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A-Mark Precious Metals Reports Fiscal Second Quarter 2014 Results
Company reports 25% increase in gross profit in quarter
SANTA MONICA, Calif.--(BUSINESS WIRE)--A-Mark Precious Metals, Inc. (NASDAQ: AMRK), a full-service precious metals trading company, reported results for the 2014 fiscal second quarter ended December 31, 2013.
Fiscal Q2 2014 Highlights
Fiscal Q2 2014 Financial Results
Revenue for the three months ended December 31, 2013 was $1.49 billion compared to $1.70 billion in the year-ago quarter. The decrease in revenue was primarily due to a decline in commodity prices for gold and silver. A decrease in the volume of gold ounces sold was largely offset by an increase in the volume of silver ounces sold, as well as stronger demand for custom silver products through certain distribution contracts.
Gross profit was $7.8 million, representing a gross profit margin of 0.5%, an improvement from a gross profit of $6.3 million or a gross profit margin of 0.4% in the year-ago quarter. Gross profit and profit margin improved as a result of increased sales of custom silver products through certain distribution contracts. Sales to distributors of unique bullion products for marketing to the retail public generate higher margins than the company’s ordinary trading activities.
General and administrative (G&A) expenses increased to $4.5 million from $3.0 million in the year-ago quarter. The increase was primarily due to higher personnel expenses; specifically recruiting and retention fees related to the addition of key employees. A one-time favorable adjustment in the prior period also contributed to the variance.
Net income totaled $2.2 million or $0.29 per diluted share, as compared to $2.5 million or $0.32 per diluted share in the year-ago quarter. The decrease in net income was primarily attributable to the increase in G&A.
“The 25% increase in gross profit and strong profitability in the quarter reveals the special nature of our business and trading platform, where our topline can be volatile but our bottom line performance is not impacted,” said Greg Roberts, A-Mark’s CEO. “It’s also important to note how our custom products—which had an increasingly positive effect over the last several months—enhance gross margins and profitability, while remaining largely unaffected by short-term fluctuations in commodity prices.”
The company’s stock began trading on the NASDAQ Global Select on March 17, 2014. Management plans to begin hosting regular quarterly conference calls beginning with its fiscal third quarter results ending March 31, 2014, with the date and time to be announced approximately a week prior.
About A-Mark Precious Metals
A-Mark Precious Metals, Inc. is a full-service precious metals trading company and an official distributor for many government mints throughout the world. The company offers gold, silver, platinum and palladium in the form of bars, plates, powder, wafers, grain, ingots and coins. Its Industrial unit services manufacturers and fabricators of products utilizing or incorporating precious metals, while its Coin & Bar unit deals in over 200 coin and bar products in a variety of weights, shapes and sizes for distribution to dealers and other qualified purchasers. The company operates trading centers in Santa Monica, California, and Vienna, Austria, for buying and selling precious metals.
In addition to wholesale and trading activity, A-Mark offers customers a variety of services, including financing, consignment and various customized financial programs. As a U.S. Mint-authorized purchaser of gold, silver and platinum coins, A-Mark purchases bullion products directly from the U.S. Mint for sale to customers. A-Mark also has distributorships with other sovereign mints, including in Australia, Austria, Canada, China, Mexico and South Africa. Customers of A-Mark include mints, manufacturers and fabricators, refiners, coin and metal dealers, banks and other financial institutions, jewelers, investors and collectors. For more information about A-Mark Precious Metals, visit www.amark.com.
Through its subsidiary Collateral Finance Corporation, a licensed California Finance Lender, the company offers loans collateralized by numismatic and semi-numismatic coins and bullion to coin and metal dealers, investors and collectors. Through its Transcontinental Depository Services subsidiary, it offers a variety of managed storage options for precious metals products to financial institutions, dealers, investors and collectors around the world.
Important Causations Regarding Forward-Looking Statements
Statements in this press release that relate to future plans, objectives, expectations, performance, events and the like are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. Future events, risks and uncertainties, individually or in the aggregate, could cause actual results to differ materially from those expressed or implied in these statements. Factors that could cause actual results to differ are identified in the company’s public filings with the Securities and Exchange Commission (SEC). More information about factors that could affect the company’s business and financial results are included in its public filings with the SEC, which are available on the SEC’s website at www.sec.gov.
The words "should," "believe," "estimate," "expect," "intend," "anticipate," "foresee," "plan" and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates on which they were made. Additionally, any statements related to future improved performance and estimates of revenues and earnings per share are forward-looking statements. The company undertakes no obligation to publicly update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements.