Q1 2025 US Global Investors Inc Earnings Call
Yeah.
[music].
As seen on slide number two.
Speaker Change: Presenters for today's program are Frank Holmes U S Global Investors', CEO, and Chief Investment Officer, Lisa Callicott, Chief Financial Officer, and myself Ali Schoenfeldt director of marketing.
Speaker Change: On slide number three.
Speaker Change: During this webcast we may make forward looking statements about our relative business outlook any forward looking statements and all other statements made during this webcast that don't pertain to historical facts are subject to risks and uncertainties that may materially affect actual results. Please refer to our press release and.
Speaker Change: Corresponding Form 10-Q filing for more detail on factors that could cause actual results to differ materially from any described today in forward looking statements any such statements are made as of today and U S. Global investors accepts no obligation to update them in the future.
Speaker Change: On slide number four this is another slide we like to highlight that kind of goes along with our disclosure or our safe Harbor slide I'll speak about it briefly in a Frank do you want to jump in please feel free but this is what we call the DNA of volatility graphic what it does is allows investors to match.
Speaker Change: Managed their expectations of various asset classes. So you see what it's showing is the standard deviation.
Speaker Change: Over a year for various industries from large cap to gold Airlines and then of course the growth stock and so what's most important is to realize that over a one day and a 10 day period.
Speaker Change: Essentially a non event for our growth stock to go up or down 2% and then subsequently up or down 4%, but then if you look at more volatile assets.
Frank Holmes: For example, if you look at the company like high which deals directly with bit point that fluctuation has historically been bigger swings Frank I don't know if you want to add any other color on this slide no I think thats very helpful.
Frank Holmes: The <unk> business that we are in the fund business.
Frank Holmes: And a lot of our funds are in the gold business. So as you can see from this visual our biggest fund as airlines and so that's a non event for those assets to go up or down 6% over a 10 day rolling period, and gold is plus or minus 6%.
Frank Holmes: We are less than that over a 10 day period.
Frank Holmes: But it's just helpful to put that in context.
Frank Holmes: That each asset class has its own unique.
Speaker Change: DNA of volatility and to manage those expectations as Holly said, it's important to understand though we update this on a regular basis because government policies over time can change an industry or category.
Speaker Change: So it is helpful.
Speaker Change: Further I'd like to point out to investors is that.
Speaker Change: We used to trade.
Speaker Change: First bought U S. Global moved here off of money market funds rates were very very high and we had big growth in our government.
Speaker Change: Agency Fund and it went from basically nothing too big in dollars of assets and that was the sort of a correlation but we were known for gold and then our goal to US was took off and we start to trade as.
Speaker Change: Stock highly correlated around what gold was doing and what the fund flows were in and out of our gold funds.
Speaker Change: And then it became predominantly off of bitcoin and hive. When we made the initial investment in the high in 2017, because we realize that weren't going to allow an ETF in the crypto industry and it was only this year.
Speaker Change: This year than it was allowed.
Speaker Change: Now this week.
Speaker Change: Elected a future president who is pro.
Speaker Change: Bitcoin ecosystem. So I think we were way ahead of our times.
Speaker Change: That Ah hi.
Speaker Change: At one time or unique invest.
Speaker Change: Investment we were early and we caught that way and we were having this tremendous volatility around bitcoin that's not happened today, because we have our highest structured note.
Speaker Change: And so that is very different composition of our four key investments.
Speaker Change: And I'm happy to see that all of these other etfs.
Speaker Change: Enjoyed success and grown.
Speaker Change: But it's taken them something like seven years before this.
Speaker Change: Event took place.
Speaker Change: I think that the.
Speaker Change: The industry now follows what the airline index is doing what the full fund flows are which is moving around and I hope to turn this presentation to give you some color on the airline industry and goal because gold is making all time highs also.
Speaker Change: Next please.
Speaker Change: I can take it back briefly on this slide as always to our loyal shareholders that are tuning in and we invite you to E Mail us at info at <unk> Dot Com and we would allow us to send you one of our hat theme here and we actually have some new gogo text on the way so like I said the message with your mailing address where.
Speaker Change: Happy to get you some USPI wagon.
Speaker Change: Next slide before I hand, this over to Frank I will briefly review our company U S. Global investors is an innovative investment manager specializing in smart beta to point out the <unk> product, we have vast experience in global markets and specialized sectors and we'll use a quantum mental strategy too.
Speaker Change: Create these smart beta two point of funding. The company was originally founded as an investment club, becoming a registered investment adviser in 1968. The company has a longstanding history of global investing and launching first of their kind investment products, including the first no load gold fund or <unk>.
Speaker Change: All known for our thematic investing in Goldman precious metals natural resources Airlines and luxury goods.
Speaker Change: Now on slide number seven I would like to hand, the presentation over to CEO Frank Holmes Frank.
Frank Holmes: Thank you Holly.
Frank Holmes: We have over 30 years' experience unique global footprint particular that grew out of gold in the world of gold and looking for gold mining assets.
Frank Holmes: The big growth in the past 30 years I spent in Africa, and Latin America.
Frank Holmes: And in certain little regions.
Frank Holmes: North America particular, Canada.
Frank Holmes: and we saw a success in pockets from Quebec and Ontario and in British Columbia, but the big growth in the gold mining industry was in emerging countries.
Frank Holmes: With the rise of GDP per capita, with China embracing capitalism and having a cultural affinity for gold, it led to a new world, especially this century, year 2000, and we look
After the great tech bubble, commodities, in particular gold
Frank Holmes: started to get this, I call it, the love of trade.
Frank Holmes: And that led us to open up a China region fund, which we have had incredible success with, and then there's this sort of anti-China concerns, and rightfully so, so we've shut that down. There's just no interest.
Frank Holmes: and it led us into other emerging countries. And with that, in that journey, we have created three ETFs because that's the new technology in the Mutual Fund 40 Act.
industry, and they've been related to our global travels.
Speaker Change: But it's always, as Holly said, a smart beta 2.0, which means that you have very quantitative regressional work that's a minimum of 10,000 hours of studies, going back over a decade to look at what is the ideal portfolio construction for up and down cycles in the economy, and what are the industry-specific factors that are best for stock picking, and you try to create a portfolio that recalibrates every quarter.
Speaker Change: And so we've been very successful in creating sustainable products. And with that...
Speaker Change: We have 100,000 readers in 80 countries and we've won many award-winning financial bloggers as we've grown the sort of footprint of sharing our global knowledge and trade with our weekly Investor Alert. Next please.
Speaker Change: So we want to thank those shareholders, in particular the Vanguard Group that we show up in their index. They own 5.32%.
Franklin Investments.
and Parrot Capital.
Speaker Change: has been a loyal investor in the micro-cap and small-cap sector. And so I'd like to thank them all for continuing to be strategic investors with us. Next, please.
Speaker Change: is that microcaps struggle to keep pace with large caps. And this is a classic example of looking since 2020, just before, I guess, COVID onset, you can see.
Speaker Change: Is the S&P as far outperformed iShares, Microcap stocks? Next please.
Speaker Change: And then when you go and look at the big cap stocks, something else is really quite interesting is the difference between market cap weighted S&P 500 versus equally weighted S&P 500. And you can see here that the market cap only of the S&P 500 is up almost 12% more than the equally weighted. So then it lends itself what stocks are leading that charge.
Speaker Change: and you can see that Tesla and Google and Microsoft and Apple and Facebook and Tesla, they've been
Speaker Change: big seven stocks that have skewed the overall, in particular, the technology of the S&P 500. And so it's not just the micro caps, it's also the big caps, and there you have seven stocks dominating the overall performance. Next, please.
Speaker Change: And then we want to go back and look at how we've done over five years, and there's the Russell Microcap Index.
Speaker Change: And since then, that sort of decline has been people taking their profits off of Jets. And even though Jets, as a stock price, has not returned to its pre-COVID, even though...
Speaker Change: more people are flying today than pre-COVID. And I'll explain that more in detail. So I try to understand that we've had this big run. And that big run, as you can see here, was a combination of Bitcoin and our investment in Hive exploding during this period, along with assets coming into the complex. So the real important part is relative to having a great product that is sustainable and is thematic enough that it attracts a lot of investors.
Next, please.
Speaker Change: So often when you're my age, you get this question and sort of good corporate governance is succession planning.
Speaker Change: And I always like to say that Warren Buffett's my hero for many reasons.
Speaker Change: But that 94-year-old Warren Buffett is now sitting on more than $325 billion in cash.
Speaker Change: and he is still blown and going. And so I often like to run in the morning five kilometers, which is about three miles. So staying healthy is important and I want to keep my brain and my body as robust as possible. So there's no immediate succession that's necessary or planned for me today. So next please.
Another sort of sage advice out of Warren Buffett.
Speaker Change: is that stock buybacks, they benefit all shareholders, not just the biggest shareholders. Increasing dividends, it benefits the biggest shareholders on that income distribution, whereas the thought process is that when you're buying shares and you're shrinking the market cap, that all shareholders benefit.
Speaker Change: And it's a combination, which I'll explain in a few seconds. But I think that we're going to demonstrate to you that we've been very strong at buying the stock.
Speaker Change: Bye! Because we've lived through these cycles before. We've lived where you have a hot product or you get a theme so correct.
Speaker Change: such as creating the first Eastern European fund that went from $4 million to $1.4 billion.
And that fund has had such difficulty with Putin first
Speaker Change: Going back and then coming back again and invading Ukraine American appetite for anything in Eastern Europe
Speaker Change: or in that region as close to Putin is really not happening and they would rather speculate in technology stocks like NVIDIA and keep that risk domestic. So that is something that I've witnessed on and I think there's a wonderful book by John Sorwecki on the wisdom of crowds.
Speaker Change: It's important to be able to capture that, but I would say, share with you that the other unique ETF products we've created are see the sky. It really captures emerging markets and global trade.
as global trade picks up, as global GDP picks up.
shipping explodes because 80% of everything is shipping so
Speaker Change: We've consolidated our exposure to Asia and to Eastern Europe by having a unique SmartBeta 2.0 for cargo, for cargo airplanes and predominantly for shipping higher-end products across oceans.
And the other part is to recognize that we are...
Speaker Change: With all our cash makes us undervalued. So we are just going to be in our sort of consistent basis, no extreme big moves, except for working and analyzing our products and looking to come up with new, exciting products next place.
Speaker Change: So often you're asked, like, why do you buy back your stock besides Warren Buffett's sage advice? Well, we believe that the U.S. global is deeply undervalued. We believe that by buying stock back, it's going to enhance shareholder value.
Speaker Change: And we believe that during this sort of lull that's taken place in particular coming into this very Challenged election cycle with so much negativity
Speaker Change: Thank God is behind us, that we offer to the shareholders a very strong shareholder yield of 9.34%. And that is a combination of stock buyback and dividends. Next, please.
Speaker Change: So the number of shares repurchased over the past three period, as you can see, that as you as grow has gone down in overall stock price,
Speaker Change: It's made it for as a long-term vision just prudent to increase our stock buybacks because we believe is deeply undervalued.
Speaker Change: But we're not going to go do something that is to pay all the cash. And as some shareholders have tried to take our cash from us, and pay some big one time price or a big dividend, which would really only enrich me not enrich the company and be able to deal with these
Speaker Change: these sort of negative cycles that you can have when you have cyclical thematic products. So we believe we're undervalued and we are showing that conviction by a very pragmatic and thoughtful way of buying back more stock. Next please.
So dividends.
It's interesting that dividends quite often in the quant world
Speaker Change: that there's a model that looks at the five-year government treasuries and what is that yield that's a safe yield for five years against what the dividend yield is today or can that your dividend grow faster than what the five-year yield is?
Speaker Change: So stocks and this is my first time in 1978 when I got hired and went into this business
and graduated from university was to have a very simple...
Speaker Change: is higher than the five-year treasury yield. And that, it makes it a very attractive proposition and another rational reason for us to buy back our stock. Next, please.
Speaker Change: So we're gonna take a look at the first quarter of 2025. Some of the strengths is that we have a strong balance sheet including cash and other investments.
Speaker Change: Shareholder value the company continues to buy back stock as I've just mentioned and pay its monthly dividend
Speaker Change: and Gold's record performance of gold reaching all-time highs and the company's gold focus.
as funds have grown modestly year-over-year on total assets.
Speaker Change: We're not seeing the big flows that you would normally see in gold and gold stocks. But I believe that when we look at global debt structures and the continuous printing money,
and many of the countries in the G20.
Speaker Change: still believe in modern monetary theory as a way to stimulate the economy, that gold and other alternative asset classes will continue to be an important part of a diversified portfolio.
Speaker Change: why we think that we're rightfully positioned for the world of gold. Next, please.
Speaker Change: So Go Gold theme, we write about it every week. It's always been this sort of idea of having 10% allocated towards gold, nice beautiful gold jewelry as gifts for love.
Speaker Change: and the other 5% in our gold funds to be able to capture this run. But you can see the total assets have modestly grown. Next, please.
They put that in context
In 2007, those assets were $2 billion.
Speaker Change: a tenfold bagger, going back to 2007 levels for gold stocks. So, if gold continues with its march, it was up two standard deviations over 60 trading days. And yes, they had corrected. And I think it's just a wonderful buying opportunity as the dollar surged with the election results. It's just normal for the short-term mean reversion. But gold as an asset class, I believe, will continue as it has this century outperformed the S&P 500.
Speaker Change: and gold royalty companies, which I've always loved, like Franco Nevada, have all performed Berkshire Hathaway since it went public in 2008.
Speaker Change: and other stocks that we own in our funds like Triple Flag. It's also Operform and it went public like two.
Speaker Change: Just after 2019, in that time frame area, and it's one of the newer royalty companies by that was the dominant share was Elliott Management, it's a hedge fund.
Speaker Change: and they wanted to create their own royalty company and because it's a unique model. And you can see that it too has been very successful outperforming majority of gold stocks since it's gone public.
Speaker Change: Rule of three, strategy and tactics create sustainable thematic products using a smart beta 2.0 strategy backed.
Speaker Change: testing up to 10,000 hours and then continuously testing every quarter, manage to preserve cash for future growth opportunities and market corrections, and M&A activity to acquire other funds. We look at deals, we get deals sent to us and still we see this sort of
Speaker Change: a lot of land valuations and other companies that own mutual funds of what they think they're really worth.
Speaker Change: and when I sometimes get the question and I say, well, then why don't you buy our assets if you think that's what your funds are worth? And it's so, it's just.
Mutual funds will slowly over time be replaced.
Speaker Change: with ETFs, that's just an ongoing evolution. They do provide a less expensive, but you need more assets to break even. And you have seen that originally it was more index ETFs
Speaker Change: and now we've seen active ETFs explode in valuations. Smart Beta 2.0 is in between both. It is a rules-based discipline of looking at an industry.
Speaker Change: that recalibrates every quarter versus just buying market cap index of an industry.
and what we have witnessed, which is very positive.
in this sort of the adoption of ETFs.
Speaker Change: has been the sort of idea that having active ETFs and the seeding of them and the funding of them, it's evolved. It's evolved just like Bitcoin ETFs evolved and finally got off the launching pad this year. Next, please.
Speaker Change: So the shareholder value is a simple algorithm. Dividends plus buybacks and debt reduction divided by market cap gives you what the shareholder value is. We don't have a debt issue, so we have lots of cash, so we're buying back stock and we're maintaining that dividend. And when you take a look at the relative valuation, it is a very attractive shareholder yield. Next, please.
And I say that because it's 9.34%. Next please.
Speaker Change: U.S. coal investors committed to returning value to shareholders when compared to treasury yields. Ten-year treasury yield is 3.81, five-year is 3.58. Our dividend itself is higher than the five-year and the overall stock buyback when you combine it, there is a better value proposition buying growth long-term. Next, please.
Speaker Change: So I'd like to look at some basic comps and give you a quick idea that Wisentree, they have over $100 billion in assets and they've had some significant growth.
Speaker Change: in new products in this past year. And sometimes it's like having a hot technology or a hot car design. It's like having a hot systematic ETF that sort of garners the interest of investors. And it's in recognizing that, but WisdomTree is 100% ETS.
Speaker Change: and their price to book trades at a higher multiple versus Invesco, which 40% of their assets are QQQ, which is a monster of an ETF that covers basic NASDAQ stocks.
Speaker Change: And you can see that they've had their challenges with their other fund and asset groups and the return on their assets have been negative. We've been slightly higher and that goes up and down. Going back a couple years back, U.S. Global had the highest return on assets.
Speaker Change: pre-tax margins they've shrunk because the funds are shrunk and it's a pretty simple math
Speaker Change: of how many funds you need to break even. And the dividend yield, as you can see, Invesco's stock is
Speaker Change: is more significantly down, so therefore their yield is higher, and you take a look at Wisdom Tree that they traded a higher price-to-book. So when you look as a GARP investor, price-to-book is important, so automatically it would show up as Invesco and U.S. Global, and then when you look at return on assets, then it would be U.S. Global and it'd be Wisdom Tree. If you're looking at pre-tax margins, then you're back to Wisdom Tree. If you're looking for dividend yield, you'd be Invesco.
Speaker Change: So it's the magic of the matrix that you create with your long-term vision, with your faith in the company, that how they function and what they do. I think that's what makes that determination. If you're just a peer, buy the cheapest price the book, then you're going to look at the best goal. If you're looking for who has the highest return on assets, you're going to like a wisdom tree.
Speaker Change: If they're looking for dinner and yield, they're going to look at Ivesco. I think the value proposition is right along the middle and that's U.S. Global. Next please.
Speaker Change: So when we look at the recent purchase, we've made $520,000. I think that it represents the, it says here it represents 4% of market cap. Now what that really means.
is that the board has approved.
Speaker Change: for us to be able to buy up to approximately 14% of the shares. Lisa, you can correct me on that.
Speaker Change: and when she speaks, etc. But roughly, it's capital which we have in our balance sheet to consistently buy back the stock without any
Speaker Change: overreaching on one day or one week just like consistent as it's undervalued to be buying back the stock. Next please.
Speaker Change: So quarterly webcasts on our thematic products, gold and interest rates, understanding the interest rate influence on mining stocks. We did a presentation recently on that and we also did one on why now is the time to consider airline stocks and just after that
Speaker Change: What's interesting for me to share with you is that Spear had jumped 68%. Well,
Speaker Change: It's after Spirit had fallen over the past year, especially with not being able to merge with JetBlue and all those problems. It had fallen over 80%.
Speaker Change: and they have this big pop. And what we see with that is that people with long hedge funds are
Speaker Change: or JETS ETF and short the stock. And all of a sudden, they got an extension on their debt refinancing, and there was massive short covering. And we see that, we see the fund flows. And so what I'm trying to share with you is that
Speaker Change: When you look at the ecosystem of investors in JETS, it's retail.
Speaker Change: It's people that trade off the oil price. It's people that use hedge funds to go long jets to short various airlines.
Speaker Change: There are GARP investors that are doing asset allocation because the airline industry is a growth industry at a very reasonable price.
So you have a very robust
trading around just as a proxy.
Speaker Change: We've further launched it in Columbia and we're expanding that and the marketing in Latin America so that we have a broader interest in our product lineup.
Speaker Change: What we did this past six months was to merge our JETS which was listed in London with another group and create a TRIP.
Speaker Change: and Trip is basically has an expanded universe that has more tourism involved with it. So, but it's really the backbone is the jets and so that has more of a critical mass listed over there that we become the global experts in the airline industry, like we are in the world of gold. Next, please.
Speaker Change: So the TSA numbers hit all-time high. They were roughly running or clearing 2.5 million people before COVID, down to 80,000 people in a day. And what you see, I don't think that's right. It was in December 2019. That was in March of 2019. And it grew. And Warren Buffett got out. He was worried. He was turning 90 years old. And there was such a negative aspect of it. But the millennials and Generation Z seemed to be the big speculators. And we had tremendous fund flows coming in. And Jets went from about $11 up to $28. And then it started getting these really good numbers.
Redemptions, which is really interesting because
Speaker Change: The TSA numbers had not reached even close to 3 million people.
Speaker Change: So you're seeing that the stock still, I believe, has another close to $10 on the upside to go to pre-COVID numbers, and the airline industry remains, in the summer, had incredible traffic.
Speaker Change: So it's a very positive, inexpensive industry that's critical for global economic activity. Next, please.
And we are
Speaker Change: the go-to people. We have that unique product and it has outperformed the benchmark which we first started with, was to beat the New York Stock Exchange Global Airline Index.
Speaker Change: there's been one or two other ones that try to come out but they do not have the smart beta 2.0 and I believe that that's a very important discipline of stock selection to outperform the index.
Speaker Change: And so what have we seen this quarter since we did our presentation? Unitas also announces a buyback, 1.5 billion dollar buyback. Jets all of a sudden pops.
Speaker Change: 10% of jets was in United Airlines, and United Airlines now is up 36%. And so I keep reiterating, like for the webcast, but going into the election, the sentiment was so pervasively negative.
Speaker Change: That's just a headwind, and we just continue to be positive and constructive and balanced in how we tell this JETS story. Next, please.
Speaker Change: Airline stocks this century have outperformed the S&P from September to November.
Speaker Change: So, we really tried to highlight that at the beginning of October, that the math suggests that there's a higher probability of the airlines will perform than they have. In fact, what's really interesting is that the best time to buy is late spring, early summer when it lags the overall S&P because six months later, the math is so much in your favor that it trades higher. And it's just interesting for the traders that we have that come in and out. Like I mentioned, there's oil traders that oil prices are rising, they're out of jets, oil prices falling, they're into jets.
Speaker Change: Then you have individual hedge fund managers that are going longer short individual names And they want to what's called a pairs trade and just becomes the proxy. Next, please
Speaker Change: So the SmarthBeta 2.0 ETF versus the New York ARCA Global Airline Index
Speaker Change: It's outperformed by 26% since we launched this after, and you gotta remember that there's no fees for the Global ARCA Index, there's fees with us, but we still outperformed. And I think that that's really a compelling story of the Smart Beta 2.0. Next please, then just buying market cap.
Speaker Change: You can see here that it's all performed this year by 13% after fees. So it does work. And that's why I try to highlight to investors that the number I showed you just earlier with United Airlines was a shorter timeframe. This is year to date. And so there's been during the summer such negative news, but the oil prices were falling and the world is coming to an end and all this negative narrative and the airlines are trading at six times and five times earnings. It just didn't make sense when the markets trading at 22 to 25 times.
Next, please.
Speaker Change: So gold gold theme, we're positioned for the gold gold theme and I think it's this idea I mentioned earlier is modern monetary theory. Please subscribe to Invest Alert, you can get more information and insightful and on YouTube we have insightful explanation of what's going on that gold gold will continue to be a unique asset class. Next please.
Speaker Change: documents that are out there for the Bitcoin ecosystem. The Bitcoiners and the crypto around the world just say that there's no pulling back in MNP and the global debt continues to climb, so one country versus another will just debase its currency faster than the other.
Speaker Change: and you can sort of see that when you take a look at the next visual, please.
Speaker Change: So when we look at CPI, the U.S. is 3.9, but when you look at global nominal GDP, it's a 7.8. Gold is slightly ahead of global nominal GDP, which is basically being fueled by all this debt. And then you want to take a look at how well gold is done in some of these big countries' currencies. Next, please.
Speaker Change: Oh, sorry, that's okay. It's also this sort of deficit, U.S. deficit spending continues to make alternative assets like gold attractive. That's called the fear trade.
Speaker Change: The love trade, which is 60% of gold demand, is more correlated to rising GDP per capita.
India is surging, China is on the ropes.
Speaker Change: in India and China, when you combine them, are 40% of the world's population. You throw in Southeast Asia, the Middle East, and now we're pushing more than, you're pushing about 60% of the world's population. And I think it's important to recognize that there's a cultural affinity. Gold is given, 24 karat gold jewelry for birthdays, for wedding season. There's two big wedding seasons in India. We have the season of lights, Diwali season, very, very significant consumption of 24 karat gold jewelry.
Next, please.
Speaker Change: That's just a visual I wanted to share with you. So the gold-gold theme, you know, gold's historic rise as a global phenomena, who's had the biggest debt spending for as a percentage of GDP has been Japan, and look how strong gold has done for Japanese investors.
Speaker Change: And if you look at the Euro, you can see India. Why do Indian women basically have six times the amount of gold as in Fort Knox? Because they trust gold more than they trust government policies for money printing. And that's just a hedge against currency debasement.
Speaker Change: The U.S. is 32%. You can see China, interestingly enough, is similar. And a lot has to do with China's currencies come down. And I think that that number is interesting because it's probably going to change after the election cycle here of a strong dollar. But they're doing everything in China to try to manage their currency against the U.S. dollar for trade and against the euro. And they predominantly export their products to Europe and America. And there's a transition taking place. So what is the theme? Go gold.
Speaker Change: BRIC countries wanna attack the US dollar and the only way they can get credibility is by buying gold. And so we're seeing central banks around the world continue to be buying gold. So gold, we believe is gonna continue to be a unique and special asset. Next, please.
So now we have
Speaker Change: What Gros is trading at, our assets are $1.5 billion, Lisa's going to give you what our earnings were, our operating income is down, we've lost money, we've made money from an earnings point of view, following all the gap rules, but from an operating point of view, we've been through these lulls before, and we think that what's behind this
Speaker Change: is the election cycle and sentiment and I think we've seen the airlines have a big pop like financials did yesterday and so the capital markets are going to open up for capital formation and private sector job creation and innovation. So I think going forward it's a very very positive for capital markets and we are a deep value proposition for that sector. And now I'd like to turn it over to Lisa please, our CFO.
Lisa Callicott: Thank you, Frank. Good morning. First, I'll start with our financial highlights on the next slide. Our quarterly average assets under management were $1.5 billion and our operating revenues were $2.16 million and net income $315,000.
The next slide shows a breakout of our earnings.
Lisa Callicott: We have operating earnings that consist of our advisory fees and services and we have other earnings which mainly consist of both realized and unrealized gains and losses on our investment holdings.
Lisa Callicott: So both our advisory earnings and our investment earnings fluctuate based on stock market forces.
Lisa Callicott: On the next slide we see that how these two components impact our earnings per share. Our operating earnings are based on average assets under management for the period and our investment earnings are based on the change in the market value of our investments.
Lisa Callicott: So both can fluctuate based on market forces, including investor sentiment, and our earnings per share also fluctuates.
Next.
Lisa Callicott: We see the effect of the decrease of our average assets under management.
Lisa Callicott: that decreased revenue and had an impact on our operating income.
Lisa Callicott: Our challenge is to raise our average assets under management, which Frank discussed, and how he is positive that we'll be able to work on that going forward. But at our current expenses, we estimate that at about $1.9 billion in average assets,
are operating income would be positive.
The next slide.
So more information about our quarter ending September 30th, 2024.
Lisa Callicott: We see that our quarterly operating revenues were $2.2 million for the quarter, which was a decrease of $976,000, or 31% from the $3.1 million in the same quarter last year. The decrease is primarily due to a decrease in our average assets under management in our JET CTS.
Lisa Callicott: and our operating expenses decreased $202,000 or 7% mainly due to a decrease in employee compensation of $193,000 or 15% and this was primarily due to decreases bonus accruals and it was somewhat offset by increases in salaries.
Lisa Callicott: On the next slide, we see operating loss for the quarter ending September 30, 2024 is $559,000 compared to operating income of $215,000 for the same quarter last year.
Lisa Callicott: Our other income for the quarter was $995,000 compared to a loss of $456,000 in the prior year. This was a change of $1.5 million and was primarily due to net investment income for the current period versus net investment loss for the prior period.
Callicotte, Frank Holmes, Holly Schoenfeldt
Lisa Callicott: Net income after taxes for the quarter was $315,000, or $0.02 per share, which is a favorable change of $491,000 compared to a net loss of $176,000, or a loss of one penny per share for the same quarter in fiscal year 2024.
Lisa Callicott: Moving to the next page, we see that we still have a strong balance sheet, which includes high levels of cash and investments.
Lisa Callicott: that will allow us to weather through this period where we have lower AUMs.
Lisa Callicott: Cash and cash equivalents was $2.7 million at September 30, 2024, and our current investments were $9.7 million.
Lisa Callicott: On the next slide is a detail of our other assets.
Lisa Callicott: And the total of all of our investments in other assets is approximately another $7.8 million.
Lisa Callicott: The next slide shows our liabilities and they have decreased from June 30th 2024 by approximately $240,000 and we have no long-term debt.
The next slide you see shows our stockholder equity detail.
Lisa Callicott: And at September 30, 2024, the company had a net working capital of $38.2 million and a current ratio of 21 to 1.
With that, I'll turn it over to Holly.
Thank you, Lisa.
Holly: All right, on the first slide of my section, I want to point out a quick stat about our website traffic during the first quarter of 2025, which is actually a quarter ending September 30th of 2024. So, as you can see on this map, we had over 407,000 readers from around the world visit USFunds.com on a year over year basis.
Holly: Many repeat visitors, but even more new visitors, which is great, who find our content from third-party syndication.
Holly: On the next slide, we're proud to report that we continue to provide original, timely market insight through our YouTube channel. We know one of the best ways to reach new and existing shareholders is through education, and we find this as one of the best ways to do so.
Holly: So if you haven't had a chance to watch some of these, I invite you to find our YouTube channel, check them out, and be sure to hit subscribe.
Holly: On the next slide, I want to highlight some of our most popular FrankTalk blogs so far in the quarter ending September 30th. As you can see here, the topics of gold and commodities, as well as anything having to do with global markets in the recent election.
Holly: were some of the most popular topics. And as a reminder, and something we are very proud of, the FrankTalk blog is actually one of the very first financial blogs out there. And this year, it celebrated its 17th year in publication.
Holly: All right, on the next slide, this was another one of the topics of a recent FrankTalk blog that we put out, which you may have read, and the topic had to do with hedge fund manager Paul Tudor Jones's recent comment about decentralized assets.
Holly: He actually told CNBC that he has longed both gold and bitcoin, and this is one of the things that Frank has been writing about for several years now in the FrankTalk blog.
Holly: So we wrote a special piece about it and we're happy to see Frank's thoughts as well as our Complex's thoughts on these assets be validated by another big name in the industry. So I just wanted to point that out.
As we move to the next slide, in October.
Holly: The marketing team is happy to report that it's been awarded another star award from the Investment Management Education Alliance, bringing our total to 94 now.
Holly: This award was presented for Excellence in Education for Investors and was specifically for our JETS ETF marketing campaign throughout the year, so we're very humbled and excited to receive that. Finally, on the next slide.
Holly: This is just a quick snapshot of our total subscriber growth over 12 months. As you can see, not only are our major social platforms growing consistently, so is the FrankTalk blog and the InvestorAlert subscriber list. So this is something we're also very proud of and they serve as an excellent way to communicate to our shareholders and potential shareholders.
Holly: And finally, on the last slide in my section, I encourage you, as always, to follow us on these platforms so you're up to date with what's going on, not only with GROW, but our funds and, of course, the broader market.
Holly: As a reminder to everyone today, if you have questions about what we just presented, please feel free to email those to info at us funds.com and we will gladly follow up with you to get anything clarified that you may need more information on.
Holly: So thank you so much for tuning in today. That concludes our webcast summarizing the first quarter of fiscal year 2025.
Holly: Goodbye.