The Marygold Companies Reports Financial Results for the Second Quarter and First Half of Fiscal 2024

Rhea-AI Summary

The Marygold Companies, Inc. reported financial results for the three and six months ended December 31, 2023. Revenue for the three months was $8.5 million, a decrease from last year. The net loss for the second quarter was $1.2 million. For the six-month period, revenue was $16.7 million, with a net loss of $1.7 million. The Company's balance sheet remained strong, with cash and investments totaling $18.6 million. TMC is focusing on growing its fintech app, Marygold & Co., despite short-term negative impacts on income.

Positive

• Revenue for the three months ended December 31, 2023, was $8.5 million, compared to $8.8 million last year.
• The net loss for the fiscal 2024 second quarter was $1.2 million, reflecting continued investment in the Marygold & Co. fintech app.
• For the six months ended December 31, 2023, revenue was $16.7 million, versus $17.7 million for the same period last year.
• The Company's balance sheet at December 31, 2023, showed cash and cash equivalents of $6.2 million and investments totaling $12.4 million, with no debt.
• Total assets at December 31, 2023, were $35 million, and total stockholders' equity was $29 million.
• TMC is focusing on developing its fintech app, Marygold & Co., using earnings from other divisions to invest in its growth.

Negative

• A net loss of $1.7 million was recorded for the six months ended December 31, 2023, compared to net income of $0.7 million for the same period last year.

Insights

Financial Analyst

The Marygold Companies, Inc.'s (TMC) reported decrease in revenue and shift from net income to net loss year-over-year for both the three-month and six-month periods ended December 31, 2023, is indicative of the company's strategic decision to invest heavily in its fintech venture, Marygold & Co. The short-term impact on earnings is evident, with a $1.2 million loss reported for the second quarter of fiscal 2024. However, the company's balance sheet remains robust, with $6.2 million in cash and cash equivalents and $12.4 million in investments and minimal debt. This suggests a strong liquidity position that can support ongoing investments.

From an investment standpoint, the current financials may deter short-term investors due to the lack of immediate profitability. However, long-term investors might be interested in TMC's strategic pivot towards fintech, a sector with high growth potential. The company's approach to fund development internally rather than through debt or equity financing is noteworthy, as it avoids shareholder dilution. Yet, stakeholders should closely monitor the execution of the fintech strategy and its market acceptance to assess the long-term viability of this investment.

Market Research Analyst

The fintech industry is rapidly evolving and TMC's investment in the development of the Marygold & Co. mobile banking app positions the company within a competitive and innovative market. The app's unique features, such as Money Pools and budget monitoring, align with current consumer trends towards integrated financial solutions. The marketing push following the soft launch in the second half of 2023 could be critical in gaining traction within the U.S. market.

While the fintech app's success is uncertain, the company's diversified portfolio, including subsidiaries in food production and security systems, provides a degree of stability and cash flow. The performance of these subsidiaries could cushion the company against the financial volatility typically associated with tech startups. Investors should watch for user adoption rates and engagement metrics following the marketing efforts to gauge the app's potential impact on TMC's future revenue streams.

Economist

The decision by The Marygold Companies, Inc. to invest in fintech reflects broader economic trends, where technology and financial services converge to create innovative products. Such investments, while risky, have the potential to disrupt traditional banking models and generate significant economic value. The company's financial results reflect the typical pattern of an initial decrease in profitability during the investment phase of a new venture.

However, the company's strong balance sheet is a positive indicator of financial health, which could provide the necessary buffer to withstand the initial losses associated with the fintech app development. The strategic allocation of capital towards high-potential sectors could pay dividends in the long run if the app gains sufficient market share and achieves scale. It's important to consider the macroeconomic environment, as shifts in consumer behavior, regulatory changes and technological advancements can all influence the success of TMC's fintech initiative.

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 the three and six months ended December 31, 2023.

Revenue for the three months ended December 31, 2023 was $8.5 million, compared with $8.8 million, last year. The Company registered a net loss of $1.2 million, equal to a loss of $0.03 per share, for the fiscal 2024 second quarter, principally reflecting continued investment in the Marygold & Co. fintech app. TMC reported net income of $0.2 million, or approximately breakeven per share, for the same quarter a year ago.

For the six-month period ended December 31, 2023, revenue was $16.7 million, versus $17.7 million for the comparable period last year. A net loss of $1.7 million, or $0.04 per share, was recorded for the six months ended December 31, 2023, versus net income of $0.7 million, equal to $0.02 per fully diluted share, for the same period a year ago.

TMC’s balance sheet remained strong at December 31, 2023. Cash and cash equivalents amounted to $6.2 million and investments totaled $12.4 million at the end of the quarter, and the Company has essentially no debt. Total assets at December 31, 2023, were $35 million, and total stockholders’ equity at quarter’s end was $29 million.

“Operating results are within the range of expectations,” said David Neibert, TMC’s Chief Operations Officer. “Our core businesses are all operating efficiently and producing cash, which is being used to build our fintech business under the Marygold & Co. brand. The more we earn at our other divisions, the more we can invest in growing the fintech app. As we are seeing, those investments will continue to negatively impact TMC’s income statement over the near term until our mobile banking app gains traction. While we are not showing profits at the consolidated level, the fundamentals of our Company remain on solid footing, and we are building what we believe to be a highly valued business and doing so without any dilutive effects of equity or debt funding from outside sources.”

Nicholas Gerber, TMC’s Chief Executive Officer, added, “We have started the marketing of our innovative fintech app, a unique mobile app with a debit card feature that enables account holders to invest in Money Pools, send money to anyone in the U.S., monitor spending habits and budgets, and to transact business at retailers throughout the world. In the background, we are readying even more features to be incorporated into the app, as daily onboarding of new accountholders increases. Following our successful soft launch in the second half of 2023, we are excited as ever that Marygold & Co. is gaining attention. I strongly believe that the strategy of using of our capital reserves to develop this app, versus borrowing or diluting our shareholders, will prove to be a sound investment as the true value is realized in the coming years.”

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 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.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 in Regina, Canada.

Original Sprout, acquired in 2017, with warehouse and office facilities located in San Clemente, California 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 its territories, the U.K., E.U., Turkey, Middle East, Africa, Taiwan, Mexico, South America, Singapore, Hong Kong, Malaysia, New Zealand, Australia and Canada among other areas.

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 initial development stage and soft launch in the U.S. in June 2023. https://marygoldandco.com/

Marygold & Co. (UK) Limited, formed in the U.K. during 2021, operates through its subsidiary acquired in 2022, Tiger Financial & Asset Management Limited (“Tiger”), a U.K. based investment adviser. Tiger’s 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. http://www.tfam.co.uk/

About The Marygold Companies, Inc.

The Marygold Companies, Inc., which changed its name from Concierge Technologies, Inc. in 2022, 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, 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, tangible benefits expected to be realized in the 2024 calendar year from current investments, 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 most recent Annual Report on Form 10-K, 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.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
		December 31, 2023				June 30, 2023
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	6,214			$	8,161
Accounts receivable, net (of which $1,624 and $1,674, respectively, due from related parties)			2,596				3,026
Inventories			2,389				2,254
Prepaid income tax and tax receivable			1,618				992
Investments, at fair value			12,379				11,481
Other current assets			1,057				904
Total current assets			26,253				26,818
Restricted cash			434				425
Property and equipment, net			1,215				1,255
Operating lease right-of-use assets			1,287				821
Goodwill			2,307				2,307
Intangible assets, net			2,112				2,330
Deferred tax assets, net			771				771
Other assets			553				554
Total assets		$	34,932			$	35,281
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses		$	3,287			$	2,771
Operating lease liabilities, current portion			715				457
Purchase consideration payable			637				605
Loans - property and equipment, current portion			352				359
Total current liabilities			4,991				4,192
LONG-TERM LIABILITIES
Loans - property and equipment, net of current portion			82				88
Operating lease liabilities, net of current portion			582				381
Deferred tax liabilities, net			242				242
Total long-term liabilities			906				711
Total liabilities			5,897				4,903
STOCKHOLDERS’ EQUITY
Preferred stock, $0.001 par value; 50,000 shares authorized Series B: 49 shares issued and outstanding at December 31, 2023 and June 30, 2023			-				-
Common stock, $0.001 par value; 900,000 shares authorized; 39,383 shares issued and outstanding at December 31, 2023 and June 30, 2023			39				39
Additional paid-in capital			12,605				12,397
Accumulated other comprehensive loss			(12	)			(144	)
Retained earnings			16,403				18,086
Total stockholders’ equity			29,035				30,378
Total liabilities and stockholders’ equity		$	34,932			$	35,281

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,
		2023				2022				2023				2022
Revenue
Fund management - related party		$	4,997			$	5,266			$	10,047			$	10,686
Food products			1,920				1,932				3,649				3,870
Beauty products			842				785				1,617				1,588
Security systems			570				665				1,123				1,295
Financial services			128				124				256				258
Revenue			8,457				8,772				16,692				17,697
Cost of revenue			2,091				2,231				4,128				4,256
Gross profit			6,366				6,541				12,564				13,441
Operating expense
Salaries and compensation			2,999				2,805				5,589				5,173
General and administrative expense			2,306				1,820				4,556				3,512
Fund operations			1,187				1,112				2,461				2,253
Marketing and advertising			718				556				1,685				1,329
Depreciation and amortization			153				148				307				297
Total operating expenses			7,363				6,441				14,598				12,564
(Loss) income from operations			(997	)			100				(2,034	)			877
Other income (expense):
Interest and dividend income			138				63				331				115
Interest expense			(3	)			(4	)			(7	)			(11	)
Other (expense) income, net			(503	)			130				(458	)			32
Total other (expense) income, net			(368	)			189				(134	)			136
(Loss) income before income taxes			(1,365	)			289				(2,168	)			1,013
Benefit (provision) for income taxes			182				(107	)			484				(334	)
Net (loss) income		$	(1,183	)		$	182			$	(1,684	)		$	679
Weighted average shares of common stock
Basic			40,397				40,371				40,397				40,371
Diluted			40,397				40,371				40,397				40,384
Net (loss) income per common share
Basic		$	(0.03	)		$	-			$	(0.04	)		$	0.02
Diluted		$	(0.03	)		$	-			$	(0.04	)		$	0.02

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240214787407/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 was the revenue for the three months ended December 31, 2023?

The revenue was $8.5 million.

What was the net loss for the fiscal 2024 second quarter?

The net loss was $1.2 million.

What were the total assets at December 31, 2023?

Total assets were $35 million.

What is TMC focusing on despite short-term negative impacts on income?

TMC is focusing on growing its fintech app, Marygold & Co.