BGCP (2020 - Q1)

Ladies and gentlemen, thank you for standing-by. And welcome to the BGC Partners Inc. First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions]. I would now like to hand the conference over to your speaker today Jason McGruder, Group Head of Investor Relations. Thank you, and please go ahead. Jason Mc

Good morning. We issued BGC's first quarter 2020 financial results press release and the presentation summarizing these results earlier this morning. You can find these at ir.bgcpartners.com. BGC spun-off all the shares in the former subsidiary, Newmark, held by BGC to the stockholders of BGC on November 30, 2018. Because BGC did not own any shares of Newmark as of year-end. Newmark's results are not included in BGC's consolidated results presented after the spin-off. Unless otherwise stated, the results provided on today's call compare only the first quarter of 2020 with the year-earlier period. We will be referring to our results on this call only on an adjusted earnings basis, unless otherwise stated. We may also refer to adjusted EBITDA. We may refer to our liquidity, which we define as cash and cash equivalents, plus marketable securities that have not been financed, reverse repurchase agreements if any and securities owned, less securities loans and repurchase agreements, if any. We define total capital as redeemable partnership interest, total stockholders' equity and non-controlling interest in subsidiaries. ,: Additional information with respect to our GAAP and non-GAAP results mentioned on today's call is available on our website at ir.bgcpartners.com and in our investor presentation, which is next to you – the press release on the left side. We refer to the Company's fully electronic businesses as Fenics. These offerings include our fully electronic brokerage products, as well as the sale of market data software solutions and post-trade services. I also remind you that information regarding our business on today's call that are not historical are forward-looking statements, within the meaning of Section 27-A of the Securities Act of 1933, as amended and Section 21-E of the Securities Exchange Act of 1934, as amended. These include statements about the effects of COVID-19 on the Company’s business results and financial position, liquidity and outlook. Any forward-looking statements involve risks and uncertainties except as required by law, BGC undertakes no obligation to update any forward-looking statements. Any outlook and targets discussed on this call assume no material acquisitions, buybacks, extraordinary transactions or meaningful changes to the Company's stock price. For a discussion of additional risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see BGC's SEC filings, including but not limited to the risk factors, and special note on forward-looking information, set forth in these filings and any updates to such risk factors and special note on forward looking information contained in subsequent forms on Form 10-K, Form 10-Q or Form 8-K. I am now happy to turn the call over to Howard Lutnick, Chairman and CEO of the company.

Good morning. And thank you all for joining us for our first quarter 2020 conference call. Joining me virtually for today’s call are BGC's President, Shaun Lynn; our Chief Operating Officer, Sean Windeatt; and our Chief Financial Officer, Steve Bisgay. Before we talk about the company, I’d like to say that we at BGC express our deeper sympathy to those who have experienced loss of loved one, economic hardship and difficulties due to the ongoing pandemic. We’ve remain thankful for the healthcare professionals, first responders and other essential workers who are helping the world to get through this unprecedented crisis. The company faces monumental challenges in the past, which we have overcome. We implemented business continuity plan. However, we never imagined they implemented it globally all at the same time. BGC’s employees have worked tirelessly over this past month; they remained focus on serving our clients during these difficult circumstances. Our employees and our technology, why we continue to operate effectively. With respect to BGC’s performance, BGC’s revenues improved by 10.7% for the first quarter of 2020, as compared to last year, while we benefited from generally higher industry volumes, this was partially offset by the dislocation faced by BGC's employees and clients to the COVID-19. But to these disruptions, we believe that our revenue improvement would have been greater. Looking forward, we expect our voice/hybrid and fully electronic brokerage business across rates and credit to benefit from the unprecedented amounts of global government of corporate debt issuance. Overtime, we believe this issuance will reach a previously unimaginable scale. This vast supply will create significant long-term opportunity for BGC. The company continues to explore a possible conversion of its UP-C partnership structure into a more simple corporate structure. If the company determines to execute such conversion, it of course would be subject to the approval of Board of Directors and the relevant committees and will be completed work to be done no earlier than year-end 2020. Any such transaction would be subject to tax, accounting, regulatory and other considerations and approvals. So, with that, I'll turn the call over to Shaun Lynn.

Thank you. And good morning everyone. Our business can be examined in three components. BGC’s and Fenics integrated voice and electronic liquidity pools, Fenics fully electronic marketplaces and their data connectivity software and post trade businesses. Of these categories, the dynamics of our integrated voice and electronic liquidity pools were impacted the most by the current crisis. We see brokerage revenues excluding insurance were up by 9% year-on-year in the quarter, while March grew by more than twice this rate. This reflected substantially higher growth in volumes and volatility because every financial asset class in the last weeks of the quarter. As we have said in the past, during periods of market turbulence, our clients often value the insights our brokers provide. As a result, voice brokers added more liquidity and market share over these past several months in many areas, where clients had access to liquidity equally via voice or electronics. This dynamic caused what we believe was a temporary shift by traders towards voice execution in many markets. This was due to both the extreme levels of volatility across many asset classes, as well as the disruptive physical dislocations faced by brokers, clients and customers of our clients. However, our clients have indicated that the dislocations caused by COVID-19 have resulted in an even greater demand for our electronic execution. The driver of this demand is at best-in-class market liquidity. The only integrated global firms like BGC can provide. BGC’s platform is an integral part of our clients’ technology. So when they execute remotely, our systems are synchronized in real time. We expect the trend towards automation to improve our electronic brokerage revenues and profitability over time. With respect to our fully electronic marketplaces, as standalone platforms generate a strong improvement in the quarter. Fenics UST generated substantial growth year-over-year, with notional volumes up by more than 300% in the first quarter compared to 14% for primary dealer volumes. We believe that Fenics UST has gained significant market share and it’s distinguishing itself as the clear number two among central limit order book or CLOB trading platforms. Moreover, Fenics fully electronic foreign exchange volumes increased by 23% compared with a year earlier, as the market has continued to embrace electronic execution in this asset class and as our foreign exchange offerings such as Fenics FX, MidFX, and Fenics Direct gained further market share. In addition, our Fenics Global Options fully electronic trading platform or Fenics GO continues its successful roll-out with numerous record volume days. It was the leading broker for certain Euro Stoxx 50 options contracts on some days during April. Our data connectivity software and post-trade services included a large percentage of recurring and predictable revenue streams. As a result, our data software and post-trade businesses once again generated solid top line growth in the quarter and were up by over 8%. With respect to our connectivity and software business, we acquired Algomi in March. Algomi provides technology aggregation buy-side clients access to venues, trading counterparties and exchanges. This subscription software as a service or SaaS, improves their workflow and liquidity through data aggregation, pre-trade information analysis and execution facilitation. We expect to integrate this business with our Lucera SaaS connectivity subscription services in order to provide both data and execution capabilities directly between banks, dealers and their buy-side customers. Of the ongoing crisis, has slowed the roll-out for some of our newer Fenics offerings over the short-term due to the fiscal dislocations experienced by our brokers and clients. We do not expect a medium to longer term strategy with respect to these financial technology businesses to be impacted. Turning to our insurance brokerage business, this industry typically generate significant amounts of predictable revenues at specific times of the year as different categories of clients sign or renew policies. Although certain clients may be facing financial hardship, or dislocation due to the pandemic insurance brokerage industry has generally performed well during past economic downturns. We expect reduced insurance near-term earnings because of the scale of the recent new hires. We anticipate this division second quarter to be well below the second quarter of 2019, and to improve in the third and fourth quarters that remain just below breakeven. We expect insurance brokerage will operate profitably in 2021 and to reach 15% margin on profitability by 2022, including additional new hires. We believe that our insurance brokerage platform is worth materially more than our investment in it. Our goal is to maximize value for our investors. And we are exploring ways to do so with respect to this business. With that, I'm now happy to turn the call over to Steve Bisgay.

Thank you, Shaun. Hello, everyone. You could find details on our quarterly results in today's press release and investor presentation. I just want to touch on a few important items related to our financial position. Because we are not a capital intensive business, we have historically returned most of our earnings to shareholders rather than building up retained earnings. This policy was designed for more ordinary economic conditions. These past few months have been the most difficult and tumultuous markets anyone on the management team at BGC has ever seen. They're probably the most uncertain markets any of our parents would have ever seen. And no one knows how long the effects of the global pandemic will last. Therefore, we have taken steps designed to further strengthen our financial position. These include reducing our quarterly dividend to common shareholders and distributions to unit holders. We did sell-out of an abundance of caution due to the potential negative impact COVID-19 might have on our clients, our industry, the overall economy and the world, not due to any company's specific concern with respect to BGC. While our revenues have improved year-on-year in March and April, it is impossible to perceive current market conditions will continue or if the pandemic by directly or indirectly impact any of our employees, clients, vendors or other market participants. In addition, as Howard said, we think the massive amounts of debt issuance underway globally lead to more revenues for us over the medium and long-term. However, it is possible that the massive quantitative easing measures taken by global central banks, lowered negative interest rates and the drop in commodity prices could temporarily lower industry volumes. We believe that the right thing for the company to do given the global macro economic uncertainty is to prioritize our near-term financial strength and fortify our balance sheet. We expect the Board to regular review our capital return policy as global conditions with respect to the pandemic evolve, and hopefully become clearer. When the time is right, we expect the Board to consider what amounts should be returned to stockholders. During the quarter, we acted to reduce our compensation related costs base and streamline our operations, which resulted in $22.7 million of GAAP charges recorded in the first quarter. This restructuring program is expected to reduce the company's GAAP compensation expenses by over $35 million for the remainder of 2020. With respect to our standalone fully electronic Fenics products such as Lucera and Fenics UST. We expect to significantly grow revenues over the next three years. And with our lower costs behind us, we expect the overall expenses for these businesses to decline. We anticipate the net investment costs for these businesses to be less than $40 million for full year 2020 and breakeven for full year 2021. Turning to share account, our fully diluted weighted average count increased by 4.3% to $538.4 million under both GAAP and adjusted earnings in the first quarter of 2020. As of March 31, 2020, our spot share count was $538.6 million. This represented a 4.3% year-on-year increase. We expect to continue using relatively more cash with respect to compensation in order to minimize dilution. Largely as a result of this, we still expect our 2020 year and fully diluted share count to increase by approximately 4% to around $550 million. With respect to the balance sheet, as of March 31, 2020, our liquidity was $512.3 million, compared with $473.2 million as of year-end 2019. Notes payable and other borrowings were $1.368.2 million, compared with $1,142.7 million, and total capital is $739.4 million compared with $767.4 million. Well, historically, the first quarter has been our most profitable quarter. It is also the quarter where we structurally use the most cash. The quarter end balance sheet reflects ordinary movements in working capital, cash paid with respect to annual employee bonuses, company employee related taxes, the aforementioned restructuring program, acquisitions, including earn-out payments and investments in our newer Fenics platforms and significant broker hires. This cash use was offset by increased borrowing under our revolving credit facility. The company has paid down $75 million of its revolving credit facility since quarter end, and we expect to continue to pay down revolver throughout the balance of the year. We believe that our credit metrics, cash generation, and access to credit all remained strong. We continue to manage our business with a focus on our investment grade ratings. Because, we've received many questions regarding our operations over the last several weeks, I would like to remind you of some key facts that are low risk brokerage business model. BGC's brokerage business is designed to execute transactions that are either named give up, matched principal or clear with central counterparties. Our transactions are therefore not balance sheet intensive. In [indiscernible] give up transactions, we match buyers and sellers and charge a fee. In match principle transactions, we execute both sides of transaction simultaneously which eliminates market risk. A significant and growing percentage of our brokerage business essentially cleared and therefore eliminates counterparty risk. For example, the numerous transactions, the buyer and seller are novated to a central counterparty such as LCH or ICE Clear. Furthermore, we are not market makers and we do not hold inventory. We do not trade on a proprietary basis. We don't have margin calls related to inventory. The margin we do place with clearing organizations is not material to our balance sheet. We also do not issue loans or provide margin to clients nor do we rely on short-term lending markets, such as repos or commercial paper to fund our operations. In short, we are a brokerage business. With that, I'm happy to turn the call back over to Shaun Lynn.

Thank you, Steve. Turning to outlook for the second quarter of 2020 compared with a year earlier. BGC’s revenues excluding our insurance brokerage business increased by approximately 2% year-on-year, the first 21 trading days of the quarter. This reflects mixed global industry volumes thus far in the quarter, as well as continued dislocation for BGC’s brokers and their clients due to COVID-19. Our guidance assumes that industry volumes and then non-insurance brokerage revenues are flat down slightly year-on-year for May and June. In addition, we expect our insurance brokerage revenues to be relatively flat year-on-year in the quarter, but to generate accelerating growth throughout the balance of the year. Due to the unpredictable nature of the continuing macroeconomic environment, we have a wider outlook range than normal. We expect to generate total revenues between $525 million and $575 million compared with $551.2 million. We anticipate pre tax adjusted earnings to be in the range of $89 million to $109 million versus $102.3 million. This includes the impact of our recent insurance brokerage hires, who are incurring costs and are not yet generating meaningful revenue. Of this investment, the midpoint of our range would have been up year-over-year. We anticipate as full year 2020 adjusted earnings tax rate to be in the range of 10% to 12% versus 11.4% for the full year 2019. We expect to update our outlook towards the end of June. With that operator, we would now like to open the call for questions.

[Operator Instructions] Please stand-by, while we compile the Q&A roster. And your first question comes from the line of Rich Repetto with Piper Sandler .

Yes. Good morning, Howard. Good morning, Shaun and, Steve, hope everybody's family, your family, you're all safe and healthier. So the first question is on Fenics, on the fully electronic revenue and Howard -- you had sort of talked about this prior that in -- the volatile markets that, customers sort of go back to their old ways. So the revenue was down 5% year-over-year, when I look but, I guess my question is when I looked at the notional volume that you disclosed, it was up 20% year-over-year, without any big change in mix and without -- with each one, each product category up in the high teens or above. So I'm just trying to understand, I do get the -- overall exploration, but how the numbers sort of support that, I guess or behind it?

Well, as we – Rich it's Shaun. As we've seen in these volatile times, and as Howard said, and the proof in the past is that our business gravitates directly towards where the liquidity pool is and where the experience has been, which is where as the dislocation happened, that voice brokers were on hand with the technology to, but they had the in depth knowledge. So therefore, there was some vast turnover that was happening by the voice brokers at this time, which is it was a slight headwind for electronic revenue. Some electronic platforms performed really well. But, in a greater volatility markets, such as in say rates and credit, we saw some -- we saw the voice brokers come to the fore.

Sorry, my mistake here. So, my next question is you pay down the revolver $75 million, I believe maybe after quarter end or towards quarter end. And, no -- your guidance is reasonably certainly reasonable for the second quarter. I guess the question is this all an indication that you're more comfortable with the scenario and I noted Steve, sort of cautionary tone as well, but I just see no big losses that it seems like your customers that -- you didn't take any customer loss so, so what's the view Howard, I guess on the business in general and I got one more follow-up after.

Hi, Richard, it’s Steve. Yes, we did pay down $75 million after quarter end, our plan is to continue to use excess cash to pay down the revolver as well under the circumstances as we continue to perform. We did not suffer anything significant to your question specifically, in Q1 no, we did not suffer any significant nor material losses at all with regard to our client activity or brokerage activity. So yes, we do plan to continue to pay down the revolver.

And, Richard, your comment -- yes, if we could be assured that April was the future of the pandemic, then of course, we will be more comfortable, but since no one can articulate what May and June will be. What will happen in the fall? I think our view is, we just want to be strong. Now it may be that, we have been through a lot. This management team has been through a lot. And, we just want to make sure that the company is very strong as it heads in uncertain times. So if April is a future of course, we are more confident to be payback as Steve just said, we decided to pay back $75 million to the revolver that clearly defines that. Do we expect to generate substantial cash going forward? Of course we do. Do we expect to pay down the revolver through the rest of the year? Of course we do. So we feel much better. We implemented our business continuity plan. Lots of brokers were very effective from home as they start to come back to the office, they will become more and more effective. We've reconfigured our offices, we're ready for them. We are looking forward to more traditional times when our staff comes to the office and works together. But, for the time being, we wait for governments to tell us what we can do. We wait for our staff to be comfortable and healthy and taken care off. And, but its April where the way yes, we are more comfortable and no, as Steve said, there was nothing that happened to BGC vis-à-vis just BGC. But, we just don't know what the future is, as nor does anybody.

Got it? We're all waiting for those returned to the normal times, Howard for sure. One last quick question. As you look at the capital return policy overall, you have a period right now, again, precaution and uncertainty. You sort of put things in limbo, if you continue to build up cash I guess, towards year-end, you could either buy back shares, you get a different stock price now. So I guess the question is, would -- is the buyback -- excuse me, as a capital return policy evolving to something to a shift to some other than just a pure dividend policy, and if it isn't, if it's still a dividend policy, then why wouldn't you -- could you ever make a commitment to the dividend, once you feel you got the all clear, paying back dividends, whatever you’ve earned but paying back some sort of percentage on what you did earn in these uncertain times?

I think, the way said at the beginning sort of sounds right, which is the Board will examine our dividend return policy, when we're feeling comfortable that that future is more balanced and more certain. So we will do a capital return policy review. And we are going to continue to do that. We are a capital return company and have historically been, but as we entered this pandemic, we felt that we were going into uncharted territory. And we felt we needed to fortify as Steve said, fortify our balance sheet, stay strong and be strong, so that we could handle whatever came our way. Looking forward, might that be share buyback, might that be a, reinstating a dividend policy or creating a new dividend policy. I think I need to leave that open. But, you should understand that we are committed to capital return in our future that is where we plan to be. That is where we have been in the past. But I think through this period of time, we just need to be strong and we need to get shareholder value. We have great assets, we have our insurance business, which we think is a valuable asset. And we just want to make sure that we act prudently and effectively for our shareholders that make sure this company is very strong for the long haul. And I think we will make our shareholders superb returns. But, we have to remain strong and focused throughout these difficult periods to get there.

Got it. Thank you and be safe.

Thanks Rich.

Your next question comes from the line of Patrick O'Shaughnessy with Raymond James.

Hey, good morning. How is employee morale holding up in light of the decline in their -- of the value of the partnership units and the reduced dividend?

Employee morale is obviously concerned with the overall pandemic, but very good in the sense that they've been able to go home, they've gone home, they've been able to work, they've been able to look after their families, they've been able to work from -- at BCP sites, and some even still from our offices where possible. We've been allowed to operate. It's a worrying time, of course, for the market as a whole. But, morale is good. Spirits are good. Obviously, our performance has been, it's been good relative to what's been happening in the global world. Performance has been good. And I think that the biggest factor, I think, that’s shown the light to our employees is the strength of the company, the strength of our technology, the strength of our infrastructure, the investments we've made over the years, and our technology, not just the phone system is not just that, a telephone lines, it's our execution platform that they can operate and still connect to their clients electronically. Whereas some say smaller brokers would not be able to compete against us. So I think they feel comforted in the knowledge that they're working at – but, I consider a great company.

Got it. Appreciate that. In your prepared comments, you spoke about how this unprecedented amount of debt issuance could be a nice long-term tailwind for the business. What did you guys see post great financial crisis where obviously we had unprecedented debt issuance fell in that period. How did that impact your rates business?

Well, it was a little different. The volumes that the Fed coming in quantitative easing and all of that sort of came in later. Whereas in this case, it came in straight away. So really April, volumes were muted from what they otherwise would have been. But, for the Central Bank, the scale of Central Bank intervention, which was massive and impressive. So I think you're going to have those two things sort of weighing on each other massive issuance, massive quantitative easing, but then again, massive issuance by governments all around the world. And since we have a great rate business all around the world, we think the government business will be the first to really dramatically change and be a tailwind for the company. And then as they taper their purchases of corporate bonds, which may in credit bonds, which may be for a while, they may be buying them for a while, I don't, I surely don't know. But, as they taper that off, the credit business will really dramatically improve, because companies, the companies who are not performing as well as BGC. They're going to have a period of time where they just don't make the money they used to make and or take losses and they're going to have to issue debt to cover those, cover those numbers. And that debt will remain outstanding for decades and decades. And that's just more raw materials for us to trade with. So I think you'll see it in governments. I think you saw the volumes when they was the, if you remember the taper tantrum, if you remember that. So I think these things will be with us for the long, long, foreseeable future as the way you've described correctly as a tailwind. But, there is the offsetting quantitative easing by the governments that are buying enormous amounts of this. And I think they've bought more that has been issued, trying to keep the capital market stable, because that will start to change. All these markets will start to issue over the next period of time when maybe a year maybe two years. But the scale of corporate issuance will be enormous, and the scale of government partnership and I mean, imagine the U.S. Government had a $3 trillion deficit this quarter it is -- it's unimaginable, and scale from where we were before. And that just means enormous issuance, cross government agencies, and that will be true around the world. So I think it's just enormous fundamental baseline, with competing issues on any given quarter at any given period of time, but ultimately, great raw material for people in our industry.

Got it. Want to circle back to some of the discussion on the Fenics brokerage revenues? So, I kind of -- I understand what you're saying. And yet, we look at some of the other fully electronic venues that are out there, market access had a really strong first quarter, Tradeweb volumes were really strong in the first quarter. I think BrokerTec had a pretty strong first quarter. So what was kind of, I guess, specific to the Fenics platforms then maybe led to -- they're underperformance relative to some of those other electronic platforms that I mentioned.

So Fenics, U.S. Treasury had a really strong – had a very strong quarter. Fenics GO had a really strong quarter. Mid FX had a strong quarter. We've had strong quarters in some of our fully electronic platforms as well. I think what is -- been a headwind for us compared to say, a mark -- a competitor, which we say, they don't have voice brokers. They have a very different offering. And it's mainly focused on dealing with client and we're mainly focused on dealer-to-dealer. And when the markets have got – when the markets have been very, very liquid, our clients have been engaging with us, really from March onwards, as we know, with regards to the voice brokers and getting that inside liquidity and knowledge they've been looking for. So, it's been a positive for us, but obviously a negative for our electronic number, but a positive for the revenue turnover and the voice component.

And I think, Rich, just to add, if you think about the liquidity that we provide between our wholesale banks and market makers, our customers have a choice, they have a choice between voice and electronic. And what we have seen and as Shaun said in his prepared remarks, is our customers migrated towards voice because they had that choice with the likes of Fenics U.S. Treasuries market access, Tradeweb, that's electronic only. And I think what we do believe, is, as you've seen previously, with the -- with the growth of our electronic conversion of our voice, electronic business, we think that we will continue to grow over time and sort of more normalized market conditions. And that will be an increase in to our profits over the medium and longer term.

[indiscernible].

Patrick just to jump on that -- is that we have a broad church, we are a global company, from Australia, all the way through Canada, and so on, where some of our other competitors focus on a certain segment of the marketplace. That is very targeted and so they're coming from a very different starting point than we are, 2,600 are brokers. And many, many different offices around the globe.

Yes, I’d appreciate that color. With insurance brokerage business, you've spoken about trying to figure out how you can extract the most value out of that franchise and I think a potential option was selling that business. Given current market conditions as a window to potentially sell that business closed for now?

I don't think so. But, I think these businesses perform well, in their counter cyclical, meaning that the desire for insurance has probably risen. I think people think about insurance more often now than before. There are certain, details where, obviously, if you are clients that are in stress, that's problematic but there were more and more clients who are going to have to re-examine their insurance needs and purchase insurance. So I think generally the business is solid. And I think the demand or the opportunity for people to invest in that business, I don't think has dissipated, it may be lower. I mean, I can't deny that value, maybe different, but I think we want to examine what's the best way and the most value we can get for our investors and our shareholders and the stakeholders generally. So I think, we're examining, and but our business is doing well. We've hired extraordinarily talented people. And those talented people have joined us, in the first quarter, in the second quarter, and insurance brokers tend to be more productive. They tend to not be able to do business with their clients in the first year that they join. So good, Shaun, maybe you should add some color to this.

Yes, just Patrick's one other thing that I think is important to mention, in this current time, that some we are a broker, not an underwriter, don’t take risk and basically, some of the stresses that you're seeing with some of the underwriters at the moment with indemnity insurance is affecting obviously the underwriters, not the brokers. I just wanted to make that point clear.

Okay, understood. Thanks. And then last one, I think for you, Howard, several years ago GFI group share price was coming in a lot of pressure and management basically came forward with the take private offer. And obviously you guys ended up buying GFI Group. So that did not take place. But given BGC’s current valuation and the stock price, would you contemplate take private deal for BGC Partners or does this business just make much more sense as a publicly traded entity?

I think in early May of two months into a pandemic and I think the answer is the one you've heard from my management team today. Head down, conservative, generate cash, get your people back to the office, take care of your people, make sure they're safe, make sure they can operate effectively and [print] your balance sheet, look forward. But, I think those kind of thoughts are just not on the menu currently. I just don't think that's which you think about in May two months into pandemic, but, someday in the future -- I'm not commenting one way or the other or anything about that and frankly we haven't thought about it at all. I think our issues are, strengthen our balance sheet, generate cash, take care of our employees, make sure they're healthy and protected. Make sure we can bring them back to the offices, when appropriate around the world and take care of our clients as best we can, strengthen our technology move to electronics, head down, focus on the steps in front of us and leave that. That's just not on the menu. We are not thinking about it. We're not talking about it. That's it.

Thank you for answering all my questions.

[Operator Instructions] I'm showing no further questions at this time. I would now like to turn the conference back to Howard Lutnick, Chairman and CEO of BGC Partners.

Hi, I just want to thank everybody for spending time with us this morning. I want to wish you all health that you have, positive time with your families and that you stay healthy, stay protected. And we really appreciate your time. And I think -- I, for one and my management team, I know all of us are tremendously proud of our employees. And I just want to finish by saying that we are completely indebted to employees who have worked tirelessly to carry us through to this point. And they have done an extraordinary job. Our technology people are our operations people. imagine settling and clearing all these transactions in those last weeks of March, and they have really been brilliant. And I think the culture we've built, the commitment to pay half to the company is second-to-none and I am – I just want to express my gratitude to my -- the team of BGC. They are -- they are wonderful human beings who care about each other, and deeply care about your company. So thank you all be safe and we look forward to speaking to you next quarter. Bye.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. And you may now disconnect.