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Goldmoney Inc. Reports Financial Results for First Quarter 2022

T.XAU

TORONTO, Aug. 11, 2021 (GLOBE NEWSWIRE) -- Goldmoney Inc. (TSX:XAU) (US:XAUMF) (“Goldmoney” or the “Company”), a precious metal financial service and technology company, today announced financial results for the first quarter ended June 30, 2021. All amounts are expressed in Canadian dollars unless otherwise noted.

Quarterly Highlights

  • Quarterly Gross Profit of $6.2 million, a decrease of 42% Year-over-Year (“YoY”).
  • Fee Revenue decreased by 40% YoY to $1.4 million.
  • Net and Comprehensive Income of $0.6 million, a $4.4 million (87%) decrease YoY.
  • Basic and Diluted Earnings per share of $0.01.
  • Revenue of $94.7 million, a decrease of 45% YoY.
  • Goldmoney.com reported a 57% decrease in Operating Income, 42% decrease in Gross Profit and 34% in Gross Margin YoY.
  • Goldmoney.com Group Client Assets remained flat YoY at $2.3 billion as at June 30, 2021.
  • SchiffGold Revenue decreased $10.6 million or 15% YoY, and Operating Income decreased $0.5 million or 47% YoY.
  • Investee Company Mene Inc. (TSXV:MENE) continued to grow its client and revenue base, reporting record Quarterly Revenue of $7.2 million, or 40% increase YoY, for its Quarter ended March 31, 2021.
  • Corporate Metal Position consisting of Coins, Bullion, and Bullion Denominated Loan increased by $6.6 million, or 14% Quarter-over-Quarter (“QoQ”) to $54.1 million as at June 30, 2021.
  • Tangible Capital increased 1% QoQ to $127.3 million.

Business Highlights

  • The company successfully transitioned all of its Goldmoney.com clients from Jersey to Canada and the UK thereby exiting the Jersey jurisdiction.
  • Totenpass Inc. ("Totenpass"), a 60% owned subsidiary of Goldmoney Inc., is nearing beta launch with quality assurance and quality control testing taking place.
IFRS Consolidated Income
Statement Data
($000s, except earnings per share) FY 2022 FY 2021 FY 2020
Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2
Revenue 94,706 139,709 97,592 243,609 173,500 164,441 108,161 127,154
Gross margin 3,977 2,453 3,401 7,566 5,981 3,232 2,188 2,268
Fee revenue 1,412 1,844 2,905 1,776 2,351 2,489 719 599
Interest income 103 211 195 217 239 374 461 536
Gross profit Excl. revaluation of precious metals inventories 5,492 4,508 6,501 9,558 8,570 6,095 3,368 3,400
Gross profit Incl. revaluation of precious metals inventories 6,167 2,146 4,917 10,421 10,615 6,999 4,088 5,403
Net income (loss) 951 (5,947 ) 4,041 7,509 6,049 (7,892 ) (2,958 ) 1,054
Basic earnings (loss) per share .01 (0.08 ) 0.05 0.10 0.08 (0.10 ) (0.04 ) 0.01

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

Statement from Roy Sebag, Chairman and Chief Executive Officer:

In fiscal Q1 of 2022, Goldmoney achieved a most important milestone: exiting the Jersey business which was acquired in 2015. Our operations, compliance and technical teams completed the successful transition of all clients to our Canadian and UK platforms with no discernable impact on our assets under custody. Our regulatory license in Jersey was subsequently ceded with no objections from the Jersey Financial Securities Commission. With this decision, Goldmoney is able to return to its entrepreneurial roots which predate the Goldmoney acquisition by BitGold Inc. in 2015, allowing our group to offer a dynamic, leaner, more profitable and technologically-oriented service. I would like to thank all of our colleagues around the world who helped to make this transition seamless for our clients while meeting all of our regulatory obligations.

As regards to the financial results, first, it is important to view the financial statements in full rather than the snapshot in the press release as these will provide a more complete picture of our profitability this quarter, even in light of the year over year decrease in revenue. Goldmoney Inc. produced $2.5 million in operating income and $1.3 million in Non-IFRS Adjusted Gain. Both of which represent a higher-than-average outcome as measured by percentage of gross revenue. Going forward, we believe that these and higher financial results will be easily achievable for Goldmoney Inc. as the significant expenditures associated with the Jersey operation begin to fade from our income statement in the coming quarters. Over the next two financial quarters, expenditures will see a significant reduction while all of our clients will have returned to normal trading activity on the platforms following the brief period of transition and re-onboarding which took place over the past quarter.

Our objective at Goldmoney Inc. is, firstly and foremostly, to consistently deliver returns on metal weight to our shareholders by growing our tangible capital per share consistently and predictably. With the Jersey exit now behind us, our immediate goal is to invest in the growth of both our current business lines as well as new ventures which we have been preparing for launch. Our ideal scenario is to have legacy businesses contribute recurring cash flow which we can redeploy to growth businesses whilst maintaining a consistent 5 to 10% return per annum on tangible capital per share. Furthermore, these new businesses, funded from this capital position, will hopefully lead towards long-term growth in revenue and earnings power.

Turning to one of these growth businesses, we are pleased to announce the imminent launch of Totenpass, our revolutionary digital storage drive product which harnesses cutting-edge material science technology with the ancient media of precious metals. We project that Totenpass will be launched in beta this autumn. For the launch, we have designed a unique referral programme, built upon the blockchain, which allows referrers to earn Bitcoin by promoting Totenpass to their friends and family. I am personally passionate and excited about Totenpass and I cherish the many test-run drives that I have made in order to store meaningful family photos and documents. This is a one-of-a-kind product which is incomparable to anything else on the market today. While it requires the consumer to shift their conceptions of digital storage media, we believe that it will be a welcome revolution for those who feel increasingly dissatisfied with the centralization of their precious digital information.

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 June 30, 2021 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 Questions

Shareholders of Goldmoney are encouraged to submit questions to management by emailing 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.

Tangible Capital 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.

Gross profit excluding gain/loss on revaluation of inventories is a non-IFRS measure, calculated as gross profit less gain/(loss) on revaluation of precious metals. The closest comparable IFRS financial measure is gross profit. Fluctuations in the value of its precious metal inventories caused by fluctuations in market prices are included in gross profit. Management believes that excluding such fluctuations more clearly illustrates the Company’s business operations.

Non-IFRS Adjusted Gain (Loss) is a non-IFRS measure, defined as total comprehensive income (loss) adjusted for non-cash and non-core items which include, but is not limited to, revaluation of precious metal inventories, stock-based compensation, depreciation and amortization, foreign exchange fluctuations and gains and losses on investments.

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 June 30, 2021.

About Goldmoney Inc.

Goldmoney Inc. (TSX: XAU) is a precious metal focused global business. Through its ownership of various operating subsidiaries, the company is engaged in precious metal sales to its clients, including arranging delivery and storage of precious metals for its clients, coin retailing, and lending. Goldmoney clients located in over 150 countries hold approximately $2.3 billion in precious metal assets. The company’s operating subsidiaries include: Goldmoney.com, SchiffGold.com and Goldmoney Lend & Borrow. In addition to the Company’s principal business segments, the Company holds a significant interest in Mene Inc., which crafts pure 24-karat gold and platinum investment jewelry that is sold by gram weight. Through these businesses and other investment activities, Goldmoney gains long-term exposure to precious metals. For more information about Goldmoney, visit goldmoney.com.

Media and Investor Relations inquiries:

Mark Olson
VP Finance
Goldmoney Inc.
mark.olson@goldmoney.com

Steve Fray
Chief Financial Officer
Goldmoney Inc.
+1 647 250 7170

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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