together to strengthen and grow our Finance division.

Okay, and so now I'll turn the call over to Mark to go into more detail about the quarter and to provide our updated outlook for the remainder of 2015.

Mark?.

Thanks, Steve. My name is Mark Shifke and I've met some of you over the years at various conferences and meetings. I've been an executive at Green Dot for the past four years, with most of that time being spent as Senior Vice President of Corporate Strategy, heading up our M&A activities.

In that role, I led the TPG, AccountNow and Achieve deals and arranged the loan syndicate with our partners at Bank of America Merrill Lynch and Wells Fargo to finance the TPG acquisition.

Over the course of the 27-year-period prior to my joining Green Dot, I held leadership positions in investment banking, law and accounting organizations, including being a partner at Davis Polk in New York and holding senior positions at JPMorgan, Goldman Sachs and KPMG.

As a bit of trivia, I was also Green Dot's second investor right after Steve and was one of Green Dot's first board members and actually served a couple of terms way back in the early days. So, I've been close to Steve and the company since the investment 15 years ago.

Grace, thank you for your contribution as CFO, and I look forward to working with you in your new role. I am very pleased and honored to serve as Acting CFO, while the company works with Korn/Ferry to recruit our permanent CFO. With that, let's talk about the quarter, and in particular, how MoneyPak is affecting our world.

While there are a number of moving parts to the story that we'll discuss, Green Dot clearly had a very strong quarter.

In Q1, Green Dot posted $231 million in total non-GAAP revenue and $83 million of adjusted EBITDA for a margin of 36% for the consolidated enterprise and an underlying margin of 21.2% for the organic business, despite the losses from the discontinuation of MoneyPak.

In terms of our key operating metrics in the quarter, consolidated active cards grew 14% year-over-year to 5.4 million 90-day active cards in total. Our organic actives were down less than 2% to 4.6 million.

And cash transfers or reloads applied to our organic branded and private label portfolios were down by over 13% in the period as a result of the discontinuation of MoneyPak. Yet, organic GDV was down only 4% because we experienced significant growth in active cards enrolled in direct deposit, which in fact were up 19% year-over-year.

The strong results of this direct deposit penetration helped to overcome much of the GDV loss from the fewer cash reloads.

When you look at cash trends for us overall, whether to our own card portfolios or the card portfolios of the network acceptance members participating in Green Dot Network, the drop is quite sharp, declining by around 2.5 million transactions in the quarter, representing a 20% decline in cash transfers year-over-year.

That's a transactional decline that generated the $12 million revenue loss in the quarter that Steve referenced. Of course, not all of those lost sales were intended to be reloads to our accounts. Recall that many MoneyPak sales were made for non-prepaid card reload purposes, like loading money to a PayPal account or paying a bill.

Many others were purchased to reload a third-party bank program not part of Green Dot.

But you can see through our organic portfolio results how the discontinuation of MoneyPak is affecting not only revenue associated with the actual reload transactions, but also to the extent the funds on those MoneyPaks would have been ultimately loaded to a Green Dot Bank-issued card is potentially affecting the revenue-generating components of our organic active card base, including potentially having an effect on the overall size of that active base.

We continued to generate strong cash flows in Q1 and maintained a very solid balance sheet. Cash flow from operations in the quarter was $84 million, which helped our total cash and investment securities reach nearly $1 billion as of March 31.

Our unencumbered cash position increased by approximately $7 million during the quarter to approximately $143 million. We define unencumbered cash as consolidated cash and investment securities, excluding such amounts held at Green Dot Bank. As a reminder, we used $65 million of our unencumbered cash towards the purchase of AccountNow during Q1.

Green Dot's very strong quarter was driven in part by outperformance of the organic business relative to the expectations. All card metrics were better than we anticipated, including the number of active cards and the revenue and variable cost per active card.

As a result of achieving higher revenue per active and lower cost per active, gross margin per active card came in better than we planned for the quarter by 22%. Beyond the variable cost savings per active card, Green Dot's increasingly efficient infrastructure is a big part of our overall margin achievement for Q1 and for the remainder of the year.

So, let's talk about our expense base. First, you may recall that when Steve talked about the potential impact of the discontinuation of MoneyPak during our Q4 earnings call and how lost revenue may ultimately translate to lost EBITDA, he also talked about all the noise in expense generation that he believe was caused by that product.

In Q1, we are in fact seeing meaningful reductions in variable expenses related to areas such as risk, customer care and supply chain. Second, we're also seeing investments we've made in better technology begin to pay off in terms of lower fixed and variable expenses across the organization.

New CRM software and our customer contact center, smarter risk analytics and predictive fraud tools in our Risk Management Group and the establishment of our new technology development center in Shanghai are all coming together to deliver real efficiencies that are helping margins.

You may have also read the press release last week about our planned migration to the MasterCard transaction processing platform, which is expected to add further efficiency to our delivery platform, starting in the second half of 2016. Of course, all of this technology spend over the past few years has added to the D&A burden on EPS.

But we're now beginning to enjoy the payoff from those investments in expanded profitability and ultimately expand the EPS. So, the summary is Q1 was a strong quarter where both acquired businesses and organic business line contributed nicely to revenue and EBITDA in the period.

But going forward, we're incrementally more cautious about the total potential full-year ecosystem revenue impacts, resulting from the discontinuation of MoneyPak. As a result, we are lowering the top end of our non-GAAP revenue guidance and maintaining our adjusted EBITDA and non-GAAP EPS guidance.

We now expect full-year non-GAAP total operating revenue in the range of $720 million to $740 million. In addition, given all the recent changes to the business from MoneyPak and our recent acquisitions, we thought it might be helpful to share with you our expectations for Q2.

So, for the current quarter, we expect non-GAAP total operating revenue of around $165 million. We are reiterating our full-year adjusted EBITDA guidance range of $150 million to $170 million.

Again, as you think of Q2, we expect adjusted EBITDA of around $33 million with an adjusted EBITDA margin of about 20% on a consolidated basis and approximately 17% expected for the organic business for Q2 and a similar high teens margin for the rest of the year.

The reason for the lower organic margin in the reminder of the year versus Q1 is that we expect the ecosystem impacts of the discontinuation of MoneyPak to take a bigger bite out of our margins as the year progresses as we expect to have lower margin on the same expense base and because the lower fee plans associated with some of the portfolios in our private label program had a year-over-year negative impact to organic margins, as we discussed last quarter and displayed on the bridge slide.

Additionally, recall that we mentioned $9 million in expenses that we had forecasted for TPG in Q1, but did not occur in that period, but will nevertheless occur throughout the remainder of the year. And finally, we are reaffirming our non-GAAP EPS guidance range of $1.24 to $1.47. For Q2, we expect non-GAAP EPS of approximately $0.23.

And with that, we will open the phones for Q&A.

Operator?.

Thank you. As a courtesy we please ask that you limit yourself to one question and a single follow-up. If you have any further questions, you may re-enter the question queue. Our first question comes from Sanjay Sakhrani from KBW. Please go ahead..

Pretty close. Hi, Sanjay..

...in for (22:02) Sanjay. My first question is just around the guidance, in terms of when we add it up, right, it's – the impact to the revenue side is between $27 million to $32 million, but you're lowering the guidance by like $40 million.

Could you provide a break-out of what other moving parts there are?.

Right, that's actually one of the questions we thought about as we were looking at the guidance range. And the math indicated $247 million, $248 million, and in the discussion, we thought, well, let's bring it down to $240 million because it gives us an opportunity.

If things go well, it will be a little bit above it, which makes sense, and at the same time, that is lower enough to reflect the more likely range of outcome.

So, I don't know that when you're looking at a range like that, that it's intended to add up precisely, but that's sort of the thinking that went into it, we could have made it something like $247 million..

Got it, got it. And then, just around TPG, you mentioned that it's coming at about $7 million light..

Yeah..

Do we have the revenues and expenses for the first quarter, where it actually came in at?.

For TPG, the answer is no. It's part of our consolidated company, it would appear, Jess, I have Jess, he's our Chief Accounting Officer.

That would appear, I guess, in the Q as a division would it not or is it all part of MoneyPak?.

Yeah, currently our Processing and Settlement segment, that's going to be lumped in as part of our sort of cash processing business with the Green Dot Network..

It does. And if you want, what we can do is after the call, Chris can follow up with you and get you some of that data to the extent it is part of our disclosure..

Okay, yeah, just in terms if it would help us model out the remainder of the year given....

Yeah, certainly for the full year, as a general rule, about 84%, 83% happens in Q1, and but we can certainly get that for you, but I'd hate to ad lib it off the top of my head..

Got, okay I'll hop back into queue with any other question, thanks..

You bet, thank you..

Thank you. The next question comes from Ramsey El-Assal from Jefferies. Please go ahead..

Hi, guys. You may have commented this. And I just may have missed it. You gave us some good color on the organic characteristics this quarter.

Did you ever a break-out for us, just the organic adjusted revenue number across the entire company, like the growth rate rather?.

We don't – but we can, Mark has that, feel free..

Sure. So when we're looking at quarter-over-quarter in terms of our organic non-GAAP revenue, it decreased 9% to $147 million for the first quarter of 2015 from $152 million for the first quarter of 2014..

So, we're down 9% year-over-year, apple-to-apples, most of that, as you can imagine, driven by the big drop in MoneyPak reload sales..

Okay. Thanks. And then on the TPG, the $ 9 million of deferred expenses, can you comment, just give us a little more color on what that is exactly and just any comment on cadence throughout the year.

I think you mentioned it was just going to come, is it going to come ratably quarter-by-quarter just for modeling purposes or is it going to be lumpier than that or anything you could....

No, it's actually not lumpy. And Paul Farina, who is our Head of FP&A and recently promoted to a more senior position than that may want to explain it better, but I'll give you the overview, and Paul, you can nod and tell me. It's a timing issue, with the new acquisition you get together with the management team.

You go through all their numbers, they're taking private company numbers, putting them into our infrastructure and trying to figure it out. And the answer is that in the model, the artifact was that we got the full year expenses right, but the timing of those expenses wrong. And we overburdened Q1 with expenses that never materialized.

And we all got excited until we realized that no, they will materialize, it's just that the timing was off in the model that was created upon the acquisition. So, that's why we wanted to call it out.

It's not, it's still money that will be there for the full year, but it has an effect of making the growth in Q1 look bigger, and that's why we wanted to make sure we call it out. So, for the full year, it still is what it is, but there was a timing artifact in the model..

And so, it's just general expenses, it's nothing....

Yeah, salaries and SG&A, exactly right, yeah..

Got it. All right, thanks a lot, guys..

Sure..

Thank you. The next question comes from George Mihalos from Credit Suisse. Please go ahead..

Great, thanks for taking my question, guys. I think you said the impact from the MoneyPak was about $12 million in the first quarter.

Just wondering what trends exactly have you seen in April and I guess how much of a deterioration have you seen in April to make you sort of raise your conservatism by 50% or so for the full year?.

Well, it isn't because of April necessarily, April by the way was similar to March. It may have been slightly worse, but in the zone and seasonality, not particularly crazy one way or the other.

It's really more Q1 and that is that when we put the model together George, we looked at, let's call it, portfolio behavior, the full ecosystem of all that trickles down from the sale of a reload. And then, you have the reload transaction itself.

The reload transaction itself is easier to figure out, that's the number of units times $4.95, or whatever the average number is. It's way harder to figure out all the trickle-down effects of how many fees and how much interchange and all that kind of a thing.

So, we guessed high, meaning we were, we put in too much in the model for portfolio effect that did not materialize in the way we thought it would, but we underestimated the transaction count. So, we didn't think there'd be $12 million, we thought it would be something less than that.

So when we realized that we had that many transactions gone in the quarter, the question is uh-oh, if that now flows through and our model was wrong by X percent in Q1, and we continue to be that wrong in Q2, in Q3, and Q4, not on the portfolio, but on the actual transactions, two things happen.

The number of transactions times $4.95 is bigger than we thought, and you have to assume that okay, if you're losing that many reloads more than what you originally thought in your model, at some point, even though we maybe didn't see it fully in Q1, it's got to catch up with you, and that's our theory, and that maybe by 2Q, 3Q or 4Qs, you start seeing a degradation in active cards, the number of active cards, the GDV on those cards.

So it may be overly conservative, but we just don't know. So the answer is, we were too high in one part of our equation, too low in the other part of our equation. So nothing about April in particular, it's more about just the number of transactions in general that are above our original estimate..

Okay. But you did not see any sort of deterioration as the quarter progressed and going into 2Q, just to be clear? You're just....

No, the same level of deterioration was consistent, if you will, from – and there may be slight variations month over month, but nothing that would change the model. But the deterioration was the moment we took MoneyPak off the shelf, how many of those MoneyPak sales would convert to SwIT? And the answer is not as many as we had modeled.

So then you have to start doing the math backwards. Okay, well, if we thought that X million missing reloads would generate Y million less of revenue from the portfolio, now we've got to up that and the whole thing trickles down to a higher number.

And that's what the – so what you're seeing in that extra $20 million to $25 million precaution, if you will, is our expectation that those higher number of transactions will generate a higher amount of trickle-down effect over time. It may not happen. We forecast Q1 to be way worse than it turned out to be.

But as we're intellectually honest looking through this, it just doesn't seem logical as a guy who knows the business fairly well that you can lose that many reloads, and at some point, not have it show up in the portfolio. So, I think that's what you're seeing..

Okay..

Or, that's what you're seeing in our model. Whether we're right or not, time will tell..

Okay, thanks.

And just for the follow-up, Steve I'm not sure if I missed it, but where are we in terms of timing of moving to sort of in-house processing on the cards? Not sure if you provided an update earlier on the call on that?.

No. Well, on the call, Mark talked about the fact that we – actually it's not fully in-house, we're using MasterCard IPS is what the name of that division is called and it's their transaction processor. I want to be clear by the way because somebody had this question before.

The fact that this platform is owned and managed by MasterCard does not mean it doesn't process Visa. So, Visa has a processor called Visa DPS, it does everything. MasterCard has a processor called MasterCard IPS, it does everything. So, I want to make clear that the transaction processor is not the same as the brand of the network, if you will.

But any event, that enrollment or that integration has been going on now for quite some time. It will continue, we begin migrating cards on it towards the end of this year in Q4. And if all goes well, we'll be fully migrated on to that new platform by June of 2016, and then fully operating completely off that platform for the second half of 2016.

And that's our schedule that so far is running well.

We're in friends and family pilot now where you can use cards and see how it works, but it's a – for those of you listening who have done processor migrations, especially for a company this size, Green Dot is one of the larger debit portfolios in the country, you don't just flick a switch, it's a very, very thoughtful, slow, methodical process because we would tend to be extraordinarily risk-averse into interrupting any kind of service to the customer.

So, it does take a long time, but once you're on it, you're on it and the savings will be quite helpful..

Thank you. The next question comes from Mike Grondahl from Piper Jaffray. Please go ahead..

Hi, Mike..

Hey, guys.

First question, can you break out the active card growth for the Green Dot branded card and the private label card?.

We can, so the branded division, if you will, if you think of our business slides in our slide deck, business lines, the branded side was up about 3% from memory, and guys, tell me if I'm wrong..

Yeah, that's correct..

And the private label side was down a similar amount, I think closer to 6% and then the average was minus 2%, a little less than 2%, it was like 1.8%, something..

Got it, okay.

Did you complete or start that roll out in the Walmart Neighborhood stores?.

It's a fabulous question and I wish I knew enough to give you that detail. The answer is Walmart builds Neighborhood stores as they build them. And when the stores get merchandized, our products are in those stores.

To answer the question, Mike, fully and maybe we can get it after the call, I need to get familiar from our Walmart GM with how many stores have been built and opened and merchandized, and I don't have that at the tip of my tongue..

Okay. Thank you..

You bet..

Thank you. The next question comes from Tulu Yunus from Nomura. Please go ahead..

...taking my question.

Just firstly on MoneyPak going back, when do you think the MoneyPak, when did they disappear from the shelves? I know you stopped shipping them out sometime I believe in 4Q, but by...?.

Well, it was even more harsh than that. So, what we did was actually beginning in April of last year, it's been a fairly long process. They were out of all Walmart stores in April of 2014. Then we took them out of certain dollar stores towards Q4 of last year. Then they came out of other stores, and I have a roadmap that we can share later.

But all the biggies were out, call it, by the end of January. And then on February 1, we literally pulled the plug. In other words, even if it was on a shelf and the customer went to buy it, it would not process, it would say invalid sale. So we actually technologically killed the product for those where it was still in the shelf by February 1.

So the answer is, it was off, oh I'm going to take a guess and say 70% or 80% of all stores in January and then we technologically killed it on February 1..

Okay.

But then so why is the – you lost $12 million in revenue in 1Q, a period where two months you didn't have the product at all, and in the first month, it sounds like you didn't have the product working at most stores?.

Yes..

Why can't we just sort of like, I guess, annualize that? Is it because of seasonality? I mean because your overall estimate of $60 million to $65 million is significantly higher than sort of 12 times four, right?.

Yeah, that's right. Well, if you annualize it and said, first of all, you don't have three full months, but let's say you have – it'd be hard to guess, but let's pretend it was $50 million having to be killed January 1 instead of February 1, a complete guess.

You could annualize that and say, okay, well, there is a $60 million in transaction costs, right. So if you take the $12 million and annualize that, you already have $48 million, call it, $50 million to buy you some time for the one month that you were a little bit active. But that's just the transaction cost. That part's the easy part.

What – and maybe I didn't explain it well enough, but you have this portfolio trickle-down effect. That's the part that's been so difficult for us to get right. The transactional part is somewhat more trivial. We can figure that out once we see the run rate, although there is a seasonality. But we know what the seasonality is over many years.

So Q1 is always going to be your heaviest quarter, so not every quarter would be that heavy, but you could figure that out with a seasonal overlay and we do internally.

The way harder part is, what does that mean for active cards? What does that mean on GDV for active card and therefore interchange for active cards? And does that mean there'll be fewer active cards altogether because we're selling less cards to bad guys like crooks and good people will use them because they want a card for their son or daughter or husband or wife.

And so, these are all the behavioral metrics that you have to try and figure out. And then the one that's even harder than that is the cashier frankly. Some retailers, we love all of our retailers, but some have better training protocols than others.

So it would not at all be uncommon in Q1, especially when we first made the change, to walk into a particular retailer, the customer knows exactly what they want to do, hey, can you swipe my card, what do you mean, swipe it? Manager aisle three, what do you mean swipe it? No, buy a MoneyPak.

No, no the company said you swipe it, I don't know what that means..

Right..

Unfortunately, that's retail, it's not pretty, but that's the nature of the game and some are better than others. And over time, as enough customers complain and figure it out, we will see that training effect moderate, but in Q1, that's a big part of it as well. So, it's somewhat of a guess. And look I'll be honest with you, as we talked about this.

We thought, well, look, we can wait another quarter to lower the guidance. In other words, it's pretty early on to the year, maybe we wait another quarter to get six months of data, which would give us a little more of a reliable run rate. But the difference of transactional volume was a good 30%, 40% ahead of what we thought it would be in Q1.

And the answer is holy cow, if that continues at that rate in Q2, by the time we reguide and lower the top end in Q2, we already may be in that zone. And we didn't want to get in that trap. So, it may be that we have a little bit of a hair trigger on the top end, but we don't think so.

With that kind of transaction count, we know, just to your point, that just on a run rate basis, you could be 50% there, so that's already $10 million over – our high end estimate was prior.

And then you figure out what is the increased trickle-down or we're saying, okay, maybe there's another $10 million to $15 million of increased trickle-down, but it may not happen exactly that way. It did not happen that way in Q1, obviously it was a pretty good quarter, but that's what we're thinking..

Got it. And if I could just sneak in one last one, you talked about private label and Greet Dot brand is doing better than you planned. Can you, have you sort of adjusted your guidance to reflect that? And if so, could you share what your revised expectations are on both of those? Thank you..

Well, we don't guide on many – kind of one business line. It's the entire enterprise and then we guide with organic, which is a combination of all of our organic portfolios with Walmart and Green Dot. So, the guidance implies whatever performance we think we're going to have on those cards within that. I'll say this by the way.

Walmart is a wonderful acquisition partner. And we sell the Greet Dot brand at Walmart. So, when we talk about the Green Dot brand versus the private label program, both are sold at Walmart. You can buy the Green Dot brand and we sell a tremendous number of Green Dot brand cards at Walmart.

And it's fair to say that much of the success we've had in the Green Dot brand has been driven by Walmart, maybe at the expense of our own private label card at Walmart.

So, it's all – Walmart is still an important distribution partner and you can see that when you look at total revenue concentration versus the revenue represented by the private label program contract. But in any event, it's all in the implied guidance, that mix would be in their good and bad, all portfolios..

Got it, thank you..

You bet, thank you..

Thank you. The next question comes from Tien-tsin Huang from JPMorgan. Please go ahead..

Tien-tsin, you would win the name annunciation of the day award..

Oh, no, I'm used to that. I don't even pay any attention to it, but thanks for that. I guess I'll start with you, on your last comment on the Walmart side. What was the actual revenue in the quarter in the concentration, and I don't think I heard any mention of GoBank.

How did that do at Walmart?.

Yeah, we didn't talk about the GoBank or the other stuff because the script was so long based on all the other data about MoneyPak that we just didn't fit it in, but GoBank continued to do well. The retention continued to do well.

Really, the same story as last time, that product has done well, but we wanted to do better and better and we want that product to be another channel that can help us get to that seven figure run rate.

Jess or Paul, which one of you would have the total Walmart concentration for the quarter or product?.

Hey, this is Mark. So, the total Walmart concentration would be 40%. But if we're looking at just MoneyCard....

Yeah, I'm sorry, you may be right because of TPG, that's right. Okay, I was going to say that sounds very low..

When we're looking at MoneyCard, it's the 29% where we, under the 30% where we thought it would be..

Yeah, but the total concentration he's saying is 40%, and the reason it's not the 50% I expected when he said that was because we have TPG in their guidance. So, the answer is, that will come up another quarter, okay..

Okay, that's good to have. Thank you.

And then, just with my follow-up, just tax, the TPG question and also a tax rebate kind of question if you don't mind, just so the tax, the TPG shift in the channels, do you have a plan to point that to your product next year to sort of reverse that trend? And as I was picking up that question, I was wondering, was some of the difficulty in modeling MoneyPak related to tax rebates, maybe driving more historically into the MoneyPak, just trying to understand what was hard to model.

No, okay..

The MoneyPak modeling miss or what we think is going to turn out to be the modeling miss is just that we had a formula that we assumed based in part on what happened when we took MoneyPak out of Walmart of how many customers would simply move to SwIT. And that fundamental model was low.

In other words, we assume, let's pretend that X percent would go to SwIT, and in fact X minus some percent went to SwIT. So that's the fundamental miss there and it wouldn't have anything to do with tax refunds. On the TPG side, so I'm not sure it's a trend. And to prepare for the earnings call, I spoke with our CEO there, a great guy, Bill Maher.

And I said Bill, tell me about this, because what we're saying, it's a shift from your franchise higher-margin players, if you will, or net margin into online or digital which has lower margins and that's the channel mix that we saw.

Is it a trend? Is it a one-time event? Their view is it's not a trend, it's just what happens year-to-year, season-to-season, sometimes it's more, sometimes it's less. And so I don't know that it's a trend because we've not seen that consistently.

What happened was the two of the franchise players did more of those transactions in-house, they've always done them in-house, but they tend to allocate some to third parties, some they keep in-house. Having said that, there's other conversations we're having where more is coming to TPG for next season and we're in those conversations.

So I think what he's is trying to say is it's part of the year-over-year negotiation, not particular a trend. And it's a 25-year-old company and you can see over those years, those numbers bouncing around somewhat. But I think it's fair to say they guessed wrong for this year, I think that's clear.

I was somewhat, as you can imagine, disappointed and a little unnerved by the percentage of that given the quarter. But as I worked with Bill on that, I feel more comforted that it's the nature of how that industry works and how that company works.

On the question of how do you get it back, so there's some revenue synergies that we talked about when we bought the company that we feel incrementally more positive about now than when we bought the company.

And that is, can we work with the tax preparation companies who use TPG's processing services to sell Green Dot accounts and GoBank accounts and that type of thing? Those conservations are going really well, you never how it's going to turn out, but we built a really powerful collection of assets, meaning a really great banquet of big balance sheet and strong relationships with advocates and others who matter, a very, very strong technology bench, increasingly becoming viewed as one of the best in all of financial services and great products and a great brand.

And so, as we meet with these tax preparation companies, along with executives at TPG, the reception has been very, very – how that all turns out at the end of the day, I don't know, but I think we will have some opportunity there.

And I do think that the miss in channel allocation shouldn't be taken as a trend or at least that's what I've been convinced after my conversations with TPG management. So, anyhow – and by the way, it's interesting to note the number of transactions is actually up.

So, it's interesting to learn that business better and to see it, I have six months of experience at it, Bill has been there for five years or six years. So – but that's the information and I hope that explains it a little bit better or gives you some better color..

It does. Thank you, Steve..

Thank you. The next question comes from Smitti Srethapramote from Morgan Stanley. Please go ahead..

Steve, I think my name beats Tien-tsin's..

Operator, if you're listening by the way, it's meant to be a humor and it's very tough, I would have just as tough of a time. But go ahead, Smitti..

Sure.

So, first question is, can you help us quantify the cost synergies from the acquisitions, where they're coming from and also help us understand the – you're able to maintain guidance, can you help us understand where the upside to EBITDA and EPS are coming from, if you can help it?.

Yeah, what was the first question? I couldn't hear what he said, what's the guidance – where the cost synergies come from? Yeah, so let me answer the first one first. The cost synergies come from all the things that Green Dot, well, I'll call, the mother ship does so well.

We're just such a high scale player in terms of things like call center and IVR and increasingly software development and risk and loss management and regulatory oversight, and all the things you need to do in States to sell financial products. So think about that whole, what I call, the belly of the beast, the widget factory.

And we do that at such high scale and not to sound overly proud of our company, but we do it so well in terms of the quality scores and the way we do the training of our employees in call center and at risk. We really are best-of-class operator in that way.

So when you make an acquisition like AccountNow and Achieve, and they're good companies but they're small, they're small scale, things that they're doing for let's pretend $1 a call, we end up maybe doing for $0.23 a call, or IVRs that they're outsourcing and that are costing X per call into the IVR, we're fractional to X.

And you just go down the list. Our loss management techniques. The technology that we have to detect potential regi charge-offs before they become regi charge-offs.

Smitti, you know it because you're probably a customer of a large bank and something will happen and you'll get a text message or a phone call that says, we've noticed unusual activity on your such and so card, please call 1800.

Those are all neural networks that are predictive of common usage pattern by customer that tells you, hey, this one day could turn into a fraud event that will turn into a charge-off. We've never had that stuff before, but we do now. This is all the technology that we've invested in.

So when we take these smaller companies and to a very systematic process, begin to integrate chunk by chunk, the cost savings can be quite extreme. And we're having good success with that. We also have a wonderful team called the F2 (47:00) Office which in Green Dot kind of runs our world.

It's called the enterprise-wide product delivery office and headed by one of our 11-year executives.

And it's a very important division because it's a very systematic project management team that touches every division of the company and we work these integration projects in a very methodical and professional fashion so you can actually guarantee certain results by certain dates and it's actually hit every single target.

They've done a wonderful job. So a lot of sales in those divisions, all the things you would expect.

And then the second question was what?.

I guess you know, you outlined you were able to make up for the lower revenue....

Oh, the shortfall, yeah....

Yeah, shortfall, three different things, can you just help us quantify what percent of the...?.

Yeah, so three things, one was, and the word got a lot of laughs, but I don't how to better describe it, maybe for Italian, I'd say agida, but all the nonsense, all the noise, the word I use is meshugaas of MoneyPak..

Yeah..

It's hard to quantify it, but on one hand, you're saying, hey, this product is pretty good gross margin, maybe it's a 40% or 45% gross margin, but that's also the product generating all the calls to call center....

Right..

...and all the risk activities, and me flying to Washington D.C. to give testimony to Senators, and packaging that is out of stock and constantly doing emergency replenishments and on and on and on.

And in fact while we couldn't quantify it and rip it apart in an analysis, just knowing the company the way I know the company, I said guys, when we get rid of that product, you're going to see a lot that nonsense go away.

And in fact that's happened, so call center utilization and utilization of our risk investigators and charge-offs as a percentage of MoneyPaks, all of that has plummeted and that's been one big area. Another area is just the initiative effect, initiatives we put into place.

We spent a lot of money on technology that, as Mark said in his script, has the impact on D&A that is painful when you look at our EPS year-over-year. But, this stuff allows us to long-term be a sustainable competitive player and compete with all the big boys.

We can't be a bank of our size, look we've become a pretty big sized bank when you look at our customer accounts, 5.5 million active customers, and that's without the nonsense of MoneyPak and whatever that was generating. That's a big bank, at this point, if you look at the national size of banks.

And so, we need to have the technology that allows us to compete on an efficient basis. So, all the predictive fraud tools, some of which I mentioned earlier, the new CRM software package, which took us way too long to develop frankly, but was a couple-year process.

But now when you call the company, we know by whether you're calling in, are you a high-value customer and you go to that operator over there, are you a low-value customer, we like all of our customers, but on a relative basis, and you go to that operator over there, are we are going to give you that Reg E (49:48) chargeback right away because you know that you've been with us for a year in direct deposit or are we going to investigate that claim because you've only had your account for a day and it's weird that you're calling about a Reg E (49:56).

All these kinds of things allow us to more efficiently execute our day-to-day business, and the savings have been extreme when you look at all that. Another area was our software development center in Shanghai, China that was built by Kuan Archer who at the time was our Chief Technology Officer, now he's our Chief Operating Officer.

Kuan without question one of my more favorite executives in the company. And he said hey, Steve look at, no disrespect to you guys, you're all my favorites, Kuan would be one of my many favorites.

And he said look, when I worked at Microsoft and Symantec and others, we had these Chinese development centers, I'll build one for you and it's really going to help us in addition to our technology centers in Palo Alto and in Pasadena and in Tampa.

It's going to allow us to do a lot of software development, QA and other key assignments, especially on the mobile apps and Internet at a price fractional to the U.S., while still maintaining a very powerful U.S. presence. And we've done that and you're seeing the efficiency of code checked in across the world that's quite impressive.

If we ever put together another Investor Day here at the company and it would be fun to do, we'll show you what's called the international sync-up where Green Dot Pasadena, Green Dot Tampa and Green Dot China, all sync up on these big TV screens.

So, literally, we're working around the clock on code development, QA, checking in code and that's one of the ways we've been able to develop so many new products simultaneously and integrate processors and build new risk controls, it's really been a renaissance period for Green Dot over the past 12 months..

Great, Steve, thanks for that detailed answer, and then maybe just lastly just quickly, any updates on the Walmart renewal?.

I thought I'd go through the call without a Walmart question, but it's fair to say. The answer is that none that I can share with you, yeah, none that I can share with you, I guess....

Thank you..

Okay..

Thank you. The next question comes from Ashwin Shirvaikar from Citibank. Please go ahead..

Thank you. Hey, guys, so midpoint-to-midpoint, you lowered revs by $30 million, that's great. I guess a point of clarification, was the revenue contribution from the two prepaid managers, program managers already included in your prior guidance? Just want to make sure..

Yes, so AccountNow and Achieve were part of this year's guidance, that's correct. Yeah, I mean – and that's why we try to give the little roadmap to that so you can see about $32 million, $7 million on the miss on TPG for full year and the potential additional impact of $25 million on MoneyPak, those together are $32 million.

And that's the delta that we're trying to guide down to. We've padded the top end a little bit with another $8 million because it felt good, but that's how we did the math, that's right..

Okay. And with regards to the MoneyPak product, as you were taking it out of various stores over the course of last year, were you already seeing some sort of a downstream impact that could have helped you in the analysis to your – I'm trying to figure it out, I mean clearly, you've given yourselves some breathing room here.

But I'm trying to figure out sort of the level of confidence if that...?.

Oh gosh, look, I'm trying to think about how to describe it. I think it's fair to say that we've struggled on guiding MoneyPak. To have this kind of a miss or this kind of an increase in the estimate after one quarter would be a fairly good indication that our prognostication isn't exactly going to win the FP&A award of the year.

So, I think it's – we have to go back and say, well look, how the hell did that happen? What did we do to figure that out? You go to look at all the analysis.

And the core analysis of it, because it's not scientific, you're trying to understand cashier behavior, customer behavior, how much is really fraud, how much is, really to the honest, mom and dad trying to buy a card for their kid in school? You don't know.

And so, it's honest guesses and we have actually multiple teams of people in FP&A running their own analysis to see who, I know we chose the highest one which is $40 million of the three analyses that were done.

But at the end of the day, it wasn't enough and to make sure not that we're overly cautious now, but the number of transactions I think, if you were to say what's the core analysis you got wrong, it would be, we thought more reloads would convert to SwIT than it did.

That's probably the foundational analysis because everything flows from that foundational analysis, right. And that I think is the part we missed. Now, we have theories right now in our revenue team that oh yeah, but Steve, once the retailers learn how to do it more and more, they're learning how to do it, and that trend will self-correct, maybe.

We could have waited, like I said earlier to one of the other questions, maybe we could have waited another quarter, don't know. But that sort of was our thinking in it, and we'll see how it plays out.

We were really pleased, we thought that Q1 organic results would be really damaged because you have MoneyPak going away, you have a lot of confusion with cashiers, it's tax season, kind of the perfect storm. But our core business really held up once well, direct deposit was increased at record levels.

We achieved a record milestone in the number of reloaders and the number of direct deposits, with 1 million direct depositors and 3 million active reloaders, far and away the largest active reloading base in the industry.

And it's all not to all, in other words you're seeing the fraud leave the system to the extent we had that fraud, it's gone, we can't do it now. And we don't have any deals today with any tax preparation companies.

So, Green Dot is kind of naked in the sense that it's just customers who choose our brand and use it, as you would choose to use our bank account at whatever bank you use. So it's a pretty gratifying result, if that may change rest of the year, we'll be at the high end of range or maybe better, who knows? But we don't know.

And with that many missing reload transactions, we think that we're going to be in for a spank and we're just not sure exactly when and that's why you're seeing the caution..

Understood. Thank you for that, appreciate it..

Thank you. The next question comes from Andrew Jeffrey from SunTrust. Please go ahead..

Hi guys, thanks for taking the question..

Sure, you bet..

Steve, as I think about the knock-on effects from the discontinuation of MoneyPak, how have you thought sort of holistically about whether or not there are or were Green Dot customers who were really using MoneyPak solely for sort of that anonymous load, the quasi-cash functionality of the product and may never come back and ultimately create sort of a, perhaps a structural change in the growth profile of the business? In other words, when we lap this MoneyPak....

Yeah..

...discontinuation, could there continue to be this trickle-off effect, if you will?.

Well, no, you level out. But to your point, Andrew, we fully believe that there's, and that's why we killed the product, that there's some level of nonsense and mischief in the portfolio. And by the way, that would be, as you know, not just with Green Dot, every bank has fraud, every bank. I don't care who you are and what you are.

And every prepaid company has it.

I think what maybe is a little bit different about Green Dot is because we're the only bank in the industry directly regulated by the Federal Reserve and because as an individual, I have a somewhat conservative view on these kinds of issues, regulatory issues, governance issues, so we tend to run on the more conservative side.

As we've always been, as you know by following the company, very, very strict on fraud controls. Way back before anyone talked about tax fraud and anything else, we were on these earnings calls as far back as 2012, talking about new risk controls and new methods of out-of-wallet identity verification.

It's a neurotic question, but why is Green Dot doing that? Nobody else is doing that, well now they are. They're going to need to, right. And we've always sort of been on the cutting edge of that.

And so we did believe and do believe that some amount of our active cards and some amount of MoneyPak sales were there in ways that we don't want them to be there. We want them out of our company. And this is what I said in my prepared remarks.

It may be that at the end of the day, you're a somewhat smaller revenue company, but a more efficient company with higher margins, less call center utilization, customers who are more available to lend money to as we try to get into lending and other kinds of activities and a more healthier, sustainable, long-term company. And so, you may be right.

I don't think it affects your growth profile forever. That wouldn't make sense. In other words, you can only get rid of MoneyPak once. So once that product's gone and it's been gone since February 1 and increasingly to last quarter, Q4 into February 1, once it's gone, it's gone. So what you're going to see is, and frauds, just by the way, don't retain.

In other words, you don't buy. Remember, our cards are never anonymous. They're fully fledged Patriot Act-compliant bank accounts. So, to open an account, you have to go through the whole panoply of customer identification tools, just like opening a checking account at a Chase or a Wells Fargo or somewhere like that.

So, it's the same controls that all of us use as regulated banks subject to Patriot Act. So the cards were never anonymous. The question is, when do you see all the nonsense get fully out of the system? Our answer, the answer is, should be fairly quickly because fraudsters don't keep their cards and reload them for years.

They use them, they get their money off, they throw them away, they buy a new one. They use them, they get the money off, they throw them away, they buy a new one. And that's what creates those one and done or part of that one and done behavior. But you also have a lot of very honest customers doing the same thing.

I want to buy something at Orbitz, an airline ticket. I want to buy something at eBay, I need a card for a day. So, the problem is that the fraudsters look just like a good guy. And so, we're not sure exactly where it's going to end up. But to your point, that's why we're so thrilled with how resilient the active card base was in Q1.

Yeah, we were down 1.8%, but given that we lost MoneyPak's 20% down in the reload division, we could have had every right to be down 15%-20% and we weren't.

So, that's telling me that hey, we may have been selling MoneyPaks or having trouble converting to SwIT, but our active card base, which seem to be what's remaining honest good customers who want to use a bank that doesn't rip them off.

And that's what excites me because even if it means you got to take a haircut as a reset in revenue, it is what it is. But going forward, you have a real customer base that has sustainability..

Okay. And one quick follow-up, I noticed that some of the historical metrics, card metrics, cash transfer metrics, et cetera, were restated.

What's going on with that?.

That, I don't know what that means.

Jess, can you restate it what way, Andrew?.

(1:01:34)..

Oh, you're talking about key metrics yeah, because we bought companies and bought portfolios and so, so you can't, in other words, we're no longer just a prepaid company. So you have to sort of include now GoBank, which hadn't been included before, and that now has legitimate GDV.

We now have an ever-increasing gift card portfolio that we now need to sweep in or should sweep in to give the size of a full network. And then what we did for the GDV at PPG, a lot of initials here, that is large GDV, we did not include that because that's really not consistent with the card portfolio.

So that we're keeping separate as a transaction metric. But the explanation should be fairly obvious and logical to our investors.

And I would assume it is to you too, but was there a question about one of them that did not seem logical?.

No, just to clarify, you just pro formaed the historicals....

Yeah, and then what you do is you change the prior period to make sure that investors can see the apple-to-apple comparison. That's exactly right..

Thank you..

Thank you.

I think operator, that does it unless my screen is wrong and – is there anyone else?.

No, at this time, we're showing no further questions..

Okay, well thank you for your time today on the call. I know there was a lot of data and lot to share, but we wanted to give you a good crisp review. Thank you, Mark, and you did a fabulous job today and thank you everybody for listening. And we'll see once you, I'm sure, on the conference circuit shortly..

Thank you. That does conclude our conference for today. Thank you for your participation. You may now disconnect your lines..