TORONTO, Nov. 14, 2017 (GLOBE NEWSWIRE) -- Goldmoney Inc. (TSX:XAU) (“Goldmoney”), a precious metal financial
service and technology company, today announced financial results for the quarter ended September 30, 2017. All amounts are
expressed in Canadian dollars unless otherwise noted.
Financial Highlights
- Consolidated Revenue of $126.3 million, an increase of $1.1 million (+1%) quarter over quarter (“QoQ”)
- Group Gross Operating Profit of $1.6 million, an increase of $0.37 million (+29%) QoQ
- Client metal weight under custody growth in all four precious metals
- Basic and diluted net loss per share of ($0.01)
- Non-IFRS Adjusted Gain1 of $0.04 million
- Non-IFRS Cash and Tangible Common Equity2 of $61.1 million at September 30, 2017 vs. $61.2 million at June 30,
2017
- Cryptocurrencies position primarily of Bitcoin Cash of $1.3 million at September 30, 2017
- Currency loans totaling $13.7 million of balance sheet capital extended to users against their fully-reserved
metal
Operational Highlights
- Launched consolidated Goldmoney Holding account with combined Goldmoney Wealth and Network features.
- Subsequently integrated 20 new global deposit and redemption options into unified Holding, including WeChat Pay, Alipay,
SEPA, UnionPay, and 16 additional payment integrations.
- Completed build-out and subsequent launch of first brick-and-mortar Goldmoney Branch in Toronto.
- Completed investment in Menē 24 karat jewelry subsidiary and subsequent private beta launch.
- Initiated New York Stock Exchange (NYSE) listing process.
- Launched BlockVault Inc. subsidiary and ColdBlocks™: custodial cold storage technology for cryptocurrency assets.
The Company made several key advancements following the close of the first quarter, including the closing of a $30 million
private placement to new institutional investors.
IFRS
Consolidated Income Statement Data
(expressed in $000s except loss per share) |
FY 2018 |
FY 2017 |
FY 2016 |
|
Q2 |
Q1 |
Q4 |
Q3 |
Q2 |
Q1 |
Q4 |
Q3 |
Revenue |
126,274 |
125,211 |
131,851 |
139,149 |
140,391 |
112,409 |
108,705 |
80,824 |
Fee
Revenue |
645 |
661 |
713 |
633 |
711 |
655 |
513 |
501 |
Gross
margin |
958 |
1,320 |
1,284 |
1,401 |
1,543 |
1,361 |
1,271 |
897 |
Gross profit
(excludes precious metal inventory P&L) |
1,602 |
1,981 |
1,997 |
2,034 |
2,254 |
2,016 |
1,785 |
1,398 |
* 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 consolidated financial statements and MD&A.
“The second quarter was a transitional quarter for the group with higher than ordinary professional, service, general and
administrative costs as we consolidated the Goldmoney Holding into one unified account with reduced transaction fees. This
unification is what ultimately paved the way for our official foray into cryptocurrency assets, which will be launched as a
buy-sell feature within days. We also began to invest and capitalize our new BlockVault subsidiary, which will employ our
proprietary ColdBlocks™ technology for institutional-grade custody of crypto assets. Lastly, we completed and fully paid for
our capital investments in the first brick-and-mortar branch in Toronto, and the Menē 24 karat jewelry venture which has now
launched and is generating revenue. In that light, breaking even while maintaining our tangible capital, seems fair," said
Goldmoney CEO Roy Sebag. “With that said, I am disappointed in these results as we narrowly missed on achieving our second
consecutive net income quarter due to an operational mistake. When we transitioned to the lower fees in June, our dealing desk in
Jersey did not properly update certain metal price feeds from incoming counterparties. The result was that we were executing at a
disadvantageous price against one specific counterparty, and in some cases losing on platinum, palladium, and silver against
certain client order-flows. In what was a bad quarter for all precious metal businesses, Goldmoney actually saw growth in both
revenue, client deposits, and even margin, but this error might have cost us up to $0.5-$0.7 million based on initial calculations.
We have since corrected this personnel error, and the gross margin has now normalized and should even grow next quarter with the
launch of crypto-assets. I believe we have a better brand and infrastructure to aggressively compete with the incumbent
cryptocurrency custodians who now oversee tens of billions of such assets under custody. Over the next few quarters we will
allocate free cash flow and growth capital towards that objective hiring engineers, compliance, customer service, and marketing
staff. This process has in fact already begun with our head-count growing every week since quarter-end.”
“While the second quarter proved to be another transition quarter for the newly consolidated Goldmoney Holding platform, we
continued to show consistent client activity and slight nominal growth despite record low advertising and client acquisition
expenditures, as well strong macroeconomic headwinds in the retail precious metal sector. It’s been widely reported that many of
our competitors have seen sales volumes and client activity drop as much as 20 to 40 per cent or more year over year in this period
of exceptionally low realized price volatility; overall, we see the consistent top line activity – despite lower growth and
advertising spend – as a strong signal that our reduced fees and continuous launch of new technology and products has been seeding
early client network effects and gains in market share,” said Goldmoney CFO Josh Crumb. “Looking ahead, our third quarter should be
the final quarter of our intentionally-reduced marketing spend during this platform transition and ramp up phase, and we plan to
market the launch of our new branches, new crypto asset offering, and other broader momentum building initiatives more aggressively
into calendar year end. Turning specifically to our recently announced crypto asset launch and BlockVault subsidiary, both
initiatives are progressing well and we look forward to at least one month of new crypto asset-related revenue in Q3, and the
launch and institutional market entry of BlockVault in Q4.”
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 and six months ended September 30,
2017, 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.
Conference Call Information
The company will be hosting its annual conference call to discuss earnings, and a general corporate update. The call is open to
investors and will be held by Josh Crumb, CFO of Goldmoney Inc. and Roy Sebag CEO of Goldmoney Inc.
PARTICIPANT ACCESS CODE: 362764
DIAL-IN NUMBERS:
Toronto: +1 647 478 7145
New York: +1 917 962 0650
London: +44 203 7696819
To view additional local dial-in numbers, please click here.
QUESTIONS:
Please note that the conference line will be muted to all callers. Questions to be answered during the call can be emailed ahead of
time 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.
Non-IFRS Adjusted Loss1 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, (iii) the impact of foreign exchange gains or losses, and (iv) unrealized gains or
losses on investments held for sale. Refer to the MD&A for a detailed breakdown of these items.
Non-IFRS Cash Loss is a non IFRS financial measure. This figure excludes from comprehensive loss the impact of non-cash items,
including the amortization of intangible assets or stock based compensation. Refer to the MD&A for a detailed breakdown of
these items.
Tangible Common Equity 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.
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, 2017.
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 $1.8 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:
Jacquelyn Humphrey
Director of Global Communications
Goldmoney Inc.
jac@goldmoney.com
Josh Crumb
Chief Strategy Officer & CFO
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 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. 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.