Liz Bowman - Assistant Controller and Director of SEC Reporting
Ron Johnston - CFO
Keith Kendrick - SVP of Strategic Marketing
Alex Hart - President and CEO
Brett Huff - Stephens
Brad Evans - Heartland
Tier Technologies, Inc. (TIER) F4Q10 (Qtr End 09/30/2010) Earnings Call Transcript November 23, 2010 8:00 AM ET
Good morning and welcome to the Tier Technologies fourth quarter and FY 2010 earnings conference call. (Operator Instructions) Thank you. Ms. Bowman, you may begin your conference.
Good morning. My name is Liz Bowman, Tier Technologies Assistant Controller and Director of SEC Reporting. At this time, I would like to welcome everyone to the Tier Technologies earnings conference call for the fourth quarter and fiscal year ended September 30, 2010. Today's call is scheduled for one hour.
After the market closed yesterday, we issued a press release announcing Tier's financial results for the fourth quarter and fiscal year ended September 30, 2010. And we filed a copy of the text of today's call, not including the Q&A, and accompanying presentation which includes Charts that will be referenced during the call. A copy of these materials can be found in the Investor Relations section of our web site, www.tier.com.
We invite shareholders and analysts who wish to speak to management about the company and its performance to schedule a meeting by contacting our CFO, Ron Johnston, by calling him at 571-382-1333 or by e-mailing him at firstname.lastname@example.org.
A taped replay of this call will be available on the company's web site from Tuesday, November 23, 2010 at 10:00 AM Eastern Time until Tuesday, December 7, 2010 at 11:59 PM Eastern Time. Alternatively, you can hear a replay by dialing 866-445-8304 and entering the conference ID 9206454.
I want to remind you that the various remarks that we make about the company's future expectations, plans, and prospects constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.
The forward-looking statements discussed on this call represent management's current expectations about the company's future financial performance based on the information available to us today. This information may change and our actual results may differ materially from these forward-looking statements. We undertake no obligation to update any such forward-looking statements.
There are numerous risks and uncertainties that affect our business and may affect these statements, including but not limited to general economic conditions, which affect the company's financial results in all of our markets, which we refer to as "verticals", particularly the federal, state and local income tax and property tax verticals; the effectiveness and performance of the company's systems, payment processing platforms and operational infrastructure; failure to achieve anticipated gross margin levels due to unanticipated costs incurred in transaction-based projects; increasing competition; the company's ability to realize revenues from its business development opportunities; changes in laws and government regulatory compliance requirements; ability to attract and retain qualified personnel; and other risk factors that are set forth in our SEC filings. In this call, references to "the quarter" or "the fourth quarter" refer to quarter ended September 30, 2010 and referencing to the year or the full year refer to the fiscal year ended September 30, 2010.
In addition today on the call, Alex Hart will discuss our intention to conduct a Dutch Auction tender offer to purchase up to $10 million in our common stock, which was announced in our press release yesterday. The tender offer will be made only pursuant to the offer to purchase, letter of transmittal, and related materials that the company will distribute to the stockholders and filed with the Securities and Exchange Commission. Stockholders and investors should read carefully the offer to purchase letter of transmittal and related materials before making any decisions with respect to the tender offer, because these materials will contain important information including the various terms of and conditions to the tender offer.
Stockholders and investors may obtain a free copy of the tender offer statement on Schedule TO, the offer to purchase letter of transmittal and other documents that the company will file with the Securities and Exchange Commission, at the Commission's web site at www.sec.gov, when these documents become available. Stockholders may also request a copy of these documents, when they become available from the company at no cost by writing or telephoning the company.
With me on the call today are Ron Johnston, our Chief Financial Officer; Keith Kendrick, our Senior Vice President of Strategic Marketing; and Alex Hart, our President and Chief Executive Officer. We'll begin the call with Alex. Alex?
Thank you, Liz and good morning. I've been on the job for exactly 99 days. So I'd like to start by giving you an overview of the things I've learned and the actions I've taken thus far to get this company back on track. Our financial results have obviously been very disappointing. I know that I won't be in this job for long, if we don't show meaningful improvement relatively soon. Ron will go through the financial results in detail in a moment.
So I'd like to start with the fundamental challenges that we faced that led to this poor performance and tell you what we're doing to meet these challenges. After Ron goes through the financials, I'll also spend some time talking about the reasons that I'm excited about our longer-term potential. And give you a sense of how and in return how you can assess whether or not we're making progress. We'll conclude of course with Q&A.
First and foremost, I think it's important to admit that we've made some fairly sizable mistakes over the past few years. We have a lot of great people, a number of strong long-standing client relationships and significant domain expertise in a profitable and growing segment of the bill payment business.
Unfortunately, we also momentarily lost sight of some important things; the fact that our clients and our customers that reasonably exist; the idea that our associates expect and deserve to work in a respectable and collaborative environment for the benefit of our clients; and realization that our investors deserve a meaningful return in exchange for the purpose of using their money to build the business.
In short, despite good intentions, I think we took our eyes off the ball. With that result that that we have significant debts to repay to our investors, to our clients, and to our associates. I'd first like to address our relationship with the investment community.
As a public company we have a responsibility to make the best decisions we can to generate meaningful and sustainable return to our investors. We may not always agree with each of our shareholders in terms of the best way to achieve those goals, but they have every right to expect that we will consider their perspectives and explain the rationale behind our decisions in public forum such as this call.
One of the first questions I got, after taking the helm here, was whether or not we were going to do a stock buyback or utilize some other means of returning some of our cash to shareholders. We currently have $20 million stock repurchase plan in place and thus far we've purchased about $12 million worth of our stock in other plan. But we clearly cannot buy enough stock, as quickly as we would like to under the existing program. We are therefore going to cancel the remainder of our existing plan and hold the Dutch Auction tender offer to buy up to $10 million worth of our common stock.
Some of you may look at our balance sheet and wonder why we're not purchasing even more. But we frankly need to take a fairly conservative approach for the time being. We currently have $63.1 million in various forms of cash, cash equivalents and investments in marketable securities. Of that amount, $7.3 million are in restricted investments. We need to have at least $25 million to $30 million cash reserve to maintain our ability to use ACH processing.
After the ACH requirement, we will have approximately $24 million to $29 million in cash. Of that amount we need a healthy operating cushion while we figure out the true cost of operating and improving the business. Especially in this environment where companies like ours are finding it very difficult to secure bank loans on reasonable churns.
Given these considerations, we think the $10 million is the most that we should use at the present time for stock buyback. With that said, we will not be in a position to consider any meaningful acquisitions for the foreseeable future. And we do not anticipate having any significant improvements in the short-term investment potential of our cash. So we will continue to assess our cash needs with an eye toward the future purchase of our stock, while obtaining an attractive price range.
Our debt to our clients is of equal concern. We currently operate on three technology platforms. We made some very well attention decision to support go further investment in these legacy platforms, while we worked on the platform consolidation project. But our relative lack of progress toward a unified system has led to 12 to 18 month delay in rolling-up some of the new product and services for both existing clients and new prospects or demanding.
The good news is that our market leadership position, especially in governments and higher education segments have enabled us to retain the bulk of that demand. Our immediate focus is on ensuring the continued reliability of our legacy platforms, completing the development of the products that will enable us to grow revenue at a more acceptable rate, and ascertaining which products in which customer segments warrant the most aggressive investments down the road.
To the lost of the both, some of our timed resources to determining which of the technological components we've built is worthy of continued investments. And what new components need to be added to both leverage our existing capabilities and minimize customer's disruption.
On the employee front, I would first like to thank those who continue to work very hard to serve our clients over the past few years. It sounds like it's been a fairly tough environment and I am both impressed with and grateful for the degree to which the majority of our customers, particularly of our employees have continued to do a great job.
Many of the folks, who've built the company as combined to create Tier Technologies are still around and as committed as ever to building great company. At the same time, I had to make some difficult decisions to part company with a few folks that were either miscast or in some cases too battle fatigued to re-engage at the level we need now.
We've already promoted several talented but underutilized leaders in sales, operations, implementations and information technology thus far. And we brought in a new product management exec, a gentleman named Atul Garg, whom I worked with in a previous life, to fill a big gap in our product development process. These changes have already yielded a renewed sense of energy and enthusiasm in their respective organizations.
Our biggest immediate need is for a Chief Technology Officer, who'll be able to help us to build the product development capability that we will need to capture the opportunities ahead of us. The new CTO will also lead design and the developments of the new platform architecture, so we will need to achieve the operational leverage that leads to sustainable margin growth. Since we've made progress in the CTO search, but we'll not be in a position to make any announcements on that front for several weeks.
At this point, I'd like to turn it over to Ron, for a thorough review of the financials.
Thank you, Alex. Results from continuing operations for the quarter reflected total revenues of $27.3 million, up 6.4% from the same quarter last year. During the quarter, we processed over $1.5 billion of payments, which represents an 11.7% increase versus the same quarter last year. This increase was driven by 25.8% increase in transaction volume.
EPS revenues for the quarter were $26.6 million, revenue growth of 7.3% and EPS was driven by increase in a payments process for educational institutions. Revenues from the educational vertical grew 24.8%. We also experienced strong revenue growth in our utility vertical.
Chart 4 provides a summary of the net revenue of the EPS business. Gross margin from continuing operations, which we calculate by subtracting our direct cost from our revenues was, 22.8% for the quarter which is 11.6% lower than the same quarter last year. Gross margin in our EPS business was 22.1%, down approximately 290 basis points from the same period of last year.
Overall margin reduction resulted from an approximate 40% reduction in our wind-down business. General and administrative expenses from continued operations were $6.7 million for the quarter up 31.5%, compared to the same quarter last year. The increase in G&A was attributable primarily to the accrual of severance expense expected to be paid to our former Chief Operating Officer, recruiting cost for our CEO and CTO positions, increased business tax expenses on a state basis, as well as a one time legal expense accrual reversal in the fourth quarter of last fiscal year.
Selling and marketing expenses were $1.9 million for the quarter up 54.3%, primarily due to the increased advertising cost over the prior year, as we expanded our marketing program to additional verticals and increased partnership payments in our education vertical.
For the fourth quarter, the reported negative adjusted EBITDA $2.1 million as compared to positive adjusted EBITDA from continuing operations of $1.1 million in the prior year quarter. On a full year basis we reported adjusted EBITDA from continuing operations of a positive $1.4 million, as compared to a positive $3.0 million in the prior year.
Throughout the fiscal year we incurred several non-recurring expenses including severances of $1.6 million, legal and governance cost of $.13 million, and various miscellaneous costs aggregating to $0.7 million. Without such one time expenses, adjusted EBITDA from continuing operations was approximated to $5 million. Our consolidated net loss for fully diluted share in the quarter was $0.25, compared to a loss of $0.06 per fully diluted share in the same quarter last year.
I want to have everyone please review the script and/or the accompanying Charts for definitions of adjusted EBITDA and net revenues. Charts 5 and 6 provided reconciliation of net income quarter loss from continuing operations to adjusted EBITDA for the continuing operations for the three and 12 months that ended September 30, 2010 and 2009.
Financial highlights for the 12 months ended September 30, 2010 are as follows. Revenues from continuing operations were $130.2 million from the same period last year. This growth was driven by our electronic payments business these revenues were$127.2 million up 3.2% over the same period last year.
The 3.2% revenue increase in our EPS business versus the same period last year was driven by the growth and number of transactions process. During the year EPS processed 18.7 million transactions and $7.8 billion in payment volume an increase of 25.9 and 13% respectively over the same period last year.
Chart 7 summarizes the EPS revenue and transaction growth trends since fiscal year 2004. For the year we reported a loss of $6.2 million or $0.34 per fully diluted share this compares to a loss of $11.5 million or $0.59 per fully diluted share in fiscal 2009. Details of this appear in Chart 8.
The consolidated balance sheet appears on Chart 9. Cash, restricted cash and cash equivalents and investable securities are $61.3 million as Alex mentioned earlier. This number reflects a reduction of $8.2 million from the prior quarter the reduction was caused by reduction and net settlements payable and quarterly loss.
You will also know the reduction in investments and marketable securities of $31.2 million reflecting the liquidation of the auction rate securities in July of 2010 that investment is now carried in short term investments and cash.
The company head count of September 30 2010 was 220 employees and 23 contractors. Lastly I want to mention that our Form 10-K was filed after market closed yesterday with the Securities and Exchange Commission we encourage all of you to review the statements and notes in order to better understand our current operations. Alex Hart says a few concluding remarks.
Thanks Ron. There are obviously a number of explanations for a poor financial performance some of which are beyond our control, but some of them are clearly things we can and will change. We recently completed both, the strategic review and the budgeting process and while we don't have perfect information we feel confident that we are headed in the right direction.
We're just simply focused on four goals, number one make reliability a reality, number two go where the payments are, number three fund the future and number four work together making reliability a reality is job one. Our company has developed a reputation over the years for being a reliable partner and payment provider to the IRS 4,600 direct billers in states and local governments, higher education and utilities industry.
Unfortunately our performance over the past few years has eroded the confidence of some of those billers and we've already begun the work to restore that confidence. As you know Tier Technologies was built through a series of acquisitions including Official Payments Corporation, People's Corporation and most recently ChoicePay Inc.
As a result we currently operate our business on multiple technology platforms. We've already discussed the fact that we've expended a considerable amount of effort to consolidate those platforms over the last two years but that effort has not been well received by our clients has delayed our progress in other areas.
At this time we postponed all migration plans for current clients and then set our focus on strengthening our existing platforms and making the necessary investments to provide competitive products on each of them. We're developing these products as self contained reusable components wherever possible to minimize the amount of rework that might be required in the future.
The previous management team will focus all new development on the consolidated platform and our lack of progress in that effort has left us at a competitive disadvantage. Therefore during fiscal 2011 we expect to focus our technology efforts on, one, increasing the stability, availability and reliability of all three platforms; two, maintaining industry leading security and compliance capabilities; three, retaining our existing clients by delivering the enhancements a new product that they have been asking us for; and four, improving our fundamental infrastructure including a review of any and all components that we might more efficiently outsource.
We expect to review of plans related to a consolidated platform by mid-year, I believe that this renewed focus will move us a long way towards our goal of making reliability a reality.
Goal number two is to go where the payments are. That sounds fairly straight forward but we have a number of very talented associates, they are capable of doing a lot of interesting things but we've occasionally lost focus of the fact that we need to concentrate our efforts and our resources on the markets and the relationships to bring us the most value.
I came to Tier, because I believe that the biller direct payments phase is more faster than the rest of the market. As a veteran of the bank centric bill payment model I was already aware of the fact that the total U.S. bill payment market as illustrated in Chart 10 is quite large, roughly $4.5 trillion annually.
My initial assumption was that the biller direct side of the business is growing at a rate fairly consistent with that of the bank consolidator business but in fact our research done in concert with the IT group this past summer in the case of the biller direct category is the fastest growing segment as indicated in Chart 11.
I am an early adopter, proponent and provider of electronic bill payment so its easy for me to forget that there is still significant portions of the population that have not yet embraced electronic payments but 68% of the bill payment volume as recently as 2009 was paid via cash or check. We believe that the biller direct model has inherent competitive advantages as the population continues to move from checks and money orders to electronic forms of payments. And part due to the availability of newer forms of walk up and sort of value-based payments, both of which are a fundamental part of our strategy.
Billers have always prepared to maintain the privacy of their customer relationships and many of them want to work with companies like Tier, so that they can provide these services in a way that improves their cash flow, reduces their regulatory burdens and reinforces the direct relationships they value. And unlike banks, which generally limit customers to using funds on deposit as a form of payment, we provide our billers with ability to accept a broad range of payment choices, credit, debit, ACH, and more to meet the needs of their customers.
There are a number of attractive vertical markets within the biller direct space, but we will focus in the short-term on the markets, where we believe that we have relatively unique assets. We recognize that we will probably need to broaden our vertical focus over the long-term and we will refocus our near-term efforts on billers on the income tax, real property tax, higher education and municipal utility markets.
A summary of our verticals and the growth rates appear in Chart 12. We served well over 4,600 billers in all 50 states and the District of Columbia today. And we intend above increase in number of billers we serve and just as importantly to improve and broaden the relationships we have today in these already growing markets.
We expect that this renewed focus will not only improve our standing with our core clients to billers, but will also improve our competitive offerings to consumers who are looking for more ways to pay their bills.
Chart 14, shows the growing number of My Account registrations at our official payments web site. Opt-in registration and the growing traffic our web site is generating, are indications that there is a strong interest in our service and real equity in our official payments brand, despite the fact that we've made relatively minimal investments in user experience to date.
Our third goal is to fund the future into a stronger expense management, and more creative use of outside vendors and payment processing partners. We've already begun creating a much more cost-conscious culture and will continue to manage cost in line with our strategy. While we've achieved substantial headcount reductions and facilities consolidations over the last several years, including the closure of three of our data centers between December 2009 and July 2010. I believe that more can be done.
We expect to improve profitability by growing revenues, while aggressively managing expenses. The summary is it may warrant increased investment as opportunities arise; if so, we'll explain our rationale for those investments and discuss the results we intend to achieve. All the areas haven't got any attention they deserve across all of our platforms, is a category that includes a number of direct cost, primarily the unchanged fees, payment processing fees, banking fees, dues and assessments we've paid at the credit card companies that we partner with to provide payment services to our clients.
We intended to focus on gross revenue generation, which is still important. But we need a renewed focus on net revenue and profitability as we grow the business. With regardless focus on costs, vendor management and higher margin payment choices, we can fund the future.
Lastly, we need to work together. The corporate culture that I inherited was fundamentally broken. And as I mentioned, some of our lease were either so steep in that culture, or so battle fatigue from fighting it, so we had to make some fairly immediate changes. As I said earlier, we have a number of very talented, dedicated and committed associates, and we will continue to look for ways to improve the efficiency of our organization. And to supplement the great people we have today with additional talent that fits our new culture and brings expertise, especially in the payments arena, we will need to fully realize the great potential that I see.
Before I open it up for questions, please note that we will not be providing additional information on the tender offer at this time. Information about the offer will be contained in documents that will be filed with the SEC and mailed to stockholders. And we are not giving revenue guidance at this time. This is a tough economic environment and simply do not have a way of predicting when tax-based revenues might return to traditional levels, while many states have balance budget requirements. It is yet to be seen how legislators will raise taxes in the midst of continued high unemployment and concerns over the strength of the recovery.
For all of our goals in fiscal year 2011, is to reduce our dependence on revenue from tax related payments. But it is a growing segment in terms of transaction volume and will continue to be a very important part of our business. Transaction growth in general, which we believe will be about 10% this year, is one of the metrics that we will discuss on a regular basis, since this is a reasonable proxy for the health and future revenue potential of the business.
Chart 7, which Ron Johnston referred to earlier, provides a current view of transaction growth for fiscal 2011. We believe that our renewed focus and the needs of investors, clients and associates will result in significant improvement in the underlying fundamentals of the business. And position Tier for a much more satisfying financial result in fiscal year 2012.
For we currently believe that fiscal year 2011 will be a relatively flat year from adjusted EBITDA perspective. We will of course try to do better than that, but there are number of debts we need to repay to get the company growing in the right direction again. In failing to make those investments for the sake of better short-term performance, it would likely lead to a much more uncertain future.
Thank you for your time and attention this morning. At this time I'd like to open the call to Q&A.
(Operator Instructions) Our first question comes from Brett Huff of Stephens.
Brett Huff - Stephens
Just a couple of quick questions, when you talked about flattish EBITDA are you talking about the roughly $5 million in adjusted EBITDA that you guys would have seen ex-one timers for fiscal '010?
Yes, we do.
Brett Huff - Stephens
And then the trend growth drivers, as you guys see going forward and you gave some initial guidance, it looks like about 12% type trend growth and that's a few points above what your kind of assumption for the market is? What do you think is driving, that should drive you guys above the market that little bit?
Well I think we're really well positioned in a number of our markets. We have a history doing very well in those places. Our biggest problem is that the actual size of transactions is down, because tax rolls are down and property values were down. But we continue to make inroads in terms of market share and to grow our transaction volume ahead of pace.
Brett Huff - Stephens
In terms of cost versus spend, I know that you're still probably going through what the right thing to do is for the business. But just, can you give us a couple of anecdotes of where do you think the cuts any come and where you think the spend, maybe needed just to give us in term of anecdotal sense for that?
In terms of changing the culture, I think there were a number of place where we just didn't think about the impact of certain things we were doing. For example, just staying at less expensive hotels when we're around the road and being more cost conscious, sharing rides whenever possible, things that I'm used to doing. And I think a lot of the smaller companies do, we drove offside of, and need to refocus on those things.
In term of structural changes, we really don't have any magic bullets there. We do sense that we're spending more in certain places and we'd like to that we could get more efficient in some parts of the company, but it so pretty early in a day there.
Brett Huff - Stephens
And then, you had mentioned that you thought there are some sort of debts that you needed to repay, it sounds like customer satisfaction as the company is focused more on the Nex-Gen platform versus the existing platforms. Have you seen, as you've joined the company to the day and tell you that you've seen attrition on some of those customers or is it just sort of a relationship that's been strained?
We've been relatively fortunate there. I think because of our history, because frankly it's a difficult market to sell into in many ways, because there's often an expensive RFP process for many of these fields. We've been fortunate to retain a lot of that business, but in the large utility market and particularly we've seen some attrition that is frankly not acceptable. Across the board though, I think we've done very well and retained our clients. But we know that there's pent-up demand for certain products and services that we haven't delivered yet and we need to make good on those promises very quickly.
Brett Huff - Stephens
In terms of the long-term cost structure, ex-some of the operational things that you're talking about, just sharing rides or hotel rooms. And OpEx one of the big story I think for us and some investors was the consolidation of the platforms to achieve just overall lower cost structure. And its sounds like we're going to wait maybe another six months or so and before you make a final decision on what to do there. But can you give us any color on when we will start to see the benefits to some of that consolidation if and when it goes forward?
At some extent it's a definitional problem, we have consolidated data centers and we've achieved some efficiencies through that process. I think perhaps we need to asses whether or not is a realistic goal to have a single technology platform in the sense, that while we want to have a single bill payment warehouse, we want to have a single payment engine, we may or may not have a single front end. And in fact it may not be desirable to have a single front end, given that things like mobile payments, walkup payments, all will have unique front ends so to the extent that we can reduce the complexity of the middle tier-I think we'll go a long way towards having a single system whether not it is actually single platform.
Depending on your definition, we'll be determining in part by our new CTO. I come out of the world where we did fairly massive integration for banks like Chase Manhattan, Wachovia, Bank One etc. And in many we would integrate 60 or 70 different back ends to create a single system. And a lot of those legacy back ends were not going anywhere. So I am familiar with the degree of complexity that can be achieved and the efficiencies that we can achieve through creating single Tier in the middle that really reduces the operational cost of operating those different systems.
Brett Huff - Stephens
And then the last question is can you give us an update on how the IRS business is doing I know we're past the peak season there, but just relative to the new competition you guys are seeing are you continuing to keep share or take share, or reducing share relative to those competitors?
We actually retained our share quite well this past year, although at a cost as you probably noted we spent more on advertising on paper on pay per click in particular that we would have anticipated in part to make sure that we maintain that share.
(Operator Instructions) (inaudible) your line is open.
Can you talk to us about the enhancements and new products that the clients are requesting?
I rather not get into the specifics of those for competitive reasons but they are not fundamental weaknesses in product they are enhancements to the product ways of leveraging what we already do for them in ways they find interesting and that we agree are interesting and we think profitable. And we simply put those off while we are trying to build a consolidated platform and have made the progress we should have.
You talk particularly about competition. What are you seeing in the overall market from a competitive standpoint how is it changing?
Those are changing a whole lot they're still are largely a group of fairly small companies, fairly aggressive companies that are making a certain amount of noise in certain geographies or in certain segments.
There is no single competitor or single set of competitors even that pose a particular problem, but there's no question that we are in segments that people find appealing and so I would anticipate that competition will increase over the next couple years specially since we frankly haven't rolled out new products and we given people a bit of an opening. So we need to come back very strongly.
It is looks like the convenience fee margins are getting squeezed though. And I'm wondering is that continuing or if people are coming into this market I wonder if they are looking at the margins that you are fighting against here?
That certainly is possible and I expect that in any business margins will get compressed. Especially we haven't offered anything new. You either offer additional value for the price you are charging or you expect your price to be compressed. And we haven't offered enough new value to maintain our pricing as well as would like and so we have work to do there.
And then on the customer service side that impact for part of your cost structure or not?
It is in fact the mixed blessing of loosing some of our large utility clients is that they had an overwhelmingly large customer service burden relative to our other clients. And so it's sort of a good news, bad news situation everyone want revenue relief. But I am not entirely sure we are making a lot of money on that revenue. And two of our new product management guys is very focused on this and figuring it out exactly which products, which deals, which segments, are the most profitable so that we can put more investment into those areas where we have the most opportunity.
It does appear we have one more question from Brad Evans.
Brad Evans - Heartland
I said a few actually with regarding inside ownership of the company and I am curious as to Alex since you've been on board have you been restricted from personally buying stock at this point and I am curious when the window would open for insiders to put stock personally?
I have not been legally restricted from buying stock I have been practically restricted from buying stock given my personal financial situation but I feel like I have very much in alignment with our investors' senses. I have a lot to take care if it goes well. I have (inaudible) again if it doesn't go well. So I certainly would love to buy more stock down the road as I am able to.
Brad this is Ronald I'd give you a little more direct answer on that Alex has joined the company in late August our quite period started 15 days before the end of the fiscal year which is September 30. And the availability for management and insiders to begin to buy stock again is after the third day from today.
Brad Evans - Heartland
Just to be clear then so that there have been since Alex's been on Board, there has been a window in which either management or members of the Board would have been able to actually in the open market purchase stock on a personal basis. Is that correct?
About 15 days.
Brad Evans - Heartland
Okay, so it is extremely disappointing that the board continues to and the management team continues to its just very confusing as to why insiders have not been able to show some commitment to the stock in terms of ownership that's a point number one. And I guess as a long term shareholder I guess you're just not making a very compelling case as to why shareholders not best off for the company to hire an investment bank to solicit interest in the Company.
I mean this is been a massive disappointment for shareholder and we continue to disappoint shareholders and the strategy that we are hearing now today is particularly troubling relative to where the company is currently situated relative to the last management.
So you're not making a very powerful case as to why shareholders should give management more time and one more chance to try to restore value shareholders and this Dutch tender seems to be an olive branch that is somewhat hallow?
Brad, I will respond to that frankly this is my first chance so I don't expect you to believe me. I expect you to do what I have asked my associates to do which is to cautiously optimistic. To at least be open to the possibility that the company poorly managed before it is better managed today will considerably better performing in the future, but clearly in 99 days I have not work nay miracles and the next 99 days won't produce some miraculous recovery either. But I think we're on the right path. I think we're focused on the right things that we have some very talented people. And we'll add some more talented people to the mix.
So I do think things will improve significantly I understand your frustration I feel your pain, It's shared by many of the associates here who worked for years to build the business that they have seen at a minimum stall in many ways to go back and it hurts them as well both financially and psychologically.
So, people are very focused on approving the performance and we hope you'll hang in there and we order for that.
As I mention at the beginning of this call a copy of the text of this call and a company in-charge are posted in the investor relation section of our website www.tier.com. We invite shareholders and analyst who wish to speak to the management about the company and its performance to schedule a meeting by contacting our CFO, Ron Johnston at 571-382-1333 or email@example.com.
Thank you. This concludes our earning release call for fiscal year 2010 for Tier Technology.
This concludes today's conference. Thank you for participating.
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