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CXI - Currency Exchange International News Story

C$12.96 0.4  3.4%

Last Trade - 02/12/21

Sector
Financials
Size
Micro Cap
Market Cap £47.3m
Enterprise Value £15.7m
Revenue £19.0m
Position in Universe 920th / 2710

Currency Exchange International Announces Financial Results for the Three-Month Period Ended April 30, 2021 and Adoption of Advance Notice By-Law

Fri 11th June, 2021 12:20am
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TORONTO, June 10, 2021 (GLOBE NEWSWIRE) -- Currency Exchange International,
Corp. (the “Company”) (TSX:CXI; OTCBB:CURN), announces its financial
results and management's discussion and analysis ("MD&A") for the three and
six-months ended April 30, 2021 (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.

On March 11, 2020 the World Health Organization (“WHO”) officially
declared COVID-19, the disease caused by a novel coronavirus, a
pandemic. Measures enacted to curtail COVID-19 by various governments have
significantly impacted travel and tourism, and therefore the demand for
foreign currencies. The Company has experienced a material decline in revenue
as a result. While the Company continues to operate, it is not possible to
reliably estimate the duration and severity of these consequences as well as
their impact on the financial position and results of future periods.

Randolph Pinna, CEO of the Company, stated, “Q2 marked a milestone in the
pandemic for the Company. CXI’s trailing twelve-month revenue was higher in
Q2 than in the previous quarter ended January 31, 2021. This inflection point
also coincided in the same quarter that saw the group’s consolidated net
revenue being higher than it was in the comparative period a year ago. While
the improvement is seemingly small relative to CXI’s pre-pandemic revenue,
it is important to note that it is mostly not as a result of a recovery in
travel and tourism based demand for foreign currencies, but rather due to the
execution of our strategic plan and the diligent effort by our employees to
diversify our revenue base while becoming more efficient in process and cost
control. Significant progress has been made in growing our international
payments business, as well as strengthening our position in the global
banknote trade. While we continue to pursue this strategy, we are optimistic
that we are now on the precipice of a recovery in international travel. There
are tangible indicators that the vaccines have proven effective at combatting
the coronavirus, allowing some countries to relax regulations that restrict
global mobility. The European Union is now opening up travel to vaccinated
travelers and we anticipate that the border between Canada and the U.S. is
likely to re-open sometime this summer. We are taking a conservative approach
in our expectations on the recovery as it pertains to revenue and maintain a
focus on returning to profitability.”

Corporate and Operational Highlights:
* Since April 30, 2020, the Company has added 768 new customer relationships
comprising 1,196 locations, of which 274 relationships representing 608
locations were added in the U.S. and 494 relationships representing 588
locations were added in Canada. Approximately one-half of the new customer
relationships in Canada were added pursuant to the business acquisition
completed on July 29, 2020 as announced on June 30, 2020.
* Exchange Bank of Canada continued its growth in the international payments
segment in Canada, initiating trades with 210 new corporate clients, enabling
it to more than double its payment revenue over the same quarter in the prior
year.
* In the three-months ending April 30, 2021, the Company has further increased
its penetration in the financial institution market in the U.S. with the
addition of 42 new clients (106 for fiscal year 2021), representing 112 (233
for fiscal year 2021) locations.
* The Company increased its penetration in the global banknote market with the
addition of a European-based financial institution client.
* The Company had a net negative operating cash flow, excluding the impact of
working capital changes in the quarter of approximately $0.5 million, or $0.2
million per month, which indicates a progressive reduction in operating cash
outflow since October 31, 2020. The liquidity position is strong with $54M in
unrestricted cash.
Financial Highlights for the Three-month Period Ended April 30, 2021 compared
to the Three-month Period Ended April 30, 2020:
* Revenue increased 4% or $0.3 million to $6.6 million for the three-month
period ended April 30, 2021. This represents an inflection point for the
Company, as the revenue in the prior year period included revenue prior to the
declaration of the COVID-19 pandemic on March 11, 2020. While revenue between
the two periods is relatively consistent, the operating expenses as a
percentage of revenue has improved, demonstrating progression towards the
Company’s goal of returning to positive operating leverage. This reflects
the positive impact from the restructuring actions taken in 2020 to re-size
the business; 
* A net operating loss of $0.6 million in the three-month period ended April
30, 2021 compared to $2.3 million in net operating income for the three-month
period ended April 30, 2020. Operating expenses declined by 17%, in part due
to previous restructuring actions and other cost reduction efforts that have
mitigated a significant amount of the revenue decline;
* Other income included $0.5 million from government grants for the
three-month period ended April 30, 2021;
* A net loss of $0.9 million in the three-month period ended April 30, 2021
compared to a net loss of $2.9 million for the three-month period ended April
30, 2020;
* A net loss per share of ($0.14) on a basic and fully diluted basis for the
three-month period ended April 30, 2021, compared to net loss per share of
($0.46) in the three-month period ended April 30, 2020; and
* The Company had $65.8 million in current assets and $56.5 million in net
equity at April 30, 2021.
Financial Highlights for the Six-month Period Ended April 30, 2021 compared to
the Six-month Period Ended April 30, 2020:
* Revenue for the six-month period ended April 30, 2021 declined by 28% over
the same period in the prior year. The decline reflects the unprecedented
impact that COVID-19 pandemic-related travel restrictions have had on consumer
demand for banknotes. The decline in the U.S. also reflects the reduction in
retail branch locations, which decreased by 24% to 35 locations at April 30,
2021, from 46 at April 30, 2020; 
* A net operating loss of $1.9 million in the six-month period ended April 30,
2021 compared to a net operating loss of $1.2 million for the six-month period
ended April 30, 2020. This is reflective of the reduction in revenue from
year-to-year due to the ongoing pandemic. However, this is offset by a decline
in operating expenses of 22% for the same period;
* Other income included $0.7 million from government grants for the six-month
period ended April 30, 2021;
* A net loss of $2.7 million in the six-month period ended April 30, 2021
compared to a net loss of $2.8 million for the six-month period ended April
30, 2020;
* A net loss per share of ($0.41) on a basic and fully diluted basis for the
six-month period ended April 30, 2021, compared to net loss per share of
($0.43) in the six-month period ended April 30, 2020.
As demonstrated in the table below, 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. The coronavirus pandemic has significantly impacted the ability for
people to travel, and therefore the three-month periods ending April 30, 2020,
July 31, 2020, October 31, 2020, January 31, 2021, and April 30, 2021 are not
indicative of typical seasonality.

Selected Financial Data

 Three-months   Revenue     Net operating         Net income          Total assets  Total equity  Earnings (loss)       
 ending                     income (loss)         (loss)                                          per share             
                                                                                                  (diluted)             
                $           $                     $                   $             $             $                     
                                                                                                                        
 4/30/2021      6,573,570   (558,010    )         (924,691    )       79,856,635    56,520,124    ($0.14     )          
 1/31/2021      5,089,429   (1,315,151  )         (1,721,104  )       82,354,069    57,039,436    (0.27      )          
 10/31/2020     4,935,917   (1,852,195  )         (3,465,632  )       85,758,517    58,229,735    (0.54      )          
 7/31/2020      3,879,873   (1,993,117  )         (2,274,719  )       96,105,961    61,462,798    (0.35      )          
 4/30/2020      6,323,344   (1,303,410  )         (2,942,948  )       99,263,039    62,965,874    (0.46      )          
 1/31/2020      9,874,289   1,162,930             159,274             108,319,219   66,323,630    0.02                  
 10/31/2019     11,469,079  1,863,442             769,393             82,729,714    66,329,035    0.13                  
 7/31/2019      12,402,484  2,935,899             1,820,768           81,719,233    65,447,949    0.28                  

Adoption of Advance Notice Bylaw:

The Company also announced that the Company’s board of directors (the
“Board”) has adopted an advance notice bylaw (the “Advance Notice
Bylaw”), which establishes a framework for advance notice of shareholder
proposals and nominations of directors by shareholders of the Company. The
adoption of the Advance Notice Bylaw is intended to:
* Facilitate an orderly and efficient annual general or special meeting
process;
* Ensure that all shareholders receive adequate notice of shareholder
proposals and director nominations and sufficient information regarding all
proposals and director nominees; and
* Allow shareholders to register an informed vote after having been afforded
reasonable time for appropriate deliberation.
The Advance Notice Bylaw, among other things, fixes a deadline by which
holders of record of common shares of the Company must submit shareholder
proposals and director nominations to the Company prior to any annual meeting
of shareholders and sets out the required information that must be included in
the notice to the Company. No person will be eligible for election as a
director of the Company unless nominated in accordance with the Advance Notice
Bylaw. This same requirement applies to shareholder proposals.

To be timely, a shareholder’s notice must be delivered to the Secretary at
the principal executive offices of the Company not later than the close of
business on the 90th day nor earlier than the close of business on the 120th
day prior to the first anniversary of the preceding year’s annual meeting;
provided, however, that in the event that the date of the annual meeting is
more than thirty (30) days before or more than 70 days after such anniversary
date, notice by the shareholder to be timely must be so delivered (A) no
earlier than the close of business on the 120th day prior to such annual
meeting and (B) no later than the close of business on the later of the 90th
day prior to such annual meeting or the close of business on the 10th day
following the day on which public announcement of the date of such meeting is
first made by the Company.

The Advance Notice Bylaw is now in effect and the Company intends to seek
shareholder approval to ratify the amendment to the Company’s bylaws to
include the Advance Notice Bylaw at the Company’s next annual general
meeting of shareholders (“AGM”). A summary of the Advance Notice Bylaw
will be contained in the information circular to be prepared for the 2021 AGM
and mailed to the Company’s shareholders. A copy of the Advance Notice Bylaw
is available on SEDAR.

Conference Call

The Company plans to host a conference call on June 11, 2021 at 8:30 AM (EST).
To participate in or listen to the call, please dial the appropriate number:
* Toll Free: 1-855-336-7594
* Conference ID Number: 8388766
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. Primary products and
services include the exchange of foreign currencies, wire transfer payments,
Global EFTs, purchase and sale of foreign bank drafts and international
travelers’ cheques, and foreign cheque clearing. Related services include
the licensing of proprietary FX software applications delivered on its
web-based interface, www.ceifx.com (“CXIFX”), 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 Information
For further information please contact: 
Bill Mitoulas
Investor Relations
(416) 479-9547
Email: bill.mitoulas@cxifx.com
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, the impact of COVID-19
coronavirus on factors relevant to the Company’s business, 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, 2020. 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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