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Exhibit 99.1

 

A-Mark Precious Metals Reports Fiscal Second Quarter 2024 Results

Q2 FY 2024 Diluted Earnings Per Share of $0.57

Repurchase of 440,092 Common Shares for $12 Million

Asset Backed Securitization Notes Payable paid off at Maturity

Company reaffirms regular quarterly cash dividend policy of $0.20 per share

 

El Segundo, CA – February 6, 2024 – A-Mark Precious Metals, Inc. (NASDAQ: AMRK), a leading fully integrated precious metals platform, reported results for the fiscal second quarter ended December 31, 2023.

 

Management Commentary

 

“Our second quarter results reflect the strength of our fully-integrated platform to generate profitable results,” said A-Mark CEO Greg Roberts. “Despite continued softened demand, we delivered $0.57 per diluted share, $25.1 million of non-GAAP EBITDA, and continued to enhance shareholder value by increasing our share repurchase program by buying back 440,092 shares of common stock during the quarter. During December, we also repaid our Notes Payable from our $100MM Asset Backed Securitization.

“We continue to explore strategic opportunities, as reflected by our recent M&A activity, and to invest in logistics automation initiatives at our A-Mark Global Logistics (AMGL) facility in Las Vegas, which will allow us to efficiently handle a greater number of SKUs and increased volume, all while effectively minimizing our operational costs. We are confident that these strategic measures will support our growth strategy as we strive to further expand our business.

“Our commitment to generating stockholder value remains firm, and we are confident in A-Mark’s diversified and proven business model.”

Fiscal Second Quarter 2024 Operational Highlights

Gold ounces sold in the three months ended December 31, 2023 decreased 20% to 450,000 ounces from 565,000 ounces for the three months ended December 31, 2022, and decreased 9% from 495,000 ounces for the three months ended September 30, 2023
Silver ounces sold in the three months ended December 31, 2023 decreased 30% to 26.6 million ounces from 38.1 million ounces for the three months ended December 31, 2022, and decreased 13% from 30.4 million ounces for the three months ended September 30, 2023
As of December 31, 2023, the number of secured loans decreased 32% to 715 from 1,049 as of December 31, 2022, and decreased 11% from 803 as of September 30, 2023
As of December 31, 2023, secured loans receivable increased 4% to $106.6 million from $102.5 million as of December 31, 2022, and increased 7% from $99.2 million as of September 30, 2023

 


 

 

Direct-to-Consumer new customers for the three months ended December 31, 2023 decreased 60% to 52,500 from 131,200 for the three months ended December 31, 2022, and increased 34% from 39,100 for the three months ended September 30, 2023
Direct-to-Consumer active customers for the three months ended December 31, 2023 increased 17% to 136,400 from 116,400 for the three months ended December 31, 2022, and increased 28% from 106,400 for the three months ended September 30, 2023
Direct-to-Consumer average order value for the three months ended December 31, 2023 decreased $171, or 7% to $2,218 from $2,389 for the three months ended December 31, 2022, and decreased $222, or 9% from $2,440 for the three months ended September 30, 2023
JM Bullion’s average order value for the three months ended December 31, 2023 decreased $177, or 8% to $2,061 from $2,238 for the three months ended December 31, 2022, and decreased $178, or 8% from $2,239 for the three months ended September 30, 2023

 

 

 

2


 

 

 

 

Three Months Ended December 31,

 

 

 

2023

 

 

 

2022

 

 

Selected Operating and Financial Metrics:

 

 

Gold ounces sold (1)

 

450,000

 

 

565,000

 

Silver ounces sold (2)

 

26,575,000

 

 

38,137,000

 

Number of secured loans at period end (3)

 

715

 

 

1,049

 

Secured loans receivable at period end

 

$

106,565,000

 

$

102,470,000

 

 

Direct-to-Consumer ("DTC") number of new customers (4)

 

52,500

 

 

131,200

 

Direct-to-Consumer number of active customers (5)

 

136,400

 

 

116,400

 

Direct-to-Consumer number of total customers (6)

 

2,439,900

 

 

2,193,200

 

Direct-to-Consumer average order value ("AOV") (7)

$

2,218

 

$

2,389

 

JM Bullion ("JMB") average order value (8)

$

2,061

 

$

2,238

 

CyberMetals number of new customers (9)

 

1,400

 

 

4,300

 

CyberMetals number of active customers (10)

 

1,900

 

 

1,300

 

CyberMetals number of total customers (11)

 

26,200

 

 

12,500

 

CyberMetals customer assets under management at period end (12)

$

6,500,000

 

$

5,600,000

 

 

 

 

 

(1) Gold ounces sold represents the ounces of gold product sold and delivered to the customer during the period, excluding ounces of gold recorded on forward contracts.

(2) Silver ounces sold represents the ounces of silver product sold and delivered to the customer during the period, excluding ounces of silver recorded on forward contracts.

(3) Number of outstanding secured loans to customers that are primarily collateralized by precious metals at the end of the period.

(4) DTC number of new customers represents the number of customers that have registered or set up a new account or made a purchase for the first time during the period within the Direct-to-Consumer segment.

(5) DTC number of active customers represents the number of customers that have made a purchase during any month during the period within the Direct-to-Consumer segment.

(6) DTC number of total customers represents the aggregate number of customers that have registered or set up an account or have made a purchase in the past within the Direct-to-Consumer segment.

(7) DTC AOV represents the average dollar value of product orders (excluding accumulation program orders) delivered to the customer during the period within the Direct-to-Consumer segment.

(8) JMB AOV represents the average dollar value of product orders delivered to JMB's customers during the period.

(9) CyberMetals number of new customers represents the number of customers that have registered or set up a new account or have made a purchase for the first time during the period on the CyberMetals platform.

(10) CyberMetals number of active customers represents the number of customers that have made a purchase during any month during the period from the CyberMetals platform.

(11) CyberMetals number of total customers represents the aggregate number of customers that have registered or set up an account or have made a purchase in the past from the CyberMetals platform.

(12) CyberMetals customer assets under management represents the total value of assets managed by the Company on behalf of CyberMetals customers.

 

 

 

 

3


 

 

 

 

Three Months Ended

 

 

 

December 31, 2023

 

 

 

September 30, 2023

 

 

Selected Operating and Financial Metrics:

 

 

Gold ounces sold (1)

 

450,000

 

 

495,000

 

Silver ounces sold (2)

 

26,575,000

 

 

30,378,000

 

Number of secured loans at period end (3)

 

715

 

 

803

 

Secured loans receivable at period end

 

$

106,565,000

 

$

99,167,000

 

 

Direct-to-Consumer ("DTC") number of new customers (4)

 

52,500

 

 

39,100

 

Direct-to-Consumer number of active customers (5)

 

136,400

 

 

106,400

 

Direct-to-Consumer number of total customers (6)

 

2,439,900

 

 

2,387,400

 

Direct-to-Consumer average order value ("AOV") (7)

$

2,218

 

$

2,440

 

JM Bullion ("JMB") average order value (8)

$

2,061

 

$

2,239

 

CyberMetals number of new customers (9)

 

1,400

 

 

2,400

 

CyberMetals number of active customers (10)

 

1,900

 

 

2,500

 

CyberMetals number of total customers (11)

 

26,200

 

 

24,800

 

CyberMetals customer assets under management at period end (12)

$

6,500,000

 

$

6,000,000

 

 

 

 

 

(1) Gold ounces sold represents the ounces of gold product sold and delivered to the customer during the period, excluding ounces of gold recorded on forward contracts.

(2) Silver ounces sold represents the ounces of silver product sold and delivered to the customer during the period, excluding ounces of silver recorded on forward contracts.

(3) Number of outstanding secured loans to customers that are primarily collateralized by precious metals at the end of the period.

(4) DTC number of new customers represents the number of customers that have registered or set up a new account or made a purchase for the first time during the period within the Direct-to-Consumer segment.

(5) DTC number of active customers represents the number of customers that have made a purchase during any month during the period within the Direct-to-Consumer segment.

(6) DTC number of total customers represents the aggregate number of customers that have registered or set up an account or have made a purchase in the past within the Direct-to-Consumer segment.

(7) DTC AOV represents the average dollar value of product orders (excluding accumulation program orders) delivered to the customer during the period within the Direct-to-Consumer segment.

(8) JMB AOV represents the average dollar value of product orders delivered to JMB's customers during the period.

(9) CyberMetals number of new customers represents the number of customers that have registered or set up a new account or have made a purchase for the first time during the period on the CyberMetals platform.

(10) CyberMetals number of active customers represents the number of customers that have made a purchase during any month during the period from the CyberMetals platform.

(11) CyberMetals number of total customers represents the aggregate number of customers that have registered or set up an account or have made a purchase in the past from the CyberMetals platform.

(12) CyberMetals customer assets under management represents the total value of assets managed by the Company on behalf of CyberMetals customers.

 

Fiscal Six Months 2024 Operational Highlights

 

Gold ounces sold in the six months ended December 31, 2023 decreased 21% to 945,000 ounces from 1,194,000 ounces for the six months ended December 31, 2022
Silver ounces sold in the six months ended December 31, 2023 decreased 23% to 57.0 million ounces from 74.1 million ounces for the six months ended December 31, 2022
Direct-to-Consumer new customers for the six months ended December 31, 2023 decreased 49% to 91,600 from 180,200 for the six months ended December 31, 2022
Direct-to-Consumer active customers for the six months ended December 31, 2023 increased 29% to 242,800 from 188,500 for the six months ended December 31, 2022
Direct-to-Consumer average order value for the six months ended December 31, 2023 decreased $45, or 2% to $2,316 from $2,361 for the six months ended December 31, 2022
JM Bullion’s average order value for the six months ended December 31, 2023 decreased $55, or 3% to $2,140 from $2,195 for the six months ended December 31, 2022

 

4


 

 

 

 

 

Six Months Ended December 31,

 

 

 

2023

 

 

 

2022

 

 

Selected Operating and Financial Metrics:

 

 

Gold ounces sold (1)

 

945,000

 

 

1,194,000

 

Silver ounces sold (2)

 

56,953,000

 

 

74,054,000

 

Number of secured loans at period end (3)

 

715

 

 

1,049

 

Secured loans receivable at period end

 

$

106,565,000

 

$

102,470,000

 

 

Direct-to-Consumer ("DTC") number of new customers (4)

 

91,600

 

 

180,200

 

Direct-to-Consumer number of active customers (5)

 

242,800

 

 

188,500

 

Direct-to-Consumer number of total customers (6)

 

2,439,900

 

 

2,193,200

 

Direct-to-Consumer average order value ("AOV") (7)

$

2,316

 

$

2,361

 

JM Bullion ("JMB") average order value (8)

$

2,140

 

$

2,195

 

CyberMetals number of new customers (9)

 

3,800

 

 

6,600

 

CyberMetals number of active customers (10)

 

4,400

 

 

1,600

 

CyberMetals number of total customers (11)

 

26,200

 

 

12,500

 

CyberMetals customer assets under management at period end (12)

$

6,500,000

 

$

5,600,000

 

 

 

 

 

(1) Gold ounces sold represents the ounces of gold product sold and delivered to the customer during the period, excluding ounces of gold recorded on forward contracts.

(2) Silver ounces sold represents the ounces of silver product sold and delivered to the customer during the period, excluding ounces of silver recorded on forward contracts.

(3) Number of outstanding secured loans to customers that are primarily collateralized by precious metals at the end of the period.

(4) DTC number of new customers represents the number of customers that have registered or set up a new account or made a purchase for the first time during the period within the Direct-to-Consumer segment.

(5) DTC number of active customers represents the number of customers that have made a purchase during any month during the period within the Direct-to-Consumer segment.

(6) DTC number of total customers represents the aggregate number of customers that have registered or set up an account or have made a purchase in the past within the Direct-to-Consumer segment.

(7) DTC AOV represents the average dollar value of product orders (excluding accumulation program orders) delivered to the customer during the period within the Direct-to-Consumer segment.

(8) JMB AOV represents the average dollar value of product orders delivered to JMB's customers during the period.

(9) CyberMetals number of new customers represents the number of customers that have registered or set up a new account or have made a purchase for the first time during the period on the CyberMetals platform.

(10) CyberMetals number of active customers represents the number of customers that have made a purchase during any month during the period from the CyberMetals platform.

(11) CyberMetals number of total customers represents the aggregate number of customers that have registered or set up an account or have made a purchase in the past from the CyberMetals platform.

(12) CyberMetals customer assets under management represents the total value of assets managed by the Company on behalf of CyberMetals customers.

 

 

5


 

 

Fiscal Second Quarter 2024 Financial Highlights

Revenues for the three months ended December 31, 2023 increased 7% to $2.079 billion from $1.950 billion for the three months ended December 31, 2022 and decreased 16% from $2.48 billion for the three months ended September 30, 2023
Gross profit for the three months ended December 31, 2023 decreased 28% to $46.0 million from $64.0 million for the three months ended December 31, 2022 and decreased 7% from $49.4 million for the three months ended September 30, 2023
Gross profit margin for the three months ended December 31, 2023 decreased to 2.21% of revenue, from 3.28% of revenue for the three months ended December 31, 2022, and improved from 1.99% of revenue in the three months ended September 30, 2023
Net income attributable to the Company for the three months ended December 31, 2023 decreased 59% to $13.8 million from $33.5 million for the three months ended December 31, 2022, and decreased 27% from $18.8 million for the three months ended September 30, 2023
Diluted earnings per share totaled $0.57 for the three months ended December 31, 2023, a 58% decrease compared to $1.35 for the three months ended December 31, 2022, and decreased 26% from $0.77 for the three months ended September 30, 2023
Adjusted net income before provision for income taxes, depreciation, amortization, and acquisition costs (“Adjusted net income before provision for income taxes” or “Adjusted net income”), a non-GAAP financial performance measure, for the three months ended December 31, 2023 decreased 53% to $21.7 million from $46.5 million for the three months ended December 31, 2022, and decreased 19% from $26.8 million for the three months ended September 30, 2023
Earnings before interest, taxes, depreciation and amortization (“EBITDA”), a non-GAAP liquidity measure, for the three months ended December 31, 2023 decreased 48% to $25.1 million from $48.7 million for the three months ended December 31, 2022, and decreased 18% from $30.4 million for the three months ended September 30, 2023

 

 

 

Three Months Ended December 31,

 

 

 

2023

 

 

 

2022

 

 

 

 

(in thousands, except Earnings per Share)

 

 

 

 

 

 

 

 

 

 

 

Selected Key Financial Statement Metrics:

 

 

 

 

 

 

 

 

Revenues

 

$

2,078,815

 

$

1,949,705

 

 

Gross profit

 

$

46,041

 

$

63,969

 

 

Depreciation and amortization expense

 

$

(2,811

)

$

(3,260

)

 

Net income attributable to the Company

 

$

13,766

 

$

33,481

 

 

 

 

 

 

 

 

 

 

 

Earnings per Share:

 

 

 

 

 

 

 

 

Basic

 

$

0.60

 

 

 

$

1.43

 

 

Diluted

 

$

0.57

 

 

 

$

1.35

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Measures (1):

 

 

 

 

 

 

 

 

Adjusted net income before provision for income taxes

 

$

21,728

 

 

 

$

46,471

 

 

EBITDA

 

$

25,096

 

 

 

$

48,659

 

 

 

 

 

 

 

 

 

 

 

(1) See Reconciliation of U.S. GAAP to Non-GAAP Measures on pages 21-23

 

 

 

 

 

 

6


 

 

 

 

Three Months Ended

 

 

 

December 31, 2023

 

 

 

September 30, 2023

 

 

 

 

(in thousands, except Earnings per Share)

 

 

 

 

 

 

 

 

 

 

 

Selected Key Financial Statement Metrics:

 

 

 

 

 

 

 

 

Revenues

 

$

2,078,815

 

$

2,484,618

 

 

Gross profit

 

$

46,041

 

$

49,405

 

 

Depreciation and amortization expense

 

$

(2,811

)

$

(2,792

)

 

Net income attributable to the Company

 

$

13,766

 

$

18,827

 

 

 

 

 

 

 

 

 

 

 

Earnings per Share:

 

 

 

 

 

 

 

 

Basic

 

$

0.60

 

 

 

$

0.81

 

 

Diluted

 

$

0.57

 

 

 

$

0.77

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Measures (1):

 

 

 

 

 

 

 

 

Adjusted net income before provision for income taxes

 

$

21,728

 

 

 

$

26,779

 

 

EBITDA

 

$

25,096

 

 

 

$

30,448

 

 

 

 

 

 

 

 

 

 

 

(1) See Reconciliation of U.S. GAAP to Non-GAAP Measures on pages 21-23

 

 

 

 

 

 

7


 

 

Fiscal Six Months 2024 Financial Highlights

 

Revenues for the six months ended December 31, 2023 increased 19% to $4.563 billion from $3.850 billion for the six months ended December 31, 2022
Gross profit for the six months ended December 31, 2023 decreased 32% to $95.4 million from $140.6 million for the six months ended December 31, 2022
Gross profit margin for the six months ended December 31, 2023 decreased to 2.09% of revenue, from 3.65% of revenue for the six months ended December 31, 2022
Net income attributable to the Company for the six months ended December 31, 2023 decreased 59% to $32.6 million from $78.6 million for the six months ended December 31, 2022
Diluted earnings per share totaled $1.34 for the six months ended December 31, 2023, a 58% decrease compared to $3.18 for the six months ended December 31, 2022
Adjusted net income for the six months ended December 31, 2023 decreased 55% to $48.5 million from $107.7 million for the six months ended December 31, 2022
EBITDA for the six months ended December 31, 2023 decreased 50% to $55.5 million from $110.9 million for the six months ended December 31, 2022

 

 

 

Six Months Ended December 31,

 

 

 

2023

 

 

 

2022

 

 

 

 

(in thousands, except Earnings per Share)

 

 

 

 

 

 

 

 

 

 

 

Selected Key Financial Statement Metrics:

 

 

 

 

 

 

 

 

Revenues

 

$

4,563,433

 

$

3,850,056

 

 

Gross profit

 

$

95,446

 

$

140,561

 

 

Depreciation and amortization expense

 

$

(5,603

)

$

(6,444

)

 

Net income attributable to the Company

 

$

32,593

 

$

78,606

 

 

 

 

 

 

 

 

 

 

 

Earnings per Share:

 

 

 

 

 

 

 

 

Basic

 

$

1.40

 

$

3.35

 

 

Diluted

 

$

1.34

 

$

3.18

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Measures (1):

 

 

 

 

 

 

 

 

Adjusted net income before provision for income taxes

 

$

48,507

 

 

 

$

107,745

 

 

EBITDA

 

$

55,544

 

 

 

$

110,885

 

 

 

 

 

 

 

 

 

 

 

(1) See Reconciliation of U.S. GAAP to Non-GAAP Measures on pages 21-23

 

 

 

 

 

Fiscal Second Quarter 2024 Financial Summary

Revenues increased 7% to $2.079 billion from $1.950 billion in the same year-ago quarter. Excluding an increase of $231.6 million of forward sales, revenues decreased $102.5 million, or 7.3%, which was due to a decrease in gold and silver ounces sold, partially offset by higher average selling prices of gold and silver.

The Direct-to-Consumer segment contributed 18% and 23% of the consolidated revenue in the fiscal second quarters of 2024 and 2023, respectively. JMB’s revenue represented 16% of the consolidated revenues for the fiscal second quarter of 2024 compared with 21% for the prior year fiscal second quarter.

 

8


 

 

Gross profit decreased 28% to $46.0 million (2.21% of revenue) from $64.0 million (3.28% of revenue) in the same year-ago quarter. The decrease in gross profit was due to lower gross profits earned from both the Wholesale Sales & Ancillary Services and Direct-to-Consumer segments. The Direct-to-Consumer segment contributed 48% and 57% of the consolidated gross profit in the fiscal second quarters of 2024 and 2023, respectively. Gross profit contributed by JMB represented 41% of the consolidated gross profit in the fiscal second quarter of 2024 and 51% of the consolidated gross profit for the prior year fiscal second quarter.

Selling, general and administrative expenses increased 8% to $22.4 million from $20.8 million in the same year-ago quarter. The change was primarily due to an increase in compensation expense (including performance-based accruals) of $1.4 million, higher consulting and professional fees of $0.6 million, an increase in information technology costs of $0.4 million, partially offset by a decrease in insurance costs of $0.9 million, and lower advertising costs of $0.4 million.

Depreciation and amortization expense decreased 14% to $2.8 million from $3.3 million in the same year-ago quarter. The change was primarily due to a $0.6 million decrease in JMB’s intangible asset amortization expense.

Interest income increased 27% to $6.3 million from $5.0 million in the same year-ago quarter. The aggregate increase in interest income was primarily due to an increase in other finance product income of $0.8 million and an increase in interest income earned by our Secured Lending segment of $0.6 million.

Interest expense increased 41% to $10.2 million from $7.2 million in the same year-ago quarter. The increase in interest expense was primarily due to an increase of $2.4 million associated with our Trading Credit Facility due to an increase in interest rates as well as increased borrowings and an increase of $1.1 million related to product financing arrangements, partially offset by a decrease of $0.3 million related to the AMCF Notes (including amortization of debt issuance costs) due to the repayment in December 2023.

Earnings from equity method investments decreased 83% to $0.8 million from $4.7 million in the same year-ago quarter. The decrease was due primarily to decreased earnings of our equity method investees.

Net income attributable to the Company totaled $13.8 million or $0.57 per diluted share, compared to net income of $33.5 million or $1.35 per diluted share in the same year-ago quarter.

Adjusted net income before provision for income taxes for the three months ended December 31, 2023 totaled $21.7 million, a decrease of $24.8 million or 53% compared to $46.5 million in the same year-ago quarter. The decrease is principally due to lower net income before provision for income taxes.

EBITDA for the three months ended December 31, 2023 totaled $25.1 million, a decrease of $23.6 million or 48% compared to $48.7 million in the same year-ago quarter. The decrease was principally due to lower net income of $19.6 million, lower income tax expense of $5.1 million, higher interest income of $1.3 million, and higher interest expense of $2.9 million.

 

Fiscal Six Months 2024 Financial Summary

Revenues increased 19% to $4.563 billion from $3.850 billion in the same year-ago period. Excluding an increase of $891.6 million of forward sales, revenues decreased $178.2 million, or 6.1%, which was due to a decrease in gold and silver ounces sold, partially offset by higher average selling prices of gold and silver.

The Direct-to-Consumer segment contributed 15% and 23% of the consolidated revenue for the six months ended December 31, 2023 and 2022, respectively. JMB’s revenue represented 14% of the consolidated revenues for the six months ended December 31, 2023 compared with 21% for the six months ended December 31, 2022.

 

9


 

 

Gross profit decreased 32% to $95.4 million (2.09% of revenue) from $140.6 million (3.65% of revenue) in the same year-ago period. The decrease in gross profit was due to lower gross profits earned from both the Wholesale Sales & Ancillary Services and Direct-to-Consumer segments. The Direct-to-Consumer segment contributed 45% and 56% of the consolidated gross profit for the six months ended December 31, 2023 and 2022, respectively. Gross profit contributed by JMB represented 38% and 49% of the consolidated gross profit for the six months ended December 31, 2023 and 2022, respectively.

Selling, general and administrative expenses increased 15% to $44.2 million from $38.6 million in the same year-ago period. The change was primarily due to an increase in consulting and professional fees of $2.6 million, an increase in compensation expense (including performance-based accruals) of $2.6 million, an increase in information technology costs of $0.7 million, partially offset by a decrease in insurance costs of $0.5 million.

Depreciation and amortization expense decreased 13% to $5.6 million from $6.4 million in the same year-ago period. The change was primarily due to a $1.1 million decrease in JMB’s intangible asset amortization expense.

Interest income increased 23% to $12.4 million from $10.1 million in the same year-ago period. The aggregate increase in interest income was primarily due to an increase in other finance product income of $1.5 million and an increase in interest income earned by our Secured Lending segment of $0.8 million.

Interest expense increased 50% to $20.0 million from $13.4 million in the same year-ago period. The increase in interest expense was primarily driven by an increase of $5.6 million associated with our Trading Credit Facility due to an increase in interest rates as well as increased borrowings, an increase of $1.6 million related to product financing arrangements, partially offset by a decrease of $0.4 million related to the AMCF Notes (including amortization of debt issuance costs) due to the repayment in December 2023, and a $0.2 million decrease in loan servicing fees.

Earnings from equity method investments decreased 53% to $3.5 million from $7.3 million in the same year-ago period. The decrease was due primarily to decreased earnings of our equity method investees.

Net income attributable to the Company totaled $32.6 million or $1.34 per diluted share, compared to net income of $78.6 million or $3.18 per diluted share in the same year-ago period.

Adjusted net income before provision for income taxes for the six months ended December 31, 2023 totaled $48.5 million, a decrease of $59.2 million or 55% compared to $107.7 million in the same year-ago period. The decrease is principally due to lower net income before provision for income taxes of $58.7 million and lower amortization of acquired intangibles of $1.1 million.

EBITDA for the six months ended December 31, 2023 totaled $55.5 million, a decrease of $55.3 million or 50% compared to $110.9 million in the same year-ago period. The decrease was principally due to lower net income of $45.9 million, lower income tax expense of $12.9 million, lower amortization of acquired intangibles of $1.1 million, higher interest expense of $6.6 million, and higher interest income of $2.3 million.

 

Quarterly Cash Dividend Policy

A-Mark’s Board of Directors has re-affirmed its previously announced regular quarterly cash dividend policy of $0.20 per common share ($0.80 per share on an annual basis). The Company paid a $0.20 quarterly cash dividend on January 29, 2024 to stockholders of record as of January 16, 2024. It is expected that the next quarterly dividend will be paid in April 2024. The declaration of regular cash dividends in the future is subject to the determination each quarter by the Board of Directors, based on a number of factors, including the Company’s financial performance, available cash resources, cash requirements and alternative uses of cash and applicable bank covenants.

 

10


 

 

Conference Call

A-Mark will hold a conference call today (February 6, 2024) to discuss these financial results. A-Mark management will host the call at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) followed by a question-and-answer period.

To participate, please call the conference telephone number 10 minutes before the start time and ask for the A-Mark Precious Metals conference call.

Webcast:

U.S. dial-in number: 1-888-506-0062

International number: 1-973-528-0011

Participant Access Code: 362228

The call will also be broadcast live and available for replay on the Investor Relations section of A-Mark’s website at www.ir.amark.com. If you have any difficulty connecting with the conference call or webcast, please contact A-Mark’s investor relations team at 1-949-574-3860.

A replay of the call will be available after 7:30 p.m. Eastern time through February 20, 2024.

Toll-free replay number: 1-877-481-4010

International replay number: 1-919-882-2331

Participant Access Code: 49671


 

 

 

11


 

 

About A-Mark Precious Metals

Founded in 1965, A-Mark Precious Metals, Inc. is a leading fully integrated precious metals platform that offers an array of gold, silver, platinum, palladium, and copper bullion, numismatic coins, and related products to wholesale and retail customers via a portfolio of channels. The company conducts its operations through three complementary segments: Wholesale Sales & Ancillary Services, Direct-to-Consumer, and Secured Lending. The company’s global customer base spans sovereign and private mints, manufacturers and fabricators, refiners, dealers, financial institutions, industrial users, investors, collectors, e-commerce customers, and other retail customers.

A-Mark’s Wholesale Sales & Ancillary Services segment distributes and purchases precious metal products from sovereign and private mints. As a U.S. Mint-authorized purchaser of gold, silver, and platinum coins since 1986, A-Mark purchases bullion products directly from the U.S. Mint for sale to customers. A-Mark also has longstanding distributorships with other sovereign mints, including Australia, Austria, Canada, China, Mexico, South Africa, and the United Kingdom. The company sells more than 200 different products to e-commerce retailers, coin and bullion dealers, financial institutions, brokerages, and collectors. In addition, A-Mark sells precious metal products to industrial users, including metal refiners, manufacturers, and electronic fabricators.

Through its A-M Global Logistics subsidiary, A-Mark provides its customers with a range of complementary services, including managed storage options for precious metals as well as receiving, handling, inventorying, processing, packaging, and shipping of precious metals and coins on a secure basis. A-Mark’s mint operations, which are conducted through its wholly owned subsidiary Silver Towne Mint, enable the company to offer customers a wide range of proprietary coin and bar offerings and, during periods of market volatility when the availability of silver bullion from sovereign mints is often product constrained, preferred product access.

A-Mark’s Direct-to-Consumer segment operates as an omni-channel retailer of precious metals, providing access to a multitude of products through its wholly owned subsidiaries, JM Bullion and Goldline. JM Bullion is a leading e-commerce retailer of precious metals and operates seven separately branded, company-owned websites targeting specific niches within the precious metals market: JMBullion.com, ProvidentMetals.com, Silver.com, GoldPrice.org, SilverPrice.org, BGASC.com and BullionMax.com. JMB also owns CyberMetals.com, an online platform where customers can purchase and sell fractional shares of digital gold, silver, platinum, and palladium bars in a range of denominations. Goldline markets precious metals directly to the investor community through various channels, including television, radio, and telephonic sales efforts. A-Mark also holds minority ownership interests in four additional direct-to-consumer brands.

The company operates its Secured Lending segment through its wholly owned subsidiary, Collateral Finance Corporation (CFC). Founded in 2005, CFC is a California licensed finance lender that originates and acquires loans secured by bullion and numismatic coins. Its customers include coin and precious metal dealers, investors, and collectors.

A-Mark is headquartered in El Segundo, CA and has additional offices and facilities in the neighboring Los Angeles area as well as in Dallas, TX, Las Vegas, NV, Winchester, IN, and Vienna, Austria. For more information, visit www.amark.com.

A-Mark periodically provides information for investors on its corporate website, www.amark.com, and its investor relations website, ir.amark.com. This includes press releases and other information about financial performance, reports filed or furnished with the SEC, information on corporate governance, and investor presentations.

 

12


 

 

Important Cautions 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. These include statements regarding expectations with respect to future profitability and growth, dividend declarations, the amount or timing of any future dividends, future macroeconomic conditions and demand for precious metal products, and the Company’s ability to effectively respond to changing economic conditions. Future events, risks and uncertainties, individually or in the aggregate, could cause actual results or circumstances to differ materially from those expressed or implied in these statements. Factors that could cause actual results to differ include the following: the failure to execute the Company’s growth strategy, including the inability to identify suitable or available acquisition or investment opportunities; greater than anticipated costs incurred to execute this strategy; changes in the current international political climate, which historically has favorably contributed to demand and volatility in the precious metals markets; potential adverse effects of the current problems in the national and global supply chains; increased competition for the Company’s higher margin services, which could depress pricing; the failure of the Company’s business model to respond to changes in the market environment as anticipated; changes in consumer demand and preferences for precious metal products generally; potential negative effects that inflationary pressure may have on our business; the inability of the Company to expand capacity at Silver Towne Mint, the failure of our investee companies to maintain, or address the preferences of, their customer bases; general risks of doing business in the commodity markets; and the strategic, business, economic, financial, political and governmental risks and other Risk Factors described in in the Company’s public filings with the Securities and Exchange Commission.

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.

Use and Reconciliation of Non-GAAP Measures

 

In addition to presenting the Company’s financial results determined in accordance with U.S. GAAP, management believes the following non-GAAP measures are useful in evaluating the Company’s operating performance: “adjusted net income before provision for income taxes” and “earnings before interest, taxes, depreciation and amortization” (“EBITDA”). Management believes the “adjusted net income before provision for income taxes” non-GAAP financial performance measure assists investors and analysts by facilitating comparison of period-to-period operational performance on a consistent basis by excluding items that management does not believe are indicative of the Company’s core operating performance. The items excluded from this financial measure may have a material impact on the Company’s financial results. Certain of those items are non-recurring, while others are non-cash in nature. Management believes the EBITDA non-GAAP liquidity measure assists investors and analysts by facilitating comparison of our business operations before investing activities, interest, and income taxes with other publicly traded companies. Non-GAAP measures do not have standardized definitions and should be considered in addition to, and not as a substitute for or superior to, the comparable measures prepared in accordance with U.S. GAAP, and should be read in conjunction with the financial statements included in the Company’s Quarterly Report on Form 10-Q to be filed with the SEC. Management encourages investors and others to review the Company’s financial information in its entirety and not to rely on any single financial or liquidity measure.

 

13


 

 

In the Company’s reconciliation from its reported U.S. GAAP “net income before provision for income taxes” to its non-GAAP “adjusted net income before provision for income taxes”, the Company eliminates the impact of the following three amounts: (i) acquisition expenses; (ii) amortization expenses related to intangible assets acquired; and (iii) depreciation expense. The Company’s reconciliations from its reported U.S. GAAP “net income before provision for income taxes” to its non-GAAP “adjusted net income before provision for income taxes”, and “net income” and “net cash provided by (used in) operating activities” to its non-GAAP “EBITDA” are provided below and are also included in the Company’s Quarterly Report on Form 10-Q to be filed with the SEC for the quarterly period ended December 31, 2023.

Company Contact:

 

Steve Reiner, Executive Vice President, Capital Markets & Investor Relations

A-Mark Precious Metals, Inc.

1-310-587-1410

sreiner@amark.com

Investor Relations Contact:

 

Matt Glover or Greg Bradbury

Gateway Group, Inc.

1-949-574-3860

AMRK@gateway-grp.com



 

 

14


 

 

A-MARK PRECIOUS METALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except for share data)

 

 

 

December 31, 2023

 

 

June 30, 2023

 

 

 

(unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash

 

$

28,495

 

 

$

39,318

 

Receivables, net

 

 

42,720

 

 

 

35,243

 

Derivative assets

 

 

25,745

 

 

 

77,881

 

Secured loans receivable

 

 

106,565

 

 

 

100,620

 

Precious metals held under financing arrangements

 

 

19,520

 

 

 

25,530

 

Inventories:

 

 

 

 

 

 

Inventories

 

 

591,737

 

 

 

645,812

 

Restricted inventories

 

 

518,613

 

 

 

335,831

 

 

 

1,110,350

 

 

 

981,643

 

Income tax receivable

 

 

1,022

 

 

 

 

Prepaid expenses and other assets

 

 

5,864

 

 

 

6,956

 

Total current assets

 

 

1,340,281

 

 

 

1,267,191

 

Operating lease right of use assets

 

 

4,524

 

 

 

5,119

 

Property, plant, and equipment, net

 

 

14,987

 

 

 

12,513

 

Goodwill

 

 

100,943

 

 

 

100,943

 

Intangibles, net

 

 

58,299

 

 

 

62,630

 

Long-term investments

 

 

91,886

 

 

 

88,535

 

Other long-term assets

 

 

12,938

 

 

 

8,640

 

Total assets

 

$

1,623,858

 

 

$

1,545,571

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Lines of credit

 

$

 

 

$

235,000

 

Liabilities on borrowed metals

 

 

24,215

 

 

 

21,642

 

Product financing arrangements

 

 

518,613

 

 

 

335,831

 

Accounts payable and other payables

 

 

10,689

 

 

 

25,465

 

Deferred revenue and other advances

 

 

121,648

 

 

 

181,363

 

Derivative liabilities

 

 

28,908

 

 

 

8,076

 

Accrued liabilities

 

 

12,353

 

 

 

20,418

 

Income tax payable

 

 

 

 

 

958

 

Notes payable

 

 

3,234

 

 

 

95,308

 

Total current liabilities

 

 

719,660

 

 

 

924,061

 

Lines of credit

 

 

298,000

 

 

 

 

Deferred tax liabilities

 

 

16,697

 

 

 

16,677

 

Other liabilities

 

 

4,121

 

 

 

4,440

 

Total liabilities

 

 

1,038,478

 

 

 

945,178

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

Preferred stock, $0.01 par value, authorized 10,000,000 shares; issued and outstanding: none as of December 31, 2023 or June 30, 2023

 

 

 

 

 

 

Common stock, par value $0.01; 40,000,000 shares authorized; 23,848,248 and 23,672,122 shares issued and 22,901,153 and 23,336,387 shares outstanding as of December 31, 2023 and June 30, 2023, respectively

 

 

239

 

 

 

237

 

Treasury stock, 947,095 and 335,735 shares at cost as of December 31, 2023 and June 30, 2023, respectively

 

 

(26,780

)

 

 

(9,762

)

Additional paid-in capital

 

 

170,816

 

 

 

169,034

 

Accumulated other comprehensive loss

 

 

(961

)

 

 

(1,025

)

Retained earnings

 

 

440,445

 

 

 

440,639

 

Total A-Mark Precious Metals, Inc. stockholders’ equity

 

 

583,759

 

 

 

599,123

 

Noncontrolling interest

 

 

1,621

 

 

 

1,270

 

Total stockholders’ equity

 

 

585,380

 

 

 

600,393

 

Total liabilities, noncontrolling interest and stockholders’ equity

 

$

1,623,858

 

 

$

1,545,571

 

 

 

 

 

15


 

 

A-MARK PRECIOUS METALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except for share and per share data; unaudited)

 

 

 

Three Months Ended December 31,

 

 

Six Months Ended December 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues

 

$

2,078,815

 

 

$

1,949,705

 

 

$

4,563,433

 

 

$

3,850,056

 

Cost of sales

 

 

2,032,774

 

 

 

1,885,736

 

 

 

4,467,987

 

 

 

3,709,495

 

Gross profit

 

 

46,041

 

 

 

63,969

 

 

 

95,446

 

 

 

140,561

 

Selling, general, and administrative expenses

 

 

(22,396

)

 

 

(20,813

)

 

 

(44,241

)

 

 

(38,597

)

Depreciation and amortization expense

 

 

(2,811

)

 

 

(3,260

)

 

 

(5,603

)

 

 

(6,444

)

Interest income

 

 

6,311

 

 

 

4,984

 

 

 

12,413

 

 

 

10,080

 

Interest expense

 

 

(10,168

)

 

 

(7,236

)

 

 

(19,991

)

 

 

(13,366

)

Earnings from equity method investments

 

 

777

 

 

 

4,669

 

 

 

3,486

 

 

 

7,346

 

Other income, net

 

 

569

 

 

 

833

 

 

 

842

 

 

 

1,360

 

Unrealized gains on foreign exchange

 

 

105

 

 

 

1

 

 

 

11

 

 

 

215

 

Net income before provision for income taxes

 

 

18,428

 

 

 

43,147

 

 

 

42,363

 

 

 

101,155

 

Income tax expense

 

 

(4,467

)

 

 

(9,550

)

 

 

(9,419

)

 

 

(22,321

)

Net income

 

 

13,961

 

 

 

33,597

 

 

 

32,944

 

 

 

78,834

 

Net income attributable to noncontrolling interest

 

 

195

 

 

 

116

 

 

 

351

 

 

 

228

 

Net income attributable to the Company

 

$

13,766

 

 

$

33,481

 

 

$

32,593

 

 

$

78,606

 

Basic and diluted net income per share attributable
   to A-Mark Precious Metals, Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.60

 

 

$

1.43

 

 

$

1.40

 

 

$

3.35

 

Diluted

 

$

0.57

 

 

$

1.35

 

 

$

1.34

 

 

$

3.18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

23,079,500

 

 

 

23,489,000

 

 

 

23,222,100

 

 

 

23,442,700

 

Diluted

 

 

24,063,500

 

 

 

24,731,600

 

 

 

24,298,100

 

 

 

24,708,400

 

 

 

 

 

 

 

 

16


 

 

A-MARK PRECIOUS METALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands; unaudited)

 

 

 

Six Months Ended December 31,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

32,944

 

 

$

78,834

 

Adjustments to reconcile net income to net cash flows from operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

5,603

 

 

 

6,444

 

Amortization of loan cost

 

 

1,214

 

 

 

1,140

 

Share-based compensation

 

 

1,146

 

 

 

1,069

 

Earnings from equity method investments

 

 

(3,486

)

 

 

(7,346

)

Dividends and distributions received from equity method investees

 

 

269

 

 

 

551

 

Other

 

 

157

 

 

 

421

 

Changes in assets and liabilities:

 

 

 

 

 

 

Receivables, net

 

 

(7,477

)

 

 

(12,548

)

Secured loans receivable

 

 

 

 

 

1,011

 

Derivative assets

 

 

52,136

 

 

 

49,955

 

Income tax receivable

 

 

(1,022

)

 

 

(2,525

)

Precious metals held under financing arrangements

 

 

6,010

 

 

 

22,479

 

Inventories

 

 

(128,707

)

 

 

(181,534

)

Prepaid expenses and other assets

 

 

(134

)

 

 

371

 

Accounts payable and other payables

 

 

(14,778

)

 

 

3,194

 

Deferred revenue and other advances

 

 

(59,715

)

 

 

(1,341

)

Derivative liabilities

 

 

20,832

 

 

 

27,154

 

Liabilities on borrowed metals

 

 

2,573

 

 

 

(28,308

)

Accrued liabilities

 

 

(8,274

)

 

 

(7,157

)

Income tax payable

 

 

(958

)

 

 

(382

)

Net cash used in operating activities

 

 

(101,667

)

 

 

(48,518

)

Cash flows from investing activities:

 

 

 

 

 

 

Capital expenditures for property, plant, and equipment

 

 

(3,824

)

 

 

(2,662

)

Purchase of long-term investments

 

 

(50

)

 

 

(500

)

Purchase of intangible assets

 

 

 

 

 

(4,500

)

Secured loans receivable, net

 

 

(5,937

)

 

 

22,742

 

Other

 

 

(848

)

 

 

 

Net cash (used in) provided by investing activities

 

 

(10,659

)

 

 

15,080

 

Cash flows from financing activities:

 

 

 

 

 

 

Product financing arrangements, net

 

 

182,782

 

 

 

64,589

 

Dividends paid

 

 

(32,686

)

 

 

(28,088

)

Distributions paid to noncontrolling interest

 

 

 

 

 

(1,001

)

Net borrowings and repayments under lines of credit

 

 

63,000

 

 

 

32,000

 

Repayment of notes

 

 

(95,000

)

 

 

 

Proceeds from notes payable to related party

 

 

2,688

 

 

 

3,887

 

Repayments on notes payable to related party

 

 

 

 

 

(2,135

)

Repurchases of common stock

 

 

(16,936

)

 

 

 

Debt funding issuance costs

 

 

(2,975

)

 

 

(219

)

Proceeds from the exercise of share-based awards

 

 

962

 

 

 

725

 

Payments for tax withholding related to net settlement of share-based awards

 

 

(332

)

 

 

(1,604

)

Net cash provided by financing activities

 

 

101,503

 

 

 

68,154

 

Net (decrease) increase in cash

 

 

(10,823

)

 

 

34,716

 

Cash, beginning of period

 

 

39,318

 

 

 

37,783

 

Cash, end of period

 

$

28,495

 

 

$

72,499

 

 

 

 

17


 

 

Overview of Results of Operations for the Three Months Ended December 31, 2023 and 2022

Consolidated Results of Operations

The operating results for the three months ended December 31, 2023 and 2022 were as follows (in thousands, except per share data):

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

2023

 

 

 

2022

 

 

 

Change

 

 

 

$

 

 

 

% of revenue

 

 

 

$

 

 

 

% of revenue

 

 

 

$

 

 

 

%

 

Revenues

 

$

2,078,815

 

 

 

 

100.000

%

 

 

$

1,949,705

 

 

 

 

100.000

%

 

 

$

129,110

 

 

 

 

6.6

%

Gross profit

 

 

46,041

 

 

 

 

2.215

%

 

 

 

63,969

 

 

 

 

3.281

%

 

 

$

(17,928

)

 

 

 

(28.0

%)

Selling, general, and administrative expenses

 

 

(22,396

)

 

 

 

(1.077

%)

 

 

 

(20,813

)

 

 

 

(1.067

%)

 

 

$

1,583

 

 

 

 

7.6

%

Depreciation and amortization expense

 

 

(2,811

)

 

 

 

(0.135

%)

 

 

 

(3,260

)

 

 

 

(0.167

%)

 

 

$

(449

)

 

 

 

(13.8

%)

Interest income

 

 

6,311

 

 

 

 

0.304

%

 

 

 

4,984

 

 

 

 

0.256

%

 

 

$

1,327

 

 

 

 

26.6

%

Interest expense

 

 

(10,168

)

 

 

 

(0.489

%)

 

 

 

(7,236

)

 

 

 

(0.371

%)

 

 

$

2,932

 

 

 

 

40.5

%

Earnings from equity method investments

 

 

777

 

 

 

 

0.037

%

 

 

 

4,669

 

 

 

 

0.239

%

 

 

$

(3,892

)

 

 

 

(83.4

%)

Other income, net

 

 

569

 

 

 

 

0.027

%

 

 

 

833

 

 

 

 

0.043

%

 

 

$

(264

)

 

 

 

(31.7

%)

Unrealized gains on foreign exchange

 

 

105

 

 

 

 

0.005

%

 

 

 

1

 

 

 

 

0.000

%

 

 

$

104

 

 

 

 

10,400.0

%

Net income before provision for income taxes

 

 

18,428

 

 

 

 

0.886

%

 

 

 

43,147

 

 

 

 

2.213

%

 

 

$

(24,719

)

 

 

 

(57.3

%)

Income tax expense

 

 

(4,467

)

 

 

 

(0.215

%)

 

 

 

(9,550

)

 

 

 

(0.490

%)

 

 

$

(5,083

)

 

 

 

(53.2

%)

Net income

 

 

13,961

 

 

 

 

0.672

%

 

 

 

33,597

 

 

 

 

1.723

%

 

 

$

(19,636

)

 

 

 

(58.4

%)

Net income attributable to noncontrolling interest

 

 

195

 

 

 

 

0.009

%

 

 

 

116

 

 

 

 

0.006

%

 

 

$

79

 

 

 

 

68.1

%

Net income attributable to the Company

 

$

13,766

 

 

 

 

0.662

%

 

 

$

33,481

 

 

 

 

1.717

%

 

 

$

(19,715

)

 

 

 

(58.9

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net income per share attributable to
 A-Mark Precious Metals, Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.60

 

 

 

 

 

 

 

$

1.43

 

 

 

 

 

 

 

$

(0.83

)

 

 

 

(58.0

%)

Diluted

 

$

0.57

 

 

 

 

 

 

 

$

1.35

 

 

 

 

 

 

 

$

(0.78

)

 

 

 

(57.8

%)

 

 

 

18


 

 

Overview of Results of Operations for the Three Months Ended December 31, 2023 and September 30, 2023

Consolidated Results of Operations

 

The operating results for the three months ended December 31, 2023 and September 30, 2023 were as follows (in thousands, except per share data):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

December 31, 2023

 

 

September 30, 2023

 

 

Change

 

 

 

$

 

 

% of
revenue

 

 

$

 

 

% of
revenue

 

 

$

 

 

%

 

Revenues

 

$

2,078,815

 

 

 

100.000

%

 

$

2,484,618

 

 

 

100.000

%

 

$

(405,803

)

 

 

(16.3

%)

Gross profit

 

 

46,041

 

 

 

2.215

%

 

 

49,405

 

 

 

1.988

%

 

$

(3,364

)

 

 

(6.8

%)

Selling, general, and administrative expenses

 

 

(22,396

)

 

 

(1.077

%)

 

 

(21,845

)

 

 

(0.879

%)

 

$

551

 

 

 

2.5

%

Depreciation and amortization expense

 

 

(2,811

)

 

 

(0.135

%)

 

 

(2,792

)

 

 

(0.112

%)

 

$

19

 

 

 

0.7

%

Interest income

 

 

6,311

 

 

 

0.304

%

 

 

6,102

 

 

 

0.246

%

 

$

209

 

 

 

3.4

%

Interest expense

 

 

(10,168

)

 

 

(0.489

%)

 

 

(9,823

)

 

 

(0.395

%)

 

$

345

 

 

 

3.5

%

Earnings from equity method investments

 

 

777

 

 

 

0.037

%

 

 

2,709

 

 

 

0.109

%

 

$

(1,932

)

 

 

(71.3

%)

Other income, net

 

 

569

 

 

 

0.027

%

 

 

273

 

 

 

0.011

%

 

$

296

 

 

 

108.4

%

Unrealized gains (losses) on foreign exchange

 

 

105

 

 

 

0.005

%

 

 

(94

)

 

 

(0.004

%)

 

$

199

 

 

 

211.7

%

Net income before provision for income taxes

 

 

18,428

 

 

 

0.886

%

 

 

23,935

 

 

 

0.963

%

 

$

(5,507

)

 

 

(23.0

%)

Income tax expense

 

 

(4,467

)

 

 

(0.215

%)

 

 

(4,952

)

 

 

(0.199

%)

 

$

(485

)

 

 

(9.8

%)

Net income

 

 

13,961

 

 

 

0.672

%

 

 

18,983

 

 

 

0.764

%

 

$

(5,022

)

 

 

(26.5

%)

Net income attributable to noncontrolling interest

 

 

195

 

 

 

0.009

%

 

 

156

 

 

 

0.006

%

 

$

39

 

 

 

25.0

%

Net income attributable to the Company

 

$

13,766

 

 

 

0.662

%

 

$

18,827

 

 

 

0.758

%

 

$

(5,061

)

 

 

(26.9

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net income per share attributable to
   A-Mark Precious Metals, Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.60

 

 

 

 

 

$

0.81

 

 

 

 

 

$

(0.21

)

 

 

(25.9

%)

Diluted

 

$

0.57

 

 

 

 

 

$

0.77

 

 

 

 

 

$

(0.20

)

 

 

(26.0

%)

 

 

 

 

19


 

 

Overview of Results of Operations for the Six Months Ended December 31, 2023 and 2022

Consolidated Results of Operations

 

The operating results for the six months ended December 31, 2023 and 2022 were as follows (in thousands, except per share data):

 

Six Months Ended December 31,

 

2023

 

 

 

2022

 

 

 

Change

 

 

 

$

 

 

 

% of revenue

 

 

 

$

 

 

 

% of revenue

 

 

 

$

 

 

 

%

 

Revenues

 

$

4,563,433

 

 

 

 

100.000

%

 

 

$

3,850,056

 

 

 

 

100.000

%

 

 

$

713,377

 

 

 

 

18.5

%

Gross profit

 

 

95,446

 

 

 

 

2.092

%

 

 

 

140,561

 

 

 

 

3.651

%

 

 

$

(45,115

)

 

 

 

(32.1

%)

Selling, general, and administrative expenses

 

 

(44,241

)

 

 

 

(0.969

%)

 

 

 

(38,597

)

 

 

 

(1.003

%)

 

 

$

5,644

 

 

 

 

14.6

%

Depreciation and amortization expense

 

 

(5,603

)

 

 

 

(0.123

%)

 

 

 

(6,444

)

 

 

 

(0.167

%)

 

 

$

(841

)

 

 

 

(13.1

%)

Interest income

 

 

12,413

 

 

 

 

0.272

%

 

 

 

10,080

 

 

 

 

0.262

%

 

 

$

2,333

 

 

 

 

23.1

%

Interest expense

 

 

(19,991

)

 

 

 

(0.438

%)

 

 

 

(13,366

)

 

 

 

(0.347

%)

 

 

$

6,625

 

 

 

 

49.6

%

Earnings from equity method investments

 

 

3,486

 

 

 

 

0.076

%

 

 

 

7,346

 

 

 

 

0.191

%

 

 

$

(3,860

)

 

 

 

(52.5

%)

Other income, net

 

 

842

 

 

 

 

0.018

%

 

 

 

1,360

 

 

 

 

0.035

%

 

 

$

(518

)

 

 

 

(38.1

%)

Unrealized gains on foreign exchange

 

 

11

 

 

 

 

0.000

%

 

 

 

215

 

 

 

 

0.006

%

 

 

$

(204

)

 

 

 

(94.9

%)

Net income before provision for income taxes

 

 

42,363

 

 

 

 

0.928

%

 

 

 

101,155

 

 

 

 

2.627

%

 

 

$

(58,792

)

 

 

 

(58.1

%)

Income tax expense

 

 

(9,419

)

 

 

 

(0.206

%)

 

 

 

(22,321

)

 

 

 

(0.580

%)

 

 

$

(12,902

)

 

 

 

(57.8

%)

Net income

 

 

32,944

 

 

 

 

0.722

%

 

 

 

78,834

 

 

 

 

2.048

%

 

 

$

(45,890

)

 

 

 

(58.2

%)

Net income attributable to noncontrolling interest

 

 

351

 

 

 

 

0.008

%

 

 

 

228

 

 

 

 

0.006

%

 

 

$

123

 

 

 

 

53.9

%

Net income attributable to the Company

 

$

32,593

 

 

 

 

0.714

%

 

 

$

78,606

 

 

 

 

2.042

%

 

 

$

(46,013

)

 

 

 

(58.5

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net income per share attributable to
 A-Mark Precious Metals, Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.40

 

 

 

 

 

 

 

$

3.35

 

 

 

 

 

 

 

$

(1.95

)

 

 

 

(58.2

%)

Diluted

 

$

1.34

 

 

 

 

 

 

 

$

3.18

 

 

 

 

 

 

 

$

(1.84

)

 

 

 

(57.9

%)

 

 

20


 

 

Reconciliation of U.S. GAAP to Non-GAAP Measures for the Three Months Ended December 31, 2023 and 2022

 

A reconciliation of net income before provision for income taxes to adjusted net income before provision for income taxes for the three months ended December 31, 2023 and 2022 follows (in thousands):

 

Three Months Ended December 31,

 

2023

 

 

2022

 

 

Change

 

 

 

$

 

 

$

 

 

$

 

 

 

%

 

Net income before provision for income taxes

 

$

18,428

 

 

$

43,147

 

 

$

(24,719

)

 

 

 

(57.3

%)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition costs

 

 

489

 

 

 

64

 

 

$

425

 

 

 

 

664.1

%

Amortization of acquired intangibles

 

 

2,165

 

 

 

2,763

 

 

$

(598

)

 

 

 

(21.6

%)

Depreciation expense

 

 

646

 

 

 

497

 

 

$

149

 

 

 

 

30.0

%

Adjusted net income before provision for income taxes (non-GAAP)

 

$

21,728

 

 

$

46,471

 

 

$

(24,743

)

 

 

 

(53.2

%)

 

A reconciliation of net income to EBITDA, and operating cash flows to EBITDA for the three months ended December 31, 2023 and 2022 follows (in thousands):

 

Three Months Ended December 31,

 

2023

 

 

2022

 

 

Change

 

 

 

$

 

 

$

 

 

$

 

 

%

 

Net income

 

$

13,961

 

 

$

33,597

 

 

$

(19,636

)

 

 

(58.4

%)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

(6,311

)

 

 

(4,984

)

 

$

1,327

 

 

 

26.6

%

Interest expense

 

 

10,168

 

 

 

7,236

 

 

$

2,932

 

 

 

40.5

%

Amortization of acquired intangibles

 

 

2,165

 

 

 

2,763

 

 

$

(598

)

 

 

(21.6

%)

Depreciation expense

 

 

646

 

 

 

497

 

 

$

149

 

 

 

30.0

%

Income tax expense

 

 

4,467

 

 

 

9,550

 

 

$

(5,083

)

 

 

(53.2

%)

 

 

11,135

 

 

 

15,062

 

 

$

(3,927

)

 

 

(26.1

%)

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before interest, taxes, depreciation, and amortization (non-GAAP)

 

$

25,096

 

 

$

48,659

 

 

$

(23,563

)

 

 

(48.4

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Operating Cash Flows to EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

Net cash used in operating activities

 

$

(57,405

)

 

$

(328,140

)

 

$

(270,735

)

 

 

(82.5

%)

Changes in operating working capital

 

 

74,387

 

 

 

361,909

 

 

$

(287,522

)

 

 

(79.4

%)

Interest expense

 

 

10,168

 

 

 

7,236

 

 

$

2,932

 

 

 

40.5

%

Interest income

 

 

(6,311

)

 

 

(4,984

)

 

$

1,327

 

 

 

26.6

%

Income tax expense

 

 

4,467

 

 

 

9,550

 

 

$

(5,083

)

 

 

(53.2

%)

Earnings from equity method investments

 

 

777

 

 

 

4,669

 

 

$

(3,892

)

 

 

(83.4

%)

Share-based compensation

 

 

(482

)

 

 

(534

)

 

$

(52

)

 

 

(9.7

%)

Amortization of loan cost

 

 

(692

)

 

 

(586

)

 

$

106

 

 

 

18.1

%

Other

 

 

187

 

 

 

(461

)

 

$

648

 

 

 

140.6

%

Earnings before interest, taxes, depreciation, and amortization (non-GAAP)

 

$

25,096

 

 

$

48,659

 

 

$

(23,563

)

 

 

(48.4

%)

 

 

 

21


 

 

Reconciliation of U.S. GAAP to Non-GAAP Measures for the Three Months Ended December 31, 2023 and September 30, 2023

 

A reconciliation of net income before provision for income taxes to adjusted net income before provision for income taxes for the three months ended December 31, 2023 and September 30, 2023 follows (in thousands):

 

Three Months Ended

 

December 31, 2023

 

 

September 30, 2023

 

 

 

Change

 

 

 

$

 

 

$

 

 

 

$

 

 

 

%

 

Net income before provision for income taxes

 

$

18,428

 

 

 

23,935

 

 

 

$

(5,507

)

 

 

 

(23.0

%)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition costs

 

 

489

 

 

 

52

 

 

 

$

437

 

 

 

 

840.4

%

Amortization of acquired intangibles

 

 

2,165

 

 

 

2,165

 

 

 

 

 

 

 

 

%

Depreciation expense

 

 

646

 

 

 

627

 

 

 

$

19

 

 

 

 

3.0

%

Adjusted net income before provision for income taxes (non-GAAP)

 

$

21,728

 

 

$

26,779

 

 

 

$

(5,051

)

 

 

 

(18.9

%)

 

 

A reconciliation of net income to EBITDA, and operating cash flows to EBITDA for the three months ended December 31, 2023 and September 30, 2023 follows (in thousands):

 

Three Months Ended

 

December 31, 2023

 

 

 

September 30, 2023

 

 

 

Change

 

 

 

$

 

 

 

$

 

 

 

$

 

 

 

%

 

Net income

 

$

13,961

 

 

 

$

18,983

 

 

 

$

(5,022

)

 

 

 

(26.5

%)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

(6,311

)

 

 

 

(6,102

)

 

 

$

209

 

 

 

 

3.4

%

Interest expense

 

 

10,168

 

 

 

 

9,823

 

 

 

$

345

 

 

 

 

3.5

%

Amortization of acquired intangibles

 

 

2,165

 

 

 

 

2,165

 

 

 

$

 

 

 

 

%

Depreciation expense

 

 

646

 

 

 

 

627

 

 

 

$

19

 

 

 

 

3.0

%

Income tax expense

 

 

4,467

 

 

 

 

4,952

 

 

 

$

(485

)

 

 

 

(9.8

%)

 

 

11,135

 

 

 

 

11,465

 

 

 

$

(330

)

 

 

 

(2.9

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before interest, taxes, depreciation, and amortization (non-GAAP)

 

$

25,096

 

 

 

$

30,448

 

 

 

$

(5,352

)

 

 

 

(17.6

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Operating Cash Flows to EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash used in operating activities

 

$

(57,405

)

 

 

$

(44,262

)

 

 

$

13,143

 

 

 

 

29.7

%

Changes in operating working capital

 

 

74,387

 

 

 

 

65,127

 

 

 

$

9,260

 

 

 

 

14.2

%

Interest expense

 

 

10,168

 

 

 

 

9,823

 

 

 

$

345

 

 

 

 

3.5

%

Interest income

 

 

(6,311

)

 

 

 

(6,102

)

 

 

$

209

 

 

 

 

3.4

%

Income tax expense

 

 

4,467

 

 

 

 

4,952

 

 

 

$

(485

)

 

 

 

(9.8

%)

Dividends received from equity method investees

 

 

 

 

 

 

(269

)

 

 

$

269

 

 

 

 

100.0

%

Earnings from equity method investments

 

 

777

 

 

 

 

2,709

 

 

 

$

(1,932

)

 

 

 

(71.3

%)

Share-based compensation

 

 

(482

)

 

 

 

(664

)

 

 

$

(182

)

 

 

 

(27.4

%)

Amortization of loan cost

 

 

(692

)

 

 

 

(522

)

 

 

$

170

 

 

 

 

32.6

%

Other

 

 

187

 

 

 

 

(344

)

 

 

$

531

 

 

 

 

154.4

%

Earnings before interest, taxes, depreciation, and amortization (non-GAAP)

 

$

25,096

 

 

 

$

30,448

 

 

 

$

(5,352

)

 

 

 

(17.6

%)

 

 

 

22


 

 

Reconciliation of U.S. GAAP to Non-GAAP Measures for the Six Months Ended December 31, 2023 and 2022

 

A reconciliation of net income before provision for income taxes to adjusted net income before provision for income taxes for the six months ended December 31, 2023 and 2022 follows (in thousands):

 

Six Months Ended December 31,

 

2023

 

 

2022

 

 

Change

 

 

 

$

 

 

$

 

 

$

 

 

 

%

 

Net income before provision for income taxes

 

$

42,363

 

 

$

101,155

 

 

$

(58,792

)

 

 

 

(58.1

%)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition costs

 

 

541

 

 

 

146

 

 

$

395

 

 

 

 

270.5

%

Amortization of acquired intangibles

 

 

4,330

 

 

 

5,474

 

 

$

(1,144

)

 

 

 

(20.9

%)

Depreciation expense

 

 

1,273

 

 

 

970

 

 

$

303

 

 

 

 

31.2

%

Adjusted net income before provision for income taxes (non-GAAP)

 

$

48,507

 

 

$

107,745

 

 

$

(59,238

)

 

 

 

(55.0

%)

 

A reconciliation of net income to EBITDA, and operating cash flows to EBITDA for the six months ended December 31, 2023 and 2022 follows (in thousands):

 

Six Months Ended December 31,

 

2023

 

 

2022

 

 

Change

 

 

 

$

 

 

$

 

 

$

 

 

 

%

 

Net income

 

$

32,944

 

 

$

78,834

 

 

$

(45,890

)

 

 

 

(58.2

%)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

(12,413

)

 

 

(10,080

)

 

$

2,333

 

 

 

 

23.1

%

Interest expense

 

 

19,991

 

 

 

13,366

 

 

$

6,625

 

 

 

 

49.6

%

Amortization of acquired intangibles

 

 

4,330

 

 

 

5,474

 

 

$

(1,144

)

 

 

 

(20.9

%)

Depreciation expense

 

 

1,273

 

 

 

970

 

 

$

303

 

 

 

 

31.2

%

Income tax expense

 

 

9,419

 

 

 

22,321

 

 

$

(12,902

)

 

 

 

(57.8

%)

 

 

22,600

 

 

 

32,051

 

 

$

(9,451

)

 

 

 

(29.5

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before interest, taxes, depreciation, and amortization (non-GAAP)

 

$

55,544

 

 

$

110,885

 

 

$

(55,341

)

 

 

 

(49.9

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Operating Cash Flows to EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash used in operating activities

 

$

(101,667

)

 

$

(48,518

)

 

$

53,149

 

 

 

 

109.5

%

Changes in operating working capital

 

 

139,514

 

 

 

129,631

 

 

$

9,883

 

 

 

 

7.6

%

Interest expense

 

 

19,991

 

 

 

13,366

 

 

$

6,625

 

 

 

 

49.6

%

Interest income

 

 

(12,413

)

 

 

(10,080

)

 

$

2,333

 

 

 

 

23.1

%

Income tax expense

 

 

9,419

 

 

 

22,321

 

 

$

(12,902

)

 

 

 

(57.8

%)

Dividends and distributions received from equity method investees

 

 

(269

)

 

 

(551

)

 

$

(282

)

 

 

 

(51.2

%)

Earnings from equity method investments

 

 

3,486

 

 

 

7,346

 

 

$

(3,860

)

 

 

 

(52.5

%)

Share-based compensation

 

 

(1,146

)

 

 

(1,069

)

 

$

77

 

 

 

 

7.2

%

Amortization of loan cost

 

 

(1,214

)

 

 

(1,140

)

 

$

74

 

 

 

 

6.5

%

Other

 

 

(157

)

 

 

(421

)

 

$

(264

)

 

 

 

(62.7

%)

Earnings before interest, taxes, depreciation, and amortization (non-GAAP)

 

$

55,544

 

 

$

110,885

 

 

$

(55,341

)

 

 

 

(49.9

%)

 

 

23