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Goldmoney Inc. Reports Record Revenue for Second Quarter 2020, Increases Quarterly Dividend by Approximately 20%

TORONTO--(BUSINESS WIRE)--

Goldmoney Inc. (XAU.TO) (XAUMF) (“Goldmoney” or the “Company”), a precious metal financial service and technology company, today announced financial results for the second quarter ended September 30, 2019. All amounts are expressed in Canadian dollars unless otherwise noted.

Quarterly Highlights

  • Record Quarterly Revenue of $127.2 million, an increase of $57.6 million (83%) Year-over-Year (“YoY”) and $68 million (115%) Quarter-over-Quarter (“QoQ”).
  • Record Quarterly Gross Margin of $2.5 million, an improvement of $1 million (65%) QoQ and $0.9 million (55%) YoY.
  • IFRS Gross Profit of $5.6 million, compared to $4.1 million for Q1 2020, an increase of $1.5 million (37%) QoQ.
  • Total Comprehensive Income of $2.7 million, compared to $0.5 million in Q1 2020, a 506% improvement.
  • Basic and Diluted earnings per share of $0.01.
  • Corporate Precious Metal Exposure of $20.6 million as at September 30, 2019.
  • Currency and Precious Metal Loans totaling $28 million of balance sheet capital extended to users against their pledged precious metals, earning interest rates up to 4.69%.
  • Tangible Common Equity of $133.5 million compared to $130 million in Q1 2020.
  • Client Assets Under Custody increased by 5.6% from the previous quarter to $1.9 billion as at September 30, 2019.
  • Board of Directors Increased Quarterly Dividend Payment by approximately 20% to $0.003805 per share

IFRS Consolidated Income Statement Data

 

 

 

 

 

 

($000s, except earnings per share)

FY 2020

FY 2019

Q2

Q1

Q4

Q3

Q2

Q1

Revenue (1)

127,154

59,116

64,171

84,029

69,550

63,794

Fee Revenue

599

606

591

580

610

575

Gross margin

2,501

1,517

1,393

1,566

1,611

1,686

Interest income

536

555

416

448

502

446

Gross profit Excl. revaluation of precious metals inventories

3,633

2,682

2,782

2,749

3,092

3,321

Gross profit Incl. revaluation of precious metals inventories

5,636

4,104

2,069

4,152

2,182

3,978

 
  1. In accordance with IFRS, the Company has prospectively changed its revenue accounting policy and has provided retrospective application. The Company restated revenue as net basis instead of gross for fees from exchange services. Transfer of fiat currency to the customer and receipt by the Company of precious metals, crypto assets or other fiat currency, were treated as an exchange service (net basis), instead of revenue from the sale of the fiat currency (gross basis). There is no impact to gross margin and net income.

Refer to “Use of Non-IFRS Financial Measures” and “Reconciliation of Non-IFRS Financial Measures” in the MD&A.

Statement from the Chief Executive Officer

I am pleased to report to shareholders our financial results from the period ended September 30, 2019. This was our best operational quarter since becoming a publicly traded company in 2015. These financial results demonstrate the great harmony between our business lines which resulted in record revenue, cash flows, and operating results while also demonstrating the ability of the business to generate additional user volumes and related asset inflows.

Our group generated over $127 million in quarterly revenue, a new record under the revised accounting methodology we implemented in Q3 2019. Of this revenue, we produced a record $3.6 million of Gross Profit before any precious metal movements, and $5.6 million when incorporating precious metal movements. The IFRS Operating Expenses (OPEX) was $4.5 million for the period of which (as we have previously noted to shareholders) there are significant non-cash and non-recurring items. Through ongoing cost containment and other efficiencies, the trend in reducing our OPEX is becoming clear on both a quarterly and annual basis. Our target for the next two quarters is to reduce OPEX by an additional $1-1.5 million per quarter resulting in a potential group Cash OPEX of approximately $3 million per quarter. Assuming this to be the case in early 2020 and coupled with our ability to maintain the level of profitability we have been achieving in recent quarters, the group pro-forma operating free cash flow should be recurring. Such operating free cash flow is significant both in validating our business model and also providing a unique form of return on precious metals as our group cash flows are substantially linked to precious metal values.

In light of our robust quarterly results, the Goldmoney Inc. Board of Directors has increased our quarterly dividend payment by approximately 20%. The Board also intends to complete further share purchases this quarter under our Normal Course Issuer Bid program after considering the current share price and discount to intrinsic value which exists in the market subject to regulatory approval.

Finally, I would like to thank all who continue to make the Goldmoney Inc. group a successful global enterprise: our clients, our employees and executives, and our shareholders.

- Roy Sebag, Chairman and Chief Executive Officer

Financial Information and IFRS Standards

The selected financial information included in this release is qualified in its entirety by, and should be read together with, the Company's consolidated financial statements for the quarter ended September 30, 2019 and prepared in accordance with International Financial Reporting Standards ("IFRS") and the corresponding management's discussion and analysis, which are available under the Company's profile on SEDAR at www.sedar.com.

Investor Relations Questions

Shareholders of Goldmoney are encouraged to submit questions to management by emailing ir@goldmoney.com. The Company will periodically publish responses to selected questions received in order to allow all investors ongoing access to information about Goldmoney’s strategy, operations, and business plans.

Non-IFRS Measures

This news release contains non-IFRS financial measures; the Company believes that these measures provide investors with useful supplemental information about the financial performance of its business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating its business. Although management believes these financial measures are important in evaluating the Company's performance, they are not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with IFRS. These non-IFRS financial measures do not have any standardized meaning and may not be comparable with similar measures used by other companies. For certain non-IFRS financial measures, there are no directly comparable amounts under IFRS. These non-IFRS financial measures should not be viewed as alternatives to measures of financial performance determined in accordance with IFRS. Moreover, presentation of certain of these measures is provided for year-over-year comparison purposes, and investors should be cautioned that the effect of the adjustments thereto provided herein have an actual effect on the Company's operating results.

Non-IFRS Adjusted Gain1 is a non IFRS financial measure. This figure excludes from IFRS Net Income the impact of non-cash items, including the amortization of intangible assets and stock-based compensation. Refer to the MD&A for a detailed breakdown of these items.

Tangible Common Equity2 is a non-IFRS measure. This figure excludes from total shareholder equity (i) intangibles, and (ii) goodwill, and is useful to demonstrate the tangible capital employed by the business.

Adjusted Gross Profit3 is a non IFRS financial measure, also referred to as Gross profit excluding gain/(loss) on revaluation of precious metals inventories. This figure excludes from Gross profit the gain (loss) on revaluation of precious metals inventories.

For a full reconciliation of non-IFRS financial measures used herein to their nearest IFRS equivalents, please see the section entitled "Reconciliation of Non-IFRS Financial Measures" in the Company's MD&A for the quarter ended September 30, 2019.

About Goldmoney Inc.

Goldmoney Inc. (XAU.TO) is a precious metal focused investment company. Through its ownership of various operating subsidiaries, the company is engaged in precious metal investment, custody and storage, jewelry, coin retailing, and lending. Goldmoney manages and oversees in excess of $2.0 billion in assets for clients around the world. The company’s operating subsidiaries include: Goldmoney.com, Menē Inc. (TSXV: MENĒ), SchiffGold.com, and Lend & Borrow Trust. Through these businesses and other investment activities, Goldmoney gains long-term exposure to precious metals. For more information about Goldmoney, visit goldmoney.com.

Forward-Looking Statements

This news release contains or refers to certain forward-looking information. Forward-looking information can often be identified by forward-looking words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “estimate”, “may”, “potential” and “will” or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. All information other than information regarding historical fact, which addresses activities, events or developments that the Goldmoney Inc. believes, expects or anticipates will or may occur in the future, is forward-looking information. Forward-looking information does not constitute historical fact but reflects the current expectations the Company regarding future results or events based on information that is currently available. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking information will not occur. Such forward-looking information in this release speak only as of the date hereof.

Forward-looking information in this release includes, but is not limited to, statements with respect to: service times for transactions on the Goldmoney network; growth of the Company’s business, expected results of operations, and the market for the Company’s products and services and competitive conditions. This forward-looking information is based on reasonable assumptions and estimates of management of the Company at the time it was made, and involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Such factors include, among others: the Company’s operating history; history of operating losses; future capital needs and uncertainty of additional financing; fluctuations in the market price of the Company’s common shares; the effect of government regulation and compliance on the Company and the industry; legal and regulatory change and uncertainty; jurisdictional factors associated with international operations; foreign restrictions on the Company’s operations; product development and rapid technological change; dependence on technical infrastructure; protection of intellectual property; use and storage of personal information and compliance with privacy laws; network security risks; risk of system failure or inadequacy; the Company’s ability to manage rapid growth; competition; the ability to identify opportunities for growth internally and through acquisitions and strategic relationships on terms which are economic or at all; effectiveness of the Company’s risk management and internal controls; use of the Company’s services for improper or illegal purposes; uninsured and underinsured losses; theft & risk of physical harm to personnel; precious metal trading risks; and volatility of precious metals prices & public interest in precious metals investment; and those risks set out in the Company’s most recently filed annual information form, available on SEDAR. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company undertakes no obligation to update or revise any forward-looking information, except as required by law.

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