A-Mark Precious Metals Inc. Q3 2023 Earnings Call
Good afternoon, and welcome to the a mark precious metals conference call for the fiscal third quarter ended March 31st 20 twenty-three My name is Kelly and I will be your operator this afternoon.
Before this call a mark issued its results for the fiscal third quarter 2023 in a press release, which is available in the Investor Relations section of the company's website at Www Dot a mark Dot Com you.
And you can find the link in the Investor Relations section at the top of the homepage.
Joining us today for today's call are a marks CEO , Greg Roberts, President Thor <unk> and CFO Kathleen Simpson Taylor 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 would 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 Kelly and good afternoon, everyone and thanks for joining us on our call today as we reported in our earnings release, just a few minutes ago. The third quarter marked another period of solid financial performance for a mark highlighted by $35 9 million of net income and diluted EPS of $1 46, you'll be in a quarterly return.
On the equity of 6% these.
These results further demonstrate the effectiveness of our fully integrated platform, particularly.
Particularly in times of macroeconomic uncertainty and increased market volatility our.
Our integrated capabilities allow us to ops optimized access to inventory, providing us with a consistent source of supply during periods of increased demand, which contributed to quarter over quarter increases of 19% in revenue and 18% in gross profit during the third quarter, our direct to consumer segment continued.
To contribute significantly and impressively to our overall results generating 57% of our consolidated gross profit for the quarter driven by 124 basis point increase in the segment's gross margin percentage compared to the third quarter of fiscal 2022.
We remain active in our pursuit of investment opportunities that align with our strategic strategic vision and to expand our geographic footprint.
Our minting business remains a consistent contributor to our overall performance with production output currently near record levels.
<unk> is consistently producing over 1 million ounces per week.
During the third quarter Silver town man achieved ISO certification in recognition of the facility's high standards for quality management.
The certification not only refers reaffirms the mints longstanding reputation as a leading manufacturer of silver bullion products, but also allows us products to be accepted into individual retirement accounts for iras for.
Further expanding <unk> strong customer base, Jamie Meadows, and his team have worked tirelessly to achieve this and we congratulate them.
Finally, I am pleased to report that the company purchased 335735 shares of its common stock during the quarter for an aggregate value of $9 8 million.
We view our share repurchase program as an attractive investment opportunity for the company and another way to deliver value to our shareholders.
Now I'll turn it over to our CFO Kathleen Simpson Taylor to walk you through our financials in more detail then our president Thor <unk> will discuss our key operating metrics. Afterwards, I will provide a further update on our business and growth strategy.
And take questions.
Please take it away.
Thank you, Greg and good afternoon, everyone.
Our revenues for fiscal Q3, 2023 increased 10% to $2 3 billion from $2 1 billion in Q3 of last year.
Excluding an increase of $312 5 million of forward sales revenue decreased $104 5 million or 6%, which was due to a decrease in gold ounces sold and lower average selling prices of silver partially.
Set by an increase in silver ounces sold and higher average selling prices of gold.
The D. T. C segment contributed 23% of the consolidated revenue in fiscal Q3, 2023, and 28% of the consolidated revenue in Q3 of last year.
Revenue contributed by JM <unk> JMP represented 20% of the consolidated revenues for fiscal Q3 of 2023 compared to 26% in Q3 of last year.
For the nine months period, our revenues increased 2% to $6 2 billion from $6 1 billion in the same year ago period.
Excluding an increase of $596 1 million of forward sales, our revenues decreased $498 3 million or 10%, which was due to a decrease in gold ounces sold and lower average selling prices of gold and silver partially offset by an increase.
<unk> and silver ounces sold.
The D T C segment contributed 23% and 27% of the consolidated revenue for the nine months ended March 31, 2023, and 2022, respectively.
Revenue contributed by J N V represented 21% of the consolidated revenues for the nine months ended March 31, 2023 compared to 25% in the same year ago period.
Gross profit for fiscal Q3, 2023 increased 5% to $75 5 million or 326% of revenue from $72 1 million or 34, 2% of revenue in Q3 of last year.
Excluding the $312 5 million increase in forward sales gross margin percentage increased to four 5% of revenue from 4.0 a percent of revenue.
Last year.
The overall increase in gross profit was due to higher gross profits earned from both the wholesale sales and ancillary services and direct to consumer segment.
Gross profit contributed by our DTC segment represented 57% of the consolidated gross profit in fiscal Q3, 2023 compared to 58% in the same year ago period.
Gross profit contributed by J N D represented 47% of the consolidated gross profit in fiscal Q3, 2023 compared to 48% in Q3 of last year.
For the nine months period gross profit increased 11%.
$216 1 million or three 5% of revenue from 194.0 million or three 2% of revenue in the same year ago period.
Excluding the $5 $96 1 million increase in forward sales gross margin percentage increased to four 7% of revenue from three 8%.
The gross profit increase was due to higher gross profits earned from both the wholesale sales and ancillary services and DTC segment.
Gross profit contributed by the DTC segment represented 56% of the consolidated gross profit in both of the nine month periods ended March 31, 2023, and 2022 respectively.
Gross profit contributed by J M. D represented 48% and 46% of consolidated gross profit for the nine months ended March 31, 2023, and 2022, respectively.
SG&A expenses for fiscal Q3, 2023 increased 16% to $23 8 million from $25 million in Q3 of last year.
The increase was primarily due to an increase in compensation expense.
Including performance based accruals of $2.6 million.
Higher advertising cost of zero point $5 million, an increase in computer related expenses of 0.3 million and an increase in insurance costs zero point $2 million.
Partially offset by lower consulting and professional fees, a zero or <unk> 5 million.
For the nine months period, SG&A expenses increased 12% to $62 4 million from $55 9 million in the same year ago period.
The increase was primarily due to an increase in compensation expense, including performance based accruals of $5 1 million higher advertising costs of $2 4 million an increase in computer related expenses of <unk> 8 million and an increase in insurance costs and zero point.
4 million, partially offset by lower consulting and professional fees of $2 5 million.
Depreciation and amortization expense for fiscal Q3, 2023 decreased 56% to $3 3 million from $7 5 million in Q3 of last year.
The decrease was primarily due to a $4 3 million dollar decrease in amortization of acquired intangibles related to J M D.
For the nine months period, depreciation and amortization expense decreased 59% to $9 8 million from $24 1 million in the same year ago period. The decrease was primarily due to a $14 4 million decrease in amortization of acquired.
<unk> related to J M D.
Interest income for fiscal Q3, 2023 increased 14% to $6 1 million from $5 3 million in Q3 of last year.
The aggregate increase in interest income was primarily due to higher other finance product income.
Partially offset by lower interest income earned by our secured lender lending segment.
For the nine month period interest income increased 0.3% to $16 2 million from $16 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, partially offset by lower interest income earned by our secured lending segment.
Interest expense for fiscal Q3, 2023 increased 70% to $9 2 million from $5 4 million in Q3 of last year.
The increase in interest expense was primarily driven by $3 1 million associated with our trading credit facility and the AMC F notes, including amortization of debt issuance costs.
And 0.9 million related to product financing arrangements, partially offset by a decrease of <unk> 3 million of loan servicing fees.
For the nine months period interest expense increased 39% to $22 6 million from $16 3 million in the same year ago period.
The increase was primarily driven by $4 9 million associated with our trading credit facility and the M. C F notes, including amortization of debt issuance costs.
One 8 million related to product financing arrangements.
And <unk> 4 million and interest associated with liabilities on borrowed metals.
Partially offset by a decrease of zero point $7 million of loan servicing fees.
Earnings losses from equity method investments in Q3, 2023 decreased 104% to a loss of <unk> 1 million compared to earnings of $1 6 million in the same year ago quarter.
The net decrease was primarily due to lower earnings of our equity method investees.
For the nine months period earnings from equity method investments increased 69% to $7 3 million from $4 3 million in the same year ago period.
The net increase of 3 million was primarily due to our additional 40% ownership interest in silver Gold Bull, which was acquired in June 2022.
Net income attributable to the company for the third quarter of fiscal 2023 totaled $35 9 million or $1.46 per diluted share.
This compares to net income attributable to the company of $37 4 million or $1 53 per diluted share in Q3 of last year.
Adjusted for the effect of the two for one stock split in the form of a stock dividend in June 2022.
For the nine months period net income attributable to the company totaled $114 5 million or $4 64 per diluted share, which compares to net income attributable to the company of $95 2 million or $3 92 per diluted share in the same year ago.
Period adjusted for the effect of the two for one stock split in the form of a stock dividend that occurred in June 2022.
Adjusted net income before provision for income taxes, a non-GAAP financial performance measure, which excludes acquisition expenses amortization and depreciation for Q3 fiscal 2023 totaled $49 2 million a decrease of 10%.
Compared to $54 3 million in the same year ago quarter.
Adjusted net income before provision for income taxes for the nine month period totaled $156 9 million, a 9% increase from $144 4 million in the same year ago period.
EBITDA, a non-GAAP liquidity measure for Q3 fiscal 2023 totaled $52 3 million, a 2% decrease compared to $53 6 million in Q3 fiscal 2022.
EBITDA for the nine month period totaled $163 1 million, a 14% increase compared to $143 7 million in the same year ago period.
Now turning to our balance sheet at quarter end, we had $78 $1 million of cash compared to $37 8 million at the end of fiscal year 2022.
Our tangible net worth at the end of the quarter was $396 9 million up from $321 6 million at the end of the prior fiscal year.
Finally, as we announced in a prior press release Amer sport of directors reaffirmed its previously announced regular quarterly cash dividend policy of <unk> 20 per common share, which the company paid in April .
It is expected that the next quarterly dividend will be declared and paid in July 2023.
The declaration of regular cash dividends in the future, including the next quarter is subject to the determination each quarter by the board of directors based on a number of factors, including the company's financial performance avail.
Available cash resources.
Cash requirements and alternative uses of cash and applicable covenants.
That completes my financial summary, now I will turn the call over to Thor, who will provide an update on our key operating metrics Thor.
Thank you Kathleen looking at our key operating metrics for the third quarter of fiscal 2023, we sold 659000 ounces of gold in Q3 fiscal 2023, which was down 9% from Q3 of last year, but was up 17% from the previous quarter.
So the nine month period, we sold one 9 million ounces of gold, which was down 9% from the same year ago period.
We sold $36 9 million ounces of silver in Q3 fiscal 2023, which was up 7% from Q3 of last year, but was down 3% from last quarter.
The nine month period, we sold 111 million ounces of silver, which was up 17% from the same year ago period.
The number of new customers in our DTC segment, which is defined as the number of customers that are registered or set up a new account or made a purchase for the first time. During the period was 64700 in Q3 fiscal 2023, which is down 40% from Q3 of last year and was down 51% from last quarter.
It is important to note approximately 55% of the new customers in the previous quarter were attributable to the acquired customer lists of BG ASC in October of 2022.
For the nine month period, the number of new customers in our <unk> segment was 244900.
Which was up 35% from 182000, new customers in the same year ago period, approximately 30% of the new customers in the nine months routes were attributable to the acquired customer lists of BG ASC in October of 2022.
The number of total customers in our DTC segment at the end of the third quarter was approximately $2 3 million, which was a 15% increase from the prior year.
Year over year increase in total customers was primarily due to organic growth of our <unk> customer base as well as the acquired customer lists from BG ASC in October of 2022.
The DTC segment average order value, which represents the average dollar value of third party product orders exclude excluding accumulation program orders delivered to DTC segment customers. During Q3 fiscal 2023 was 2452, which was down $266 from Q3 fiscal.
2022 for the nine month period, our GTC average order value was $2394, which compares to 2458 from the same year ago period.
For the fiscal third quarter, our inventory turn ratio was 2.4, which was a 23% decrease from $3. One in Q3 of last year.
Im a period, our inventory turnover ratio was 7.0, which was 27% which was a 27% decrease from the nine month period of last year.
Finally, the number of secured loans at the end of March totaled 963.
Decrease of 8% from December 31, 2022 and <unk>.
A decrease of 64% from March 31, 2020 here the dollar value of our loan portfolio at the end of March 2023 totaled $96 9 million, which was down 5% from the end of December and down 34% from March 31 2022.
That concludes my prepared remarks, I'll now turn it over to Greg for closing remarks.
Thank you Soren Kathleen.
Exceptional market conditions that we experienced in the latter half of the third quarter Postbank crisis have continued keeping us optimistic about the outlook for a mark as we close out our fiscal year. Looking ahead, we continue to evaluate growth opportunities to further expand our customer base and our geographic footprint, we continue to invest in our minting biz.
<unk> and <unk> and are currently in the process of expanding the size of the facility and acquiring additional equipment to further increase minting capacity, we remain optimistic that our proven business model and integrated platform will allow us to realize growth and profitability over the long run.
This concludes my remarks.
Kelly.
Certainly the floor is now open for questions. If you have any questions or comments. Please press star one on your phone at this time.
So while posing your question. Please pickup your handset is listening on a speaker phone to provide optimum sound policy. Please hold just a moment, while we poll for questions.
Your first question is coming from Thomas Forte with D. A Davidson. Please pose your question your line is live.
Great. Thank you, so Gregg zaun, Kathleen and Steve Congrats on a fantastic quarter.
Had three questions, but they're pretty quick ones. So I'll go one at a time. So Greg can you give your current thoughts on capital allocation, including dividends, one time dividends and buying back shares you bought back shares in the quarter.
Sure.
I think that.
Post post this quarter.
We have added to our added to our capital added to our tangible net worth I think that the.
The company.
<unk> had a buyback plan in place.
We've had for a while we felt in this last quarter that there was an opportunity to deploy capital.
And a good way, we I think the average purchase price for the 335000 shares it was around $29 a share.
And so we saw that as an opportunity.
I think that we continue to have a good pipeline of.
Of acquisition targets.
In fact, it's fairly robust right now so we're very careful about how.
How we're going to deploy capital in that way.
Very comfortable with the quarterly dividend and as we have said before depending on where we are after the fiscal year, we usually take a close look at our special dividend.
Really depending on all the factors I just discussed and what we think is the proper amount returned to shareholders.
At that time so.
All of those things we look at regularly.
And.
Pretty comfortable right now that we're in a position to be able to make these decisions and.
Return return capital or do things that we think are good for shareholder value.
Alright, So you touched on this twice already so I don't know what more you can add but.
On the strategic M&A front, including international direct to consumer expansion is there anything you want to add above and beyond what you've already said so far.
Yeah.
Not really I mean, I think it's the same I think.
At the moment, we feel very good about the pipeline and we have a lot of opportunities that are that have developed.
No guarantee any of them will happen we're in the early stages on a few a few things we're looking at.
But but optimistic that we can continue to do acquisitions and do as we have done in the past are accretive for accretive for the company and the shareholders and that we feel we have a good formula and we're we're finding opportunities that we.
We believe we will be good for those whether that's in the DTC segment or the <unk> business or the wholesale trading business I think we're always we're always open to.
Acquisitions and opportunities that that makes sense like what we've done historically.
Alright, and then last one for me.
I think that investors may not fully understand.
This which is why I want to ask so for those investors who may not be familiar.
How does a sustained period of elevated gold prices impact your business.
I mean I've talked about this.
Almost every quarter for the last 10 years.
The price of gold is a little bit less important to our.
Activity level as.
As is the circumstances behind the price of gold.
What we were what we saw.
In in the month of March and the month of April was a panic flight to safety.
And the price of the metal really didn't matter, particularly in the last three weeks of March.
People just were taking money out of banks and people were buying safety.
That is a.
Behavior that our customers have not really.
Exhibited.
Yes.
The past short term.
It was a different feel it was a different.
Behavior by the client.
But there was a tremendous amount of volatility and a tremendous amount of of fear of missing out I believe.
At the end of last quarter, we're reporting on.
So the price was.
Very strong and near new highs and the and the sentiment of missing out.
It was evident for us.
Historically, we've talked about drops in price.
Really stimulated.
Interest.
We still expect to see those in the future, but the macro environment right now is such that there is a.
I believe that.
There are more crisis is to come there is more uncertainty there is more volatility.
The world seems to be.
Somewhat uneasy right now overall.
And that that particular sentiment in the environment that we're seeing.
Is favorable to us.
It's.
It's a good thing for us generally our slowest periods.
Happen when when the price of gold and silver is very tightly range bound over a long period of time.
And we are just arent seeing that right now.
Thank you Greg I really appreciate that.
Sure.
Your next question is coming from Lucas pipes with B Riley Securities. Please pose your question. Your line is live thank.
Thank you very much operator, good afternoon, everyone and Greg you touched on it just a bit.
In the prior question, but I wanted to ask a little bit more about the trends.
Since quarter end, you mentioned the uncertainty.
Around the debt ceiling right now that that's that that that's an issue a lot of folks are are seemingly concerned about so what have you seen in terms of volume customer acquisitions.
The margin on the on the product.
In the DTC segment would appreciate maybe some additional color on that and then.
How it how it may.
Yes.
Your outlook for the end of the year. Thank you very much.
Sure. It seems like I should be asking you that I saw your last report and it seemed like you were you were doing your homework and you were very.
<unk> to the the premiums and what has happened pretty.
Pretty much since the middle of March or the first week of March.
We really this quarter for us was really like night and day.
We we reported on our last quarter that <unk>.
<unk> and January had started off fairly slow for us and there were a number of factors to that a lot of it was was inventory availability and again there was some tight range bound periods February continued to be.
Fairly slow the week before the SBB crisis, we saw activity pick up.
And we saw just a little bit different behavior from our from our customers and then the last three weeks of March were for.
For all the reasons that you mentioned in the panic that seem to ensue.
It was extremely good for us in all aspects of the business perform just as we would expect them to and there was a new level of.
Just.
What seemed like fear and and just flight to quality.
But we hadn't seen compressed into such.
A short period of time before.
I attribute all of that work that everybody here has done to the success and being prepared so that we could take advantage of it we had plenty of inventory our DTC.
<unk> took full advantage of the increase in demand and.
We have seen the level of activity.
Continue and in the first part of this quarter April was was very active for us.
<unk>.
I believe the the overall crisis and the overall uncertainty in the market right now and just really kind of a fear of what what comes next it seems like.
Every Sunday afternoon, or every early Monday morning, there is a new event that the government is having to deal with.
And.
I think.
I think that that bodes well for our are part of the economy or are part of the world. So we feel like we're well positioned and we're seeing some good activity right now.
Thank you.
Also congratulations for being in a position to take advantage of that market opportunity.
Hi, I wanted to touch on the Mint expansion really quickly and I wonder if.
What sort of capital outlays the expansion requires what payback periods Youre looking at and then I saw that.
You tend to certification that qualifies.
The man I believe for I R E investments, how does that work and what's the market opportunity.
Thank you very much Greg.
Sure.
Sure.
As it relates to the expansion we've had an opportunity to.
Acquire some new equipment that will expand a certain product line that we are very active in right now it will require a small construction build and then we expect the machine or to be online probably in September .
The overall.
Capital expense for this small expansion is probably less than $2 million. So it's not a ton of money.
As it relates to return on investment.
It's going to depend a little bit on where the demand goes between now and in September October and November , but but before anywhere near the activity level, we have right now.
This new machine and this this expansion.
Could have a one to two year payback.
The market is.
Super active it could be quicker, but somewhere in the one to two year range. On this is what we would be shooting for.
As it.
Accomplishment.
Craig that's Super helpful. Really appreciate all the color and continued best of luck to you and your team.
The next question is coming from.
Pleasure question your line.
Good afternoon, and congrats on the strong quarter.
Kinda Goin' off of.
Some of the questions regarding the inventory build you guys had some help rebuild in the in the June quarter in March quarter, and you touched on kind of a.
June quarter here to liquidate some of inventory can you just kind of touch on you guys thought process behind your inventory management and when you may build or when you may liquidate depending on market conditions.
Well, the the demand really dictates, where our inventory will be and how fast the inventory turns.
We're currently.
Pretty booked up through the end of June .
For both Sunshine and Silvertowne products.
The Royal Canadian meant continues to be an allocation and we're not getting enough Royal Canadian meant product.
The U S men is continuing their allocation program.
And we are.
We're not getting enough of that product either so I guess you know.
The inventory buildup it depends a lot on the product a lot of times, you'll see our inventory buildup dollar wise it it might be 400 ounce gold bars or 1001 silver bars that are very low margin for us. So it really depends about the composition of the inventory and how much of it.
Is fabricated product that will sell through our DTC and how much of it is industrial sized bars that will sell to two manufacturers or or institutions. So it's not.
It's not just as easy as saying, what how we will build up or what we will build up in right.
Right now it would be very difficult for us to build up inventory because we're we're pretty much selling everything we can make.
And they're in the demand is is driving that.
As as I mentioned on the last call towards the end of November and December of 22 and through January and February we had a significant slowdown in demand and we were able to take that opportunity to build up inventory and have it live on the shelves and that that was.
It was opportunistic for us and it played out very well as as we saw a spike in demand the first and second week of March and the demand.
Has has continued through through the first the first part of this quarter.
But just going by what our inventory is and and and what it says on the balance sheet can be a little bit.
More complex than that it has a lot to do with the makeup and then strategically what the company decides.
We want to build up for some promotion or some opportunity in the future. So it's just a little more complicated than just what the line item is on the balance sheet.
Great. Thank you for the add detail there that was very helpful and well actually it's quick one for me. The act, it's nice to eat a healthy and you said 124 basis point expansion and direct to consumer can you just unpack that a little bit was that driven by spreads and the increased volumes at the end of the quarter or is there something <unk>.
There.
Though I think it was just our ability to be prepared and to be able to sell a lot of product when our competition and the DTC segment seemed to be a little less.
Prepared or didn't have as much inventory, so I think that when when when we're taking market share and were more taking customers.
And and there's less product available.
You know the.
The market is going to naturally.
Price product a little bit higher.
And and I think.
We were able to take advantage of that.
And it was.
It was good for us we not only saw some increase in margins. We saw we had the product to sell and I believe you know.
Our new customer accounts, and our our our ability to to find new customers and service those customers.
Was very good towards the end of the quarter and.
Is reflecting very strongly for the start of the new quarter.
Great I appreciate the feedback and na congrats again on the Strunk order.
Thank you.
Your next question.
Does your question.
Hey, Greg caffeine adore, thanks for taking the questions. Congrats on this wrong results.
Most of my questions have been answered here, but you wanted to follow up on the expansion of the facility until it down then you know you kind of covered a little bit regarding timing and everything but I wanted to get a sense of maybe the magnitude of the expansion or I guess the level of production volume that you're kind of seeking maybe match the demand.
I know your comment was we're.
Really selling everything we can make so I just wanted to get a sense of what.
The degree to the expansion there.
Right and there's two we've talked a little bit before that we've we've bought some property.
In Winchester, Indiana.
The Jamie Meadows was able to acquire for us and there's a longterm plan for a much bigger expansion, but but that's gonna take some time.
And I would say that.
Much more longterm as it relates to expansion.
As it relates to what I described earlier this was a specific set of machinery.
It had been an order.
With with another company and and the the machinery the company decided not to take delivery of the machinery and so we were able to jump in and get the slot.
Which is which is why we are going to be able to take delivery of this.
Set of machinery and hopefully in August or September and get online very quickly generally you need to plan on 12 to 18 months lead time for some of this equipment. So this was a real opportunity for for us too.
Jump to the front of the line and get something that we really think we need.
It's my understanding that that when we get this fully online in October .
Likely to add 500000, plus ounces a week.
500000 ounces plus a month of additional capacity for us So a very fair a very very nice jump and we're we're looking forward to getting it online for for products right now that we actually can't make enough of it it fits this.
Piece of machinery fits a product line that.
We're having trouble keeping up with so it worked out very well for us and that's exactly what we needed and we're going to be able to get it quicker than we normally would so very <unk>.
Very happy with with the progress we're making on this project.
Got it that's great to hear appreciated color there and did want to ask you you know I.
I'd ask you in the past, but sometimes I feel like you have some pretty good insights into the apply dynamics from the U S Mint and how that will trend going forward I'm curious do you have any comments on where you expect that to drink.
Yeah, I I don't really I mean, it's.
From from what I can tell right now the the trends of limited production.
Is continuing I think certainly if you look at the premiums on U S Mint product.
Particularly in silver not so much in gold, but particularly in silver the premiums continue to.
To be at an elevated level.
And that's just a combination of you.
Supply and demand in right now.
The premiums would indicate there's not enough supply coming out of the meant for the demand.
And you know that's a good thing for us.
We're going to we're not going to complain and we always like to have a little bit more product but.
I think that the continued.
<unk>.
Lack of lack of what you know filling the demand it's there.
Really longterm plays out well for a mark in our private meant products and particularly silvertowne in sunshine that that the longer this persists.
The longer.
You know our customers are going to favor and Wanna buy silvertowne and Sunshine products and the acceptance level of that those products and the quality of the product that Sunshine and Silvertowne are are are manufacturing.
Rival has a lot of sovereign minutes right now and we we've come so far in the product is so good that you know.
The brands are stronger than ever and the and the ISO Sir certification really.
Really illustrates that so.
The.
The man is making a great product, we love their product.
We could sell more of it if we had it.
And.
We'll see what happens, but but I don't I.
I don't anticipate right now that there's any.
He is going to be any <unk>.
Significant or material change in what they are able to produce every month.
Mmm sure that's helpful. Greg.
You know I I think you already kind of answered my questions regarding M&A up there. So I'll leave it there for now but I appreciate the help.
Okay.
Thank you.
Coming from.
Please post your question your line of sight.
Hi, Thanks for taking my question curious if you could talk a little bit about counterparty risk when it comes to your hedging on your Golden Silver with all the bank runs has it been going on lately.
I mean, we live fairly O eight crisis, and we've been there and we've lived through the <unk> global crisis as it relates to large counterparties. We we have Ah Ah what I believe is the one of the best risk management.
Strategies in it in the marketplace Uhm, we have not seen any counterparty disruption throughout the last eight weeks, our philosophy really like most people in the in the country as we'd like to be.
I'm engaged with with banks and institutions that we believe fall in the too big to fail category.
We have positioned ourselves over the last 15 years to to continually have our largest <unk>.
Counterparty positions with institutions that we believe are too big to fail.
And and we've really tried to avoid.
Having positions are having counterparty risk that we deem material in this area with with any of the mid level or smaller counterparties that we could deal with and I think that's just part of our risk management and and we feel we feel like we do a really good job on this and I think.
You know how we <unk>.
Particularly sore and I have manage this in the last 18 years or 19 years is.
As we feel pretty good about that.
You know that you can always.
You always know that a black Swan event is out there and you always know that.
Need to prepare for the worst and hope for the best but I believe that in our case.
We've been doing this for quite some time and our philosophy really hasn't changed since.
Since 0809, where we really moved away from.
What we felt at the time were higher risk Counterparties and we've you know we've we've focused on.
I'm doing most of our business with with high level institutions.
Got it thank you very helpful.
Do you have any commentary on where sales are trendy, especially on the D. T C side for Q4 versus what you saw in Q3.
I I, you know I feel like the businesses all segments of the businesses were really excelling at the end of of Q3.
I feel like.
Everything really work together everything was there we really took advantage of it generated a tremendous amount of gross profit in the last month of the quarter.
I think that what we're seeing right now through five weeks of Q4, we're very optimistic.
And I can say that the business.
Continues to.
To exceed my expectations as it relates to you know just the seamless.
The seamless operations that all of our divisions are working together rowing in the same direction, you know from getting getting raw metal to delivering 10 ounces of silver to somebody's doorstep you know, it's a it's a very complex and an intense process.
You know throughout the spikes in demand that we saw you know, particularly over a couple of weekends.
In in March towards the end.
Our delivery our ability to get products to DTC customers in a very very short period of time when people were really panicked and just really wanted anything in their hands as opposed to in a brokerage account or in a bank account.
Our team you know really over achieved so I I you know I.
I don't know, what's gonna happen next week I I can just comment on what I've seen so far.
And we feel really firing on what I would say 12 cylinders right now.
Got it. Thank you that's all for me.
At question and answer session.
Mister Robert.
[noise]. Thank you Kelly I'd like to thank all of our shareholders for joining.
Joined our call today. Thank you for your interest and continued support I'd also like to thank all of our employees for their dedication and commitment to earmarks continued success. We look forward to keeping you apprised of marks progress. Thank you.
That's why we conclude today's cough.
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[noise] statements made during this cough.
Today's call thing before.
Regarding future.
Teacher plans.
Expectations performance.
For me.
Within the meaning of the private securities.
1995.
1934.
Sure.
And uncertainties individually alright.
Cause actual.
Cause.
The following.
You too.
Strategy.
Greater than anticipated.
Changes.
Political climate.
Competition.
Services.
Hi.
The company's business model.
Changes in the market.
I'm doing business.
Financial.
As described in the company's public file.
With the Securities and Exchange Commission.
Shed.
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Okay.
[noise] statements speak only.
On which they might need.
Additionally.
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Statements.
The company.
Leaders.
[noise] statements.
Finally.
Today's call will be available.
The company's website.
Is today.
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