Quarterly report pursuant to Section 13 or 15(d)

Segments and Geographic Information

v3.19.3.a.u2
Segments and Geographic Information
6 Months Ended
Dec. 31, 2019
Segment Reporting [Abstract]  
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
in thousands
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
December 31, 2019
 
December 31, 2018
 
December 31, 2019
 
December 31, 2018
 
Revenue by segment (1)(2)
 
 
 
 
 
 
 
 
 
Wholesale Trading & Ancillary Services (3)
 
$
1,038,154

 
$
1,088,188

 
$
2,499,087

 
$
2,642,501

 
Direct Sales
 
17,436

(a) 
12,724

(b) 
37,517

(c) 
23,501

(d) 
 
 
$
1,055,590

 
$
1,100,912

 
$
2,536,604

 
$
2,666,002

 
 
 
 
 
 
 
 
 
 
 
_________________________________
 
 
 
 
 
 
 
 
 
(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.
 
 
 
(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.
 
(3) The elimination of inter-segment sales are reflected in the Wholesale Trading & Ancillary Services segment.
 
(a) Includes $4.8 million of inter-segment sales from the Direct Sales segment to the Wholesale Trading & Ancillary Services segment.
 
 
 
(b) Includes $0.1 million of inter-segment sales from the Direct Sales segment to the Wholesale Trading & Ancillary Services segment.
 
 
 
 
 
 
 
 
 
 
 
(c) Includes $13.1 million of inter-segment sales from the Direct Sales segment to the Wholesale Trading & Ancillary Services segment.
 
 
 
 
 
 
 
 
 
 
 
(d) Includes $0.3 million of inter-segment sales from the Direct Sales segment to the Wholesale Trading & Ancillary Services segment.
 
 
 
 
 
 
 
 
 
 
 
in thousands
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
December 31, 2019
 
December 31, 2018
 
December 31, 2019
 
December 31, 2018
 
Revenue by geographic region
(as determined by the shipping address or where the services were performed):
 
United States
 
$
781,043

 
$
968,883

 
$
1,886,664

 
$
2,344,519

 
Europe
 
93,308

 
48,609

 
155,410

 
138,761

 
North America, excluding United States
 
166,835

 
82,285

 
467,232

 
178,669

 
Asia Pacific
 
12,822

 
614

 
18,935

 
2,957

 
Africa
 

 

 
31

 
1

 
Australia
 
1,582

 
521

 
8,332

 
1,095

 
 
 
$
1,055,590

 
$
1,100,912

 
$
2,536,604

 
$
2,666,002

 
 
 
 
 
 
 
 
 
 
 
Gross Profit and Gross Margin Percentage
in thousands
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
December 31, 2019
 
December 31, 2018
 
December 31, 2019
 
December 31, 2018
 
Gross profit by segment(1)
 
 
 
 
 
 
 
 
 
Wholesale Trading & Ancillary Services
 
$
6,597

 
$
6,804

 
$
13,357

 
$
14,216

 
Direct Sales
 
1,534

 
1,513

 
3,114

 
2,576

 
Total gross profit
 
$
8,131

 
$
8,317

 
$
16,471

 
$
16,792

 
Gross margin percentage by segment(1)
 
 
 
 
 
 
 
 
 
Wholesale Trading & Ancillary Services
 
0.635
%
 
0.625
%
 
0.534
%
 
0.538
%
 
Direct Sales
 
8.798
%
 
11.891
%
 
8.300
%
 
10.961
%
 
Weighted average gross margin percentage
 
0.770
%
 
0.755
%
 
0.649
%
 
0.630
%
 
 
 
 
 
 
 
 
 
 
 
_________________________________
 
 
 
 
 
 
 
 
 
(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.
 
 
 
 
 
 
 
 
 
 
 
Operating income and (expenses)
in thousands
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
December 31, 2019
 
December 31, 2018
 
December 31, 2019
 
December 31, 2018
 
Operating income (expense) by segment
 
 
 
 
 
 
 
 
 
Wholesale Trading & Ancillary Services
 
 
 
 
 
 
 
 
 
Selling, general and administrative expenses
 
$
(5,477
)
 
$
(5,649
)
 
$
(11,279
)
 
$
(10,907
)
 
Interest income
 
$
2,230

 
$
2,354

 
$
4,492

 
$
4,406

 
Interest expense
 
$
(2,444
)
 
$
(2,974
)
 
$
(5,270
)
 
$
(4,854
)
 
Other income, net
 
$
102

 
$
815

 
$
114

 
$
1,063

 
Unrealized income (loss) on foreign exchange
 
$
125

 
$
52

 
$
3

 
$
(18
)
 
Secured Lending
 
 
 
 
 
 
 
 
 
Selling, general and administrative expenses
 
$
(384
)
 
$
(344
)
 
$
(732
)
 
$
(689
)
 
Interest income
 
$
4,002

 
$
2,298

 
$
7,508

 
$
4,797

 
Interest expense
 
$
(2,637
)
 
$
(1,535
)
 
$
(4,953
)
 
$
(3,012
)
 
Other income, net
 
$
47

 
$
24

 
$
89

 
$
24

 
Direct Sales
 
 
 
 
 
 
 
 
 
Selling, general and administrative expenses
 
$
(2,009
)
 
$
(2,110
)
 
$
(4,129
)
 
$
(4,226
)
 
Interest expense
 
$

 
$
(147
)
 
$

 
$
(342
)
 
Other income (expense), net
 
$
1

 
$
(157
)
 
$
(219
)
 
$
(157
)
 
Net income (loss) before provision for income taxes
in thousands
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
December 31, 2019
 
December 31, 2018
 
December 31, 2019
 
December 31, 2018
 
Net income (loss) before provision for income taxes by segment
 
 
 
 
 
 
 
 
 
Wholesale Trading & Ancillary Services
 
$
1,133

 
$
1,402

 
$
1,417

 
$
3,906

 
Secured Lending
 
1,028

 
443

 
1,912

 
1,120

 
Direct Sales
 
(474
)
 
(901
)
 
(1,234
)
 
(2,149
)
 
 
 
$
1,687

 
$
944

 
$
2,095

 
$
2,877

 
Depreciation and Amortization
in thousands
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
December 31, 2019
 
December 31, 2018
 
December 31, 2019
 
December 31, 2018
 
Depreciation and amortization by segment
 
 
 
 
 
 
 
 
 
Wholesale Trading & Ancillary Services
 
$
(403
)
 
$
(395
)
 
$
(800
)
 
$
(791
)
 
Secured Lending
 
(19
)
 

 
(35
)
 

 
Direct Sales
 
(244
)
 
(306
)
 
(499
)
 
(607
)
 
 
 
$
(666
)
 
$
(701
)
 
$
(1,334
)
 
$
(1,398
)
 
Advertising expense
in thousands
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
December 31, 2019
 
December 31, 2018
 
December 31, 2019
 
December 31, 2018
 
Advertising expense by segment
 
 
 
 
 
 
 
 
 
Wholesale Trading & Ancillary Services
 
$
(12
)
 
$
(161
)
 
$
(68
)
 
$
(268
)
 
Secured Lending
 
(2
)
 
(1
)
 
(5
)
 
(4
)
 
Direct Sales
 
(332
)
 
(486
)
 
(736
)
 
(966
)
 
 
 
$
(346
)
 
$
(648
)
 
$
(809
)
 
$
(1,238
)
 
Precious metals held under financing arrangements
in thousands
 
 
 
 
 
 
 
December 31, 2019
 
June 30, 2019
 
Precious metals held under financing arrangements by segment
 
 
 
 
 
Wholesale Trading & Ancillary Services
 
$
196,972

 
$
208,792

 
Total precious metals held under financing arrangements
 
$
196,972

 
$
208,792

 
 
 
 
 
 
 
Inventories
in thousands
 
 
 
 
 
 
 
December 31, 2019
 
June 30, 2019
 
Inventories by segment
 
 
 
 
 
Wholesale Trading & Ancillary Services
 
$
254,934

 
$
285,250

 
Direct Sales
 
7,997

 
7,611

 
 
 
$
262,931

 
$
292,861

 
in thousands
 
 
 
 
 
 
 
December 31, 2019
 
June 30, 2019
 
Inventories by geographic region
 
 
 
 
 
United States
 
$
251,995

 
$
280,924

 
Europe
 
3,892

 
3,944

 
North America, excluding United States
 
6,858

 
7,452

 
Asia
 
186

 
541

 
 
 
$
262,931

 
$
292,861

 
 
 
 
 
 
 
Total Assets
in thousands
 
 
 
 
 
 
 
December 31, 2019
 
June 30, 2019
 
Assets by segment
 
 
 
 
 
Wholesale Trading & Ancillary Services
 
$
531,005

 
$
561,902

 
Secured Lending
 
154,637

 
130,143

 
Direct Sales
 
15,300

 
13,317

 
 
 
$
700,942

 
$
705,362

 
in thousands
 
 
 
 
 
 
 
December 31, 2019
 
June 30, 2019
 
Assets by geographic region
 
 
 
 
 
United States
 
$
686,959

 
$
689,287

 
Europe
 
6,939

 
8,082

 
North America, excluding United States
 
6,858

 
7,452

 
Asia
 
186

 
541

 
 
 
$
700,942

 
$
705,362

 
Long-term Assets
in thousands
 
 
 
 
 
 
 
December 31, 2019
 
June 30, 2019
 
Long-term assets by segment
 
 
 
 
 
Wholesale Trading & Ancillary Services
 
$
39,009

 
$
32,816

 
Secured Lending
 
318

 
280

 
Direct Sales
 
4,372

 
3,416

 
 
 
$
43,699

 
$
36,512

 
in thousands
 
 
 
 
 
 
 
December 31, 2019
 
June 30, 2019
 
Long-term assets by geographic region
 
 
 
 
 
United States
 
$
43,646

 
$
36,459

 
     Europe
 
53

 
53

 
 
 
$
43,699

 
$
36,512

 

Capital Expenditures for Property, Plant, and Equipment
in thousands
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
December 31, 2019
 
December 31, 2018
 
December 31, 2019
 
December 31, 2018
 
Capital expenditures on property, plant, and equipment by segment
 
 
 
 
Wholesale Trading & Ancillary Services
 
$
279

 
$
16

 
$
376

 
$
138

 
Secured Lending
 
35

 

 
72

 

 
Direct Sales
 
4

 

 
7

 

 
 
 
$
318

 
$
16

 
$
455

 
$
138

 
 
 
 
 
 
 
 
 
 
 
Goodwill and Intangible Assets
in thousands
 
 
 
 
 
 
 
December 31, 2019
 
June 30, 2019
 
Goodwill and Intangibles by segment
 
 
 
 
 
Wholesale Trading & Ancillary Services
 
$
12,017

 
$
12,087

 
Direct Sales
 
2,358

 
2,646

 
 
 
$
14,375

 
$
14,733