Market Overview

Goldmoney Inc. Reports Financial Results for First Quarter 2019

Share:

TORONTO, Aug. 08, 2018 (GLOBE NEWSWIRE) -- Goldmoney Inc. (TSX:XAU) ("Goldmoney") (the "Company"), a precious metal financial service and technology company, today announced financial results for the first quarter ended June 30, 2018. All amounts are expressed in Canadian dollars unless otherwise noted.

Financial Highlights

  • Consolidated Revenue of $119.8 million.
  • Gross Profit of $4 million, a new quarterly record.
  • IFRS Net Income of $0.3 million.
  • Non-IFRS Adjusted Profit1 of $1.64 million.
  • Tangible Common Equity2 grew to $113.1 million from $111.5 million (increase of $1.5 million, 1%) in Q4 2018, with strong cash position consisting of $42 million in cash, $25.3 million in GICs, and $19.8 million in Loans Receivable.
  • Precious Metal Gross Margin grew to 1.44% from 1.32% compared to Q4 2018, despite a global, industry-wide slowdown in the precious metal sector.
  • Cryptocurrency Business Revenue of $17 million, compared to $31 million in Q4 2018, driven by sector volumes slowdown and 9% decrease in Bitcoin price quarter over quarter ("QoQ").
  • Currency loans totaling $19.8 million of balance sheet capital extended to users against their pledged precious metals earning interest rates ranging from 2.75% to 4%.
  • Corporate precious metal position of $24.9 million at June 30, 2018, reflecting the Company's commitment to grow long-term precious metal ownership per share from surplus returns on capital.
  • Client assets under custody stable at $1.8 billion as of June 30, 2018.
 
IFRS Consolidated Income Statement Data                
(expressed in $000s) FY 2019 FY 2018 FY 2017
  Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2
Revenue 119,839 171,102 149,819 126,274 125,211 131,851 139,149 140,391
Fee Revenue 575 580 584 645 661 713 633 711
Gross margin 1,686 2,250 1,903 958 1,320 1,284 1,401 1,543
Gross profit
(excludes Precious metal inventory P&L)
3,321 3,663 9,692 2,042 4,408 2,046 2,138 2,400
Gross profit Incl. revaluation of precious metals inventories 3,978 2,486 9,630 2,070 3,701 2,075 1,458 2,323
 

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

Please visit our SEDAR profile to view the Company's consolidated financial statements and MD&A.

"Fiscal Q1 is seasonally our weakest quarter and this year was no different than others. With that said, our operational and capital management, as well as strategic discipline yielded a gain in both Non-IFRS Adjusted Profit and, more importantly, Tangible Common Equity," said Roy Sebag, Founder and CEO of Goldmoney. "I view this as a superb result considering our financials still consolidate our jewelry start-up Menē Inc.'s growth capex and operational losses. Excluding Menē Inc.'s activities and other extraordinary items, Q1 saw our core business grow its earnings power to nearly $4 million of gross profit and an additional $1.4 million of gain on sale of investments. In my view, this result is the most important line item to focus on this quarter and was achieved in what continues to be a difficult period for precious metal businesses globally. Further, our hedging activities protected the nearly $24.9 million of metal on our balance sheet and yielded a return. I am not at all concerned about the quarter-over-quarter or year-over-year revenue decline, as I can see this is stemming from a normalization of the cryptocurrency business and seasonal cyclicality of our precious metal business. There is no tangible loss of metal weight or customers. In fact, the exact opposite is transpiring – we are seeing a steady inflow of new customers and an inflow of fiat money funding almost every day. It's just rather difficult to assess this when precious metals – most notably silver and platinum – have dropped so much in nominal CAD terms."

"A word is due on professional fees, which include Menē Inc.'s spinoff and listing fees, BlockVault investments associated with legal and start-up costs, and a special project fee in Jersey associated with a regulatory undertaking. All three items, which are consolidated as Professional Fees, will normalize back to acceptable levels over the ensuing quarters," said Sebag. "The final and most important message I would like to leave our shareholders with is an update on Menē Inc. As I type, Menē Inc.'s revenues are approaching $5 million (unaudited) since its public launch in January 2018. This revenue was generated entirely through online direct-to-consumer sales to nearly 8,000 customers residing in 20 countries. The brand, concept, and purity of our 24 karat designs are being received incredibly well – beyond any of our initial projections or expectations. Between Trustpilot and our internal product review system on mene.com, we have registered 1,300 positive reviews. The Company has seen most of its top designs consistently sold out and revenues have been systematically setting new records with nearly $700,000 (unaudited) recorded in July 2018. At this moment, there is nearly a $1 million waiting list from Menē Inc. customers for various sizes and designs in production. Production capacity is being enhanced which will support sales and growth in fiscal Q2 and Q3 of 2019. We continue to believe that the Menē Inc. business and investment will yield significant results for our shareholders that are consistent with our mission to broaden access to gold. It is safe to say that at this stage, Menē Inc. has been a successful investment for Goldmoney Inc. and the right decision to pursue. I wish to remind Goldmoney Inc. investors that we hold 80 million shares of Menē Inc. – over 35 per cent of the Company – at a total investment of just $2 million CAD. Upon spinoff, MENE shares will be marked to market on our balance sheet. Completion of the spinoff is expected by the end of September 2018, though exact timing is still uncertain. We will provide additional information about the spinoff via formal disclosures and press releases."

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 June 30, 2018 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.

Investor Relations Questions

As is our Company's tradition, we only host two conference calls per year. Our next call will be held on the reporting date for our Second Quarter results. Investors with interim questions may send them to: ir@goldmoney.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.

(1) Non-IFRS Adjusted Profit1 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.

(2) 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. Refer to the MD&A for a detailed breakdown of these items

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 year ended March 31, 2018.

About Goldmoney Inc.

Goldmoney Inc., a financial service company traded on the Toronto Stock Exchange (TSX:XAU), is a global leader in precious metal investment services and the world's largest precious metals payment network. Safeguarding nearly $2 billion in assets for clients located in more than 150 countries, Goldmoney is focused on a singular mission to make precious metals-backed savings accessible to all. Powered by Goldmoney's patented technology, the Goldmoney® Holding is an online account that enables clients to invest, earn, or spend gold, silver, platinum, palladium and cryptocurrencies that are securely stored in insured vaults in seven countries. All bullion assets are fully allocated and physically redeemable property. Goldmoney Wealth Limited is regulated by the Jersey Financial Services Commission (JFSC) as a Money Services Business. Goldmoney Network is a reporting entity to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), and is registered with the Financial Crimes Enforcement Network (FinCEN) in the U.S. For more information about Goldmoney, visit goldmoney.com.

Media and Investor Relations inquiries:

Renee Wei
Director of Global Communications
Goldmoney Inc.
renee.wei@goldmoney.com

Josh Crumb
Chief Strategy Officer
Goldmoney Inc.
+1 647-499-6748

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. (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 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; 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.

Primary Logo

View Comments and Join the Discussion!