Financial Highlights for the Six-month Period Ended April 30, 2021 compared to the Six-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; andThe Company had $65.8 million in current assets and $56.5 million in net equity at April 30, 2021. 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.
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. Corporate and Operational Highlights:
Financial Highlights for the Three-month Period Ended April 30, 2021 compared to the Three-month Period Ended April 30, 2020: 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.”
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: Three-monthsending RevenueNet operatingincome (loss)Net income(loss)Total assetsTotal equityEarnings (loss)per share(diluted) $$$$$$ 4/30/20216,573,570(558,010)(924,691)79,856,63556,520,124($0.14)1/31/20215,089,429(1,315,151)(1,721,104)82,354,06957,039,436(0.27)10/31/20204,935,917(1,852,195)(3,465,632)85,758,51758,229,735(0.54)7/31/20203,879,873(1,993,117)(2,274,719)96,105,96161,462,798(0.35)4/30/20206,323,344(1,303,410)(2,942,948)99,263,03962,965,874(0.46)1/31/20209,874,2891,162,930 159,274 108,319,21966,323,6300.02 10/31/201911,469,0791,863,442 769,393 82,729,71466,329,0350.13 7/31/201912,402,4842,935,899 1,820,768 81,719,23365,447,9490.28
Selected Financial Data 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.
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