Currency Exchange International Announces Financial Results for the Year and Three-Month Period Ended October 31, 2018
January 22 2019 - 8:35PM
Currency Exchange International, Corp. (the “Company”)
(TSX:CXI; OTCBB:CURN) is pleased to announce its
financial results and present management's discussion and analysis
("
MD&A") for the three month period and
year ended October 31, 2018 (all figures are in U.S. dollars except
where otherwise indicated). The complete financial statements and
MD&A can be found on the Company's SEDAR profile at
www.sedar.com.
Randolph Pinna, CEO of the Company stated, “2018 was a pivotal
year for CXI. We reinvested significant resources in growing our
core foreign currency banknote business in both Canada and the
U.S., started to diversify our revenue stream by expanding our
capability to offer global foreign currency payments, and agreed to
acquire a longstanding payments company in Montreal, Canada,
subject to regulatory approval. CXI is very well positioned
in the market and our strong capital base gives us the ability to
capitalize on potential growth opportunities in 2019.”
Corporate and Operational Highlights for
2018:
- Banknote business segment: the banknote business continued to
perform strongly, achieving 20% year-over-year growth. The
Company continued to expand its customer base within new market
segments in both Canada and the U.S.
- Foreign Currency International Payments segment: the Company
has begun to diversify its revenue base and established a fully
operational foreign currency payments business segment, which has
grown 51% year-over year.
- CXI Corporate Owned Branches: the Company successfully
opened three new locations in Los Angeles, Stamford, and New
Orleans, while closing one location in Orlando, bringing the
corporate owned retail locations total to 43.
- Total transaction volume in payments and banknotes increased by
15%, driven largely by new, larger clients being
onboarded.
- Technology Improvements: the Company successfully
launched a payments platform that will support the Company’s
ability to leverage the foreign currency payments business.
The new system enhances compliance, treasury risk oversight, and
mark-to-market processes, and positions the Company in 2019 to
offer additional foreign currency payments products such as
currency hedging.
- EBC reached an agreement to acquire assets and customers from a
22-year old payments business based in Montreal. The
acquisition is expected to close in fiscal Q2 2019, subject to
regulatory approvals being received. Integration initiatives
are underway.
- A new office and second vault location are currently being
staffed in Montreal. The new Montreal office will have 10-15
employees servicing the Eastern region of Canada in both lines of
business.
- Significant reinvestment has been made in strengthening Human
Capital within the Sales, Compliance, Risk Management teams as well
as the Board of Directors.
- The Company continues to be strongly capitalized with
complementary available Lines of Credit, providing ample
flexibility and nimbleness to fund organic growth and to consider
and capitalize upon accretive M&A opportunities in 2019.
Financial Highlights for the Year Ended October 31, 2018
compared to the Year Ended October 31, 2017:
- During the year ended October 31,
2018, transactional activity between the Company and its customers
increased 15% to 1,118,000 transactions from 974,000 for the year
ended October 31, 2017. The dollar volume of these transactions
grew almost 50%. Since October 31, 2017, the Company has
added 360 new customer relationships representing 2,724 new
transacting locations;
- Revenues increased 2 0 % or $6.6
million to $39.1 million for the year ended October 31, 2018 from
$32.5 million for the year ended October 31, 2017;
- Net operating income increased 4%
or $300,000 to $8.2 million for the year ended October 31, 2018
from $7.9 million for the year ended October 31, 2017;
- Net income increased 11% or
$405,000 to $4.2 million for the year ended October 31, 2018 from
$3.8 million for the year ended October 31, 2017; and
- The increase in profitability for
the year is attributable to increased contributions from payments,
increased margins from changes in currency mix, organic growth from
wholesale and retail business lines, and lower taxes in the United
States.
Financial Highlights for the Three-Month Period Ended
October 31, 2018 compared to the Three-Month Period Ended October
31, 2017:
- During the three-month period ended
October 31, 2018, transactional activity between the Company and
its customers increased 15% to 320,000 transactions from 278,000
for the three-month period ended October 31, 2017;
- Revenues increased 10% or $.9
million to $10.3 million for the three-month period ended October
31, 2018 from $9.4 million for the three-month period ended October
31, 2017;
- Net operating income decreased
$791,000 to $1.8 million for the three-month period ended October
31, 2018 from $2.6 million for the three-month period ended October
31, 2017;
- Net income decreased 24% or
$342,000 to $1 million for the three-month period ended October 31,
2018 from $1.3 million for the three-month period ended October 31,
2017; and
- Despite increased contributions
from payments, increased margins from changes in currency mix and
organic growth from wholesale and retail business lines,
profitability decreased because of increased operating expenses
driven by largely non-recurring expenses related to implementing
strategic priorities in the quarter. Examples of the priority
investment areas include establishing a Regulatory Compliance
Management (RCM) Framework (in EBC), Multi-state Licensing,
Payments platform development, acquisition support, and product
development.
Selected Financial Data
Three-months ending |
Revenue |
Net operating income |
Net income (loss) |
Total assets |
Total equity |
Earnings (loss) per
share (diluted) |
|
$ |
$ |
$ |
$ |
$ |
$ |
10/31/2018 |
10,270,233 |
1,724,576 |
995,967 |
|
73,267,274 |
62,721,937 |
|
0.17 |
|
7/31/2018 |
11,537,280 |
3,533,642 |
2,407,522 |
|
86,860,274 |
61,629,104 |
|
0.37 |
|
4/30/2018 |
8,887,772 |
1,115,289 |
507,606 |
|
84,714,970 |
57,789,679 |
|
0.08 |
|
1/31/2018 |
8,402,855 |
1,764,296 |
316,148 |
|
79,794,495 |
57,809,076 |
|
0.05 |
|
10/31/2017 |
9,355,315 |
2,609,517 |
1,337,947 |
|
63,968,227 |
56,492,618 |
$ |
0.21 |
|
7/31/2017 |
9,862,335 |
3,597,678 |
1,944,247 |
|
71,348,901 |
55,545,083 |
$ |
0.31 |
|
4/30/2017 |
7,172,429 |
1,424,291 |
625,052 |
|
66,875,712 |
52,111,070 |
$ |
0.10 |
|
1/31/2017 |
6,087,142 |
290,024 |
(85,776 |
) |
60,399,965 |
51,438,703 |
$ |
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
Seasonality is reflected in the timing of when
foreign currencies are in greater or lower demand. In a normal
operating year there is seasonality to the Company's operations
with higher revenues generated from March until September and lower
revenues from October to February. This coincides with peak tourism
seasons in North America when there are generally more travelers
entering and leaving the United States and Canada.
On July 9, 2018 the Company announced its
wholly-owned subsidiary EBC has entered into a definitive agreement
to acquire the assets of a business operating 22 years primarily in
the province of Quebec from the private family owners who were
advised by Laurentian Bank Securities. These assets include a total
of approximately 400 corporate customers that are engaged in
international payments. It is expected that approximately 10
employees will be retained and employed in EBC’s new Montreal
Office. The transaction is subject to regulatory approval and will
not close until all approvals have been obtained.
Conference Call
The Company plans to host a conference call on
January 23, 2019 at 8:30 AM (EST). To
participate in or listen to the call, please dial the appropriate
number:
- Toll Free: 1 (855) 336-7594Conference
ID number: 6288109
About Currency Exchange International,
Corp.
The Company is in the business of providing a
range of foreign exchange technology and processing services in
North America, including the Hawaiian Islands. Primary products and
services include the exchange of foreign currencies, wire transfer
payments, purchase and sale of foreign bank drafts and
international travelers cheques, and foreign cheque clearing.
Related services include the licensing of proprietary FOREIGN
CURRENCY software applications delivered on its web-based
interface, www.ceifx.com (“CEIFOREIGN CURRENCY”), and
licensing retail foreign currency operations to select companies in
agreed locations.
The Company’s wholly-owned Canadian subsidiary,
Exchange Bank of Canada, based in Toronto, Canada, provides foreign
exchange and international payment services to financial
institutions and select corporate clients in Canada through the use
of its proprietary software – www.ebcfx.com.
Contact InformationFor further information
please contact:Bill MitoulasInvestor Relations(416)
479-9547Email: bill.mitoulas@ceifx.comWebsite: www.ceifx.com
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATION
This press release includes forward-looking
information within the meaning of applicable securities laws. This
forward-looking information includes, or may be based upon,
estimates, forecasts and statements as to management’s expectations
with respect to, among other things, demand and market outlook for
wholesale and retail foreign currency exchange products and
services, proposed entry into the Canadian financial services
industry, future growth, the timing and scale of future business
plans, results of operations, performance, and business prospects
and opportunities. Forward-looking statements are identified by the
use of terms and phrases such as “anticipate”, “believe”, “could”,
“estimate”, “expect”, “intend”, “may”, “plan”, “predict”,
“preliminary”, “project”, “will”, “would”, and similar terms and
phrases, including references to assumptions.
Forward-looking information is based on the
opinions and estimates of management at the date such information
is provided, and on information available to management at such
time. Forward-looking information involves significant risks,
uncertainties and assumptions that could cause the Company’s actual
results, performance or achievements to differ materially from the
results discussed or implied in such forward-looking information.
Actual results may differ materially from results indicated in
forward-looking information due to a number of factors including,
without limitation, the competitive nature of the foreign exchange
industry, currency exchange risks, the need for the Company to
manage its planned growth, the effects of product development and
the need for continued technological change, protection of the
Company’s proprietary rights, the effect of government regulation
and compliance on the Company and the industry in which it
operates, network security risks, the ability of the Company to
maintain properly working systems, theft and risk of physical harm
to personnel, reliance on key management personnel, global economic
deterioration negatively impacting tourism, volatile securities
markets impacting security pricing in a manner unrelated to
operating performance and impeding access to capital or increasing
the cost of capital as well as the factors identified throughout
this press release and in the section entitled “Risks and
Uncertainties” of the Company’s Management’s Discussion and
Analysis for Year Ended October 31, 2016. The forward-looking
information contained in this press release represents management’s
expectations as of the date hereof (or as of the date such
information is otherwise stated to be presented), and is subject to
change after such date. The Company disclaims any intention or
obligation to update or revise any forward-looking information
whether as a result of new information, future events or otherwise,
except as required under applicable securities laws.
The Toronto Stock Exchange does not accept
responsibility for the adequacy or accuracy of this press release.
No stock exchange, securities commission or other regulatory
authority has approved or disapproved the information contained in
this press release.
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