Currency Exchange International Corp

TSX:CXI

Good morning, ladies and gentlemen, and welcome to the Currency Exchange International Q2 2025 Financial Results Conference Call. [Operator Instructions] Also note that this call is being recorded on June 12, 2025. And now I would like to turn the conference over to Bill Mitoulas, Investor Relations. Please go ahead, sir.

Thank you, Sylvie. Good morning, everyone. Welcome to the Currency Exchange International conference call to discuss the financial results for the Second Quarter of the 2025 fiscal year. Thanks for joining us. With us today are President and CEO, Randolph Pinna; and Group CFO, Gerhard Barnard. Gerhard will provide an overview of CXI's financial results and his latest perspective on the company's operations. Randolph will then provide his commentary on CXI's strategic initiatives, sales efforts and business activities after which, we'll open it up for your questions.

The conference call is open to shareholders, prospective shareholders, members of the investment community, including the media. For those of you who may happen to leave our call before its conclusion, be advised that this conference call will be recorded and then uploaded to CXI's Investor Relations website page, along with the financial statements and MD&A. Please note that this conference call will include forward-looking information which is based on a number of assumptions, and actual results could differ materially. Please refer to our financial statements and MD&A reports for more information about the factors that could cause these different results and the assumptions that we have made. With that, I'll turn the call over to Gerhard. Gerhard, please go ahead.

Thank you, Bill, and thank you, everyone, for joining today's call. These results are presented in U.S. dollars and my overview of the company, CXI, will also incorporate the results of the discontinued operations of Currency Exchange International. As a reminder, on February 18, 2025, the group announced its decision to seize the operations of its only owned subsidiary, Exchange Bank of Canada. The plan aims for the bank to seize all customer activity by August 2025 in preparation for administrative and financial statement audits required and an application to the Minister of Finance in Canada to discontinue the Exchange Bank of Canada from the Bank Act. This voluntary discontinuance is expected to be completed in the fourth quarter of 2025, subject to the receipt of all necessary regulatory approvals. Financial information on the bank's discontinuance is based on our current, monthly updated information available as well as certain projected information based on various assumptions regarding revenue, expenses, currency movements and client behavior to name a few.

Any projected financial information as well as any information on the discontinued operations mentioned in this call as well as forward-looking information involves known and unknown risks, uncertainties and other factors that may cause the company's actual results, performance or achievements to be materially different from any of its future information.

As a result of the Board's decision to discontinue EBC's operations, the company assessed the requirements of IFRS 5, non-current assets held for sale and continued operations, and concluded that the Canadian business component related to EBC should be presented as discontinued operations starting this quarter, that's the second quarter. According to IFRS 5, the company presented the associated asset liabilities within a disposal group on the consolidated interim financial statements, as at April 30, 2025. Also, the results of discontinued operations are presented as a separate line item in the condensed interim consolidated statement of [indiscernible] and comprehensive income, net of tax. This classification resulted in presenting the company's results of operations for continuing and discontinued operations separately.

Now it is important to note that all results of continuing operations have been revised to exclude EBC's results and all associated intercompany transactions as per IFRS 5. The impact of EBC's results of operations is briefly discussed separately under discontinued operations as a segment in the interim financial statements. Accordingly, the United States operations represent continuous operations of the company and the Canadian operations present discontinued operations of the company.

In the second quarter, we reported $2.7 million of net income from continuing operations and a net loss of $0.7 million from Exchange Bank of Canada, our discontinued operations. These results include restructuring charges, related to discontinued operations in Canada, representing legal and advisory fees of about $200,000 pretax and certain onetime charges of roughly $100,000 pretax.

Now excluding these items, the group's adjusted net income increased by 18% to $2.3 million compared to $2 million in the prior year. Adjusted diluted earnings per share of $0.36 was 24% higher than the prior year. Management anticipates that certain operating expenses and personnel costs that are currently shared with EBC will be 100% borne by CXI, subsequent to the exit of EBC from Canada. And at the current annualized estimated costs is approximately $3 million after tax. This estimate is subject to change throughout EBC's discontinuance process. Now let's look at the consolidated performance for the 3 months ended April 30, 2025 compared to the prior year.

Before I go into details, I'd like to note that the company measures and evaluates its performance using a number of financial metrics and measures. Some of which do not have standardized meaning under General Accepted Accounting Principles or GAAP and may not be comparable to other companies. Now we call these measures non-GAAP financial measures and/or adjusted results. The company's management believes that these measures are more reflective of its operating results and provides a better understanding of management's perspective on the performance.

These measures enhance the comparability of our financial performance for the current period with the corresponding period in 2024. Management included a full reconciliation of the key performance and non-GAAP measures in the MD&A. When we refer to reported results, we refer to the results as reported in the financial statements based on IFRS, International Financial Reporting Standards. When we refer to adjusted results, such as adjusted net income, we refer to performance non-GAAP measures.

The company generated revenue from continuing operations of roughly $16 million for the 3-month period ended April 30, 2025, a 3% decrease from the prior period quarter. The revenue decrease was driven by a decline in the Banknotes product line despite a 5% growth in the Payments product line. The decline in Banknotes revenue was due to a decline in demand of foreign currency as [ travel ] activity tapered during the current quarter. Between February 2025 and April 2025, approximately 240 million traveler passed through TSA checkpoints in the United States airports compared to roughly 216 million in the same period last year. Operating expenses decreased $1.2 million or 10%. The company reported operating income of roughly $5.1 million in the current quarter, 16% higher than the $4.4 million reported last year despite the decline in revenues.

Now this is primarily due to the favorable impact of a weaker U.S. dollar on the revaluation of foreign currency bank notes holdings, which resulted in $780,000 foreign currency exchange gain in the current quarter compared to a foreign currency exchange loss of roughly $513,000 in the prior quarter. The group's net income, including the results from discontinued operations, which is Exchange Bank of Canada, amounted to $2 million in the current quarter compared to net income of $506,000 in the prior period quarter as last year's results were negatively impacted by a deferred tax charge of $1.4 million that was reported in EBC, which has been classified as discontinued operations.

Adjusted EBITDA for the current quarter was $5.1 million, an increase of 15% compared to the prior quarter's $4.5 million. The following is the highlight of revenue by product line from continuing operations for the 3 months ended April 30, 2025, compared to the previous 3 months ending April 30, 2024. Now banknotes revenue had a 5% decline in combined wholesale and direct-to-consumer in the second quarter compared to the prior period due to a decrease in consumer demand for foreign currencies as the quarter started slower, followed by a gradual improvement towards the end of the quarter. The company experienced growth in domestic financial institution customers while there was a decline in money services businesses.

The business trading volumes on wholesale banknotes revenue was $653 million for the current 3-month period compared to roughly $714 million in the prior period. Overall, wholesale banknotes accounted for 41% of total revenue compared to 42% in the prior period. Direct-to-consumer banknotes revenue decreased roughly $380,000 or 6%. Despite the slight growth achieved through the OnlineFX platform, driven by travel currencies, revenue generated via the other two delivery channels, tapered slightly during the quarter. During the current quarter, the company added the state of Mississippi to its network and the OnlineFX platform can now service 46 states, including the District of Columbia, 4 additional states compared to the same period last year.

Business trading volumes on total direct-to-consumer banknotes revenue was about $90 million for the current 3 months period compared to $94 million for the prior period. Direct-to-consumer revenue represents 42% in the current and prior quarter. Payments revenue. Revenue in the payments product line increased $135,000 or 5% in the 3-month period, compared to prior period, supported by a 13% increase in trading volume activity from existing financial institution customers and the on-boarding of new customers.

Business trading volumes on payment revenue were $1.4 billion for the current quarter compared to $1.27 billion in the prior period. And payments make up roughly 16%, 17% of our total revenue in the group. Now the following is a highlight of the operating expenses for continuing operations for the 3 months, April 2025 compared to the previous 3 months of last year.

As stated above and throughout this document, all results of continuing operations have been revised to exclude EBC's results and all associated intercompany transactions. During the 3 months period ended April 30, 2025, the company's operating expenses decreased by $1.2 million or 10% compared to the same 3-month period in the prior year. The ratio comparing total operating expenses to total revenue for the 3 months period improved to 68% compared to 73% for the 3 month period ended 2024, primarily due to the large foreign exchange gains realized during the current quarter.

Salaries and benefit expenses increased when compared to the prior period quarter mostly driven by growth in head count in our [indiscernible] and the company-owned branch locations, in addition to general inflation increases in salaries and benefits.

Marketing and publicity costs increased over 100%, primarily due to the company's expanded focus on marketing initiatives, campaigns, retail investments and establishing customer loyalty programs that support corporate goals with a focus on the direct-to-consumer business growth.

Bank services charges represent bank charges associated with payments and banknotes, transactions, but primarily driven by the Payments product line. It is important to note that the CXI processes certain payments through EBC's correspondent bank and gets a charge back allocated to our intercompany allocations. Stock based compensation includes a noncash amortization expense related to the vesting of the company's equity-based stock options in addition to cash-based awards of RSUs and DSUs. The liability from DSUs and RSU awards is adjusted to reflect the closing price at the end of each quarter.

During the current quarter, there was a net expense of roughly $65,000 related to outstanding DSUs and RSUs due to the impact of the decline in the stock price. This compares to expense of $285,000 for DSUs and RSUs in the prior quarter. Losses and shortages typically represent shipment loss in transit that the company sells from shares in addition to several other losses incurred in the normal course of business. In the current quarter, the company had many losses in shipments, better, in addition to some insurance recovery announced related to shipment. [ So our ] losses and shortages are constantly decreasing. Foreign exchange gains or losses represents the net result of foreign currency exchange transactions after considering hedging and risk management strategies designed to reduce inherent risk in the company's exposure to foreign exchange, thereby minimizing volatility in earnings.

Net foreign exchange gains for the current quarter of $780,000 were primarily attributed to the impact of a weaker U.S. dollar against the company's foreign currency banknote holdings. Compared to the prior year's quarter, where the company had $513,000 loss on foreign currency losses. The company's aging strategy is designed to mitigate downside risk while allowing the potential gains when foreign currencies strengthened against the U.S. dollar.

The Euro was the largest contributor to the net foreign currency gains for the 3-month period ended 30th April 2025. And the prior period was impacted by losses realized primarily on the company's bank holdings in Mexican pesos and exotic currencies. Interest on lease liabilities reflect additional interest incurred for the corporate headquarters as well as the [ new vault ] that opened in the second half of last year.

Interest expense decreased as a result of a decline in average borrowings. The company used the majority of its borrowing to fund EBC's operations, which started to taper during the current period. The average outstanding borrowings by the company amounted to close to $580,000 during the second quarter compared to $1.3 million during the prior quarters with the average interest rate on borrowing being 6.7% compared to about 7.7% in the prior year.

Now income tax expense in the current quarter is related to continuing operations in the United States, it primarily reflects an average, an effective tax rate of 31%, where the majority of the increased expenses above the statutory rate was related to stock-based compensation that was impacted by a decline in the share price as mentioned before.

Summary of the results of continuing operations for the 6-month period. Now as stated up in the document, all earnings from continuing operations have been advised to exclude EBC's results as well as associated intercompany transactions.

Revenue for the 6-month period increased $816,000 or 3% from the prior period last year. The revenue increase over the comparable period was driven by growth in both product growth in the United States during the first quarter of the year and was primarily due to the addition of new customers and an increased demand for exotic currencies. The 3% growth in revenue was primarily driven by the Payments product line, which had $550,000 or 11% growth, followed by a 1% growth in our banknotes revenue.

This is for the 6 months year-to-date. Wholesale and direct-to-consumer banknotes businesses increased $185,000 and $82,000, while operating advances decreased $445,000 or 2%. The company reported net operating income of [indiscernible] during the current 6-month period, which is 16% higher than the $7.7 million reported last year, primarily due to the growth of revenue and foreign currency gains realized in the current 6-month period compared to the prior year 6 months with the company at foreign exchange gains of $500,000 and comparing that to the prior period foreign exchange loss of $185,000.

The company reported a net income from continuing operations of $4.4 million for the current 6 months compared to $4.8 million for the same period last year. The group's net income including the results from discontinued operations, amounted to $2.8 million for the current 6 months period compared to $1.36 million for the same period last year, as last year's results were negatively impacted by a deferred tax charge of $1.4 million that was reported in EBC, as I mentioned, which is now being classified as discontinued operations.

Based on adjusted results, the net income grew $583,000 or 21% compared to the same period last year, to $3.37 million in the current 6-month period compared to $2.8 million in the prior year. So really that 21% growth in the year-to-date numbers on the adjusted results. Now the following is a highlights of the revenue by product line for continuing operations for the last 6 months.

Banknotes revenue. Revenue in banknotes grew in both the wholesale and direct-to-consumer and increased by $267,000 or 1% in the current 6-month period, compared to the prior period due to stronger consumer demand for foreign currency in the first quarter of the year, which tapered a bit during the second quarter. Also, banknotes revenue increased by $185,000 or 1% as business trading volumes on the wholesale banknote revenues were $1.2 billion for the current 3-month period compared to $1.3 billion in the prior period. While the company had growth in domestic financial institution customers, there was a decline in Money Services businesses. As I mentioned, overall, wholesale banknotes accounted to roughly 41% of the total revenue.

Direct-to-consumer banknotes revenue maintained levels with an 82% or 1% increase in the current 6-month period compared to the prior period as the company maintains its market share through its diversified delivery channels, including OnlineFX platform, company-owned branches and agent relationships. Payments revenue product line increased roughly $550,000 or 11% during the 6-month period compared to the prior period, supported by a 25% increase in trading volume activity from existing financial institution customers and the additional on-boarding of new customers.

Now the operating expenses during the 6 months decreased $445,000 or 2% compared to the same period last year. The ratio comparing total operating expenses to total revenue improved to 71% compared to 75% in the previous period. As we mentioned, stock-based compensation during the current period, there was an expense reversal in the amount of $110,000 related to the outstanding DSUs and RSUs awards as a result of a decline in the stock price, this compares to an expense of $846,000, for DSU and RSU awards during the same period last year.

Now let's briefly look at discontinued operations of Exchange Bank of Canada. They had a net loss of $692,000 in the second quarter compared to a net loss of $2.2 million for the same period in the prior period. For the 6 months ending April '25, discontinued operations had a net loss of $1.6 million compared to a net loss of $3.4 million for the same period in the prior year. Diluted adjusted loss per share from discontinued operations was a loss of $0.09 for the second quarter and a loss of $0.18 for the 6 months ending April 2025.

Reviewing the balance sheet as at April 30, '25, management views return on equity as a useful measure of return on capital invested. Due to the seasonality involved in the company's business, the company uses a trailing 12-month net income to calculate ROE, which has been consistent at around 12% over the last 12 months. On April 30, 2025, the company had a strong financial position with net working capital of $60 million and total equity of $81 million, and at 100% available unused line of credit amounting to $40 million.

On November 28, 2024, the TSX accepted the company's notice of intention to make another ECIB or share buyback and automated securities purchase plan and ASPP to purchase for cancellation, a maximum amount of 316,646 common shares of the company, representing 5% of the company's issued and outstanding common shares, purchased under this ECIB or share buyback commenced on December 2, 2024, and will terminate on December 1, 2025 or such earlier date in the event that the maximum number of shares sold in the NCIB has been repurchased.

Now during the 6-month period ended April 30, 2025, the company purchased for cancellation 80,500 common shares at market prices trading on the TSX for a total of $1.2 million. These shares were immediately canceled and moved from treasury.

At this time, I would like to hand the call over to Randolph Pinna, our CEO, for his perspective.

Thank you, Gerhard. Good morning, everybody. I will try to keep this quick and give you an update from the CEO's desk here. As you know, a big focus is made on our exit from Canada by discontinuing Exchange Bank of Canada. I'm proud to report that our discontinuance plan is on schedule. We have been operating a favorable to budget. We have successfully reached a favorable terms with all employees, so that they either have jobs or have been comfortable with our discontinuance. And so we're very proud that all relationships with the employees are continuing to be strong.

We are very focused on off-boarding all of our customers. The majority of our customers have stopped as of May 30. We do have a handful of domestic clients that due to our service obligations, we'll continue to transact with Exchange Bank of Canada, until August 30, and at which time all operations of Exchange Bank of Canada will cease, and the last few months of our fiscal year will be focused on the formal discontinuance that we hope to receive from the Finance Minister's Office.

Of course, with this in mind, my focus as CEO is not only to ensure the proper discontinuance and exit from Canada, but more importantly is the focus on CXI's overall strategy and the organizational structure of CXI to ensure significant growth, profitable growth for the years ahead. Our strategy session was quite robust this year, knowing that we no longer have our Federal Reserve relationship, our bank subsidiary and no longer have the intercompany trading transfer pricing and all of the complications of running a multinational organization. Now that CXI and its continuing operations is 100% focused on its businesses that it has in the U.S. and its relationships, we have that -- an updated strategic plan that is being presented to the Board of Directors this month for feedback and final approval in September as usually done.

Our strategy has not changed in the sense that Payments and Banknotes are our core focuses of the business. The Payments business being the smaller part, a much smaller part of the business, is still a high growth area we see. We are focused on continuing to add new customers, and that is through just raw new addition of customers as well as the integrations with trading systems, wire platforms, allowing for new customers to have the one provider, one platform relationship that we seek to establish with many financial institutions in the U.S., and I'm happy to see that continuing to grow, and we have a full pipeline in our Payments category for additional Payment revenues.

Additionally, we're very proud to announce that we do have three clients already on a Domestic Payment platform, utilizing the Federal Reserve Direct Program. The Fed Direct allows us to provide the software connecting the smaller bank to their Federal Reserve relationship in an automated fashion so that CXI receives Software-as-a-Service income while not processing the physical domestic payments. Now that our pilot is concluded, we are focused on selectively growing our payments business, both with International payments as a core focus as well as domestic opportunities should financial institutions utilize us for both.

The largest part of our business is our Banknote business, and that is continuing to remain as a top focus of CXI. The expansion in Louisville has been very successful and the Managing Director, Wade Bracy, has done an excellent job with automation and preparation for the potential significant growth that could be ahead for CXI's and Banknotes. The Louisville facility is strategically located near one of our primary shipping vendors, which has allowed us to expand our cutoff time due to them accepting packages up to 9 p.m. as opposed to previously our cutoff time was 4:00 p.m.

And therefore, this advantage is quite helpful, especially with customers on the West Coast or Hawaii, allowing for better processing, better customer service to the clients. Not only has this facility allowed for better processing times, it has utilizing recycling machines, which accepts currency in processes and then re-allows it to go out through the ATM machine. This efficiency has been very noticeable, and therefore, will allow us to continue to add business without having to add as many humans as we grow.

The pipeline for the Banknote product is still quite full. We do have additional new client opportunities in front of us, both in the wholesale banknote business as well as the direct-to-consumer business. The direct-to-consumer business, as you know, has three elements to it: the online store, as Gerhard mentioned, continues to allow us to reach more of the population, 46 states, representing over 92% of the whole U.S. population. So the OnlineFX program allows us to have a home delivery service or to their home or office, should they choose that instead.

The Direct-to-consumer business also has the Agent Program. We do see opportunity for significant growth through the agent program, through online and physical stores. And this is a great way to grow as we don't have the cost of rent, payroll, build-outs and all of those that go along with physical stores. Even still, the physical stores do allow for full revenues as opposed to the Agent Program is a shared revenue model. So we are selectively continuing to grow our retail network, with key markets, which are Florida, California, Hawaii and New York as well as select other states based on the dynamics of those cities that we intend to enter. So you will see us continuing to selectively add a couple of stores a year in our physical growth.

So between the wholesale business and the direct-to-consumer business, we do feel that we can continue to grow our banknote business in spite of the decline that we're seeing on inbound travel due to the political tariffs and other noise in the market.

Lastly, the executive team and I are always reviewing opportunities for mergers and acquisitions. We do not have anything to announce now, but I do confirm that it remains a priority for Gerhard and I both in the Banknotes and Payment space. Again, nothing to announce, but we continue to have interest in strategic opportunities. So that concludes my update. And I would like to turn it over to you to ask questions. I do since we spent quite a time on our little update to you. We do ask that you just have your one question, maybe a little tag on to it, but no more than two questions. And if you could re-queue that would be great if you have more questions. Thank you very much, and I'll open up the lines, operator?

[Operator Instructions] And your first question will be from Robin Cornwell at Catalyst Research.

I guess my first question is really on the $3 million expenses that you discussed is, Gerhard, is that going forward? So we -- and obviously, you probably expect that $3 million be finished by the end of this fiscal year. Can you just expand on that?

Yes, Robin. Thank you for the question. So that $3 million after tax is expenses that we anticipate to continue after exiting Canada. So they will remain with CXI. And that would typically be personnel costs, that will be bank charges that will be certain share costs between us and Exchange Bank of Canada.

Okay. So that is like a permanent expense going forward there?

That is a permanent expense. And not to that value, that is currently just our current approximation of what we see that lies ahead, but management is aggressively working to reduce those expenses. They're in personnel, they're in licensing, in software expenses. And Robin, [ I see ] important points to mention here as well as there is no continuation of EBC losses in the group results going forward either.

Right. So the expenses will be pretty much going forward. They're already in your numbers for the first half. Is that correct?

On an annualized basis -- on an annualized consolidated basis, those expenses are obviously consolidated into the group net results, but when you look at continued and discontinued operations because intercompany transactions are included, they are not have viewed or part of continuing operations or discontinued operations, each one of these entities get their own expenses for this quarter. So we highlighted the fact that there is transfer pricing that will now be canceled if we had a person in CXI that worked 40% for EBC, and we keep that person in CXI, we have to now pick up that additional 40%, because it will no longer be there.

My next question is for Randolph. Randolph, you mentioned the inbound traffic slowing down tariff impact, et cetera. What about the outbound traffic? Have you seen -- or -- and you're coming into your seasonally stronger period, do you sense or see outbound traffic stronger or weaker?

We have not allowed. It is noticeable that there are countries like Canada and select countries in Europe that seem to be what I'll call protesting with their feet by not by choosing to go to a different country instead of America this year. The outbound continues to be a strong business and we have not seen much change. It is -- as you see in the numbers, it's relatively flat. It's a little up due to the dollar has weakened partly, but mostly it has been these recession fears and so forth. But the outbound business is still strong business, and we do see growth in that business.

Our OnlineFX store continues to show growth and with our heightened investment in marketing for the online product and our overall cash product. We do feel that the outbound business will continue to be a strong area of revenue. And we feel the inbound is a temporary hiatus as a lot of people are still coming in spite of their willing -- their want to not come, but a lot of people are. So we do not feel that the banknote business is going to be so difficult, but we did see a softening in that. But the outbound is still pretty steady.

[Operator Instructions] Next, we will hear from Jason Senensky at Chapter Twelve Capital.

Just wanted to clarify on the $3 million, Gerhard. So is that -- are you saying that there will be $3 million of incremental costs to go against like the continuing operations? Or are you saying that there's $3 million of costs, some of which are currently being absorbed by CXI, but the portion was being absorbed by EBC will now have to be fully absorbed by CXI if you understand the distinction I'm making?

Yes, that's correct, Jason. So like my payroll was spread out between EBC and CXI -- of course, the majority was at CXI, but some of it was paid by EBC and now that EBC is not -- won't be in existence, we won't have the revenues. And thankfully, we won't have any more of their losses. There is this cost of roughly of $3 million that the organization will have, but we anticipate to absorb that relatively quick with the continued growth of the business.

As Gerhard mentioned in his comments. So if you had someone that was 30% devoted to EBC that person we have chosen not to let go. And hence, we have the capacity to continue to grow without adding new people. So I'd like to think that we will absorb that relatively quickly in the fiscal '26 year. But go ahead, Gerhard, if you want to add to that?

Jason, did that answer your question?

Well, let me just clarify one more time, just to make sure. So for the first 6 months of the year, you reported about $4.4 million of net income from continuing operations. So if I take that -- like am I to take that $3 million number divided in half and say that pro forma instead of reporting $4.4 million of net income from continuing operations, you'll report $2.9 million for the first 6 months of the year? Or is the impact less than $1.5 million sort of the half of the year?

The impact will be less than $1.5 million as we continue to manage those expenses down. But if you take continuing operations, which exclude any intercompany transactions or transfers or balances, you are correct. You have to look at that number, deduct it from continuing operations and to get your continuing operations number. However, as we mentioned, that on a consolidated group basis right now when you have continued and discontinued, those -- that $3 million is neutralized or eliminated, if I can call it that from 2025 numbers. But for '26, yes. Management has been actively managing the costs everywhere.

If you look at how we dealt with shipping, bank charges, and we're very focused on getting those costs as low as possible.

I think I've got it. I might just follow up offline to confirm. Maybe if I could just throw one more quick one in the net working capital went down quite a bit or even just cash went down quite a bit quarter-over-quarter. And I think that's because of the classification of EBC to discontinued operations.

But maybe, Gerhard, if you can just elaborate on the decline in net working capital and whether there's any working capital that you expect to recover from EBC as you wind down the operations there?

Yes. I think you're spot on there, Jason, as we mentioned in quarter 1, we are aggressively and actively working on exiting Canada, and there is a potential of repatriating some of our capital from EBC over to CXI from discontinuance of Exchange Bank of Canada at the end of the process.

And Jason, as you said, we can elaborate a bit more, but the interesting thing now is looking at everything and continued and discontinued. So if you think of that same question you asked for continuing operations, our working capital year-over-year for continuing increase from roughly $55 million to $60 million, because the number you see now on the balance sheet is continuing operations of CXI only. And I know that for the first quarter with the more challenging to understand and you look at the balance sheet, the whole EBC is actually now consolidated into three lines on the statement of financial position.

So EBC is now literally only included an asset held for distribution to shareholders, liabilities directly associated with asset held distribution to shareholders and at AOCL. So every other number in all the financial statements are continuing operations for CXI. And that's the beauty of this IFRS 5, [indiscernible] discontinuing. You show the readers how the business will continue without the discontinued operation. Happy to take it offline and explain what I can in the financials a bit more, Jason.

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

Okay. Well, thank you, everybody, for your time this morning. I know some of you are out west. So it's quite early. So thank you for making the time. As Gerhard has already indicated to someone on the call, we will be happy to have one-on-one calls to answer what was covered and disclosed in the MD&A in our financials, and we welcome any questions or feedback from anyone here. And again, I appreciate your support of CXI and look forward to talking to you again. Thank you.

Thank you. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines. Have a good day.