Filing Scope and Business Context
The source is a Form 10-Q filed by Concierge Technologies, Inc., not Marygold Companies, Inc. It covers the quarter and nine months ended March 31, 2021, with comparisons to March 31, 2020. The filing was signed May 14, 2021. Marygold & Co. is described as a newly formed, development-stage fintech subsidiary of Concierge and had not yet begun commercial operations.
The company operates through investment fund management, food products and printing, security systems, and beauty products subsidiaries in the United States, New Zealand, and Canada. Wainwright's fund-management activities generated the majority of consolidated revenue.
Financial Performance and Position
| Metric | Three months ended March 31, 2021 | Three months ended March 31, 2020 | Nine months ended March 31, 2021 | Nine months ended March 31, 2020 |
|---|---|---|---|---|
| Revenue | $9.54 million | $5.90 million | $30.26 million | $17.72 million |
| Gross profit | $7.21 million | $4.15 million | $23.13 million | $12.48 million |
| Gross margin | 75.5% | 70.3% | 76.5% | 70.4% |
| Operating income (loss) | $2.04 million | $(0.18) million | $6.64 million | $(0.22) million |
| Net income (loss) | $1.58 million | $(17,236) | $5.15 million | $(37,258) |
| Basic EPS | $0.04 | $(0.00) | $0.14 | $(0.00) |
- Revenue increased approximately 62% year over year in the quarter and 71% for the nine-month period. Fund-management revenue rose 101% in the quarter and 116% year to date, primarily due to higher assets under management.
- Wainwright reported approximately $5.1 billion of assets under management at March 31, 2021. Average AUM was approximately $4.8 billion for the quarter and $5.1 billion for the nine-month period, versus $2.3 billion and $2.2 billion, respectively, in the prior-year periods.
- Operating margin was approximately 21.4% for the quarter and 22.0% year to date, compared with negative margins in the prior-year periods.
- Cash and cash equivalents were $14.26 million at March 31, 2021, compared with $9.81 million at June 30, 2020. Working capital was approximately $19 million.
- Net cash provided by operating activities was $5.32 million for the nine months, compared with $23,245 in the prior-year period. Investing cash outflows were $1.03 million, including $993,435 for business assets, and financing cash outflows were $25,394.
- Total liabilities were $5.32 million and stockholders' equity was $24.66 million at March 31, 2021. Reported borrowings were approximately $1.0 million, including $603,500 of related-party notes and approximately $392,949 of property-related debt. One $3,500 related-party note was past due.
- Operating lease liabilities totaled $1.29 million. The company had $1.83 million of short-term investments in addition to cash.
Material Changes Versus the Prior Comparable Period
- Profitability improved substantially, with the company moving from operating and net losses to operating income of $2.04 million and net income of $1.58 million in the quarter.
- Wainwright's revenue growth was the principal driver of consolidated improvement. Its nine-month income before tax increased to approximately $8.1 million from $0.2 million.
- Printstock Products Limited, acquired July 1, 2020, contributed approximately $1.1 million of quarterly revenue and $2.7 million of nine-month revenue. The acquisition increased food-industry scale but also added operating costs and acquisition-related assets.
- Other operating units generated lower or mixed results. Original Sprout reported a quarterly net loss of approximately $120,000 and a nine-month net loss of approximately $116,000, versus profits in the prior-year periods.
- Brigadier's revenue declined year to date, primarily because COVID-19 restrictions delayed residential installation activity. Management characterized the activity as deferred rather than permanently lost.
- Marygold startup expenses were approximately $441,000 in the quarter and $1.1 million for the nine-month period. Marygold had capitalized $217,990 of internally developed software costs as of March 31, 2021.
- Series B preferred shares declined from 53,032 to 49,360 as 3,672 shares converted into 73,440 common shares. Common shares outstanding increased to 37,485,959.
Guidance, Outlook, Risks, and Unusual Items
- Management stated that Wainwright, Gourmet Foods, Brigadier, and Original Sprout were expected to be profitable in the coming fiscal year and that the company had sufficient capital for expected corporate expenses and stated objectives, subject to continued subsidiary performance.
- The company plans to expand existing businesses, pursue acquisitions of profitable mature companies, develop new fund products, broaden Original Sprout distribution and online channels, grow Brigadier and Gourmet Foods, and launch Marygold fintech services during the current fiscal year. No quantified revenue or earnings guidance was provided.
- COVID-19 continued to affect security-system installations, beauty-product distribution, and New Zealand operations. Management also noted risks from economic and financial-market disruption.
- Wainwright's results are highly dependent on assets under management, commodity markets, fund performance, and related-party fund relationships. Fund-management revenue is concentrated in related parties, and USO represented 64% of quarterly and 67% of nine-month Wainwright revenue.
- USCF, USO, and an executive received SEC and CFTC Wells Notices concerning disclosures and actions during the 2020 oil-market disruption. Related securities and derivative class and shareholder actions remained pending. The company stated that it intended to vigorously contest the allegations and had not accrued legal loss contingencies.
- Customer and supplier concentrations exist across subsidiaries, including significant food, printing, and security customers. The company also depends on certain monitoring and packaging providers, although management identified alternative providers.
- The nine-month tax provision was $1.69 million, compared with a $202,420 tax benefit in the prior-year period. Unrecognized tax benefits were approximately $0.3 million.
- Inventory impairment was $67,576 for the nine months, and Original Sprout incurred costs related to facility relocation, obsolete inventory, packaging changes, and new product development.
Investor Verification Checklist
- Verify the issuer and period: the supplied filing identifies Concierge Technologies, Inc. and March 31, 2021, while the request metadata identifies Marygold Companies and “2020 Q3.”
- Assess the sustainability of Wainwright's unusually strong growth and its dependence on commodity-linked AUM and related-party funds.
- Review the status, potential exposure, insurance coverage, and disclosure developments related to the SEC/CFTC Wells Notices and USO litigation.
- Reconcile reported borrowings, including the past-due $3,500 note, related-party notes, property loan, and operating lease obligations.
- Evaluate whether Marygold's $647,000 of vendor commitments and continuing development spending can be supported by operating cash flow.
- Monitor COVID-19 effects, customer concentrations, foreign-currency movements, Original Sprout's recovery, and Printstock integration.
- Confirm future filings for any Marygold commercial launch, subsequent financing, acquisitions, changes in preferred-share conversion, or material legal developments.