Q4 2021 A-Mark Precious Metals Inc Earnings Call
[music].
Good afternoon, and welcome to a Mark precious metals conference call for the fiscal fourth quarter and full year ended June 30th 2021.
Name is Laura and I will be your operator this afternoon.
For this call a mark issued its results for the fiscal fourth quarter and full year 2021 and a press release, which is available in the Investor Relations section of the company's website at Www Dot <unk>.
Dot Com you can find the link to the Investor Relations section at the top of the homepage.
Joining us for today's call are a March CEO Grub Roberts, President Thor Johnson, CFO, Kathleen Simpson Taylor as well I guess.
J M bullion T O Michael Wittmeyer.
Following their remarks, we will open the call to your questions. Then before we conclude the call I'll provide the necessary cautions regarding the forward looking statements made by management during this call.
I'd like to remind everyone that this call is being recorded and will be made available for replay via a link available in the Investor Relations section of a Mark's website now I would like to turn the call over to a Mark's CEO Mr. Greg Roberts Sir Please proceed.
Thank you Laura and good afternoon, everyone.
And thank you for joining our call today.
As you can see from our earnings release, we just reported the fourth quarter marked a fantastic finish to a record record a truly transformative year for a mark.
During the quarter, we delivered 51 million and net income and diluted EPS of $4.28. We also generated a 28% sequential increase in gross profit with our overall gross profit margin at 4%.
This outstanding performance is due to our best in class platform and continued strong market conditions greatly enhanced by our recent acquisition of JM bullion, which had its first full first full quarter of contribution to a mark.
In fact, 37.6 million or 43% of our gross profit and $24 million of our pretax earnings for the quarter were attributable to Jr.
For the full fiscal year, our net income was $165.0 million or $96.0 and diluted share.
With a 37% return on shareholder equity.
Excluding the nonrecurring Ryan Remeasurement gain related to the J M bullion acquisition.
We continue to see positive macro tailwind benefiting our business to sustain the wholesale and retail demand for silver and gold products.
Bind with ongoing supply constraints and volatility.
Have resulted in continued higher premiums spreads contributing to our excellent financial performance.
The inherent synergies of our complementary mentoring businesses have positioned us well and have allowed us to benefit greatly from the robust and favorable market dynamics, we have experienced this fiscal year.
We continue to be proactive in implementing our strategies to further grow the a mark business and capitalize on market opportunities.
This is demonstrated not only by our expanded direct to consumer segment with our acquisition of JM Boeing in March and our recently announced increased investment in Pinehurst points, but also through our improved access to precious metal.
And finished product supply through our now full ownership of silver town Mint and our recent increased ownership of the Sunshine Mint.
Over the last several years, our business has transformed diversified and become even more vertically integrated.
Following us through enhanced product offerings to our customers and outperform our competition.
Now.
I will turn the call over to our CFO Kathleen Simpson Taylor to walk you through our financials in more detail.
And then a mark President Thor Juergen will discuss discuss our kpis.
And finally, Michael Wittmeyer CEO of Dzhambul, Ian will provide an update on our direct to consumer segment.
After all of that I will provide a further update on our business growth and strategy and take your questions Kathleen.
Thank you, Greg and good afternoon, everyone. Our revenues for fiscal Q4, 2021 increased 31% to 2.18 billion from $7.0 billion in Q4 of last year for the full fiscal year.
Our revenue increased 39% to 761 billion from $51.0 billion last fiscal year. The increase for both Q4 and the full year was primarily due to revenue from J M. D. Combined with an increase in the total amount of gold and silver ounces sold and higher selling price.
<unk> of Goldman Silver, which was partially offset by lower for retail.
J M Dias revenues for the post acquisition period totaled $674.0 million, representing 9% about full year revenue.
Gross profit for fiscal Q4, 2021 increased 211% to $88.0 million or 4% of revenue from $28 million or 168% of revenue in Q4 of last year.
For the full fiscal year gross profit increased 214% to $212.0 million or $2, 76% of revenue down $67 million or 123% of revenue in the prior fiscal year.
The increase in gross profit was primarily due to J M D, which contributed 22% of the total gross profit for the full fiscal year combined with higher gross profit from the wholesale sales and ancillary services segment and also goldmine.
SG&A expenses for fiscal Q4, 2021 increased 144% to 25 million from $12.0 million in Q4 of last year.
The increase was primarily due to $20.0 million of expenses incurred by J M D of which $14.0 million is attributable to amortization expense.
And overall increases in consulting costs.
<unk> 5 million compensation expense of Europe, $3 million and insurance costs zero point $7 million.
For the full fiscal year, SG&A expenses increased 60% to $66.0 million from $44.0 million in fiscal 2020.
The increase for the full fiscal year was primarily due to $19.0 million of expenses incurred by J M D.
<unk> $15.0 million of amortization expense combined with acquisition cost of $8.0 million associated with the acquisition of J M D.
Increased compensation expense, including performance based accruals at $6.0 million and higher insurance costs of one 4 million.
Interest income for fiscal Q4, 2021 increased 60% to $7.0 million from $6.0 million in Q4 of last year. The increase in interest income was primarily due to higher interest income earned from our secured lending segment due to higher average monthly secured loan.
Valences outstanding as compared to Q4 of fiscal 2020.
And also higher other finance product income for.
For the full fiscal year interest income decreased 13% to $23.0 million from $23.0 million in fiscal 2020.
The decrease in interest income was primarily due to lower interest income earned by our secured lending segment due to lower average monthly secured loan balances outstanding as compared to the prior fiscal year. This was partially offset by higher other finance product income.
Interest expense for fiscal Q4, 2021 increased 45% to $7.0 million from $9.0 million in Q4 of last fiscal year. The increase in interest expense was primarily due to higher interest expense associated with a higher usage of our trading credit facility.
Product financing arrangements and liabilities on borrowed metals and also increases in loan servicing fees related to the higher average secured loan balances as compared to Q4 of fiscal 2020.
For the full fiscal year interest expense increased 5% to $28.0 million from $27.0 million in fiscal 2020.
The full year increase in interest expense was primarily driven by higher interest expense associated with product financing arrangements.
Interest from liabilities on borrowed metals and this was partially offset by a reduction in loan servicing fees and less interest expense related to the company's trading credit facility.
Net income attributable to the company for the fourth quarter of fiscal 2021 totaled 51.0 million or $32.0 per diluted share, which was a significant improvement from net income attributable to the company of $25.0 million or $51.0 per diluted.
Sure in Q4 of last year, our diluted EPS for the quarter is based on the weighted average shares outstanding during the quarter, which totaled 11.9 million shares this was compared with 7.2 million and.
Weighted average shares outstanding during the fourth quarter of last year.
Adjusted net income before provision for income taxes, a non-GAAP financial measure for Q4 fiscal 2021 totaled $75.0 million compared with $23 million for Q4 fiscal 2020.
Our net income attributable to the company totaled $165.0 million or 17.79 cents $96.0 per diluted share for fiscal year 2021, compared to net income attributable to the company of 30 million 30.
<unk> 5 million or $4.31 per diluted share for fiscal year 2020.
Our diluted EPS for the fiscal year is based on the weighted average shares outstanding during the fiscal year, which totaled 9 million shares and its not based on the 11.2 million shares outstanding at the end of the fiscal year.
Our net income attributable to the company for fiscal year 2021 includes a $29.0 million remeasurement gain in connection with the JMP acquisition, excluding the Remeasurement gain net income attributable to the company for fiscal year 2021 totaled $133 three.
Yes.
Adjusted net income before provision for income taxes, a non-GAAP financial measure for fiscal 2021 totaled $1 $88.0 million compared with $48.0 million for fiscal 2020.
Now turning to our balance sheet at fiscal year end, we had $105.0 million of cash compared to $55.0 million at the end of the prior year.
Our tangible net worth at the end of the fiscal year 2021 was $173.0 million up from 91.0 million at the end of fiscal year 2020.
I'm also pleased to announce that our board of directors approved a nonrecurring special dividend of $2 per common share. This special dividend will be paid on or about September 24, 2021 to stockholders of record as of September 20th 2021.
That completes my financial summary, and now I'll turn the call over to Thor, who will provide an update on our key performance metrics Thor.
Thank you Kathleen.
Looking to our key operational metrics for the fiscal fourth quarter and fiscal full year of 2021, we sold 772000 ounces of gold in Q4, which was an increase of 15% from Q4 of last year and consistent with the prior quarter.
For the full fiscal year, we sold $9.0 million ounces of gold, which was up 26% for fiscal 2020.
We sold $42.0 million ounces of silver in Q4 fiscal 2021, which was up 20% from Q4 of last year and up 8% from last quarter for the full fiscal year, we sold $117.0 million ounces of silver, which was up 26% from fiscal 2020.
Wholesale trading ticket volume, our second key metric, which represents the total number of profit orders processed about 30 days decreased 26% to 33335 tickets.
Third quarter and increased 23% from Q4 of last year.
For the whole fiscal year wholesale trading ticket volume increased 1% to 143438 tickets compared to fiscal 2020. It is worth noting that average order size per ticket increased 33% over the same year ago period, driving an increase in overall revenue.
Key metrics is inventory turnover, which is a measure of how quickly inventory has moved during the period for the fourth quarter, our inventory turnover ratio was $4, one which is up 11% from $3 seven in the prior quarter, but was down 9% from four five in Q4 of last year.
For fiscal year, our inventory turnover ratio was 19.0, which was up 8% from $17 six in fiscal 2020.
And finally, the number of secured loans at the end of June totaled 1881, an increase of 20% from the end of the March from the end of March an increase of 162% from June 32020, the dollar value of our loan portfolio at the end of June totaled 113.0 million, which is up <unk>.
12% from the March and up 77% from June 32020, typically the number of loans increases during periods of precious metals prices rising Persian Gulf pricing and decreases during periods of declining precious metals prices.
That concludes my prepared remarks, I will now turn it over to Michael who will provide us with an update on the direct to consumer segment Michael.
Thank you Thor now focusing on our retail business, our direct to consumer segment delivered strong results for the fourth quarter greatly benefiting from the first full quarter with J M. B and the continued profitable results at goldmine.
Kathleen highlighted J M. B contributed 22% to <unk> gross profit for the full fiscal year 2021.
Overall retail market strength, along with the J M. B acquisition accelerated the growth in our DTC customer base with the addition of 84300 new customers during the fiscal year of which 80500 were generated by JMP during the post acquisition period.
Active DTC customers increased to 167700 at the end of fiscal year 'twenty. One from 6200 at the end of fiscal year 'twenty.
Total customers increased to $8.0 million at the end of fiscal year 'twenty. One from 158000 at the end of fiscal year 'twenty $6.0 million of the total customers at the end of fiscal year 'twenty one originated from JMP and 163000 were from gold bar.
DTC ticket volume grew to almost 332000 in fiscal year 'twenty, one compared with approximately 18500 in fiscal year 'twenty.
The integration of JMP into a March has gone very smoothly.
As plans JMP has now successfully leveraging the enhanced access to the <unk> supply chain and product portfolio.
A significant advantage in the precious metals e-commerce landscape.
We continue to see opportunities to expand our DTC footprint as demonstrated by our recent increased investment in Pinehurst, where we now hold a 49% ownership position.
Hey, Mark has enjoyed a highly synergistic relationship with Pinehurst since its initial 10% investment in 2019.
Pinehurst as a leading precious metals broker and one of the nation's largest e-commerce retailers of modern numismatic certified coins on ebay was in excess of 150000 ebay customers on boarded over the last 36 months.
We will continue to evaluate opportunistic investments within the DTC segment.
Typically targeting value add brands that can provide a mark with a broader geographic or customer footprint.
That concludes my update on the direct to consumer segment I'll now turn it over to Greg Greg.
Greg are you there.
Thank you Michael.
In addition to delivering outstanding financial results for the fiscal year, we have made significant progress executing our strategic initiatives and growth plan framework. Our successful execution of this plan has further <unk> position as a leading full service provider to the precious metals market and fully integrated precious metals platform.
The strategic highlights for the year was of course, our acquisition of <unk> and just the six months since the acquisition, we have realized significant momentum on our post acquisition plans and integration activities.
J M continues to outperform and has exceeded our expectations. We are looking forward to working closer with pinehurst coins after increasing our related investment with them last month, and adding them to our direct to consumer portfolio.
<unk> had its most profitable year since the <unk> acquisition.
Which also contributed to the success of the direct to consumer segment during the fiscal year.
We continue to employ marketing programs and initiatives, which result in customer conversion and drive profitability.
As mentioned earlier on the call we continued to benefit from our full ownership of the silver town Mint, which has provided us with better price stability as well as access to silver products during periods of supply constraints.
Our capital investment in two plant must tunnels at the mint have improved product quality and increased available capacity to over $800000 additional.
800000 additional ounces per week.
Our increased investment in Sunshine Mint during the fourth quarter has also improved our access to precious metal supply and allows us to work even closer with our long standing partner.
We believe a mark now has the two best private minting properties in North America.
Turning to our logistics operation fiscal 2021 was a record year for AAM Global logistics, we shipped over $2.0 million packages, representing an increase of nearly 60% from fiscal 2020.
We continue to evaluate growth opportunities for our facilities.
At MGM.
Our secured lending segment was profitable in the fourth quarter and our loan portfolio has increased and rebounded from the lower fiscal 2020 year end balances.
Which resulted from the temporary drop in precious metal prices, we saw in March 2020.
As Tom mentioned, we have over 800 loans outstanding as of June 32021.
Looking ahead we.
We are very optimistic and remain confident that our favorable competitive position vertically integrated platform.
Expanding customer increased expanded.
Expanded customer base and diversified business model will continue to help us capitalize on near term opportunities and realize continued growth and profitability over the long term.
Operator.
Thank you Sir at this time, we'll be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad. It confirmation tone will indicate your line is in the question queue. You May press star to move your question from the queue for participants using speaker equipment.
It may be necessary for you to pick up your handset before pressing the star keys, one moment, while we poll for questions. Our first question comes from the line of Thomas Forte with D. A Davidson you May proceed with your question.
Great. Thank you and congratulations Greg and team on an excellent quarter, an excellent fiscal year. So one question one follow up and then I might get back in queue for additional ones. So.
Greg I anticipate that getting questions from investors tomorrow on your capital allocation decisions, how should we think about when you decide to make minority interests as you.
The increase in Providence, and then how should we think about one time dividends as you announced another one time dividend this quarter.
I think we follow the same decision, making tree that we always have.
But as it relates to acquisitions and I think you were referring to the Pinehurst acquisition, our increased ownership that we announced.
I think that that was.
A timing situation and I think a lot of Ara.
Minority initial investments in companies.
Companies that we feel confident about.
About where they're going I think it has a lot to do with timing a little less to do with capital allocation.
I think that.
Okay.
We tried to take a look at all of our.
<unk> whether it be.
An acquisition, whether it be a dividend, whether whether it'd be the need for increased capital because of inventory or or opportunistic purchases that we can make and.
And we try to look out over the near term in the short term and then we make a decision.
I think that.
In this case, we got to the end of the fiscal year end.
We looked at what we generated just like we did last year.
And we looked at what we thought.
We had on the on the horizon.
Opportunities for capital and we made a decision that we thought.
The $2.
Special dividend was appropriate.
I think you know us.
Everybody knows by now that's followed the company.
We deal in a very volatile market.
And our capital needs go up and down on an hourly basis or daily basis, and that's just the world We live in so I.
I think we tried to be very conservative and careful.
We had a great opportunity earlier in the year.
To raise a little capital.
For the <unk> acquisition.
Not knowing at that time.
You know how the next quarter or two was going to perform and.
And we made that we thought was the right decision at the time.
Looking at our results for this fiscal year, obviously it was outstanding we felt that we had.
A little bit of excess capital that we could return to shareholders.
And that's what we decided to do.
But I think as it relates to acquisitions.
The company has.
Always has three or four things, we're looking at and.
In this quarter.
We felt our best opportunities were.
With.
You know the increased ownership in Sunshine.
As well as.
<unk>.
The willingness and the.
Enthusiasm of Pinehurst to increase our.
Ownership with with them.
I think it's interesting that pinehurst.
Hum.
Really.
Their enthusiasm for getting more involved with a mark.
It was not only selfish selfish on pioneer as part that they felt that their business is going to grow faster and do better you know being on the a mark team.
But also.
His confidence in what we're doing overall at a mark and as you know.
Requested enthusiasm to take some stock can be a part of a mark.
Just a great great combination and a great opportunity for us and we moved we moved very quickly on that opportunity when it was available to us.
Great and then for my follow up question it might be too much to say that one of the unexpected benefits of jam bullion has been how you've improved marketing efforts, maybe search engine optimization for goldmine.
And then I also wanted to see if you can give me an update on your current thoughts on you've talked before about doing a digital gold offering.
Yep.
As it relates to JM and their willingness and helpfulness as it relates to the whole company I can't say enough for Michael and his team and everybody and how how they've just integrated into our culture and into what a mark is trying to achieve and I haven't.
You know obviously, there's only so many hours in the day and Michael and I talk all the time about how to best allocate that time.
But but certainly J M billions willingness to help gold line or or.
Any other needs we have from them as it relates to some of their expertise as they have been very generous with their time.
And they have been.
Very fair and.
Very much a team player as it relates to.
Prioritizing the use of their tech team and what their tech team can accomplish we're just yeah.
We're very happy to have them onboard yet as it relates to the digital currency Michael.
Michael do you want to take this and give Tom just a little update on on where we're at on on our card new.
Our new product.
Yes of course.
So we're making significant progress on this.
I don't know that we're ready to get into all the details on this call today, but we're.
There are several several months into this project now and it's it's really the top priority on my plate.
We're spending a lot of my time personally on this project and I think we're very enthusiastic about what we're going to come out with and.
You'll hear more about soon for sure.
Wonderful alright, so I'll get back in the queue I have some more questions.
Great.
As a reminder, if you would like to ask a question. Please press star one on your telephone keypad.
While we pull for questions.
Our next question comes from the line of Andrew Scott with Roth Capital Partners. You May proceed with your question.
Good afternoon.
Thanks for taking my questions I feel like a broken record, but I also want to congratulate you on another strong quarter.
So my first question is focused on the direct to consumer offerings guidance spoke in the past that the synergies you can realize with the services that <unk> provides but now that you have multiple channels direct to consumer channels are there any other synergies that you guys might be able to realize.
Across the different DTC platforms may be be it consumer data or pushing through certain inventory through certain channels.
Any comments there would be great.
Sure.
I mean.
One of the greatest things about having these retail facing businesses that I get the opportunity to to really see trends quickly and to try to assess trends as it relates to the different customer demographics and the different types of customers.
I mean, I think that's a.
That is a big synergy that you can't really quantify but I think that it certainly helps.
Just us to better understand and forecast how the market is performing.
I mean I think.
We have seen.
Over the last six months, we've seen <unk>.
Different indicate different indicators coming from different customer bases.
I think in the last few weeks gold line.
Has been indicating to us that their customer base has been.
Yeah.
Reenergized and has been very active particularly in the last.
30 days.
And I think that we've seen again, we had a little bit of a slowdown.
In July.
That has picked back up in August and September.
And again I think we see some we see some data and some trends that are very good for us I think.
As it relates to sharing of data.
I don't think we've formalized anything there yet.
But certainly I'm communicating with the guys at JM and what they're seeing.
And being able to test products and see how products work, whether it be with.
The entire JM base or with a.
Just a slice of the JM base.
I think it is helping a market as a whole to understand better what a consumer is looking for and what they're demanding.
And certainly.
As it relates to.
Getting getting all of our DTC companies to row in the same direction and I think the ability to.
To work together.
Offer.
The same product or a similar product.
And then just have that power to move through larger quantities of products and just have the confidence and comfort level that we can do it.
He has really been very helpful to just managing the overall business, whether it be our traders or Thor in the banking.
Side of the business and.
And cash flow and management its theres just been just a number of things that that we found to be you know.
Just very useful in managing the business.
Great. Thank you very much quick follow up here and I apologize if I missed this in the opening remarks.
But can you talk to the breakout in ticket volumes between the wholesale core business and.
Direct to consumer so we can understand.
I understand that the trends in both businesses.
Yes, we haven't talked about that.
I'd say that that information is really well articulated in our K.
And I think if you go into the DTC segment in our K I would say that that's probably where you'll find the exact numbers.
I hesitate a little bit on some of these user and customer numbers and breaking them down I see things more as a whole and I just don't want to Miss step and give you information that turns out to be different so that those specific numbers I would point to RK.
Great well do and just last quick one for me before I hop into queue.
Backing on your last earnings call you guys talked about getting the new equipment at silver town up and running close to Max capacity hopefully by June or July.
So can you guys just provide an update.
On how that's gone over the quarter, yes.
Yeah, we've talked about that a little bit earlier on the opening remarks, both of our Flameless tunnels are functioning and working at silver town.
At silver town.
I've just done a great job.
Brent Mccormack, who really has the operations guy there and Jamie Meadows.
Got to use these new machines online and.
And we've been able since since probably the middle of July we've been able to add 800000 ounces of silver product a week coming out of there. So.
It's Ben.
It's been great I'm, sorry, 800000 ounces a month so it's been.
It's been great.
And J M has a number of these products coming out of the Flameless tunnel on their site.
And it's.
We have a great product 100 ounce Pony var, which is getting made in the Flameless tunnel, we have a 10 ounce Pony bar that's on the JM site.
And they've been very well received from the retail customers. So couldnt be happier with the quick installation.
It's a quite a job to get all of the ingredients just right in these machines and the guys at silver jump Mint have done a great job.
Awesome. Thanks, again for the color and I'll hop back in the queue.
Our next question comes from the line of Richard Grillage with <unk> Capital Advisors. You May proceed with your question.
Thank you.
So regarding the digital currency initiatives I'm, a little scratching my head a little bit is this.
Likely to take the form of a.
Gold or precious metals backed.
Digital currency.
Michael do you want to try to explain a little better what we're what our first stages are on this product and what we're doing.
Sure.
So it's it's.
Effectively going to allow customers to invest in digital representation in gold and silver.
We're looking at a variety of products, we'll be able to offer.
And I think.
I don't want to overstep hearing.
Speak too much on SBA, that's essentially yet.
Very slick digital platform that will allow people to do this in a very well.
Low cost and convenient fashion.
And just something we're very excited about putting out.
Well thanks Adam.
I'm, sorry, well that involve those peoples.
We would ship.
Or is it going to be simply a derivative.
No it well the idea of the product is that whether it's on the phone or on the desktop.
That customers can take advantage of small.
Purchases.
Gold will be segregated and they'll own a piece of a bar.
And we also will.
Match that.
With what we're looking at now is.
Some quarterly opportunities for customers that own.
A piece of a bar to convert those holdings into physical metal when they.
When they when they want to do that and it allows them to save on shipping. It allows them also to to move the physical.
Small products physical products into a storage account if they choose to but.
But it's kind of an opportunity for some.
Alex accumulation at whatever fraction of an ounce they might want to do in gold or 63 ounces of silver and then the.
The application the App and the presentation.
On a phone will allow somebody to.
You know really see up to the minute what the value of that product is and how many ounces they own.
It will allow us to be in communication with the customer.
And offer them opportunities, if they'd like to convert into physical.
It allows somebody to buy multiple allowances over months and months and then have just one single conversion and shipping opportunity to take possession or like I said, they could they could store it in.
Tds, which is our storage business.
And then we believe that this will be the foundation of other products, we can add.
We've we've talked about.
The ability to create a credit card off of this using your holdings.
We're in the very initial stages of that.
We just we think it's going to be.
Just a great opportunity to to give consumers a different option.
To buying physical and having it shipped to their house the next day.
Critical to that is going to be your reputation.
In terms of the storage etcetera, and I think that's a great opportunity because very few people have such a long history you've had yep.
And we I mean, we have a great track record I mean Tds has you know.
Hum.
Hundreds of millions of dollars of product currently that we're storing for customers.
And so we do we do have a built in logistics business, which you know about as well as a storage business, which has been storing metal for customers. We also have at AMG, we haven't talked about it a lot, but we're an authorized IRR.
We're a depository for a number of the IRR trustees. So we've we've had a great reputation for protecting and managing.
Customers assets. So I think it's you know.
Along with the other custody work we do in the storage. We do this is just a great opportunity for us to expand.
Great. Thank you for your work.
Thank you.
As a reminder, if you would like to ask a question. Please press star one on your telephone keypad.
Moment, while we poll for questions.
Our next question comes from the line of Thomas Forte with D. A Davidson you May proceed with your question.
Three quick follow ups, Greg I don't know if it's a better way to phrase this is but with the integration of JM bullion shall we think of it as higher lows for your earnings per share in periods of low interest income.
Precious metals.
Should we think of it as less volatility in your earnings per share when we compare maybe Europe performance in one quarter as peak interest in performance another quarter with moderate interest and then two more after that one.
Yeah.
I think that.
We are now 90 days or 120 days away from the last time, we talked to you guys and I think.
We are.
As you can tell from the tone of our voice and what Michael had to say and everything I think we're super optimistic that a very large transaction in a very.
Something new to a mark has gone as well as it has and I think part of that is.
Our increased comfort level that yes, I believe that that you know.
The lows that we saw two or three years ago or not.
Indicative of what this company would do in the exact same environment now I don't know if you can ever replicate the exact same environment from three years ago I doubt it but I do believe that our loans will be higher than our highest will be higher.
And to answer your question.
I mean anytime that.
We are spreading out.
Product to the retail investor across.
And a half or 2 million users or more I believe that is going to.
Create.
Less volatility in our earnings and it's going to help us a little bit better in forecasting.
How we how we look at things going forward, which is just a luxury.
We didn't have a few years ago.
We were much more one dimensional five years ago today were very multidimensional.
I think that as I said before I highlighted some of the data that we're getting.
I, just believe that whether it be inventory management.
Or the ability to create product.
Overnight.
And address consumers' needs immediately before they go someplace else.
Is just huge I mean I was on our call today, we have now implemented.
Twice, a week meetings with J M <unk> and aim.
Hey, Mark and some others.
As it relates to inventory and product management and.
In development.
And we've talked about products today.
Our call this morning.
We believe a mark will have on their webs I mean, Cambodian will have on their website for sale within 10 days.
That's just something that.
Hey, Mark never had before.
We created products, but it could be months before we knew whether or not those products, we're going to be successful or not.
And a lot of it was just a marketing tuition without a lot of data.
J M.
Pinehurst and gold line really gives us the opportunity to do tests and to test enthusiasm with customers.
Before we run off and make.
300000 units of something.
So that's that.
Tech team at JM and their ability to do tests and help us understand.
What they think the product will sell out at her or what how many they need.
It's just all new to us so to answer your question, yes, and yes.
Excellent alright, so the second of three can you give us your current thoughts on international expansion for your E Commerce efforts.
I can tell you that.
We have a couple of things that we are.
Yeah.
Past the point of being curious and we're looking at some international opportunities as we speak.
And it's not a surprise we talked about this back in March and February when we were doing a road show.
And I think that.
You know certainly the combination of a mark and Jay Amboy in Pinehurst and gold line and the other companies that we have minority interest in <unk>.
People are responding very positively to.
Wanting to kind of get on get on the a mark train and so we are seeing opportunities. We're welcoming any inquiries, where I think that the team that I have here with Michael and others at a mark and quickly assessing.
Opportunities that look good to us that we think have.
Not only long term.
Financial benefits, but also create human resources, which is the first thing we really look at is making sure that the human element of any acquisition fits with the AMR culture, and what we're trying to do here, but.
But I think our ability to assess quickly.
For the team that's on those projects to work quickly.
<unk>.
We're very enthusiastic about that and yes, we are looking at a couple of international opportunities.
Great and then I saved probably the most important for last.
I could ask the question in a word but I'll instead I'll go with a phrase hogs.
How should we think about inflation and the impact it's having on your business.
No.
I've said, it a little bit lost.
Last call.
I mean, I think I am only.
More committed to this inflation cycle not being transitory.
I was talking to somebody today that.
Import product from China.
And they were telling me that.
They had 400 containers a product stuck in China.
They had to pay four times as much to store it.
And you know a.
A year in Africa, they were paying $8000 to ship a container from China and today, they are paying $32000 of container.
And they've had to raise raise prices on their product and theres been no pushback from the consumer so.
That is pretty strong.
I also spoke to somebody else, who who told me.
They were on the board of the bank back in 19, 79% to 1980 and the fed came to them and said this inflation is only transitory use the same exact words.
And then you know.
Overnight raised prior to 200 basis points so I.
My Crystal ball is not 100%.
I do.
By this.
Inflation is just going to go away next quarter.
Okay I saw I saw a chart today that said used cars are up 42, the price of used cars are up 42% since the first of the year.
And.
Out of this list of 10 things I think that.
The lowest anything went up was 10%.
This list of 10 things I buy all of them. So.
It was 10% to 42% in nine months.
I don't know what that exactly means but it sounds like inflation to make.
Me too alright, Thank you Greg.
Our next question comes from the line of Andrew Scott with Roth Capital Partners. You May proceed with your question.
Last one for me so for a while.
The lending business, when you're talking about getting the loan portfolio back over $100 million, which we hit in March.
We had another good quarter of growth.
In June can you guys just talk to kind of where you see that business going from here on in particular with the whole new pool of consumer and so you guys can market too with the.
In addition of gambling.
Yeah.
Looking at a number of finance options.
For customers at JM, we've tested a few.
Yeah.
Kind of beta tests, we have done.
I think that.
Right now I would say that we're comfortable with the growth of our loan book and we're cautiously optimistic across a number of new initiatives, we've done from our lending business that we're seeing.
Good responses.
For whatever reason I would just say that that.
In the current.
Environment and the the current price of precious metals I would say that we are seeing a little slower growth than maybe we have seen in the past.
Golden Silver have been fairly stagnant.
For quite some time I mean, if you look absent a big drop we had a few weeks ago, where gold was down 100 Bucks on a Sunday night and silver was down the dollar I think on which those drops have now rebounded the drops were great for our business.
We had a great couple of weeks following that.
But.
Overall prices had been fairly range bound and we've still been being able to do quite well, but as it relates to the to the lending side.
I think that where we.
We're just not seeing quite as faster growth as maybe we saw a few years ago.
We've we're investigating a.
A couple of other opportunities, we think might be out there.
To assist our customers in purchasing more product.
So.
We're working on it.
And we are.
We're happy we did.
We did continue to be above $100 million.
I think we had.
Weak.
In the last couple of months, where we were up nearly $115 million in total loans. So that was that was a good number for us to.
Print and.
Other than that.
Pretty status quo in that business.
At this time. This concludes our question and answer session I would now like to turn this call back over to Mr. Roberts for closing remarks.
Thank you very much.
I'd like to thank all the shareholders for joining the call today.
Your interest and support is greatly appreciated.
Many thanks to all of our employees at a mark.
And their commitment and dedication to our success our success.
We look forward to keeping you apprised of <unk> progress.
And the next month or two so thank you all for joining us.
Yeah.
Before we conclude today's call I would like to provide <unk> safe Harbor statement that includes important cautions regarding forward looking statements made during this call.
During today's call there were forward looking statements made regarding future events.
Once that relate a much future plans objectives expectations performance events and the like are forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995, and the Securities Exchange Act of 1934, future events risks and uncertainties individually or in the <unk>.
Aggregate could cause actual results to differ materially from those expressed or implied in these statements.
That could cause actual results to differ include the following the failure to execute the companys growth strategy as planned greater than anticipated costs incurred to execute the strategy changes in the current domestic and international political climate increased competition for a much higher margin services, which could do.
Press pricing the failure of the company's business model to respond to changes in the market environment as anticipated general risks of doing business in the commodity markets and other business economic financial and governmental risks as described in the company's public filings with the Securities and Exchange Commission.
Sure believe estimate expect intend anticipate foresee plan.
And similar expressions and variations therefore identify certain of such forward looking statements, which speak only as of the date on which they were made additionally, any statements related to the future improved performance and estimates of revenues and earnings per share are forward looking statements.
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. Finally, I would like to remind everyone that a recording of today's call will be available for replay via a link in the investors section of the company's website. Thank you for joining us.
Today for a Mark's earnings call you may disconnect your lines at this time.
Okay.
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