Question-and-Answer Session
Operator
(Operator instructions) We will go to Anurag Rana with KeyBanc.
Adam Josephson – KeyBanc
Good morning everyone. This is Adam Josephson in for Anurag. The operating margin in the EFT segment higher than we were expecting at over 20%. What should we expect along these lines in 2009, particularly given ongoing spending on the cross-border initiative?
Michael Brown
Rick you can correct me if – you want to answer. Well, as Kevin may be has mentioned in the past, actually our losses with respect to our cross-border initiative are going down every quarter. We are offsetting the huge expenses we had before we launched with revenue today. So we are alive in what Kevin, five countries right now. And so as we add there are three more big countries to come online and another one or two more. As we bring these countries online, we are going to have, you know, basically effectively similar or less cost combined with higher revenues. So that is going to tend to over time, over the period of this year, kind of push down that loss. So, and then when you are asked about operating margins, I mean there was a point in our past history, where we had operating margins in the segment of 25%, 26%. We do not believe that that is impossible to get to again, in fact that is our goal. So, as we bring in, as you know these contracts are extremely lucrative. We have signed a number of them. We've announced them. We are going to bring them alive over the second and third, second and maybe a little bit into the third quarter of this year. As those go live most of that money goes straight to the bottom line, which will improve our margin. So, when you look all those, you know, I don't want 22% to be the end game here. I'd like it to be pretty much higher than that.
Adam Josephson – KeyBanc
Thanks, and regarding your prepaid business how much more business do you think you can substantially gain in Australia, and where do you envision the bulk of your growth coming from over the next couple of quarters?
Michael Brown
Well, I would imagine that we probably garnered most all the retailers we're going to get in Australia, although there are probably a few holdouts that we can, you know, squeeze out of that marketplace. But I think the most important thing in Australia is now that we own the largest segment of that market by far, by far, we want to continue to push more products through that distribution channel, which are very lucrative for us, like that next new EFT Contract. So, even though our market share per se it may stay the same or just go up slightly, our profitability can continue to increase. Certainly, not quite at the pace of watching a competitor, you know, fall down and go dead on it, like we saw with third and fourth quarter, but we see a lot of opportunity in that market because we can now do things and offer products to that market that maybe we couldn't have before because we were in a competitive position where it wasn’t as cost-effective to do so. Outside of Australia, we continue to make gains in places like the US and Germany. These two markets forces are pretty sizeable and, you know, our teams in both of those areas continue to do better and we have got Poland, same kind of thing. We just keep – Poland just a small started to market a few years ago and is now really coming into its own. So, I think what you are seeing the overarching thing, is our competitors are weak or dead, and we're going to keep punching them while they are on the ropes and, you know, do what we can to continue to gain business.
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