Currency Exchange International, Corp. (the "Company")
(TSX:CXI)(PINKSHEETS:CURN), is pleased to announce its financial results and
present the management's discussion and analysis ("MD&A") for the four-month and
thirteen-month periods ended October 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.
Change in Reporting Period
Effective February 2013, Currency Exchange International, Corp. changed its
fiscal year end to October 31, 2013 to conform with the same change in fiscal
year end made by its wholly owned subsidiary corporation, Currency Exchange
International of Canada Corp. ("CXIC") to comply with the reporting period for
Canadian chartered banks as part of the ongoing process of CXIC applying for a
bank license in Canada. As a result, the consolidated financial statements are
presented as the thirteen-months ended October 31, 2013 compared to the year
ended September 30, 2012. The MD&A presents financial information for the
four-months and thirteen-months ended October 31, 2013 compared to the
three-months and year ended September 30, 2012.
Financial Highlights for the Four-Month Period Ended October 31, 2013 Compared
to the Three-Month Period Ended September 30, 2012:
-- Revenues increased 92% to $6.5 million for the four-months ended October
31, 2013 from $3.4 million for the three-months ended September 30,
2012;
-- Operating income increased 55% to $2.2 million for the four-months ended
October 31, 2013 from $1.4 million for three-months ended September 30,
2012;
-- The Company raised Cdn$10.8 million in equity through the exercise of
1,435,725 common share purchase warrants, which expired on September 8,
2013, representing over 98% of the warrants available for exercise
bringing the total number of shares issued and outstanding to 5,390,473;
-- Net income increased to $1.7 million for the four-months ended October
31, 2013 from $1.5 million for the three-months ended September 30,
2012. Net income includes a one-time non-cash fair value adjustment for
the warrant liability which expired September 8, 2013. This fair value
adjustment increased net income by $0.3 million for the four-months
ended October 31, 2013 and by $0.9 million for the three-months ended
September 30, 2012. Net income before this one-time non-cash adjustment
is $1.4 million for the four-months ended October 31, 2013 and $0.6
million for the three months ended September 30, 2012. The increase in
net income was due primarily to a $0.8 million increase in operating
income;
-- The Company added four new retail branch locations in Maryland,
Illinois, California, and New York; and
-- The Company added 31 new clients representing approximately 900
locations during the four-months ended October 31, 2013.
The Company's total revenue for the four month period ended October 31, 2013 was
$6.5 million compared to $3.4 million for the three month period ended September
30, 2012. Revenues increased 50% in Canada compared to the same period of the
previous year while revenues generated in the United States increased by nearly
98%. Certain expenses, including salaries and benefits, stock based compensation
and rent were higher during the period to support the expansion of Currency
Exchange International of Canada Corp. and the Company's branch and client
network.
Financial Highlights for the Thirteen-Month Period Ended October 31, 2013
Compared to the Year Ended September 30, 2012:
-- Revenues increased 30% to $16.0 million for the thirteen- months ended
October 31, 2013 from $12.3 million for the year ended September 30,
2012;
-- Operating income increased 13% to $4.0 million for the thirteen-months
ended October 31, 2013 from $3.6 million for the year ended September
30, 2012 primarily due to strong revenue growth of 30% offset by
increases in operating expenses of 37%, which were a result of
additional expenses associated with the Canadian operations, increase in
stock based compensation and the costs of opening five new retail branch
locations;
-- The Company raised Cdn$10.8 million in equity through the exercise of
1,435,725 common share purchase warrants, which expired on September 8,
2013, representing over 98% of the warrants available for exercise
bringing the total number of shares issued and outstanding to 5,390,473;
-- Net income decreased $0.1 million to $2.6 million for the thirteen
months ended October 31, 2013 from $2.7 million for the year ended
September 30, 2012. Net income includes a one-time non-cash fair value
adjustment for the warrant liability which expired September 8, 2013.
This fair value adjustment increased net income by $0.5 million for the
thirteen months ended October 31, 2013 and by $1.0 million for the year
ended September 30, 2012. Net income before this one-time non-cash
adjustment is $2.2 million for the thirteen months ended October 31,
2013 from $1.8 million for the year ended September 30, 2012.
-- The Company added five new retail branch locations in Florida, Maryland,
Illinois, California, and New York; and
-- The Company added 119 new clients representing approximately 3,300
locations during the thirteen-months ended October 31, 2013.
The Company's revenue for the thirteen month period ended October 31, 2013 was
$16.0 million compared to $12.3 million for the year ended September 30, 2012,
an increase of 30%. Revenues increased over 92% in Canada compared to the same
period of the previous year while revenues generated in the United States
increased 25%. Certain expenses, including salaries and benefits, rent, and
stock based compensation were higher during the period to support the expansion
of Currency Exchange International of Canada Corp. and the Company's branch and
client network.
Selected Financial Data
---------------------------------------------------------------------------
Operating Net Total
Period Date Revenue income income Assets
(unaudited) $ $ $ $
---------------------------------------------------------------------------
Four-months ended 31-Oct-13 6,463,406 2,207,417 1,669,609 33,681,819
---------------------------------------------------------------------------
Three-months ended 30-Jun-13 3,799,683 1,094,456 1,466,835 19,997,719
---------------------------------------------------------------------------
Three-months ended 31-Mar-13 2,919,292 435,357 (575,087) 18,709,964
---------------------------------------------------------------------------
Three-months ended 31-Dec-12 2,808,053 308,233 80,338 19,929,308
---------------------------------------------------------------------------
Three-months ended 30-Sep-12 3,369,548 1,433,792 1,475,426 18,225,628
---------------------------------------------------------------------------
Three-months ended 30-Jun-12 3,152,246 676,915 208,542 17,275,581
---------------------------------------------------------------------------
Three-months ended 31-Mar-12 3,076,693 631,705 497,415 16,829,379
---------------------------------------------------------------------------
Three-months ended 31-Dec-11 2,715,986 831,209 536,269 10,391,386
---------------------------------------------------------------------------
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Return Return
on on
Total assets equity
Period Date equity (annualized) (annualized)
(unaudited) $ % %
--------------------------------------------------------------------
Four-months ended 31-Oct-13 29,763,976 22.2% 27.9%
--------------------------------------------------------------------
Three-months ended 30-Jun-13 17,607,201 30.3% 35.0%
--------------------------------------------------------------------
Three-months ended 31-Mar-13 16,255,314 -12.4% -13.8%
--------------------------------------------------------------------
Three-months ended 31-Dec-12 16,734,553 1.7% 2.0%
--------------------------------------------------------------------
Three-months ended 30-Sep-12 16,226,974 30.7% 38.4%
--------------------------------------------------------------------
Three-months ended 30-Jun-12 14,711,060 4.7% 5.7%
--------------------------------------------------------------------
Three-months ended 31-Mar-12 14,478,596 16.1% 21.1%
--------------------------------------------------------------------
Three-months ended 31-Dec-11 6,695,607 21.3% 32.5%
--------------------------------------------------------------------
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.
Conference Call
The Company plans to host a conference call on January 9, 2014 at 2:00 PM (EST).
To participate in or listen to the call, please dial the appropriate number:
Toll Free: +1 (855) 336-7594
Conference ID number: 28961947
About Currency Exchange International, Corp.
The Company is in the business of providing a range of foreign currency exchange
and related products and 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 traveler cheques, and foreign cheque clearing. Related services
include the licensing of proprietary FX software applications delivered on its
web-based interface, www.ceifx.com ("CEIFX") and licensing retail foreign
currency operations to select companies in agreed locations.
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.
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 Thirteen-Month Period Ended
October 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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Currency Exchange International, Corp.
Randolph W. Pinna
President and Chief Executive Officer
407.240.0224
Randolph@ceifx.com
www.ceifx.com
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