Goldmoney Inc.
TSX : XAU

Goldmoney Inc.

November 14, 2016 07:00 ET

Goldmoney Inc. Reports Financial Results for Second Quarter 2017

TORONTO, ONTARIO--(Marketwired - Nov. 14, 2016) - Goldmoney Inc. (TSX:XAU) (the "Company"), a financial technology company operating a global, 100% reserved gold-based financial network, today announced financial results for the second quarter ended September 30, 2016. All amounts are expressed in Canadian dollars unless otherwise noted.

Second Quarter Financial Highlights

  • Consolidated Revenue of $140.4 million, an increase of $28 million (+25%) over Q1 2017, and an increase of $74.1 million (+112%) from Q2 2016.
  • Total Comprehensive Loss of $1.36 million, a 41% improvement from Q1 2017.
  • Basic and diluted and net loss per shares of $0.02, improved from $0.04 per share in Q1 2017.
  • Q2 Non-IFRS Adjusted Loss of $805,508, up $2.7 million year over year, and an improvement of $834,238 from Q1 2017.
  • Q2 Non-IFRS Cash Loss of $537,333, an improvement of $2.8 million year over year.
  • Total Operating Income of $1.4 million from the Goldmoney Wealth business.
  • Liquidity position grew to $61.06 million, up by $1.6 million over March 31, 2016.
  • Total operating expenses reduced by $633,875, a 15% decrease from Q1 2017.
  • More than 1.25 million user signups with $1.9 billion in client assets as at September 30, 2016.

Second Quarter Operational Highlights

  • Completed integration of Personal, Business and Wealth divisions under the unified Goldmoney brand.
  • Launched Real Time Audit complete with collaborative KPIs.
  • Accelerated direct-to-bank value settlement and added local processing capabilities for several currencies, including: AUD, CHF, CZK, EUR, GBP, HKD, SGD, USD, JPY, and ZAR.
  • Unveiled PayPal integration and exclusive vault for users in the U.K. and Europe.

The Company made several key advancements following the close of the second quarter:

  • Launched the new Goldmoney App for iOS and Android.
  • Initiated the development of Goldmoney branch locations.
  • Enabled the funding of Wealth Holdings with gold balances held in Goldmoney Network accounts.
  • Announced Goldmoney USA Limited registered with FinCEN and launched P2P transfers in the U.S.

"We are pleased to share our financial results this quarter, as this is the second consecutive quarter of revenue growth on lower operating expenditures. Our internal cost rationalization efforts coupled with strong operating performance have directly resulted in a 72% reduction in total comprehensive loss year over year, which validates our commitment to disciplined spending while we grow the network," said Goldmoney Inc. CFO Katie Sokalsky. "A large portion of our expenditure is still non-cash, so it's important to consider both the Non-IFRS Adjusted Loss and Non-IFRS Cash Loss figures to understand the true cash outlay. We have delivered on the objectives we set for the Company one year ago, and are pleased to have produced a very strong return for investors this quarter."

"This was a great quarter for Goldmoney Inc. The acceleration of organic platform activity led to growth in revenue and long-term earnings power in the form of transaction margin and custodial fees, which is evident in the 25% increase in revenue achieved in Q2 despite a 40% reduction in marketing spend," said Roy Sebag, founder and CEO of Goldmoney Inc. "This marked improvement over last year demonstrates the power of our business model to generate recurring revenue, as the financial relationships we develop rely on the platform for daily savings and payment transactions. Our effective capital management and fiscal responsibility demonstrate both our long-term focus and the respect we have for the assurances of integrity we make to our customers who entrust us with nearly $2 billion of assets."

IFRS Consolidated Income Statement Data (expressed in $000s) Q2 2017 Q2 2016
(2)
$
Change
% Change
Revenue 140,391 66,248 74,143 112 %
Cost of sales (138,848 ) (65,461 ) (73,387 ) 112 %
Gross margin 1,543 787 756 96 %
Fee Revenue 711 147 564 383 %
Gain/(loss) on revaluation of previous metals inventory 69 114 (45 ) (39 %)
Gross profit (loss) 2,323 1,048 1,275 122 %
Total operating expenses (3,649 ) (6,107 ) 2,458 (40 %)
Operating loss (1,326 ) (5,058 ) 3,732 (74 %)
Total comprehensive loss (1,356 ) (4,886 ) 3,531 (72 %)
Non-IFRS Measures
Gross profit excluding gain/loss on precious metals (1) 2,254 934 1,320 141 %
Non-IFRS Adjusted Loss (1) (806 ) (3,511 ) 2,706 (77 %)
Non-IFRS Cash Loss (1) (537 ) (3,364 ) 2,827 (84 %)

Goldmoney Investor Update

The Goldmoney Inc. Investor Update for Q2 2017 can be viewed in the Investor Relations Newsroom.

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.

Non-IFRS Adjusted 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.

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.

Liquidity position is a non-IFRS measure. This figure excludes from total assets (i) prepaids and other assets, (ii) property and equipment, (iii) intangibles, and (iv) goodwill, and is useful to demonstrate the liquid net 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 September 30, 2016.

About Goldmoney Inc.

Goldmoney Inc. (TSX:XAU) 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 the Goldmoney Network, comprised of Goldmoney Personal and Goldmoney Business, anyone with internet access can buy, sell, transfer, earn, or redeem physical allocated gold. 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 1.28 million user signups from more than 150 countries and $1.8 billion in client assets (as at November 11, 2016). Goldmoney Network is registered with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). 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 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. No stock exchange, regulation services provider, securities commission or other regulatory authority has approved or disapproved the information contained in this news release.

Contact Information

  • Media and Investor Relations inquiries:
    Goldmoney Inc.
    Jacquelyn Humphrey
    Director of Global Communications
    jac@goldmoney.com

    For more information:
    Goldmoney Inc.
    Josh Crumb
    Chief Strategy Officer
    647-499-6748