Q4 2024 A-Mark Precious Metals Inc Earnings Call

August 29, 2024

Unknown Executive: My name is John and I will be your operator this afternoon. Before this call, A-Mark issued its preliminary results for the fiscal fourth quarter and four year, 2024, and a press release, which is available on the Investor Relations section of the company's website at www.a-mark.com. You can find the link to the Investor Relations section at the top of the homepage. The results presented include an estimate which management believes is reasonable of the amount of the re-measurement gain associated with the SGB transaction.

John: My name is John, and I will be your operator this afternoon.

Unknown Executive: Before this call, A-Mark issued its preliminary results for the fiscal fourth quarter in four-year 2024 and a press release, which is available in the Investor Relations section of the company's website at www.amark.com. You can find the link to the Investor Relations section at the top of the home page. The results presented include an estimate which management believes is reasonable of the amount of the remeasurement gain associated with the SGB transaction. The remeasurement gain may be adjusted once the company finalizes its review, but management does not expect any such adjustment to exceed $5 million. Such adjustment, if it occurs, would be reflected in the company's income statement and corresponding balance sheet items. The remeasurement gain is a non-cash item, relates solely to the accounting treatment for the acquisition of a controlling interest in SGB.

Unknown Executive: The re-measurement gain may be adjusted once the company finalizes its review, but management does not expect any such adjustment to exceed $5 million. Such adjustment, if it occurs, would be reflected in the company's income statement and corresponding balance sheet items. The re-measurement gain is a non-cash item, relates solely to the accounting treatment for the acquisition of a controlling interest in SGB. Has no impact on taxes and is not related to the company's operating results.

Unknown Executive: Has no impact on taxes and is not related to the company's operating results.

Unknown Executive: Joining us for today's call are A-Mark CEO Greg Roberts, President Thor Gjerdrum, 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 questions 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.

Unknown Executive: Joining us for today's call are A-Mark's CEO, Greg Roberts, President, Thor Gergerum, 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 questions regarding the forward-looking statements made by management during this call.

Unknown Executive: 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.

Gregory Roberts: Now, I would like to turn the call over to A-Mark CEO, Mr. Greg Roberts. Sir, please proceed.

Gregory Roberts: Now, I would like to turn the call over to A-Mark CEO, Mr. Greg Roberts. Sir, please proceed. Thank you, John, and good afternoon to everyone. Thank you for joining our call today. As we reported in our earnings release today, our fiscal year 2024 results demonstrate the continued strength and adaptability of our fully integrated platform to generate profitable results, even during slower market conditions. Despite facing headwinds from less favorable macroeconomic environment and the softened demand compared with last fiscal year, we still reported 66.2 of net income and deluded EPS of $2.75 per share.

Gregory Roberts: Thank you, John, and good afternoon to everyone. Thank you for joining our call today. As we reported in our earnings release today, our fiscal year 2024 results demonstrate the continued strength and adaptability of our fully integrated platform to generate profitable results even during slower market conditions. Despite facing headwinds from less favorable macroeconomic environment and the softened demand compared with last fiscal year, we still reported 66.2 of net income and diluted EPS of $2.75 per share. Excluding an estimated preliminary 14.4 million reimbursement gain from our incremental investment in Silver Gold Bowl, our diluted EPS was $2.15.

Gregory Roberts: Excluding an estimated preliminary 14.4 million reimbursement gain from our incremental investment in Silvergold Bull, our deluded EPS was $2.15. We also generated 89.9 million in non-gap EBITDA, excluding the remeasurement gain and ended the fiscal year with over 3 million direct to consumer customers, reflecting the benefits of our strategic investments. Our fourth quarter results improved from the previous quarter with a 23% increase in gross profit and deluded EPS of $0.60 per share, excluding the remeasurement gain, compared with 21 cents last quarter.

Gregory Roberts: We also generated 89.9 million in non-GAAP EBITDA, excluding the re-measurement gain, and ended the fiscal year with over 3 million direct-to-consumer customers, reflecting the benefits of our strategic investments. Our fourth quarter results improved from the previous quarter, with a 23% increase in gross profit and diluted EPS of $0.60 per share, excluding the re-measurement gain compared with 21 cents last quarter.

Gregory Roberts: Looking beyond the numbers, our fiscal year was highlighted by numerous strategic accomplishments, including broadening our international footprint by both our expansion into Asia through our acquisition of LPM and our increased investment in Silvergold Bull Canada. In line with our growth strategy, we continue to enhance our asset portfolio through JNB's acquisition of Gold.com, strengthening our precious metals digital presence. Turning to our capital structure, during the year, we repaid our notes payable from our $100 million asset back securitization and amended our trading credit facility, resulting in increased liquidity. We also repurchased 22.4 million of our common stock.

Gregory Roberts: Turning to our capital structure, during the year, we repaid our notes payable from our $100 million asset-backed securitization and amended our trading credit facility, resulting in increased liquidity. We also repurchased $22.4 million of our common stock.

Kathleen Simpson: Now, I'd like to hand the call over to our CFO, Kathleen Simpson-Taylor, who will provide a more detailed financial overview of our preliminary results.

Unknown Executive: Then, A-Mark's President, Thor Gjerdrum, will discuss our key operating metrics. Afterwards, I will provide a further update on our business and growth strategy and take questions. Kathleen?

Thor Gjerdrum: Then, A-Mark's president, Thor Gjerdrum, will discuss our key operating metrics.

Gregory Roberts: Afterwards, I will provide a further update on our business and growth strategy and take questions.

Kathleen Simpson: Kathleen? Thank you, Greg, and good afternoon, everyone. Our revenues for Q4 fiscal 2024 decreased 19 percent to $2.52 billion from $3.12 billion in Q4 of last year. Excluding an increase of $47 million of forward sales, our revenues decreased $641.4 million, or 28 percent, which was due to a decrease in gold and silver ounces sold, partially offset by higher average selling prices of gold and silver. The direct-to-consumer, or DTC segment, contributed 17 percent and 19 percent of the consolidated revenue in the fiscal fourth quarter of 2024 and 2023, respectively. J&B's revenue represented 15 percent of the consolidated revenues for the fiscal fourth quarter of 2024, compared with 17 percent for the prior year fiscal fourth quarter.

Kathleen Simpson: Thank you, Greg, and good afternoon, everyone. Our revenues for Q4 fiscal 2024 decreased 19 percent to 2.52 billion from 3.12 billion in Q4 of last year, excluding an increase of 47 million of forward sales, our revenues decreased 641.4 million or 28 percent, which was due to a decrease in gold and silver ounces sold, partially offset by higher average selling prices of gold and silver. The direct to consumer or DTC segment contributed 17 percent and 19 percent of the consolidated revenue in the fiscal 4th quarter of 2024 and 2023, respectively.

Kathleen Simpson: J&B's revenue represented 15 percent of the consolidated revenues for the fiscal 4th quarter of 2024, compared with 17 percent for the prior year fiscal 4th quarter. For the full fiscal year, our revenues increased 4 percent to 9.7 billion from 9.29 billion in the prior fiscal year, excluding an increase of 1.6 billion of forward sales, our revenues decreased 1.1 billion or 17 percent, which was due to a decrease in gold and silver ounces sold, partially offset by higher average selling prices of gold and silver.

Kathleen Simpson: For the full fiscal year, our revenues increased 4 percent to $9.7 billion from $9.29 billion in the prior fiscal year. Excluding an increase of $1.6 billion of forward sales, our revenues decreased $1.1 billion, or 17 percent, which was due to a decrease in gold and silver ounces sold, partially offset by higher average selling prices of gold and silver. The DTC segment contributed 15 percent and 22 percent of the consolidated revenue in the fiscal year ended 2024 and 2023, respectively. J&B's revenue represented 14 percent and 19 percent of the company's consolidated revenue for the fiscal year ended June 30, 2024, and 2023, respectively.

Kathleen Simpson: The DTC segment contributed 15 percent and 22 percent of the consolidated revenue in the fiscal year ended 2024 and 2023, respectively. J&B's revenue represented 14 percent and 19 percent of the company's consolidated revenue for the fiscal years ended June 30, 2024 and 2023 respectively. Gross profit for Q4 fiscal 2024 decreased 45 percent to 43 million or 1.7 percent of revenue from 78.6 million or 2.52 percent of revenue in Q4 of last year.

Kathleen Simpson: For our project for Q4, fiscal 2024 decreased 45 percent to 43 million or 1.7 percent of revenue from 78.6 million or 2.52 percent of revenue in Q4 of last year. The decrease in gross profit was due to lower gross profits earned from both the wholesale sales and ancillary services and DTC. Gross Profit contributed by the DTC segment represented 51% of the consolidated Gross Profit in Q4 fiscal 2024 compared to 60% in the same year-ago period. Gross profit contributed by J&B represented 42% of the consolidated gross profit in Q4 2024 compared to 49% in Q4 last year.

Kathleen Simpson: The decrease in gross profit was due to lower gross profits earned from both the wholesale sales and ancillary services and DTC segments. Gross profit contributed by the DTC segment represented 51 percent of the consolidated gross profit in Q4 fiscal 2024 compared to 60 percent in the same year ago period. Gross profit contributed by J&B represented 42 percent of the consolidated gross profit in Q4 2024 compared to 49 percent in Q4 of last year.

Kathleen Simpson: For the full fiscal year, Gross Profit decreased 41% to 173.3 million or 1.79% of revenue from 294.7 million or 3.17% of revenue in the prior fiscal year. The decrease in Gross Profit was due to lower gross profits earned from both the wholesale sales and ancillary services and DTC segments. The DTC segment contributed 48% and 57% of the consolidated gross profit in fiscal year 2024 and 2023 respectively. Gross Profit contributed by J&B represented 41% and 49% of the consolidated gross profit during fiscal year 2024 and 2023 respectively.

Kathleen Simpson: For the full fiscal year, gross profit decreased 41% to 173.3 million, or 1.79% of revenue, from 294.7 million, or 3.17% of revenue in the prior fiscal year. The decrease in Gross Profit was due to lower gross profits earned from both the wholesale sales and ancillary services and DTC segments. The DTC segment contributed 48% and 57% of the consolidated gross profit in fiscal year 2024 and 2023, respectively. Gross Profit contributed by J&B represented 41% and 49% of the consolidated Gross Profit during fiscal year 2024 and 2023, respectively. As GNA expenses for Q4 fiscal 2024 decreased 1% to 22.7 million from 22.8 million in Q4 of last year.

Kathleen Simpson: As GNA expenses for Q4 fiscal 2024 decreased 1% to 22.7 million from 22.8 million in Q4 of last year. The overall decrease was primarily due to a decrease in compensation expense, including performance-based accruals of 1.1 million and a decrease in advertising costs of 0.3 million, partially offset by an increase in insurance costs of 0.6 million and increase in consulting and professional fees of 0.5 million and an increase in information technology costs of 0.2 million.

Kathleen Simpson: The overall decrease was primarily due to a decrease in compensation expense, including performance-based accruals of 1.1 million and a decrease in advertising costs of 0.3 million, partially offset by an increase in insurance costs of 0.6 million and increasing consulting and professional fees of 0.5 million, and an increase in information technology costs of 0.2 million. As GNA expenses for Q4 also include 1.8 million of expenses incurred by LPM and SGD. For the full fiscal year, as GNA expenses increased 5% to 89.8 million from 85.3 million in the prior fiscal year. The increase was primarily due to an increase in consulting and professional fees of 5.3 million and an increase in information technology costs of 1.0 million, partially offset by a decrease in insurance costs of 0.9 million, a decrease in compensation expense, including performance-based accruals of 0.7 million, and a decrease in advertising costs of 0.7 million.

Kathleen Simpson: As GNA expenses for the Q4 also include 1.8 million of expenses incurred by LPM and SGD. For the full fiscal year, SGNA expenses increased 5% to 89.8 million from 85.3 million in the prior fiscal year. The increase was primarily due to an increase in consulting and professional fees of 5.3 million and increase in information technology costs of 1.0 million, partially offset by a decrease in insurance costs of 0.9 million, a decrease in compensation expense, including performance-based accruals of 0.7 million and a decrease in advertising costs of 0.7 million.

Kathleen Simpson: This school year, 2024, SGNA expenses include 2.3 million dollars of expenses incurred by LPM and SGD. Depreciation and amortization expense for Q4 fiscal 2024 increased 4% to 2.8 million from 2.7 million in Q4 of last year. The increase was primarily due to 0.4 million of amortization expense related to intangible assets acquired through our acquisitions of LPM and a controlling interest in SGD. A 0.2 million increase in depreciation expense related to our property plant and equipment, and these were partially offset by a 0.5 million dollar decrease in JMD's intangible asset amortization expense.

Kathleen Simpson: This school year, 2024, as GNA expenses include $2.3 million of expenses incurred by LPM and SGD. Depreciation and amortization expense for Q4 fiscal 2024 increased 4% to 2.8 million from 2.7 million in Q4 of last year. The increase was primarily due to 0.4 million of amortization expense related to intangible assets acquired through our acquisitions of LPM and a controlling interest in SGD. A 0.2 million increase in depreciation expense related to our property, plant, and equipment, and these were partially offset by a 0.5 million dollar decrease in JMD's intangible asset amortization expense. For the full fiscal year, depreciation and amortization expense decreased 9% to 11.4 million from 12.5 million last fiscal year.

Kathleen Simpson: For the full fiscal year, depreciation and amortization expense decreased 9% to 11.4 million from 12.5 million last fiscal year. The decrease was primarily due to a $2.2 million decrease in JMB's intangible asset amortization expense. This was partially offset by a $0.6 million increase in depreciation expense related to property plant and equipment and a $0.5 million increase in amortization expense related to intangible assets acquired through our acquisition of LPM and our increased investment which resulted in a controlling interest in SGB.

Kathleen Simpson: This was partially offset by a 0.6 million dollar increase in depreciation expense related to property, plant, and equipment and a 0.5 million dollar increase in amortization expense related to intangible assets acquired through our acquisition of LPM and our increased investment, which resulted in a controlling interest in SGB. Interest income for Q4 fiscal 2024 increased 33% to 8.1 million from 6.1 million in Q4 last year. The increase in interest income was primarily due to an increase in other finance products income of 1.6 million and an increase in interest income earned by your secured lending segment of 0.4 million.

Kathleen Simpson: Interest income for Q4 fiscal 2024 increased 33% to 8.1 million from 6.1 million in Q4 last year. The increase in interest income was primarily due to an increase in other finance products income of 1.6 million and an increase in interest income earned by our secured lending segment of 0.4 million. For the full fiscal year, interest income increased 22% to 27.2 million from 22.2 million in the prior fiscal year. The increase was primarily due to an increase in other finance products income of 3.2 million and an increase in interest income earned by our secured lending segment of 1.7 million.

Kathleen Simpson: For the full fiscal year, interest income increased 22% to 27.2 million from 22.2 million in the prior fiscal year. The increase was primarily due to an increase in other finance products income of 3.2 million and an increase in interest income earned by your secured lending segment of 1.7 million. Interest expense for Q4 fiscal 2024 increased 8% to 9.6 million from 8.9 million in Q4 last year. The increase in interest expense was primarily driven by an increase of 1.5 million associated with our trading credit facility due to an increase in interest rates, as well as increased borrowing, and an increase of 0.6 million related to products financing arrangements.

Kathleen Simpson: Interest expense for Q4 fiscal 2024 increased 8% to 9.6 million from 8.9 million in Q4 last year. The increase in interest expense was primarily driven by an increase of 1.5 million associated with our trading credit facility due to an increase in interest rates as well as increased borrowing and increase of 0.6 million related to products financing arrangements. This was partially offset by decrease of 1.4 million related to the AMCF notes, including amortization of debt issuance costs due to their repayment in December 2023.

Kathleen Simpson: And this was partially offset by a decrease of 1.4 million related to the AMCF notes, including amortization of debt issuance costs due to their repayment in December 2023. For the full fiscal year, interest expense increased 25% to 39.5 million from 31.5 million last fiscal year. The increase was primarily driven by an increase of 8.4 million associated with our trading credit facility due to an increase in interest rates, as well as increased borrowing and an increase of 3 million related to product financing arrangements. This was partially offset by a decrease of 3.2 million related to the AMCF notes, including amortization of debt issuance costs due to their repayment in December 2023, and also a 0.5 million decrease in loan servicing fees.

Kathleen Simpson: For the full fiscal year, interest expense increased 25% to 39.5 million from 31.5 million last fiscal year. The increase was primarily driven by an increase of 8.4 million associated with our trading credit facility due to an increase in interest rates as well as increased borrowing and increase of 3 million related to product financing arrangements. This was partially offset by a decrease of 3.2 million related to the AMCF notes, including amortization of debt issuance costs due to their repayments in December 2023.

Kathleen Simpson: And also a 0.5 million decrease in loan servicing fees. Earnings for equity method investments in Q4 fiscal 2024 decreased 86% to 0.8 million from 5.3 million in Q4 last year. For the full fiscal year, earnings for equity method investments decreased 68% to 4 million from 12.6 million last fiscal year. The decrease in both periods was due to decreased earnings of our equity method investments. Net income attributable to the company for the fourth quarter of fiscal 2024 total 28.6 million or $1.20 per diluted share.

Kathleen Simpson: Earnings for equity method investments in Q4 fiscal 2024 decreased 86% to 0.8 million from 5.3 million in Q4 last year. For the full fiscal year, earnings for equity method investments decreased 68% to 4 million from 12.6 million last fiscal year. The decrease in both periods was due to decrease earnings of our equity method investments.

Kathleen Simpson: Steve. Net income attributable to the company for the fourth quarter of fiscal 2024, total 28.6 million, or $1.20 per diluted share. This compares to net income attributable to the company of $41.8 million, or $1.71 per diluted share in Q4 last year. Net income for the fiscal fourth quarter of 2024 included an estimated 14.4 million re-measurement gain in connection with the acquisition of a controlling interest in SGB. This is preliminary and subject to change, excluding the impact of the estimated preliminary re-measurement gain diluted earnings for share with 60 cents. For the full fiscal year, net income attributable to the company totaled $66.2 million, or $2.75 per diluted share, which compares to net income attributable to the company of $156.4 million, or $6.34 cents per diluted share last fiscal year.

Kathleen Simpson: This compares to net income attributable to the company of 41.8 million or $1.71 per diluted share in Q4 last year. Net income for the fiscal fourth quarter of 2024 included an estimated 14.4 million re-measurement gain in connection with the acquisition of a controlling interest in SGB. This is preliminary and subject to change, excluding the impact of the estimated preliminary re-measurement gain diluted earnings for share with 60 cents. For the full fiscal year, net income attributable to the company totaled 66.2 million or $2.75 per diluted share, which compares to net income attributable to the company of 156.4 million or $6.34 cents per diluted share last fiscal year.

Kathleen Simpson: Net income attributable to the company for fiscal year 2024 included an estimated 14.4 million dollar re-measurement gain in connection with the increased investment resulting in a controlling interest in SGB. This is preliminary and subject to change. Excluding the impact of the estimated preliminary re-measurement gain diluted earnings per share for fiscal year 2024 was $2.15. Adjusted net income before provision for income taxes, a non-gap financial performance measure, which excludes depreciation, amortization, acquisition costs, re-measurement gains or losses, and contingent consideration fair value adjustments for Q4 fiscal 2024 totaled 20.1 million, a decrease of 66% compared to 59.1 million in the same year ago quarter.

Kathleen Simpson: Net income attributable to the company for fiscal year 2024 included an estimated 14.4 million dollar re-measurement gain in connection with the increased investment resulting in a controlling interest in SGB. This is preliminary and subject to change, excluding the impact of the estimated preliminary re-measurement gain diluted earnings per share for fiscal year 2024 was $2.15. Adjusted net income before provisioned for income taxes, a non-GAAP financial performance measure, which excludes depreciation, amortization, acquisition costs, re-measurement gains or losses, and contingent consideration fair value adjustments for Q4 fiscal 2024 totaled $20.1 million, a decrease of 66 percent compared to $59.1 million in the same year-ago quarter.

Kathleen Simpson: The decrease was principally due to lower net income before provisioned for income taxes. Adjusted net income before provisioned for income taxes for the full fiscal year totaled $80.3 million, a 63 percent decrease from $216 million in the prior fiscal year. The decrease was principally due to lower net income before provisioned for income taxes. A bidda, a non-gap liquidity measure for Q4 fiscal 2024 totals $36.1 million, a 42 percent decrease compared to $61.8 million in Q4 2023. The decrease was principally due to lower net income of $13.3 million, lower income tax expense of $11.3 million, and higher interest income of $2 million.

Kathleen Simpson: The decrease was principally due to lower net income before provision for income taxes. Adjusted net income before provision for income taxes for the full fiscal year totaled 80.3 million, a 63% decrease from 216 million in the prior fiscal year. The decrease was principally due to lower net income before provision for income taxes. A bidda, a non-gap liquidity measure for Q4 fiscal 2024 totaled 36.1 million, a 42% decrease compared to 61.8 million in Q4 2023.

Kathleen Simpson: The decrease was principally due to lower net income of 13.3 million, lower income tax expense of 11.3 million, and higher interest income of Q million. Excluding the impact of the estimated preliminary re-measurement gain, preliminary EBITDA for the three months ended June 30, 2024 was 21.7 million. A bidda for the full fiscal year totaled 104.2 million, a 54% decrease compared to 225 million last fiscal year. The decrease was principally due to lower net income of 90 million, lower income tax expense of 32.7 million, higher interest expense of 8 million, and higher interest income of 4.9 million.

Kathleen Simpson: Excluding the impact of the estimated preliminary re-measurement gain, preliminary EBITDA for the three months ended June 30, 2024, was $21.7 million. A bidda for the full fiscal year totaled $104.2 million, a 54 percent decrease compared to $225 million last fiscal year. The decrease was principally due to lower net income of $90 million, lower income tax expense of $32.7 million, higher interest expense of $8 million, and higher interest income of $4.9 million. Billion. Excluding the impact of the estimated preliminary re-measurement gain, preliminary EBITDA for the fiscal year ended June 30th, 2024, was 89.9 million. Turning to our balance sheet, at fiscal year end we had $48.6 million of cash compared to $39.3 million of cash at the end of fiscal year 2023.

Kathleen Simpson: Excluding the impact of the estimated preliminary re-measurement gain, preliminary EBITDA for the fiscal year ended June 30, 2024 was 89.9 million. Turning to our balance sheet, at fiscal year end we had 48.6 million dollars of cash compared to 39.3 million dollars of cash at the end of fiscal year 2023. Our non-restricted inventory showed us 579.4 million down 66.4 million from 645.8 million at the end of fiscal year 2023. Our tangible net worth excluding non-controlling interest at the end of the fiscal year was 304.8 million down from 435.5 million at the end of the prior fiscal year.

Kathleen Simpson: Our non-restricted inventory showed us $579.4 million, down $66.4 million from $645.8 million at the end of fiscal year 2023. Our chance will net worth excluding non-controlling interest at the end of the fiscal year was $304.8 million, down from $435.5 million at the end of the prior fiscal year. The reduction is due to share repurchase activity and dividends paid, combined with higher intangible assets and goodwill in connection with the acquisition of LPM and our increased investments resulting in a controlling interest of SGB. A-Mark's board of directors has continued to maintain the company's regular quarterly cash dividend program of 20 cents per common share.

Kathleen Simpson: The reduction is due to share repurchase activity and dividends paid combined with higher intangible assets and goodwill in connection with the acquisition of LPM and our increased investments resulting in a controlling interest of SUV. A-Mark's Board of Directors has continued to maintain the company's regular quarterly cash dividend program of 20 cents per common share. The most recent quarterly cash dividend was paid in July and it is expected that the next quarterly dividend will be paid in October 2024.

Kathleen Simpson: The most recent quarterly cash dividend was paid in July, and it is expected that the next quarterly dividend will be paid in October 2024.

Unknown Executive: That completes my financial summary.

Kathleen Simpson: That completes my financial summary.

Thor Gjerdrum: 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 fiscal fourth quarter and full year 2024. We sold 448,000 ounces of gold in Q4 fiscal 2024, which is down 34% from Q4 last year, and down 1% from last quarter. For the full fiscal year, we sold 108.1 million ounces of silver, which is down 31% from last fiscal year.

Thor Gjerdrum: Now I will turn the call over to Thor, who will provide an update on our key operating metrics. Thor?

Thor Gjerdrum: Thank you, Kathleen. Looking at our key operating metrics for the fiscal fourth quarter and full year 2024. We sold 448,000 ounces of gold in Q4 fiscal 2024, which is down 45% from Q4 last year and up 0.4% from the prior quarter. For the full fiscal year, we sold 1.8 million ounces of gold, which is down 31% from last fiscal year. We sold 25.4 million ounces of silver in Q4 fiscal 2024, which is down 44% from Q4 last year and down 1% from last quarter. For the full fiscal year, we sold 108.1 million ounces of silver, which is down 31% from last fiscal year.

Thor Gjerdrum: We sold 25.4 million ounces of silver in Q4 fiscal 2024, which is down 44% from Q4 last year, and down 1% from last quarter. For the full fiscal year, we sold 108.1 million ounces of silver, which is down 31% from last fiscal year. The number of new customers in the DTC segment, which is defined as the number of customers that have registered or set up a new account, or made a purchase for the first time during the period, was 570,300 in Q4 fiscal 2024, which was up 530% from Q4 last year, and increased 908% from last quarter.

Thor Gjerdrum: The number of new customers in the DTC segment, which is defined as the number of customers that have registered or set up a new account or made a purchase for the first time during the period, was 570,300 in Q4 fiscal 2024, which was up 530% from Q4 last year and increased 908% from last quarter. For the three-month periods into June 30, 2024, and 2023, approximately 92% and 32% of the new customers were attributable to the acquisition of a controlling interest in SGV and the acquired customer listed Bullion Max, respectively. For the full fiscal year, the number of new customers in the DTC segment was 718,500, which is up 114% from 335,300 new customers in the prior fiscal year.

Thor Gjerdrum: For the three month periods into June 30, 2024, and 2023, approximately 92% and 32% of the new customers were attributable to the acquisition of a controlling interest in SGV, and the acquired customer listed bullion max respectively. For the full fiscal year, the number of new customers in the DTC segment was 718,500, which is up 114% from 335,300 new customers in the prior fiscal year. Approximately 73% of the new customers in the fiscal year of 2024 were attributable to the acquisition of a controlling interest in SGV, and 31% of the new customers in fiscal year 2023 were attributable to the acquired customer list of BGAC and bullion max.

Thor Gjerdrum: Approximately 73% of the new customers in the fiscal year of 2024 were attributable to the acquisition of a controlling interest in SGV, and 31% of the new customers in fiscal year 2023 were attributable to the acquired customer list of BGAC and Bullion Max.

Thor Gjerdrum: Max. The number of total customers in the DTC segment at the end of the fourth quarter was approximately 3.1 million, which was a 31% increase from the prior year. The year-over-year increase in total customers would due to organic growth of our JNB customer base, as well as the acquisition of a petroleum interest in SGB. The DTC segment average order value, which represents the average dollar value of product orders, excluding accumulation program orders, delivers the DTC segment customers during Q4 fiscal 2024, was $2,890, which is down 12% from Q4 fiscal 2023 and up 35% from the prior quarter.

Thor Gjerdrum: The number of total customers in the DTC segment at the end of the fourth quarter was approximately 3.1 million, which was a 31% increase from the prior year. The year of year increased in total customers with due to organic growth of our JNB customer base, as well as the acquisition of a controlling interest in SGV. The DTC segment average order value, which represents the average dollar value of product orders, excluding accumulation program orders, delivers the DTC segment customers during Q4 fiscal 2024, was $2,890, which is down 12% from Q4 fiscal 2023, and up 35% from the prior quarter.

Thor Gjerdrum: For the full fiscal year, our DTC average order value was $2,407, which is down 8% from fiscal year 2023. For the fourth quarter, our inventory term ratio was 2.3, which was a 28% decrease from 3.2 and Q4 of last year, and consistent with last quarter. For the full fiscal year, our inventory term of a ratio was 9.2, a 12% decrease from 10.5 last fiscal year. Finally, the number of secured loans, as of June 30, 2024, totaled 588, a decrease of 13% from March 31, 2024, and a decrease of 33% from June 30, 2023. Our secured loans receivable value at the end of fiscal year was $113.1 million, a 2% decrease from March 31, 2024, and a 12% increase from June 30, 2023.

Thor Gjerdrum: For the full fiscal year, our DTC average order value was $2,407, which is down 8% from fiscal year 2023. For the fourth quarter, our inventory term ratio was 2.3, which was a 28% decrease from 3.2 in Q4 of last year and consistent with last quarter. For the full fiscal year, our inventory term of a ratio was 9.2, a 12% decrease from 10.5 last fiscal year. Finally, the number of secured loans, as of June 30, 2024, totaled 588, a decrease of 13% from March 31, 2024, and a decrease of 33% from June 30, 2023. Our secured loans receivable balance at the end of fiscal year was $113.1 million, a 2% decrease from March 31, 2024, and a 12% increase from June 30, 2023.

Gregory Roberts: That concludes my prepared remarks. I will now turn it over to Greg for closing remarks. Thank you, Thorey and Kathleen. Looking ahead to fiscal 2025, we have seen continued elevated prices of gold, and softened demand and premium compression during our first fiscal quarter. During the first few weeks of August, we experienced increased volatility as the marketing customers reacted to the spike in the VIX index above 38. Specifically, the week of August 5th, we saw the VIX above 38 and continued elevated for that week.

Thor Gjerdrum: That concludes my prepared remarks.

Gregory Roberts: I will now turn it over to Greg for closing remarks. Greg? Thank you, Thorey and Kathleen. Looking ahead to fiscal 2025, we have seen continued elevated prices of gold and softened demand and premium compression during our first fiscal quarter. During the first few weeks of August, we experienced increased volatility as the marketing customers reacted to the spike in the VIX index above 38. Specifically, the week of August 5th, we saw the VIX above 38 and continued elevated for that week. Our customers reacted to this, and we had a better than we expected increase in activity that week.

Gregory Roberts: Our customers reacted to this, and we had a better than we expected increase in activity that week. We continued to monitor the macro-economic environment and the impact of interest rates and the upcoming elections. We are evaluating opportunities to further expand our market reach to create value for our shareholders. We are currently advancing our logistics automation initiatives at our AMGL facility in Las Vegas, which will support increased volume and lower our operational costs.

Gregory Roberts: We continue to monitor the macroeconomic environment and the impact of interest rates and the upcoming elections. We are evaluating opportunities to further expand our market reach to create value for our shareholders. We are currently advancing our logistics automation initiatives at our AMGL facility in Las Vegas, which will support increased volume and lower our operational costs. We are also developing plans to broaden our reach in Asia, including establishing a trading hub in Singapore. We remain optimistic that our proven business model will allow us to sustain profitability and generate value for our shareholders over the long term.

Gregory Roberts: We are also developing plans to broaden our reach in Asia, including establishing a trading hub in Singapore. We remain optimistic that our proven business model will allow us to sustain profitability and generate value for our shareholders over the long term.

Gregory Roberts: This concludes my prepared remarks.

Unknown Executive: John, we can now open the line for questions. Thank you.

John: John, we can now open the line for questions. Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tunnel indicates your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star two.

Unknown Executive: At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tunnel indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, will we poll for questions? Once again, please press star one if you have a question or a comment.

John: One moment, please. Will we poll for questions? Once again, please press star one if you have a question or a comment.

Thomas Forte: The first question comes from Thomas Forte with Maxim Group. Please proceed.

Thomas Forte: First question comes from Thomas Forte with Maxim Group. Please proceed. Thanks. So Greg, when I think about your performance in the last fiscal year, it feels like you did a very good job of generating profits. When I look at the chart for gold, it's pretty much straight up into the right. So without thinking about fiscal 25. Am I right in thinking that, generally speaking, when you have a one-way trade in gold, that can be challenging for you.

Gregory Roberts: Without thinking about fiscal 25, am I right in thinking that, generally speaking, when you have a one-way trade and gold, that can be challenging for you, and despite the challenges, you're able to generate a ton of profit. Yeah, I mean, I think you hit the nail on the head. I mean, we were at almost 90 million in EBITDA for the year, which, you know, as we have messaged just, you know, in the past and today, you know, it was certainly an environment with headwinds. I mean, if you just look at, you know, what I mentioned earlier, the VIX index.

Thomas Forte: And despite the challenges, you're able to generate a ton of profits. Yeah, I mean, I think you hit the nail on the head. I mean, we were at almost 90 million in EBITDA for the year, which, you know, as we have messaged just, you know, in the past and today, you know, it was certainly an environment with headwinds. I mean, if you just look at, you know, what I mentioned earlier, the VIX index, I mean, if you look, you know, from January through the end of June.

Gregory Roberts: I mean, if you look, you know, from January through the end of June, it was at a, you know, a fairly close, you know, small range low. And we just haven't had a great deal of volatility. You know, this is what usually gives us tailwinds. So I think the performance in that environment was really good.

Thomas Forte: It was at a fairly close, you know, small range low. And we just haven't had a great deal of volatility. You know, this is what usually gives us tailwinds. So I think the performance in that environment was really good. I think, you know, the improved performance in Q4 over Q3, where I don't think the macro environment was that much different. You know, to be able to improve and get to 60 cents from 21 cents, I believe that, you know, the company and everybody with the company did a tremendous job.

Gregory Roberts: I think, you know, the improved performance in Q4 over Q3, where I don't think the macro environment was that much different, you know, to be able to improve and get to 60 cents from 21 cents. I believe that you know, the company and everybody with the company did a tremendous job. It was refreshing, as I said, in the first week of August to see the CR customer base and CR business really come to life and significantly outperform, you know, what we thought would happen. And I think that bodes well for the future.

Thomas Forte: It was refreshing, as I said, in the first week of August, to see our customer base and see our business really come to life and significantly outperform, you know, what we thought would happen. And I think that bodes well for the future. The up and to the right on the price of gold, as I've talked about before, it stagnates demand, causes buyers and sellers to be a bit more conservative. And I think, you know, we have we have weathered that.

Gregory Roberts: The up and to the right on the price of gold, as I've talked about before, it stagnates demand, causes buyers and sellers to be a bit more conservative. And I think, you know, we have we have weathered that. I think we've done a very good job of managing our inventory, managing our buybacks. I believe we have continued to maintain our place as one of the larger providers of liquidity in the market for when our customers buy back product and they need liquidity, and they count on a mark. So I think we've strengthened our relationship with our customers.

Thomas Forte: I think we've done a very good job of managing our inventory, managing our buybacks. I believe we have continued to maintain our place as one of the larger providers of liquidity in the market for when our customers buyback product. And they need liquidity and they count on a mark. So I think we've strengthened our relationship with our customers. Certainly, I believe, you know, our initiatives that we started talking about, you know, following our Q3, where we have focused significantly or significant assets and resources on new customers in our DTC segment.

Gregory Roberts: Certainly, I believe, you know, our initiatives that we started talking about, you know, following RQ3, where we have focused significantly or significant assets and resources on new customers in our DTC segment. I believe that has been hugely successful, as you can see from the numbers. For the first time, we're over three million, three million customers in the DTC network. So I believe we've outperformed a lot of areas, areas considering the environment. But I also believe we're investing for the future, and I think we're well prepared, you know, to take advantage of whatever environment there is going for.

Thomas Forte: I believe that has been hugely successful, as you can see from the numbers, for the first time, we're over 3 million customers in the DTC network. So I believe we've outperformed a lot of areas considering the environment. But I also believe we're investing for the future. And I think we're well prepared, you know, to take advantage of whatever environment there is going forward.

Gregory Roberts: Great, and then just one follow-up, and then I'll get back in the queue. So, historically, the good news is, in this kind of environment, there may be more attractive M&A opportunities.

Thomas Forte: Great, and then just one follow up, and then I'll get back in the queue. So historically, the good news is in this kind of environment, there may be more attractive M&A opportunities. Can you just talk about your current thoughts on M&A at a high level? Yes, I think we are busier than ever right now reviewing and vetting different opportunities for us. I love what we have in the funnel, and I think we have had a number of conversations where we have opportunities both large and small.

Thomas Forte: And I think that that part of our strategy is acting like we have messaged in the past and how we expect it to develop in these kinds of market conditions. So I'm very optimistic about that. I love some of the things that we're looking at. I love the ability to really vet and decide what's best for us. We continue to put acquisitions and M&A at the top of the five asset allocation items that we look at, which as I've said before, M&A, inventory, stock buybacks, dividends, and repayment of debt.

Gregory Roberts: Can you just talk about your current thoughts in M&A at a high level? Yes, I think we are busier than ever right now reviewing and vetting different opportunities for us. I love what we have in the funnel, and I think we have had a number of conversations where we have opportunities both large and small. I think that that part of our strategy is acting like we have messaged in the past and how we expect it to develop in these kinds of market conditions. So, I'm very optimistic about that. I love some of the things that we are looking at.

Gregory Roberts: I love the ability to really vet and decide what's best for us.

Gregory Roberts: We continue to put acquisitions in M&A at the top of the five asset allocation items that we look at, which, as I've said before, M&A, inventory, stock buybacks, dividends, and repayment of debt. And my goal is to always have enough liquidity and to have the ability to take advantage of whichever one of those five rises to the best return for our shareholders. I think our accomplishments and what Thor and Kathleen have been working on the last four to six months as it relates to our liquidity sources, as well as our increased liquidity with our bank group, has been a great accomplishment for A-Mark.

Thomas Forte: And my goal is to always have enough liquidity and to have the ability to take advantage of whichever one of those five rises to the best return for our shareholders. I think our accomplishments and what Thor and Kathleen have been working on the last four to six months as it relates to our liquidity sources as well as our increased liquidity with our bank group has been a great accomplishment for A-Mark. So I believe we are very well positioned right now with our balance sheet to take advantage of whichever of our five spokes, as I say, become available to us.

Gregory Roberts: So, I believe we are very well positioned right now with our balance sheet to take advantage of whichever of our five spokes, as I say, become available to us. Great.

Thomas Forte: Thank you, Greg, out of the back of the queue.

John: Once again, if you have a question or a comment, please indicate so by pressing star one on your touch-tone phone.

Andrew Stutt: The next question comes from Andrew Stutt with Roth Capital Partners. Please proceed.

Unknown Executive: Hey, good afternoon, and thank you for taking my questions. Hopped on a couple minutes late, so I apologize if you covered this, but we saw a nice pick up in a gross margin sequentially. Can you just kind of talk through the drivers there whether that's mix kind of an improved spread environment, just in additional details will be great there. Yeah, I mean, we saw an increase over most of our lines of business in this quarter versus the previous quarter.

Andrew Stutt: Good afternoon, and thank you for taking my questions. I'm hopped on a couple minutes late, so I apologize if you covered this, but we saw a nice pick up in a gross margin sequentially. Can you just kind of talk through the drivers there, whether that's mix, kind of an improved spread environment, just in additional details will be great there. I mean, we saw an increase over most of our lines of business in this quarter versus the previous quarter, so although I believe the environments were similar, I believe we performed a bit better in queue four than we did in queue three, so that's reflected in the numbers.

Unknown Executive: So although I believe the environments were similar, I believe we performed a bit better in Q4 than we did in Q3, so and that's reflected in the numbers. I think on the DTC side, as I said before in the last call, we really pounded and tried very hard to invest in marketing and to take this opportunity to really add to our new customers as well as an initiative to wake up our old customers that had in bought in the years.

Gregory Roberts: I think on the DTC side, as I said before, in the last call, we really pounded and tried very hard to invest in marketing and to take this opportunity to really add to our new customers, as well as an initiative to wake up our old customers that had in bought in the years. So that I think went very well. I think on the wholesale side, we did have some larger transactions that drove the top line, and I think... I think we just, we performed a bit better in Q4 than we did in Q3.

Unknown Executive: So that I think went very well. I think on the wholesale side, we did have some larger transactions that drove the top line. I think we just, we performed a bit better in Q4 than we did in Q3. Great, thank you.

Gregory Roberts: Great, thank you. And then you also touched on briefly some enhancements you're making to the Vegas facility in Vegas.

Gregory Roberts: And then you also touched on briefly some enhancements you're making to the Vegas facility in Vegas. Can you just kind of talk about what you're doing at the AMGL? Yeah, we have been fortunate enough to have the space next door to us become available. We are building it out with some new automated technology that allows for a modernization of the pick and pack process and the packaging process. The equipment goes by the name of Cardex and it's used by a number of large operations that are in manufacturing including SpaceX and a couple of others.

Gregory Roberts: Can you just kind of talk about what you're doing at the AMGL? Yeah, we have been fortunate enough to have the space next door to us become available. We are building it out with some new automated technology that allows for a modernization of the pick and pack process and the packaging process. The equipment goes by the name of CardEx, and it's used by a number of large operations that are in manufacturing, including SpaceX and a couple of others. So we're well along the way; this has been about a nine-month project. We are now in the build-out phase; we are installing our new machines, and this will use technology as well as some great physical machinery that is going to allow us to greatly increase our capacity on how many packages we can ship.

Gregory Roberts: So we're well along the way, this has been about a nine month project. We're now in the build out phase, we are installing our new machines and this will use technology as well as some great physical machinery that is going to allow us to greatly increase our capacity on how many packages we can ship the next time that we're pressed and markets allow for higher volumes of shipments.

Gregory Roberts: So we're going to have the next time that we're pressed and markets allow for higher volumes of shipments.

Gregory Roberts: Great, thank you. And the last one from me if I may speaking of potential times of increased volume. Can you just kind of talk about how you're positioning yourself with inventory for possible volatility in the precious metals market before the election we have coming up? Yeah, and we have seen some increased increase in premiums and some selected inventory items that we have been holding. So, you know, we're happy with that. There's a few others that we've been holding.

Gregory Roberts: Great, thank you.

Gregory Roberts: And the last one for me if I may. Speaking of potential times of increased volume, can you just kind of talk about how you're positioning yourself with inventory for possible volatility in the precious metals market before the election we have coming up? Yeah, and we have seen some increased increase in premiums and some selected inventory items that we have been holding. So we're happy with that. There's a few others that we've been holding. We haven't seen increased premiums yet. But I'm very comfortable with the inventory we're holding. I believe that we're well positioned in the event that we get more than just a week of multiples week over week that we saw in the first week of August.

Gregory Roberts: We haven't seen increased premiums yet. But I'm very comfortable with the inventory we're holding. I believe that we're well positioned in the event that we get more than just a week of multiples week over week that we saw in the first week of August. I think we're well very well positioned to take advantage of that. I think we've also developed some new business with new customers on the wholesale side that we're turning inventory a little bit faster.

Gregory Roberts: I think we're well very well positioned to take advantage of that. I think we've also developed some new business with new customers on the wholesale side that we're turning inventory a little bit faster. And I think we have managed very well our production at both Silvertown Mint and SMI that we've been very nimble at.

Gregory Roberts: And I think we have managed very well our production at both Silvertown Mint and SMI that we've been very nimble at and we've talked about this before. We have been very nimble particularly at Silvertown at being able to shift products quickly. You know, we can shift a product run in three or four days. You know, Jamie and Brent have done a great job of being very nimble and when wholesale trading or DTC asks for a product, they've been able to shift production very quickly to that.

Gregory Roberts: And we've talked about this before. We have been very nimble, particularly at Silvertown, at being able to shift products quickly. You know, we can shift a product run in three or four days. Jamie and Brent have done a great job of being very nimble, and when wholesale trading or DTC asks for a product, they've been able to shift production very quickly to that, which just allows us to have product in the marketplace that others don't. And although the premiums may be lower and the premiums aren't as they were a year or two ago, we are able to provide products and answer customer needs where we need to very quickly.

Gregory Roberts: Which just allows us to have product in the marketplace that others don't. And although the premiums may be lower and the premiums aren't as they were a year or two ago, we are able to provide products and answer customer needs where we need to very quickly. So they're very pleased at how we're managing our inventory, in a moment.

Gregory Roberts: So they're very pleased at how we're managing our inventory. at the moment.

Gregory Roberts: Great. Well, thanks for the additional color, Greg, and I can grab some progress.

Unknown Executive: Great. Well, thanks for the additional color, Greg, and I can grab some progress.

Gregory Gibas: Up next, we have Greg Gibas with Northland Securities. Please proceed.

Gregory Roberts: Up next, we have Greg Gibas with Northland Securities. Please proceed. Hey, good afternoon, Greg, Kathy and Thor. Thanks for taking the questions. You know, one of the kind of follow-up on kind of macro-related topics. You know, just to get your thoughts on kind of catalyst or drivers that can lead to improving spreads. You know, would it be mostly macro-economic related, relating to kind of volatility or anything on the supply side of the equation.

Gregory Gibas: Good afternoon, Greg, Kathleen Thor. Thanks for taking the questions. You know, one of the kind of follow-up on kind of a macro-related topics. You know, we'll just get your thoughts on kind of catalysts or drivers that can lead to improving spreads. You know, would it be mostly macro-economic-related, relating to kind of volatility or anything on the supply side of the equation? And, you know, the VIX earlier, Greg, and kind of impacting strength and August. Would you say that's a pretty good indicator performance, generally speaking? Yeah, I think, you know, we always say it, and we talk about this, you know, over the last, you know, few years, is that generally our markets are driven by a macro-economic event, and it can be anything.

Gregory Roberts: And, you know, you noted the VIX earlier, Greg, and kind of impacting strength in August. Would you say that's a pretty good indicator of performance generally speaking? Yeah. I think, you know, we always say it, and we talk about this, you know, over the last, you know, few years, is that generally our markets are driven by a macro-economic event, and it can be anything. Some are bigger than others. Some affect our customer base differently than others, and it's not always consistent.

Gregory Roberts: Some are bigger than others; some affect our customer base differently than others, and it's not always consistent. What may have had an effect two years ago may not have the same effect today. I think what we have talked about before is volatility in the spot price of gold and silver, as well as volatility to the downside in equities. That generally will affect us positively. I think that at the moment, we continue to see what everybody sees in the country, which is a lot of polarization and a lot of uncertainty as to what's going to happen in the election, what's going to happen in Israel, and what's going to happen in Russia and the Ukraine.

Gregory Roberts: What may have had an effect two years ago may not have the same effect today. I think what we have talked about before is volatility in the spot price of gold and silver, as well as volatility to the downside in equities. That generally will affect us positively. I think that at the moment, we continue to see what everybody sees in the country, which is a lot of polarization and a lot of uncertainty as to what's going to happen in the election, what's going to happen in Israel, what's going to happen in Russia and the Ukraine.

Gregory Roberts: I think all of these things are just tightening the string a little bit, and I think the string is tighter than it's been and where it actually breaks. I'm not going to predict the future, but I will say that for what we saw in the week of August, the first week of August, I believe that we saw an outsized response across wholesale and DTC, more so than I would have expected. On Monday of that first Monday of August, we had a pretty big drop in equities, and we also saw that combined with a fairly quick spike to the downside for gold and silver.

Gregory Roberts: I think all of these things are just tightening the string a little bit, and I think the string is tighter than it's been and where it actually breaks. I'm not going to predict the future, but I will say that for what we saw in the week of, you know, the week of August, the first week of August, I believe that we saw an outsized response across wholesale and DTC more so than I would have expected. And on Monday of that first Monday of August, we had a pretty big drop in equities, and we also saw that combined with a fairly quick spike to the downside for gold and silver.

Gregory Roberts: Now, three or four days later, there was a recovery, and we were back where we were the week before. But I think what I find very encouraging is that what didn't probably, to most people, seemed like that big of a deal on that Monday, it was a significant event for us and multiple of activity that we saw the week before. That is consistent with what we've always talked about. I think what I saw, though, was a little bit... A little bit more like immediate knee jerk reaction, and you can feel it very quickly, and I think that says a lot about where we're positioned to take advantage of these things.

Gregory Roberts: Now, three or four days later, there was a recovery, and we were back where we were the week before. But I think what I find very encouraging is that what didn't, probably to most people, seem like that big of a deal on that Monday, it was a significant event for us. And, you know, multiples of activity that we saw the week before. So, you know, that is consistent with what we've always talked about. I think what I saw, though, was a little bit. A little bit more like immediate knee-jerk reaction, and you can feel it very quickly.

Gregory Roberts: And I think that says a lot about where we're positioned to take advantage of these things. We still, even after that week, August is looking elevated to July, so there has been some carry on. And I think we're seeing some a little bit of a little more optimistic behavior, I would say, extending past the first week in August. I mean, certainly not to levels where we saw 18 months ago, but definitely where we see events happening and our markets are reacting, and our business is reacting favorably to the upside. Now, we still haven't seen enough demand that has really had an increased effect on premiums, which, as we've said before, is very important.

Gregory Roberts: We still, even after that week, August is looking elevated to July, so there has been some carry on, and I think we're seeing some a little bit of a little more optimistic behavior I would say, extending past the first week in August, I mean, certainly not to levels where we saw 18 months ago, but definitely where we see events happening and our markets are reacting and our business is reacting favorably to the upside. Now, we still haven't seen enough demand that has really had an increased effect on premiums, which as we've said before is very important, so we're still in my mind performing very well with the somewhat depressed premiums that we're dealing with, but it's not going to take much.

Gregory Roberts: So we're still in my mind performing very well with the somewhat depressed premiums that we're dealing with. But it's not going to take much. A lot of inventory, a lot of excess inventory has worked its way through our business as well as our competitors. And it's not going to take much of a spike in demand to see premiums increase. Sure, that makes sense and is very helpful.

Gregory Roberts: That's a lot of inventory, a lot of excess inventory has worked its way through our business as well as our competitors, and it's not going to take much of a spike in demand to see premiums increase. Sure, that makes sense, and it's very helpful, and I guess along those lines, as we think about the elections, just giving you quite a bit of operational history, and sure I'm sure there's kind of variability, but I want to get a sense of kind of common trends in maybe how it's impacted election cycle that is how it's impacted the business in historical years.

Gregory Roberts: And I guess along those lines, as we think about the elections, just giving you quite a bit of operational history, and sure I'm sure there's kind of a sense of common trends and maybe how it's impacted the election cycle, that is how it's impacted the business in historical years. Yeah, I mean, we have great history in 2016 and in 2020, and we have historical data that we look at, as well as just the knowledge and the intuition of being through it before. I will say that this cycle starting on January 1st has been different than what we have seen in the past.

Gregory Roberts: Yeah, I mean, we have great history in 2016 and 2020, and we have historical data that we look at as well as just the knowledge and the intuition of being through it before. I will say that this cycle starting on January 1st has been different than what we have seen in the past. I think that for the first six months of 24 in this election cycle, I think there was a whether it was real or perceived, you know, there was a feeling that Trump was going to win the election, and I think that that kind of lulled a lot of precious metal buyers into comfort zone.

Gregory Roberts: Certainly, if you take the end of July in the 1st of August, there has been quite a shift in the perception of how people believe the election cycle is going now. I think you can relate not entirely. You can relate some of that to our performance, and whether or not what we started to see at the end of July and the 1st of August, how much of that you can attribute to the election cycle.

Gregory Roberts: I think that for the first six months of 24 in this election cycle, I think there was a, whether it was real or perceived, there was a feeling that Trump was going to win the election. And I think that that kind of lulled a lot of precious metal buyers into a comfort zone. Certainly, if you take the end of July and the first of August, there has been quite a shift in the perception of how people believe the election cycle is going now. I think you can relate, not entirely; you can relate some of that to our performance.

Gregory Roberts: And whether or not what we started to see at the end of July and the first of August, how much of that you can attribute to the election cycle, I don't want to venture a guess there, but I will say that there has been some effect and certainly the uncertainty in where we sit today with you know, it looks like, you know, 6.68, however many days it is to the election. You know, there is a great deal more uncertainty in the cycle than maybe we saw the first six months of this year. But it hasn't lined up exactly like what we've seen in the past.

Gregory Roberts: I don't want to venture a guess there, but I will say that there has been some effect, and certainly the uncertainty in where we sit today with... You know, it looks like, you know, 6.68, however many days it is to the election. You know, there is a great deal more uncertainty in the cycle than maybe we saw the first six months of this year, but it hasn't lined up exactly like what we've seen in the past. So, you know, we'll see how it plays out. So, just feeling very good about where we're at.

Gregory Roberts: So, you know, we'll see how it plays out. I think we're really well positioned for any outcome. And, you know, we'll just like I think we're positioned for whatever outcome happens as it relates to, you know, interest rates and, and, you know, how the equities market perform over the next six months. So, just feeling very good about where we're at.

Unknown Executive: Got it, thanks Greg. If there are any remaining questions, please press star one on your touchstone phone.

Gregory Gibas: Got it.

Gregory Gibas: Thanks, Greg.

John: If there are any remaining questions, please press star one on your touch-tone phone.

Seymour Jacobs: The next question comes from Si Jacobs with Jacob's Asset Management.

Sy Jacobs: The next question comes from Sy Jacobs with Jacobs asset management. Please proceed. Hey Greg, how are you? I'm good, Sy. How are you? I'm doing well. I have a couple of questions for you both related to M&A. Before we go back to your comments about what's in your pipeline. Can you just do a quick review of now that you're a full quarter into owning LPM and those related transactions? How is playing out relative to how you modeled it?

Seymour Jacobs: Please proceed.

Seymour Jacobs: Hey Greg, how are you? I'm good, Si. How are you? I'm doing well.

Gregory Roberts: I have a couple of questions for you, both related to M&A. Before we go back to your comments about what's in your pipeline, can you just do a kind of quick review of now that you're a full quarter into owning LPM and those related transactions? How, if playing out relative to how you modeled it, and then just a comment on that sort of Hong Kong Asian market? Is it sort of similarly depressed in activity and spread margin as your home market? Or is it just a different market with different conditions?

Sy Jacobs: And then just a comment on that sort of Hong Kong Asian market. Is it sort of similarly depressed in activity and spread margin as your home market? Or is it just a different market with different conditions? Yeah, I would say that as it relates to the LPM acquisition, we're now, you know, we're now about five months into it. I would say that we're very, very pleased with the assets that we purchased.

Gregory Roberts: Yeah, I would say that as it relates to the LPM acquisition, we're now, you know, we're now about five, five months into it. I would say that we're very, very pleased with the assets that we purchased. We're very happy with the personnel that have integrated very well with AMR US. I think Kathleen and her team on the finance side have worked through the expected challenges that we had as it relates to integrating their business with ours on the finance side. I think she's nearly there and has made great; it's a great accomplishment, and we're up and running and managing that very well.

Sy Jacobs: We're very happy with the personnel that have integrated very well with AMR US. I think Kathleen and her team on the finance side have worked through the expected challenges that we had as it relates to integrating their business with ours on the finance side. I think she's nearly there and has made great, you know, it's a great accomplishment and we're, you know, up and running and managing that very well. I think that the nature of their business is similar to what our wholesale business is experiencing here.

Gregory Roberts: I think that the nature of their business is similar to what our wholesale business is experiencing here. A large part of their business is sourcing products and creating products out of Asia and selling them throughout the world, including in the US. So the demand drop-offs that we've seen in Europe and in the US have definitely affected them. From a straight P&L standpoint, I would say we're a little behind where we would hope to be today on the model, what we modeled out, but very optimistic about that we're going to see the results that we expected.

Sy Jacobs: A large part of their business is sourcing products and creating products out of Asia and selling them throughout the world, including in the US. So the demand drop-offs that we've seen in Europe and in the US have, you know, definitely affected them. You know, from a straight P&L standpoint, I would say we're a little behind where we would hope to be today on the model, what we modeled out, but very optimistic about, you know, that we're going to see the results that we expected.

Sy Jacobs: I think, you know, we're managing through that. I believe that the opportunity for AMR, we've talked about it before, the opportunity to move our wholesale assets and expertise into the Asian market and develop a wholesale trading hub in Singapore as well as use the Hong Kong facility to expand our wholesale trading to it. Capture a bit more of that business and that time zone, we're very, we're full speed ahead and we're very optimistic.

Gregory Roberts: I think we're managing through that.

Gregory Roberts: I believe that the opportunity for AMR, we've talked about it before: the opportunity to move our wholesale assets and expertise into the Asian market and develop a wholesale trading hub in Singapore, as well as use the Hong Kong facility to expand our wholesale trading to... Capture a bit more of that business and that time zone. We're very, we're full speed ahead and we're very optimistic, and Charlie from LPM and his team have been great about helping us integrate this. Thor from A-Mark is involved in this process as it relates to the Singapore facility. We've identified some talent in the region that we're enthusiastic about.

Sy Jacobs: And Charlie from LPM and his team have been great about helping us integrate this Thor from A-Mark, is involved in this process as it relates to the Singapore facility. We've identified some talent in the region that, you know, we're enthusiastic about. So, you know, that we believe is, we're still very happy with the acquisition and we believe it's going to, you know, it's definitely going to benefit A-Mark in a lot of different ways, you know, once it gets rolling.

Gregory Roberts: That we believe is, we're still very happy with the acquisition, and we believe it's definitely going to benefit A-Mark in a lot of different ways once it gets rolling.

Gregory Roberts: Right, so part two is, you know, you reference the, you know, really active, not more active than ever, the pipeline or fun, all of opportunities are too small. If you could kind of think about, I don't know, the two that you think have the highest probability of actually crossing the finish line, would that, would those include topping up, you know, partially owned companies, you know, existed that you already have a minority or majority stakes in or are they new targets, and then would they be North America, Asia, or Europe, and then lastly, the large ones, you said there's, like, large and small, with the largest likely to be done approach in trauma, what J&B meant to A-Mark as its largest acquisition ever?

Gregory Roberts: Right, so part two is you reference the really active, it's not more active than ever, the pipeline or fund all of our opportunities, arts and small.

Gregory Roberts: If you could kind of think about, I don't know, the two that you think have the highest probability of actually crossing the finish line, would those include topping up partially owned companies that you already have minority or majority stakes in, or are they new targets? And then would they be North America, Asia, or Europe? And then lastly, the large ones, you said there's large and small with the largest likely to be done approach in drama, what JNB meant to A-Mark as its largest acquisition ever? Well, I will quickly answer that. JNB was a very unique opportunity for us, and the people at JNB were extremely well versed at what they do, and it was transformational for A-Mark to go from a strict wholesale business with minority investment to a fully owned DTC business, which we have with JNB's help in a lot of ways been able to grow that tremendously.

Gregory Roberts: Well, I will quickly answer that. I don't, J&B was a very unique opportunity for us and people at J&B are, you know, we're extremely well versed at what they do, and it was transformational for A-Mark to go from a strict wholesale business with minority investment to a fully owned DTC business, which we have with J&B's help in a lot of ways been able to grow that tremendously. As it relates to topping off, I think, you know, that's probably not in the cards, I think that, you know, we did, the LPM transaction was a new business, I think that the increased ownership and the consolidation of Silver Gold Bull, again, was a little bit unique to that structure from the beginning and how we had negotiated it over time.

Gregory Roberts: As it relates to topping off, I think that's probably not in the cards. I think that we did; the LPM transaction was a new business. I think that the increased ownership and the consolidation of Silver Gold Bowl, again, was a little bit unique to that structure from the beginning and how we had negotiated it over time. So I think it was a bit of a timing opportunity for us as opposed to what I would call a new deal in the funnel. When I'm talking about new deals in the funnel, it's probably exclusively new deals.

Gregory Roberts: So I think it was a bit of a timing opportunity for us as opposed to what I would call like a new deal in the funnel. And then when I'm talking about new deals in the funnel, it's a little, it's probably exclusively new new deals. I don't have anything right now, you know, on the board that I would say is transformational or is of the size of what we did with J&B.

Gregory Roberts: I don't have anything right now on the board that I would say is transformational or is of the size of what we did with JNB. But still important, and I would say there's both wholesale and retail opportunities domestically. I think there's retail opportunities outside the US in companies that I believe can benefit from JNB's expertise. Then I think there are other deals that may be beneficial to our logistics business or our minting businesses. I'd say we're looking there and in this particular market, part of management's goals are to make sure that all parts of our business can rise in a hot market.

Gregory Roberts: But still important, and I would say, you know, there's both wholesale and retail opportunities domestically. I think there's retail opportunities outside the US in companies that I believe can benefit from J&B's expertise. And then I think, you know, there are other deals that, you know, maybe beneficial to our, you know, our logistics business or our minting businesses. I'd say we're looking there, and in this particular market, you know, part of management's goals are to make sure that all parts of our business can rise in a hot market.

Gregory Roberts: The goal is is that our highs need to be higher than our previous highs, and our lows need to be higher than our previous lows. And to do all that, you can't just focus on one area of our business. There has to be some thought that goes towards how to level up. All parts of our business, which I think we're doing, to accommodate both in acquisition but also accommodate a much hotter or higher volume market, so that we can ship more packages so that we can have more inventory, so that we can have more distribution, so that we can have more liquidity and financing for our customers.

Gregory Roberts: The goal is that our highs need to be higher than our previous highs, and our lows need to be higher than our previous lows. To do all that, you can't just focus on one area of our business. There has to be some thought that goes towards how to level up all parts of our business, which I think we're doing, to accommodate both in acquisition but also accommodate a much hotter or higher volume market so that we can ship more packages so that we can have more inventory so that we can have more distribution so that we can have more liquidity and financing for our customers.

Gregory Roberts: I think all those things come to mind when we're looking at opportunities. And I think we're comfortable growing any of those areas. Like I've said before, the seller on the buyer have to match up at the right time and the price has to be right, but I will say that in all areas we're looking at, as you can see from our performance, we're now into what we would call a slower fiscal year, so you'll have a pretty good look at trailing 12 months and what's going on in the marketplace.

Gregory Roberts: I think all those things come to mind when we're looking at opportunities, and I think we're comfortable growing any of those areas. Like I've said before, the seller and the buyer have to match up at the right time, and the price has to be right. But I will say that in all areas we're looking at, as you can see from our performance, we're now into what we would call a slower fiscal year, so you'll have a pretty good look at trailing 12 months and what's going on in the marketplace. And I do believe that as we progress forward, most targets in our business are going to have similar trailing 12 months performance, so I think it does put a more realistic view on what valuation should be.

Gregory Roberts: And I do believe that as we progress forward, most targets in our business are going to have similar trailing 12 months performance, so I think it does put a more realistic view on what valuation should be. And I think that plays to A Mark's benefit that we have such a strong balance sheet and we built such a great liquidity situation and asset and capital situation and great shareholders and we are unique in that we have the ability to actually still do an acquisition today.

Gregory Roberts: And I think that plays to A-Mark's benefit that we have such a strong balance sheet and we built such a great liquidity situation and asset and capital situation and great shareholders. And we are unique in that we have the ability to actually do an acquisition today. There's not a tremendous amount of competition out there right now with people that are looking to do the same thing we are. So it feels like it's setting up quite well for us.

Gregory Roberts: There's not a tremendous amount of competition out there right now, you know, with people that are looking to do the same thing we are, so it feels like it's setting up, setting up quite well for us. Great, that's really good color. Thanks, Craig.

Gregory Gibas: Great, that's really good color. Thanks, Greg.

John: Okay, we have no further questions in Q.

Unknown Executive: Okay, we have no further questions in Q. At this time, this concludes our question and answer session.

Gregory Roberts: At this time, this concludes our question-and-answer session.

Gregory Roberts: I'd now like to turn the call back over to Mr. Roberts for his closing remarks. Great. Thank you, John.

Gregory Roberts: I'd now like to turn the call back over to Mr. Roberts for his closing remarks. Great. Thank you, John. Again, as usual, I just said it a few minutes ago and I want to say it again. Thank you to all of our shareholders. Great group. Love talking to you guys. It's been a great, great ride here with A Mark and I can't thank you enough for your continued support. Thanks for joining our call today.

Gregory Roberts: Again, as usual, I just said it a few minutes ago, and I want to say it again. Thank you to all of our shareholders. Great group. Love talking to you guys. It's been a great, great ride here with A-Mark, and I can't thank you enough for your continued support. Thanks for joining our call today.

Gregory Roberts: I'd also like to thank our employees and our fantastic management team for their dedication and commitment to A Mark's success. And we can't wait to keep you posted and apprised on what's coming next in the A Mark world. So thank you again. Thank you very much.

Unknown Executive: I'd also like to thank our employees and our fantastic management team for their dedication and commitment to A-Mark success. And we can't wait to keep you posted and apprised on what's coming next in the A-Mark world. So thank you again. Thank you very much.

Unknown Executive: Before we conclude today's call, I would like to provide A-Mark's safe harbor statement that includes important questions regarding forward-looking statements made during this call. During today's call, there were forward-looking statements made regarding future events. Statements that relate to A-Mark's future plans, objectives, expectations, performance, events, and the like are forward-looking statements. Within the meeting of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. These include statements regarding expectations with respect to feature, profitability, and growth. International expansion, operational enhancements, and the amount or timing of any future dividends. Future dividends, risk, and uncertainties, individually or in the aggregate, could cause actual results or circumstances to differ materially from those expressed or implied in these statements.

Unknown Executive: Before we conclude today's call, I would like to provide A Mark's safe harbor statement that includes important questions regarding forward-looking statements made during this call. During today's call, there were forward-looking statements made regarding future events, statements that relate to A Mark's future plans, objectives, expectations, performance, events, and the like are forward-looking statements. Within the meeting of the Private Security's Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. These include statements regarding expectations with respect to feature, profitability, and growth, international expansion, operational enhancements, and the amount or timing of any future dividends.

Unknown Executive: Future dividends, risks and uncertainties, individually, or in the aggregate, could cause actual results or circumstances to differ materially from those expressed or implied in these statements. Factors that could cause actual results to differ, including the following failure to execute the company's growth strategy, including the inability to identify the suitable or available acquisition or investment opportunities, greater than anticipated cost incurred to execute this strategy, government regulations that might impede growth, particularly in Asia, the inability to successfully integrate recently acquired businesses, changes in the current international political climate, which historically has favorably contributed to demand and volatility in the precious metals markets, but also has posed a certain risk and uncertainties for the company, particularly in recent periods, potential adverse effects of the current problems in the national and global supply chains, increased competition for the company's higher margin services, which could depress pricing, the failure of the company's business model to respond to changes in the market environment as anticipated, changes in consumer demand and preferences for precious metals, products generally, potential negative effects that inflationary pressure may have on our business, the inability of the company to expand capacity at Silver Town Mint, the failure of our investee companies to maintain or address the preferences of their customer basis, general risks of doing business in the commodity markets, and the strategic business economic, financial, political and governmental risk and other factors, risk factors described in the company's public filings with the Securities and Exchange Commission. The company undertakes no obligation to publicly update or revise any forward-looking statements. Listeners are caution not to place undue reliance on these forward-looking statements.

Unknown Executive: Factors that could cause actual results to differ, including the following: failure to execute the company's growth strategy, including the inability to identify the suitable or available acquisition or investment opportunities; greater than anticipated cost incurred to execute the strategy; government regulations that might impede growth, particularly in Asia; the inability to successfully integrate recently acquired businesses; changes in the current international political climate, which historically has favorably contributed to demand and volatility in the precious metals markets, but also has posed a certain risk and uncertainties for the company, particularly in recent periods; potential adverse effects of the current problems in the national and global supply chains; increased competition for the company's higher margin services, which could depress pricing.

Unknown Executive: The failure of the company's business model to respond to changes in the market, environment as anticipated, changes in consumer demand and preferences for precious metals, products generally, potential negative effects that inflationary pressure may have on our business, the inability of the company to expand the capacity at Silver Town Mint, the failure of our investee companies to maintain or address the preferences of their customer bases, general risks of doing business in the commodity markets, and the strategic business, economic, financial, political, and governmental risks, and other factors, risk factors described in the company's public filings with the Securities and Exchange Commission.

Unknown Executive: The company undertakes no obligation to publicly update or revise any forward-looking statements. Listeners are cautioned not to place undue reliance on these forward-looking statements.

Unknown Executive: Finally, I would like to remind everyone that a recording of today's call will be available for replay, via link in the Investors section of the company's website. Thank you for joining us today for A-Marks, Earnings Call, you may now disconnect.

Unknown Executive: 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.

Unknown Executive: Thank you for joining us today for A-marks, earnings call.

Q4 2024 A-Mark Precious Metals Inc Earnings Call

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