Currency Exchange International, Corp. (the "Company")
(TSX:CXI)(TSX: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," commented 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.
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 products and 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 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.
Contacts: Currency Exchange International, Corp. Randolph W.
Pinna President, Chief Executive Officer & Director
407.240.0224Randolph@ceifx.com www.ceifx.com
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