Goldmoney Inc. Reports Financial Results for Fourth Quarter and Fiscal Year 2019

TORONTO–(BUSINESS WIRE)–Goldmoney Inc. (TSX:XAU) (US:XAUMF) (“Goldmoney” or the “Company”), a precious metal financial service and technology company, today announced financial results for the quarter and fiscal year ended March 31, 2019. All amounts are expressed in Canadian dollars unless otherwise noted.

Financial Highlights

  • Record Annual Net and Comprehensive Income of $22.7 million, an increase of $17 million (300%) Year-over-Year (“YoY”).
  • Record Annual Net Income of $21.7 million compared to $2.6 million for FY 2018, a 734% increase. Net and Diluted Earnings Per Share of $0.28.
  • IFRS Consolidated Annual Revenue of $281.5 million, a decrease of 17% YoY as the precious metal sector experienced more volatility and the Company exited the cryptocurrency sector in Q4 2019.
  • IFRS Annual Gross Profit of $12.4 million.
  • Non-IFRS Adjusted Annual Gain of $23.2 million. IFRS Annual Operating Loss of $11.7 million.
  • Schiff Gold Revenue of $90.7 million, a 24% growth compared to FY 2018. Schiff Gold also achieved a 11% growth in Gross Margin and 82% increase in Operating Income YoY.
  • Menē Revenue increased by $2.8 million up to October 31, 2018, when Menē became an independent publicly listed corporation on the TSX Venture Exchange.
  • Significant growth in Tangible Capital to $131.8 million, an increase of $37.5 million, or 40% as compared to $94.2 million at March 31, 2018.
  • Currency Loans totaling $28.9 million of balance sheet capital extended to users against their pledged precious metals, earning interest rates ranging from 3.55% to 5.05%.
  • Corporate Precious Metal Position of $18.3 million, a 15% YoY increase.
  • Client Asset Under Custody stable at $1.75 billion as at March 31, 2019.

Operational Highlights

  • Completed the spin-off of Menē Inc. (“Menē”), which started trading on the TSX Venture Exchange under ticker symbol MENE on November 6, 2018.
  • Distributed 3,990,000 Menē Class B subordinate voting shares to shareholders of Goldmoney on a pro rata basis.
  • Menē raised $30 million in growth capital with Canaccord Genuity and a strategic lender.
  • Launched Goldmoney Active Trader, a real-time precious metals trading and analysis platform that offers advanced trading tools, limit buy and sell orders and transparent open order books.
  • Unveiled Goldmoney Checkout, a payment integration partnership that allows Goldmoney Clients to pay for purchases at Mene.com with precious metal or fiat currency in their Goldmoney Holding.
  • Introduced Goldmoney Physical, a new e-commerce platform that allows clients to take delivery of existing Goldmoney Holding balances as precious metal coins and bars via Schiff Gold.
  • Announced the decision to formally exit cryptocurrency business.

IFRS Consolidated Income

Statement Data

 

 

 

 

 

 

 

 

(expressed in $000s except loss per share)

 

FY 2019

FY 2018

 

Q4

Q3

Q2

Q1

Q4

Q3

Q2

Q1

Revenue1

64,171

84,029

69,550

63,794

98,448

85,158

77,185

79,282

Fee Revenue

591

580

610

575

580

584

645

661

Gross margin/(loss)

1,393

1,566

1,611

1,686

2,250

1,903

958

1,320

Gross profit excl. revaluation of precious metals inventories

2,782

2,749

3,092

3,321

3,663

9,692

1,971

2,080

Gross profit Incl. revaluation of precious metals inventories

2,069

4,152

2,182

3,978

2,108

10,008

1,999

1,372

 
  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.

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

Statement from the CEO:

The 2019 fiscal year was Goldmoney Inc.’s most successful ever. On a purely financial basis, we have grown our tangible net worth by nearly $37.5 million, or 40%, over last year. This result has been achieved even though the precious metal industry has been in a period of severe decline. It can be attributed to the innovative and entrepreneurial approach we take towards our mission of broadening gold ownership. Such was the case with the founding, development, and ultimate launch of Menē, our 24-karat direct-to-consumer jewelry brand.

Additionally, our success can be attributed to our disciplined capital management, which has led towards a new high-water mark in precious metal ownership per share. As of March 31, 2019, Goldmoney Inc. had direct balance sheet exposure to $47.2 million worth of physical precious metals via direct ownership and precious metal loans. This exposure was well-timed, and positions us for significant gains in the quarters to come—especially in light of gold’s recent surge post the reporting date.

Another factor that, in my view, has contributed towards our success is our unrelenting focus on safeguarding client assets, and, consistent with that focus, our steadfast brand equity. These days, Goldmoney spends relatively little money marketing our service, and yet we see hundreds of new clients per week and millions of dollars in inflows coming organically from clients around the world. We are extremely proud of this natural positioning of dominance that we occupy within the precious metal industry and seek to ensure that our position is maintained over time.

We continue to incur atypical regulatory costs, and we see a severe disconnect between what the cryptocurrency and Silicon Valley worlds put forward as the future of fintech and the regulatory realities we all face. Our group has significant pent-up innovation that we would love to deploy in the years to come. Our ideas and our overarching thesis have been timely. At this stage, our ability to execute has been demonstrated.

As was the case with the formulation and development of Menē, we continue to actively incubate internal exploratory ventures. These ideas may follow our present business lines, while other ideas may be consistent with our group ethos—albeit in an entirely different sphere. The ideas typically involve significant intellectual property and technology, with the assembly of teams to design a proprietary proof-of-concept. Additional details will be disclosed as warranted when the concepts are further developed.

The last item I would like to discuss is the recent resurgence of precious metal prices. Things appear to be picking up significantly, and it is my belief that 2019 and 2020 will be very good years for our core businesses. In the five years since founding BitGold, all of our work has ultimately been done in the expectation of capitalizing on a rising precious metal price environment. Let us all hope that the time has come.

I would like to thank the Goldmoney and Menē teams around the world for all their hard work in 2019. This was a very important transition year for us, but you all delivered, and for that you should be very proud. I would further like to specifically thank Alessandro Premoli, Steve Fray, and Paul Mennega for their excellent performance and dedication towards our group businesses in fiscal 2019. – Roy Sebag, Chairman, President and CEO.

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 year ended March 31, 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.

Conference Call Information

In lieu of a conference call, 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 year ended March 31, 2019.

About Goldmoney Inc.

Goldmoney Inc. (TSX: XAU) 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 $1.75 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.

Contacts

Media and Investor Relations inquiries:

Renee Wei

Director of Global Communications

Goldmoney Inc.

renee.wei@goldmoney.com

Steve Fray

Chief Financial Officer

Goldmoney Inc.

+1 647 499 6748