The Marygold Companies, Inc. Reports Financial Results for 2025 Second Fiscal Quarter

Rhea-AI Summary

The Marygold Companies (NYSE American: MGLD) reported financial results for Q2 FY2025. Revenue decreased to $8.0 million from $8.5 million in the prior year, with a net loss of $1.7 million ($0.04 per share) compared to a loss of $1.2 million ($0.03 per share) in Q2 FY2024.

Six-month revenue totaled $15.9 million, down from $16.7 million, with a net loss of $3.3 million. The decline was primarily due to reduced assets under management at USCF Investments to $3.1 billion from $3.5 billion. Cash and equivalents stood at $5.7 million, while stockholders' equity decreased to $23.4 million.

The company secured a $4 million note and completed a $2.3 million equity raise. Management expects to reduce expenses in Marygold & Co. after completing the proof-of-concept phase, with plans to roll out their fintech app in the UK while strategizing US market entry.

Positive

• Cash position improved slightly to $5.7M from $5.5M
• Secured $4M note financing and completed $2.3M equity raise
• Core operating subsidiaries performing within expectations
• Completed proof-of-concept phase for fintech app

Negative

• Q2 revenue declined 5.9% YoY to $8.0M
• Net loss widened to $1.7M from $1.2M YoY
• Assets under management decreased to $3.1B from $3.5B
• Stockholders' equity declined to $23.4M from $26.6M
• Accumulated $20M investment in Marygold Project with no returns yet

Insights

Financial Analyst

The Q2 FY2025 results reveal concerning trends across multiple financial metrics. The revenue decline of 5.9% year-over-year, coupled with widening losses, signals significant operational challenges. The reduction in AUM by 11.4% at USCF Investments is particularly worrying as it directly impacts management fee revenue, the company's primary income stream.

The fintech division's continued cash burn requires careful scrutiny. While the $4 million note and planned $2.3 million equity raise provide short-term relief, this financing strategy may not be sustainable given the company's current burn rate and accumulated investment of $20 million in the Marygold Project. The promised expense reduction in the fintech subsidiary will be important for improving financial health.

The diversified business model, spanning from bakery operations to security systems, hasn't effectively offset the fintech development costs. The slight increase in cash position to $5.7 million provides minimal cushion given the ongoing operational losses and development expenses. The decline in stockholders' equity by 12% in just six months raises concerns about long-term value preservation.

While management expresses optimism about "turning the corner," the planned UK app launch and US marketing strategy remain speculative catalysts. The company's pivot to fintech, while strategic, has created significant near-term financial strain that may require more substantial restructuring or capital injection to achieve sustainable operations.

 -Company continued to invest in the Fintech sector through Marygold & Co.-

SAN CLEMENTE, Calif.--(BUSINESS WIRE)-- The Marygold Companies, Inc. (“TMC,” or the “Company”) (NYSE American: MGLD), a diversified global holding firm, today reported financial results for its 2025 second fiscal quarter ended December 31, 2024.

Revenue for the three months ended December 31, 2024 amounted to $8.0 million, compared with $8.5 million last year. The Company recorded a net loss of $1.7 million, equal to a loss of $0.04 per share, for the second quarter of fiscal year 2025, compared with a net loss of $1.2 million, equal to a loss of $0.03 per share, for the second quarter of fiscal 2024. Revenue for the six months ended December 31, 2024 totaled $15.9 million, with a net loss of $3.3 million, equal to a net loss of $0.08 per share, versus revenue of $16.7 million and a net loss of $1.7 million, or a net loss of $0.04 per share, for the comparable prior year period.

The revenue decline over both comparable prior year periods was primarily due to a reduction in average assets under management (“AUM”) at TMC’s largest subsidiary, USCF Investments, to $3.1 billion from $3.5 billion a year ago. AUM level directly impacts the management fees earned and typically fluctuates with global commodity pricing trends. Revenue also was impacted by a slight increase in the strength of the U.S. dollar, which negatively impacted currency translation values in the Company’s foreign subsidiaries. The performance of TMC’s core operating subsidiaries was within expectations, and the net loss principally reflected the Company’s continued expenses in the development and roll-out of its mobile banking fintech app through its Marygold & Co. subsidiaries in the U.S. and the U.K.

Cash and cash equivalents of $5.7 million at December 31, 2024 increased slightly from $5.5 million at June 30, 2024, the close of TMC’s prior fiscal year. Total stockholders’ equity decreased to $23.4 million at December 31, 2024 from $26.6 million at fiscal year-end, primarily reflecting the net loss incurred during the six months ended December 31, 2024.

“For the quarter just ended, we had budgeted for continued losses, based in large part on cash expenditures incurred by our Marygold fintech subsidiary,” said David Neibert, TMC’s Chief Operations Officer. “To help with cash needs for future development and rollout of our fintech app, we entered into a $4 million note during the first quarter, and in anticipation of an equity raise of $2.3 million in gross proceeds that was completed subsequent to the close of the second quarter, we finalized a prospectus supplement for our Form S-3 shelf registration. These actions produced expenses for the second quarter and contributed to the net loss.

“We are pleased that our operating subsidiaries in New Zealand, Canada and in the U.S. continue to do well overall. Moving into the second half of our fiscal year, we expect to significantly reduce expenses in our Marygold & Co. subsidiary, having successfully completed the proof-of-concept phase,” Neibert added.

Nicholas Gerber, TMC’s Chief Executive Officer, said, “We have spent nearly $20 million into what we refer to as the ‘Marygold Project,’ which includes Marygold & Co. and its counterpart, Marygold & Co. (UK) Limited. We view these costs as investments in TMC’s long-term future, and believe the Company is poised to move forward with the initial roll-out of the mobile app in the U.K. shortly, while we strategize on marketing direction for the app in the U.S.

“As shareholders, we all have gone through a painful period of enduring losses, while we refocused our corporate resources in the fintech sector. I believe we will turn the corner soon and begin to see some tangible results for those efforts,” Gerber said.

Business Units

The Company’s USCF Investments subsidiary, https://www.uscfinvestments.com/, acquired in 2016 and based in Walnut Creek, Calif., serves as manager, operator or investment adviser to 15 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.printstock.co.nz, 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, https://brigadierelite.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 in Regina, Canada.

Acquired in 2017, San Clemente, Calif.-based Original Sprout, www.originalsprout.com, produces and distributes a full line of vegan, safe, non-toxic hair and skin care products, including a “reef safe” sun screen, throughout the U.S. and in many regions throughout the world.

Marygold & Co., https://marygoldandco.com/, headquartered in Denver, Colo., is a wholly owned TMC subsidiary established in 2019 to explore opportunities in the financial technology sector. Marygold & Co. (UK) Limited, https://marygoldandco.uk/, also a wholly owned TMC subsidiary, was established in the U.K. in 2021 and operates through two U.K.-based investment advisory business units: Marygold & Co Limited (fka/Tiger Financial and Asset Management), acquired in 2022, http://www.tfam.co.uk/, and Step-by Step Financial Planners, acquired in 2024, https://www.sbsfp.co.uk/, that manage clients’ financial wealth across a diverse product range.

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 fund management, financial services, food manufacturing, printing, security systems and beauty products, under the trade names USCF Investments, Marygold & Co., Marygold & Co. 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. Such forward-looking statements involve significant risks and uncertainties that could cause the 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 and factors that may cause such differences include, without limitation, significantly reducing expenses in the Marygold & Co. subsidiary, along with the risks disclosed in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission and in the Company’s other filings with the Securities and Exchange Commission. The foregoing list of factors is not inclusive. 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. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) (unaudited)
		December 31, 2024				June 30, 2024
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	5,677			$	5,461
Accounts receivable, net (of which $1,520 and $1,455, respectively, due from related parties)			2,292				2,678
Inventories			2,189				2,191
Prepaid income tax and tax receivable			2,246				1,338
Investments, at fair value			9,232				9,551
Other current assets			961				3,034
Total current assets			22,597				24,253
Restricted cash			61				62
Property and equipment, net			1,021				1,166
Operating lease right-of-use assets			1,262				974
Goodwill			2,481				2,481
Intangible assets, net			1,218				1,375
Deferred tax assets, net			1,969				1,969
Other assets			2,389				619
Total assets		$	32,998			$	32,899
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses		$	3,782			$	4,021
Lease liabilities, current portion			627				620
Purchase consideration payable, current portion			235				277
Notes payable, current portion			3,517				315
Total current liabilities			8,161				5,233
Notes payable, net of current portion			376				-
Purchase consideration payable, net of current portion			-				237
Lease liabilities, net of current portion			748				455
Deferred tax liabilities, net			360				360
Total long-term liabilities			1,484				1,052
Total liabilities			9,645				6,285
STOCKHOLDERS’ EQUITY
Preferred stock, par value $0.001; 50,000 shares authorized
Series B: 49 issued and outstanding at December 31, 2024 and June 30, 2024			-				-
Common stock, $0.001 par value; 900,000 shares authorized; 40,188 and 40,096 shares issued and outstanding at December 31, 2024 and June 30, 2024, respectively			40				40
Additional paid-in capital			13,196				12,825
Accumulated other comprehensive loss			(568	)			(269	)
Retained earnings			10,685				14,018
Total stockholders’ equity			23,353				26,614
Total liabilities and stockholders’ equity		$	32,998			$	32,899

THE MARYGOLD COMPANIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited)
		Three Months Ended December 31,								Six Months Ended December 31,
		2024				2023				2024				2023
Revenue
Fund management - related party		$	4,685			$	4,997			$	9,276			$	10,047
Food products			1,688				1,920				3,510				3,649
Beauty products			832				842				1,430				1,617
Security systems			585				570				1,274				1,123
Financial services			214				128				423				256
Revenue			8,004				8,457				15,913				16,692
Cost of revenue			2,076				2,091				4,203				4,128
Gross profit			5,928				6,366				11,710				12,564
Operating expense
Salaries and compensation			2,947				2,999				6,094				5,589
General and administrative expense			2,361				2,306				4,926				4,556
Fund operations			1,566				1,187				2,978				2,461
Marketing and advertising			738				718				1,407				1,685
Depreciation and amortization			142				153				301				307
Total operating expenses			7,754				7,363				15,706				14,598
Loss from operations			(1,826	)			(997	)			(3,996	)			(2,034	)
Other income (expense):
Interest and dividend income			1,064				138				1,215				331
Interest expense			(362	)			(3	)			(393	)			(7	)
Other expense, net			(1,105	)			(503	)			(1,124	)			(458	)
Total other expense, net			(403	)			(368	)			(302	)			(134	)
Loss before income taxes			(2,229	)			(1,365	)			(4,298	)			(2,168	)
Benefit from income taxes			482				182				966				484
Net loss		$	(1,747	)		$	(1,183	)		$	(3,332	)		$	(1,684	)
Weighted average shares of common stock
Basic and diluted			40,863				40,397				40,855				40,397
Net loss per common share
Basic and diluted		$	(0.04	)		$	(0.03	)		$	(0.08	)		$	(0.04	)

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250205192866/en/

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

Source: The Marygold Companies, Inc.

FAQ

What caused MGLD's revenue decline in Q2 2025?

The revenue decline was primarily due to reduced assets under management at USCF Investments (from $3.5B to $3.1B) and negative currency translation impacts from foreign subsidiaries.

How much has MGLD invested in its Marygold fintech project?

The company has invested nearly $20 million in the 'Marygold Project,' which includes both Marygold & Co. and Marygold & Co. (UK)

What financing did MGLD secure in Q2 2025?

MGLD secured a $4 million note during the first quarter and completed a $2.3 million equity raise through a Form S-3 shelf registration after the second quarter.

What is MGLD's current cash position as of December 2024?

MGLD reported cash and cash equivalents of $5.7 million as of December 31, 2024, up slightly from $5.5 million at June 30, 2024.

What are MGLD's plans for its fintech app rollout?

MGLD plans to launch the mobile app initially in the UK market while developing marketing strategies for the US market, following completion of the proof-of-concept phase.