| Segments and Geographic Information |
SEGMENTS AND GEOGRAPHIC INFORMATION
The Company evaluates segment reporting in accordance with FASB ASC 280, Segment Reporting, each reporting period, including evaluating the organizational structure and the reporting package that is reviewed by the chief operating decision makers. The Company's operations are organized under three business segments — Wholesale Trading & Ancillary Services, Secured Lending, and Direct Sales. (See Note 1 for a description of the types of products and services from which each reportable segment derives its revenues.)
Revenue
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in thousands |
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Three Months Ended September 30, |
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2019 |
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2018 |
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Revenue by segment (1)(2)
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Wholesale Trading & Ancillary Services (3)
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$ |
1,460,933 |
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$ |
1,554,313 |
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Direct Sales |
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20,081 |
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(a) |
10,777 |
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(b) |
Total revenue |
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$ |
1,481,014 |
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$ |
1,565,090 |
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_________________________________ |
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(1) Inter-segment purchases from and sales to the Direct Sales segment are transacted at Wholesale Trading & Ancillary Services segment's prices, which is consistent with arms-length transactions with third-parties. |
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(2) The Secured Lending segment earns interest income from its lending activity and earns no revenue from the sales of precious metals. Therefore, no amounts are shown for the Secured Lending segment in the above table. |
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(3) The elimination of inter-segment sales are reflected in the Wholesale Trading & Ancillary Services segment. |
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(a) Includes $8.6 million of inter-segment sales from the Direct Sales segment to the Wholesale Trading & Ancillary Services segment. |
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(b) Includes $0.8 million of inter-segment sales from the Direct Sales segment to the Wholesale Trading & Ancillary Services segment. |
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in thousands |
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Three Months Ended September 30, |
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2019 |
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2018 |
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Revenue by geographic region
(as determined by the shipping address or where the services were performed):
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United States |
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$ |
1,105,621 |
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$ |
1,375,636 |
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Europe |
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62,102 |
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|
90,152 |
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North America, excluding United States |
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300,397 |
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|
96,384 |
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Asia Pacific |
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6,113 |
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|
2,343 |
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Africa |
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31 |
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1 |
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Australia |
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6,750 |
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|
574 |
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Total revenue |
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$ |
1,481,014 |
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$ |
1,565,090 |
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in thousands |
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Three Months Ended September 30, |
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2019 |
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2018 |
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Gross profit by segment(1)
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Wholesale Trading & Ancillary Services |
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$ |
6,760 |
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$ |
7,412 |
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Direct Sales |
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1,580 |
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|
1,063 |
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Total gross profit |
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$ |
8,340 |
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$ |
8,475 |
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Gross margin percentage by segment(1)
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Wholesale Trading & Ancillary Services |
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0.463 |
% |
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0.477 |
% |
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Direct Sales |
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7.868 |
% |
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9.864 |
% |
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Weighted average gross margin percentage |
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0.563 |
% |
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0.542 |
% |
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_________________________________ |
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(1) The Secured Lending segment earns interest income from its lending activity and earns no gross profit from the sales of precious metals. Therefore, no amounts are shown for the Secured Lending segment in the above table. |
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Operating income and (expenses)
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in thousands |
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Three Months Ended September 30, |
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2019 |
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2018 |
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Operating income and (expenses) by segment |
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Wholesale Trading & Ancillary Services |
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Selling, general and administrative expenses |
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$ |
(5,802 |
) |
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$ |
(5,258 |
) |
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Interest income |
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$ |
2,262 |
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$ |
2,052 |
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Interest expense |
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$ |
(2,826 |
) |
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$ |
(1,880 |
) |
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Other income, net |
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$ |
12 |
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$ |
248 |
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Unrealized loss on foreign exchange |
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$ |
(122 |
) |
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$ |
(70 |
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Secured Lending |
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Selling, general and administrative expenses |
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$ |
(348 |
) |
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$ |
(345 |
) |
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Interest income |
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$ |
3,506 |
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$ |
2,499 |
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Interest expense |
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$ |
(2,316 |
) |
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$ |
(1,477 |
) |
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Other income, net |
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$ |
42 |
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$ |
— |
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Direct Sales |
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Selling, general and administrative expenses |
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$ |
(2,120 |
) |
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$ |
(2,116 |
) |
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Interest expense |
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$ |
— |
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$ |
(195 |
) |
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Other expense, net |
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$ |
(220 |
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$ |
— |
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in thousands |
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Three Months Ended September 30, |
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2019 |
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2018 |
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Net (loss) income before provision for income taxes by segment |
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Wholesale Trading & Ancillary Services |
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$ |
284 |
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$ |
2,504 |
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Secured Lending |
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884 |
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|
677 |
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Direct Sales |
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(760 |
) |
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(1,248 |
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Total net income before provision for income taxes
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$ |
408 |
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$ |
1,933 |
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in thousands |
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Three Months Ended September 30, |
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2019 |
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2018 |
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Depreciation and amortization by segment |
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Wholesale Trading & Ancillary Services |
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$ |
(397 |
) |
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$ |
(396 |
) |
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Secured Lending |
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(16 |
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— |
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Direct Sales |
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(255 |
) |
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(301 |
) |
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Total depreciation and amortization |
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$ |
(668 |
) |
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$ |
(697 |
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in thousands |
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Three Months Ended September 30, |
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2019 |
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2018 |
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Advertising expense by segment |
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Wholesale Trading & Ancillary Services |
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$ |
(56 |
) |
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$ |
(107 |
) |
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Secured Lending |
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(3 |
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(3 |
) |
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Direct Sales |
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(404 |
) |
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(480 |
) |
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Total advertising expense |
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$ |
(463 |
) |
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$ |
(590 |
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Precious metals held under financing arrangements
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in thousands |
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September 30, 2019 |
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June 30, 2019 |
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Precious metals held under financing arrangements by segment |
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Wholesale Trading & Ancillary Services |
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$ |
200,809 |
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$ |
208,792 |
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Total precious metals held under financing arrangements |
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$ |
200,809 |
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$ |
208,792 |
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in thousands |
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September 30, 2019 |
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June 30, 2019 |
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Inventories by segment |
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Wholesale Trading & Ancillary Services |
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$ |
364,206 |
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$ |
285,250 |
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Direct Sales |
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7,992 |
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7,611 |
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Total inventories |
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$ |
372,198 |
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$ |
292,861 |
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in thousands |
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September 30, 2019 |
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June 30, 2019 |
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Inventories by geographic region |
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United States |
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$ |
358,806 |
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$ |
280,924 |
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Europe |
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6,470 |
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3,944 |
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North America, excluding United States |
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6,913 |
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7,452 |
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Asia |
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9 |
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541 |
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Total inventories |
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$ |
372,198 |
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$ |
292,861 |
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in thousands |
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September 30, 2019 |
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June 30, 2019 |
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Assets by segment |
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Wholesale Trading & Ancillary Services |
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$ |
657,621 |
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$ |
561,902 |
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Secured Lending |
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153,715 |
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130,143 |
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Direct Sales |
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15,861 |
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13,317 |
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Total assets |
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$ |
827,197 |
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$ |
705,362 |
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in thousands |
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September 30, 2019 |
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June 30, 2019 |
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Assets by geographic region |
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United States |
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$ |
809,457 |
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$ |
689,287 |
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Europe |
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10,818 |
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|
8,082 |
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North America, excluding United States |
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6,913 |
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|
7,452 |
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Asia |
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9 |
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|
541 |
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Total assets |
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$ |
827,197 |
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$ |
705,362 |
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Long-term Assets
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in thousands |
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September 30, 2019 |
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June 30, 2019 |
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Long-term assets by segment |
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Wholesale Trading & Ancillary Services |
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$ |
38,889 |
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$ |
32,816 |
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Secured Lending |
|
301 |
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|
280 |
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Direct Sales |
|
4,772 |
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|
3,416 |
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Total long-term assets |
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$ |
43,962 |
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$ |
36,512 |
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in thousands |
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September 30, 2019 |
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June 30, 2019 |
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Long-term assets by geographic region |
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United States |
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$ |
43,909 |
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$ |
36,459 |
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Europe |
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53 |
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|
53 |
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Total long-term assets |
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$ |
43,962 |
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$ |
36,512 |
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Capital Expenditures for Property and Equipment
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in thousands |
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Three Months Ended September 30, |
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2019 |
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2018 |
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Capital expenditures on plant, property and equipment by segment |
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Wholesale Trading & Ancillary Services |
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$ |
97 |
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$ |
122 |
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Secured Lending |
|
37 |
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|
— |
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Direct Sales |
|
3 |
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— |
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Total capital expenditures on property and equipment |
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$ |
137 |
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$ |
122 |
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Goodwill and Intangible Assets
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in thousands |
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September 30, 2019 |
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June 30, 2019 |
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Goodwill and Intangibles by segment |
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Wholesale Trading & Ancillary Services |
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$ |
11,978 |
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$ |
12,087 |
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Direct Sales |
|
2,502 |
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|
2,646 |
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Total goodwill and intangible assets |
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$ |
14,480 |
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$ |
14,733 |
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