Currency Exchange International Releases Financials and Appoints New Chief Financial Officer
Currency Exchange Announces Appointment of Chief Financial Officer
May 6, 2013
Toronto, Canada – Currency Exchange International, Corp. (the “Company”) (TSX:CXI; CXI.WT.S, OTCBB:CURN), is pleased to announce its financial results and management's discussion and analysis ("MD&A") for the three and six months ended March 31, 2013 (all figures are in U.S. dollars except where otherwise indicated). The complete and detailed financial statements and MD&A can be found on the Company's SEDAR profile at www.sedar.com.
Financial Highlights for the Three Months Ended March 31, 2013
- The Company added 29 new clients representing approximately 225 locations;
- The Company added 4 new inventory on consignment locations located in the United States;
- Revenues decreased from $3.1 million in 2012 to $2.9 million during 2013;
- Operating income decreased slightly to $435,000 from $632,000 for the same quarter in the previous year as a result of lower revenues offset by additional expenses from investments in Currency Exchange International of Canada Corp. and four additional branch locations compared to the same period of the previous year; and
- The company incurred a net loss of $575,000 during the first quarter of 2013. The net loss represents a decrease of $1.1 million in net income when compared to $497,000 in net income during the comparable period in 2012. The primary reason for the decline in in net income is a $926,000 loss from mark to market adjustment on common share purchase warrants. The Company's warrants are expected to be exercised or expired by September 8, 2013. The exercise or expiration of warrants will result in a complete recapture of the current mark to market adjustment of $1.1 million.
The Company's total revenue for the three months ended March 31, 2013 was $2,919,000 compared to $3,076,000 for the three months ended March 31, 2012. Revenues increased over 120% in Canada compared to the same period of the previous year while revenues generated in the United States reduced by 11%. The decrease in revenue in the United States is attributed to a reduction in the trading volume of exotic currencies, particularly the Iraqi Dinar, which were executed at higher margins and have subsequently declined in both frequency and volume. Certain expenses, being salaries and benefits, stock based compensation, and rent were higher during the period to support expansion of Currency Exchange International of Canada Corp. and the Company's branch and downstream client network.
Financial Highlights for the Six Months Ended March 31, 2013
- The Company added 41 new clients representing approximately 434 locations;
- The Company added 25 inventory on consignment locations located within the United States;
- The Company added two new retail stores in Seattle, Washington and Ft. Lauderdale, Florida;
- Revenues decreased slightly from $5.8 million in 2012 to $5.7 million during 2013 as a result of lower trading commission
- Operating income decreased to $743,000 from $1,462,000 as a result of slightly less revenues offset by additional expenses from investments in Currency Exchange International of Canada Corp. and four additional branch locations compared to the same period of the previous year; and
- The company incurred a net loss of $495,000 during the first six months of 2013. The net loss represents a decrease of $1.5 million in net income when compared to $1.0 million in net income during the comparable period in 2012. The primary reason for the decline in net income is a $923,000 loss from mark to market adjustment on common share purchase warrants. The Company's warrants are expected to be exercised or expired by September 8, 2013. The exercise or expiration of warrants will result in a complete recapture of the current mark to market adjustment of $1.1 million.
The Company's total revenue for the six months ended March 31, 2013 was $5,727,000 compared to $5,792,000 for the six months ended March 31, 2012. Revenues increased over 300% in Canada compared to the same period of the previous year while revenues generated in the United States reduced by 10%. The decrease in revenues can be attributed to a reduction in the trading volume of exotic currencies, particularly the Iraqi Dinar, which were executed at higher margins and have subsequently declined in both frequency and volume. Certain expenses, being salaries and benefits, rent, and stock based compensation were higher during the period to support expansion of Currency Exchange International of Canada Corp. and the Company's branch and downstream client network.
Appointment of Chief Financial Officer
Currency Exchange International is pleased to announce the appointment of Mr. Peter Scherer as Senior Vice President and Chief Financial Officer. Mr. Scherer was previously Senior Vice President and Chief Financial Officer at AGF Trust Company and prior to that held a number of senior financial positions at AGF Management Limited. Mr. Scherer is active with several charities and community service organizations, including the Juvenile Diabetes Research Foundation. Mr. Scherer received his MBA from the Wharton School, University of Pennsylvania and holds a Chartered Accountant (CA) and Chartered Financial Analyst (CFA) designation. Mr. Randolph W. Pinna, President and Chief Executive Officer and director of Currency Exchange International stated, "We welcome Mr. Scherer to the senior management team of CXI. Peter has significant financial experience which will be valuable as the Company seeks to grow its business and pursues its banking charter." Mr. Scherer will be succeeding Mr. Wade Bracy, who
continues his strong performance with CXI and assumes the role of Chief Financial Officer of Currency Exchange International of America Corp, a subsidiary of the Company.
“Wade Bracy’s hard work and dedication over the past 6 years has been instrumental to the success of Currency Exchange International,” Mr. Randolph W. Pinna. “Wade has improved our efficiency by fully integrating the entire operations into our accounting platform. Mr. Bracy also managed a smooth transition to our public listing on the Toronto Stock Exchange in 2012 and migration from GAAP to International Financial Reporting Standards (IFRS). We are pleased that he will assume his new role with our US operating subsidiary and will devote his time to expanding its business", added Mr. Pinna.
Option Grant
On May 3, 2013, the Company granted 22,000 options to CXI employees at a price of Cdn$7.65, with an expiration date of May 3, 2018. Vesting terms under the Plan will occur 1/3 upon the first anniversary, 1/3 upon the second anniversary and 1/3 upon the third anniversary of the grant.
Conference Call
The Company plans to host a conference call on May 7, 2013 at 4:00 PM (EST). To participate in the call please dial:
Toll Free Canada: +1 (888) 350-3035
Toll Free United States: +1 (877) 273-4202 Conference ID number: 6986532
To listen to the conference call, please dial the appropriate number and conference Id number 6986532.
The company’s services are provided in Canada by its wholly owned subsidiary based in Toronto, Canada through the use of its proprietary software www.ceifx.ca.
Contact Information
For further information please contact: Randolph W. Pinna
President, Chief Executive Officer & Director 407.240.0224
E-mail: [email protected] Website: 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, and the regulatory approval process for a new Canadian Schedule I bank, 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 the three and six months ended March 31, 2013. 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.
Currency Exchange International (CXI) is a leading provider of foreign currency exchange services in North America for financial institutions, corporations, and travelers. Products and services for international travelers include access to buy and sell more than 80 foreign currencies, gold bullion coins and bars. For financial institutions, our services include the exchange of foreign currencies, international wire transfers, purchase and sale of foreign bank drafts, international traveler’s cheques, and foreign cheque clearing through the use of CXI’s innovative CEIFX web-based FX software www.ceifx.com
