TORONTO, ONTARIO--(Marketwired - Aug. 15, 2016) - Goldmoney Inc. (XAU.TO) (the "Company"), a financial technology company operating a global, 100%-reserved gold-based financial network, announces results for its first quarter ended June 30, 2016. All amounts are in Canadian dollars unless otherwise noted.
Financial Highlights
- Consolidated Revenue of $112.4 million, an increase of $109.5 million from same period in the previous year, and an increase of $3.7 million over the prior quarter
- Consolidated Gross Profit of $2.9 million, up 51% from the prior quarter.
- Basic diluted and net loss per shares of $0.04, improved from $0.08 per share in Q4 2016.
- Q1 Non-IFRS Adjusted Loss of $1.6 million (calculated as total comprehensive loss less gain on precious metals inventory, foreign exchange movements, and non-cash expenses), an improvement of more than $1 million from Q4 2016.
- Total Operating Income of $2.1 million from the Goldmoney Wealth business (formerly GoldMoney).
- Total Comprehensive Loss of $2.3 million, a 54% improvement from Q4 2016.
- Working Capital of $57.1 million at June 30, 2016 consisting of cash, precious metals, and short-term marketable securities.
- More than 1 million user signups with $1.8 billion in customer assets as at June 30, 2016.
Operational Highlights Subsequent to June 30, 2016
- The Company entered into an agreement to acquire Schiff Gold Inc.
- Unveiled the Personal, Business, and Wealth divisions under a unified Goldmoney brand.
- Continued building the Goldmoney network with several integrations and adding local processing capability for CHF, SAR, AUD, NZD, and JPY.
- Launched the Goldmoney Real-Time Audit of customer assets.
Goldmoney Inc. produced strong performance in the first quarter of fiscal 2017, resulting from operating leverage in the Wealth business, growth in fee revenue, and continued operational expense discipline.
"Our performance this quarter is a result of the investments we have made in growing the network over the last 18 months, as well as the operating strategy we implemented on the Wealth side," said Katie Sokalsky, Chief Financial Officer. "As we learn more about our users and optimize the platform, we expect to see continued organic transaction and revenue growth. Our strong balance sheet and liquidity position allow us to pursue a disciplined growth strategy, while giving us the resources to fully build out the ecosystem."
"This was a solid quarter for the company. We made important investments in growing the network, which is our primary mission, while producing significant cash flow from Goldmoney Wealth. These results demonstrate how a small reduction in customer acquisition or technology costs would result in profitability on a cash basis, but that is not our strategy. Our investments in customer acquisition and technology are producing favourable results much earlier than our internal models predicted," said Roy Sebag, Chief Executive Officer. "To use a mining metaphor, we feel as though we've drilled our first hole encountering initial mineralization, yet the ore body is unexplored and wide open in all directions. In upcoming quarters, we will continue to invest in building out and growing our network both online and offline."
"We reached important milestones this quarter: the unification of the brand into three clearly defined businesses and reaching an agreement to acquire Schiff Gold, which is expected to expand our reach and reduce our customer acquisition cost. I'm most proud of the results of our Wealth division, as they reflect how integral this acquisition was to our overall mission. With the launch of the rebranded Goldmoney platform, we expect increased synergy within the business to fuel growth and revenue generation for the company," said Josh Crumb, Chief Strategy Officer.
Disciplined Growth Strategy
The Company showed strong improvement in both Total Comprehensive Loss (54% improvement) and Non-IFRS Adjusted Loss (improvement of over $1 million from Q4). This is a result of management's disciplined approach to growing the company while maintaining a strong balance sheet and liquidity. As of June 30, 2016, total assets are $115 million, with $57.1 million of working capital, including nearly $6.2 million in precious metals.
Wealth Business Produces First IFRS Operating Profit Since Acquisition by the Company
| Three months ended June 30, 2016(1) | |||
| IFRS Measures | |||
| Revenue | 78,938,182 | ||
| Cost of sales | (77,908,233 | ) | |
| Gross margin | 1,029,949 | ||
| Fee revenue | 619,015 | ||
| Gain/(loss) on revaluation of precious metals inventory | 898,468 | ||
| Gross profit | 2,547,432 | ||
| Operating expenses | 424,799 | ||
| Total operating income | 2,122,633 | ||
| Notes: | |||
| (1) As Wealth was acquired on July 20, 2015, there is no comparison period for Q1 2017. | |||
Goldmoney Wealth produced an IFRS operating profit of $2.1 million in the quarter, reflecting the embedded leverage in the business to rising precious metals prices as well as the operational improvements and expense reductions implemented last year after present management acquired the business. Management expects Wealth to continue producing cash flow for the group, and has identified additional operational enhancements that should lead to gross profit expansion.
Goldmoney Network Shows Continued Growth in Revenue, Margin, and Key Platform Engagement Metrics
| Three months ended June 30, | Change | ||||||
| 2016 | 2015 | $ | |||||
| IFRS Measures | |||||||
| Revenue | 33,471,004 | 2,856,937 | 30,614,067 | ||||
| Cost of sales | (33,140,392 | ) | (2,881,186 | ) | (30,259,206 | ) | |
| Gross margin | 330,912 | (24,249 | ) | 355,161 | |||
| Fee revenue | 35,799 | - | 35,799 | ||||
| Gain/(loss) on revaluation of precious metals | (56,517 | ) | 37,645 | (94,162 | ) | ||
| Gross profit (loss) | 310,194 | 13,396 | 296,798 | ||||
| Operating expenses | 3,857,611 | 2,880,086 | 977,719 | ||||
| Total operating income/(loss) | (3,547,611 | ) | (2,866,690 | ) | (680,921 | ) | |
The selected financial information included in this release is qualified in its entirety by, and should be read together with the Company's unaudited condensed consolidated interim financial statements for the three months ended March 31, 2016 prepared in accordance with International Financial Reporting Standards ("IFRS") and corresponding management's discussion and analysis, which are available under the Company's profile on SEDAR at www.sedar.com.
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.
Adjusted Non-IFRS Loss is a non IFRS financial measure. This figure excludes from comprehensive loss the impact of the following amounts: (i) any gains or losses on precious metals inventory, (ii) non-cash items, including the amortization of intangible assets or stock based compensation and (iii) the impact of foreign exchange gains or losses. Refer to the MD&A for a detailed breakdown of these items.
Working capital is a non-IFRS measure. This figure excludes from total assets (i) receivables, (ii) prepaids and other assets, (iii) property and equipment, (iv) intangibles, and (v) goodwill, and is useful to demonstrate the liquid assets the company has on hand to meet current and future obligations.
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 management's discussion and analysis for the quarter ended June 30, 2016.
About Goldmoney Inc.
Goldmoney Inc. (XAU.TO) is a mission-driven financial technology company that operates the world's largest 100%-reserved gold-based savings and payments network. Goldmoney® provides financial services as a trusted third-party, combining the unique attributes of gold with technology-driven innovation. Through Goldmoney Personal and Goldmoney Business, anyone with internet access can buy, sell, transfer, earn, or redeem physical allocated gold on the network. Goldmoney Wealth offers bespoke precious metals custody and wealth services, trading and execution, card services, tax-free retirement accounts and independent research to high net worth individual investors and institutions. Goldmoney Inc. has more than 1,160,000 user signups from more than 150 countries and $1.9 billion in client assets under administration (as at August 14, 2016). Together, Goldmoney Personal and Business are regulated as a Dealer in Precious Metals by the Financial Transactions and Reports Analysis Centre of Canada. Goldmoney Wealth is regulated as a Money Services Business by the Jersey Financial Services Commission. 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 Company 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 MD&A speak only as of the date of this MD&A. Forward-looking information in this MD&A includes, but is not limited to, statements with respect to: growth of the Company's business, expected results of operations, acquisition of Schiff Gold Inc., 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 limited 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; 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 at www.sedar.com. 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.
