The Marygold Companies, Inc. ("TMC" or the "Company") (NYSE American: MGLD), a diversified global holding firm, today reported financial results for the fiscal year and fourth quarter ended June 30, 2024.
Revenue for the 2024 fiscal year amounted to $32.8 million, compared with $34.9 million for the 2023 fiscal year. The Company sustained a net loss of $4.1 million, equal to a net loss of $0.10 per share, for fiscal 2024, compared with net income of $1.2 million, equal to $0.03 per share, for the prior fiscal year.
For the fourth quarter ended June 30, 2024, revenue was $8.3 million, compared with $8.9 million for the same period last year. Net loss for the most recent fourth quarter was $1.9 million, equal to $0.05 per share, compared with net income of $0.3 million, or $0.03 per share, for the prior year period. The primary contributor to losses incurred for the fourth quarter this year was an impairment taken by Original Sprout of approximately $1.4 million.
At the close of fiscal 2024, total stockholders' equity totaled $26.6 million, compared with $30.4 million at June 30, 2023, and total assets were $32.9 million, versus $35.3 million a year ago. Cash and cash equivalents at year-end were $5.5 million, compared with $8.2 million at the close of the prior fiscal year, with the decline principally reflecting ongoing expenses in connection with completing the development of the Company's mobile fintech app and use of cash for a deposit for a potential equity investment in a financial institution and the acquisition of a financial services company in the UK.
"As TMC implemented its plans for the future, operating results for the year were impacted by a number of factors, including continued investments in our Marygold Co. subsidiary, lower assets under management (AUM) by 11% at TMC's largest operating unit, USCF Investments, and a $1.4 million non-cash, impairment charge in connection with the Original Sprout subsidiary," said David Neibert, Chief Operations Officer. "During the fiscal 2024 year, the Company invested $5.7 million in Marygold Co. toward the development and launch of its mobile fintech app. Additionally, the Company invested $1.0 million in its Marygold Co. (UK) subsidiary to assist it with the acquisition of Step By Step Financial Planners and remit final payment for the acquisition of Tiger Financial Asset Management Limited.
"Despite the average AUM at USCF Investments declining from $3.7 billion in fiscal 2023 to $3.3 billion in fiscal 2024, the company remains highly profitable and is expected to continue the launch of newly registered Exchange Traded Funds ("ETFs") during the coming year. Our foreign subsidiaries also recorded profits in line with expectations in New Zealand and in Canada, while our California subsidiary, Original Sprout, continued to post an operating loss due to new product development costs and the ongoing restructuring of its sales channels as a result of online consumer buying trends post-COVID. In the U.K., we were pleased during the year to have completed the acquisition of two investment advisory firms. Each is envisioned to provide an outstanding launch platform for our mobile fintech app in the coming fiscal year," Neibert added.
Nicholas Gerber, TMC's Chief Executive Officer, said, "We made good progress during the past year toward a refocus on financial services, but it came at a cost. All of our investments in the future are recorded as expenses, so we posted an operating loss for the year. We dug into cash reserves, and we redirected operating profits toward the Marygold project, meaning Marygold Co., Marygold Advisory Services LLC, and Marygold Co. (UK). I believe our innovative digital platform is like nothing on the market, enabling users to spend, invest and save. A total of more than $15 million has been invested in this project over the past five years, all from internally generated funds, and I believe it is finally at an inflection point for significantly broader U.S. rollout and introduction to the U.K. marketplace.
"Our objective remains to provide shareholder value by operating the Company for the long-term, which often means making some challenging short-term investment decisions, as was the case during fiscal 2024. I thank all of our shareholders for their patience and ongoing support, and express deep gratitude to our talented team throughout the globe for their hard work and dedication, which I am confident will pay off in time for all."
Business Units
The Company's USCF Investments subsidiary, www.uscfinvestments.com, acquired in 2016 and based in Walnut Creek, Calif., serves as manager, operator or investment adviser to 16 exchange traded products, structured as limited partnerships or investment trusts that issue shares trading on the NYSE Arca.
Gourmet Foods, https://gourmetfoodsltd.co.nz/, acquired in 2015, is a commercial-scale bakery that produces and distributes iconic meat pies and pastries throughout New Zealand under the brand names Pat's Pantry and Ponsonby Pies. Acquired by Gourmet Foods in 2020, Printstock Products Limited https://www.printstocknz.com/, is a printer of specialized food wrappers and is located in Napier, New Zealand. Its operations are consolidated with those of Gourmet Foods.
Brigadier Security Systems, www.brigadiersecurity.com, acquired in 2016 and headquartered in Saskatoon, Canada, provides comprehensive security solutions to homes and businesses, government offices, schools and other public buildings throughout the province under the brands Brigadier Security Systems in Saskatoon and Elite Security.
Original Sprout, acquired in 2017, located in San Clemente, Calif.-based, www.originalsprout.com, produces and distributes a full line of vegan, safe, non-toxic hair and skin care products distributed in the U.S. and many regions throughout the world.
Marygold Co., formed in the U.S. during 2019 and operating from offices in Denver, CO, together with its wholly owned subsidiary, Marygold Co. Advisory Services, LLC, was established to explore opportunities in the financial technology sector. The company continues further development of its mobile banking app, having completed the soft launch in the U.S. in 2023. https://marygoldandco.com/
Marygold Co. (UK) Limited, https://marygoldandco.uk/, formed in the U.K. during 2021, operates through two U.K.-based investment advisory subsidiaries: Tiger Financial Asset Management Limited ("Tiger"), acquired in 2022, http://www.tfam.co.uk/, and Step-by Step Financial Planners, acquired in 2024, https://sbsfp.co.uk/. Their core business is managing clients' financial wealth across a diverse product range, including cash, national savings, individual savings accounts, unit trusts, insurance company products such as investment bonds and other investment vehicles.
About The Marygold Companies, Inc.
The Marygold Companies was founded in 1996 and repositioned as a global holding firm in 2015. The Company currently has operating subsidiaries in financial services, food manufacturing, printing, security systems and beauty products, under the trade names USCF Investments, Marygold Co., Tiger Financial Asset Management Limited, Step By Step Financial Planners, Gourmet Foods, Printstock Products, Brigadier Security Systems and Original Sprout, respectively. Offices and manufacturing operations are in the U.S., New Zealand, U.K., and Canada. For more information, visit www.themarygoldcompanies.com.
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of U.S. federal securities laws. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may" "will," "could," "should" "believes," "predicts," "potential," "continue" and similar expressions are intended to identify such forward-looking statements. These forward-looking statements, including, but not limited to, a broader rollout of the mobile fintech app, including initial marketing in the U.K., and new product development at Original Sprout, involve significant risks and uncertainties that could cause actual results to differ materially from the expected results and, consequently, should not be relied upon as predictions of future events. These forward-looking statements, including the factors disclosed in the Company's Annual Reports on Form 10-K filed with the Securities and Exchange Commission, and in the Company's other filings with the Securities and Exchange Commission, are not exclusive. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Except as required by law, the Company disclaims any obligation to update or publicly announce any revisions to any of the forward-looking statements contained in this press release
THE MARYGOLD COMPANIES, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) | ||||||||
June 30, 2024 | June 30, 2023 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | 5,461 | 8,161 | ||||||
Accounts receivable, net (of which $1,455 and $1,674, respectively, due from related parties) | 2,678 | 3,026 | ||||||
Inventories | 2,191 | 2,254 | ||||||
Prepaid income tax and tax receivable | 1,338 | 992 | ||||||
Investments, at fair value | 9,551 | 11,481 | ||||||
Other current assets | 3,034 | 904 | ||||||
Total current assets | 24,253 | 26,818 | ||||||
Restricted cash | 62 | 425 | ||||||
Property and equipment, net | 1,166 | 1,255 | ||||||
Operating lease right-of-use asset | 974 | 821 | ||||||
Goodwill | 2,481 | 2,307 | ||||||
Intangible assets, net | 1,375 | 2,330 | ||||||
Deferred tax assets, net | 1,969 | 771 | ||||||
Other assets | 619 | 554 | ||||||
Total assets | 32,899 | 35,281 | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable and accrued expenses | 4,021 | 2,771 | ||||||
Operating lease liabilities, current portion | 602 | 457 | ||||||
Purchase consideration payable | 277 | 605 | ||||||
Loans property and equipment, current portion | 333 | 359 | ||||||
Total current liabilities | 5,233 | 4,192 | ||||||
Loans property and equipment, net of current portion | 70 | 88 | ||||||
Purchase consideration payable, net of current portion | 237 | |||||||
Operating lease liabilities, net of current portion | 385 | 381 | ||||||
Deferred tax liabilities, net | 360 | 242 | ||||||
Total long-term liabilities | 1,052 | 711 | ||||||
Total liabilities | 6,285 | 4,903 | ||||||
STOCKHOLDERS' EQUITY | ||||||||
Preferred stock, $0.001 par value; 50,000 shares authorized; Series B: 49 shares issued and outstanding at both June 30, 2024 and 2023 | ||||||||
Common stock, $0.001 par value; 900,000 shares authorized; 40,096 and 39,383 shares issued and outstanding at June 30, 2024 and 2023, respectively | 40 | 39 | ||||||
Additional paid-in capital | 12,825 | 12,397 | ||||||
Accumulated other comprehensive loss | (269 | (145 | ||||||
Retained earnings | 14,018 | 18,087 | ||||||
Total stockholders' equity | 26,614 | 30,378 | ||||||
Total liabilities and stockholders' equity | 32,899 | 35,281 | ||||||
THE MARYGOLD COMPANIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) | ||||||||
Year Ended June 30, | ||||||||
2024 | 2023 | |||||||
Revenue | ||||||||
Fund management related party | 18,965 | 20,862 | ||||||
Food products | 7,271 | 7,632 | ||||||
Beauty products | 3,296 | 3,033 | ||||||
Security systems | 2,655 | 2,833 | ||||||
Financial services | 649 | 517 | ||||||
Revenue | 32,836 | 34,877 | ||||||
Cost of revenue | 8,720 | 8,751 | ||||||
Gross profit | 24,116 | 26,126 | ||||||
Operating expense | ||||||||
Salaries and compensation | 11,150 | 10,042 | ||||||
General and administrative expense | 8,942 | 7,076 | ||||||
Fund operations | 5,154 | 4,387 | ||||||
Marketing and advertising | 3,152 | 2,624 | ||||||
Impairment loss | 1,389 | |||||||
Depreciation and amortization | 585 | 577 | ||||||
Total operating expenses | 30,372 | 24,706 | ||||||
(Loss) income from operations | (6,256 | 1,420 | ||||||
Other income (expense): | ||||||||
Interest and dividend income | 756 | 275 | ||||||
Interest expense | (16 | (20 | ||||||
Other income (expense), net | 68 | (81 | ||||||
Total other income (expense), net | 808 | 174 | ||||||
(Loss) income before income taxes | (5,448 | 1,594 | ||||||
Benefit (provision) of income taxes | 1,379 | (429 | ||||||
Net (loss) income | (4,069 | 1,165 | ||||||
Weighted average shares of common stock | ||||||||
Basic | 40,396 | 40,371 | ||||||
Diluted | 40,396 | 40,404 | ||||||
Net (loss) income per common share | ||||||||
Basic | (0.10 | 0.03 | ||||||
Diluted | (0.10 | 0.03 | ||||||
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Contacts:
Media and investors, for more Information, contact:
Roger S. Pondel
PondelWilkinson Inc.
310-279-5965
rpondel@pondel.com
Contact the Company:
David Neibert, Chief Operations Officer
949-429-5370
dneibert@themarygoldcompanies.com
