Currency Exchange International Announces Financial Results for the Three-Month Period and Financial Year Ended October 31, 2020 - Seite 2

Corporate and Operational Highlights for 2020:

• Management completed a new three-year, strategic plan in October that focuses on growing its payments business and expansion in banknote markets globally. The plan was developed with the objective of returning to profitability despite conservative assumptions around an eventual recovery in its core banknote business. As part of the strategy, the Company chose to permanently close 11 of its retail locations, that in conjunction with other initiatives, including a consolidation in senior management, resulted in $1.1M in charges for restructuring and impairment in the fourth quarter.
• The Company incurred a loss provision of $1.7M in fiscal 2020 related to a customer that went bankrupt during the year. This is an unusual event as the Company has a strong repayment history with its customer base. Notwithstanding that, additional measures were implemented to reduce its credit exposure and to prevent a loss outside of the Company’s risk appetite from recurring.
• On July 29^th, the Company’s subsidiary, Exchange Bank of Canada, completed its purchase of the assets of Denarius Financial Group, a successful corporate payments business operating in the province of Quebec. EBC acquired approximately 450 new customer relationships in the transaction that added $0.3M in revenue for the year-ended October 31, 2020.
• The Company continues to be well-capitalized with $58M in net equity at the end of the fiscal year, and $48M in net current assets, most of which is in cash. The Company has sufficient liquidity to carry out its strategic plan, and is well-positioned to capitalize on opportunities.
  

Financial Highlights for the Three-month Period Ended October 31, 2020 compared to the Three-month Period Ended October 31, 2019:

• Revenue decreased 57% or $6.5 million to $4.9 million for the three-month period ended October 31, 2020, as the ongoing pandemic caused a decline in the banknotes segment of 64%, partially offset by an increase in the payments segment of 52%;
• A net operating loss of $1.9 million in the three-month period ended October 31, 2020 compared to $0.8 million in net operating income for the three-month period ended October 31, 2019. Operating expenses declined by 29%, as cost reduction efforts mitigated a significant amount of the revenue decline. Normalizing for the adoption of IFRS 16 on November 1, 2019, the net operating loss on a comparable basis would have been $2.4 million in the three-month period ended October 31, 2020;
• Other expenses included $1.1M in restructuring and impairment charges, and $0.7M for a loss provision related to a customer’s bankruptcy, partially offset by $0.3M in income for government grants for the three-month period ended October 31, 2020;
• A net loss of $2.3 million in the three-month period ended October 31, 2020 compared to a net profit of $1.8 million for the three-month period ended October 31, 2019; and
• A net loss per share of ($0.35) on a basic and fully diluted basis for the three-month period ended October 31, 2020, compared to earnings per share of $0.28 in the three-month period ended October 31, 2019.