Q2 2025 A-Mark Precious Metals Inc Earnings Call
An increase in consulting and professional fees of $1 5 million and an increase in facilities expense of zero point $8 million.
Also an increase in insurance cost of zero point $3 million and information technology costs of <unk> 2 million.
SG&A expenses for the six months ended December 31, 2024 includes $10 5 million of expenses incurred by LPN and STB, which were not included in our prior year year to date Q2 results as they were not yet consolidated subsidiary.
Depreciation and amortization expense for fiscal Q2, 2025 increased 65% to $4 6 million from $2 8 million in the same year ago quarter. The change was primarily due to an increase in amortization expense of $2 2 million relating to intangible assets acquired through our acquisition of <unk>.
L P M and our acquisition of a controlling interest in <unk>.
This was partially offset by a decrease in <unk> intangible asset amortization, a zero 5 million.
The six month period, depreciation and amortization expense increased 67% to $9 3 million from $5 6 million in the same year ago period. The change was primarily due to an increase in amortization expense of $4 4 million relating to intangible assets acquired through our acquisition of LTM and our <unk>.
Acquisition of a controlling interest in SGP, partially offset by a decrease in JMP intangible asset amortization of $1 million.
Interest income for fiscal Q2, 2025 increased 8% to $6 8 million from $6 3 million in Q2 of last year.
The aggregate increase in interest income was due to an increase in other finance product income of <unk> 6 million, partially offset by a decrease in interest income earned by our secured lending segment of <unk> 1 million.
For the six months period interest income increased 12% to $13 9 million from $12 4 million in the same year ago period. The aggregate increase in interest income was due to an increase in other finance product income of $1 2 million and an increase in interest income earned by our secured lending segment of zero.
$2 million.
Interest expense for fiscal Q2, 2025 increased 2% to $10 4 million from $10 2 million in Q2 of last fiscal year.
The increase in interest expense was primarily due to an increase of zero point $6 million associated with our trading credit facility due to increased borrowings and.
An increase of <unk> 5 million from liabilities on borrowed metals and.
An increase of <unk> 2 million related to product financing arrangements, partially offset by a decrease of $1 1 million related to the amcs notes, including amortization of debt issuance cost due to their repayment in December 2023.
For the six months period interest expense increased 2% to $20 4 million from $20 million in the same year ago period. The increase in interest expense was primarily due to an increase of $1 3 million associated with our trading credit facility due to increased borrowings as well as an increase in the weighted average.
Effective interest rates and increase of <unk> 9 million related to product financing arrangements.
And an increase of zero point $7 million from liabilities on borrowed metals. This was partially offset by a decrease of $2 5 million related to the amcs notes, including amortization of debt issuance costs due to their repayment in December 2023.
Earnings from equity method investments in Q2, 2025 decreased 410% to a loss of $2 4 million from earnings of zero point $8 million in the same year ago quarter for the six months period earnings from equity method investments decreased 153% to a loss of $1 8 million from earnings of $3 5 million in the.
Same year ago period, the decrease in both periods was due to decreased earnings of our equity method investees.
Net income attributable to the company for the second quarter of fiscal 2025 totaled $6 6 million or <unk> 27 per diluted share. This compares to net income attributable to the company of $13 8 million or <unk> 57 per diluted share in Q2 of last year.
For the six months period net income attributable to the company totaled $15 5 million or <unk> 65 per diluted share, which compares to net income attributable to the company of $32 6 million or $1 34 per diluted share in the same year ago period.
Adjusted net income before provision for income taxes, a non-GAAP financial measure, which excludes depreciation amortization acquisition costs and contingent consideration fair value adjustments for fiscal Q2, 2025 totaled $13 4 million a decrease of 38%.
Compared to $21 7 million in the same year ago quarter.
Adjusted net income before provision for income taxes for the six months period totaled $28 1, Million% to 42% decrease from $48 5 million in the same year ago period.
EBITDA, a non-GAAP liquidity measure for Q2 fiscal 2025 totaled $16 2, million% to 35% decrease compared to $25 1 million in Q2 fiscal 2024.
EBITDA for the six months period totaled $34 million, a 39% decrease compared to $55 5 million in the same year ago period.
Turning to our balance sheet at quarter end, we had $37 8 million of cash compared to $48 6 million at the end of fiscal year 2024, our tangible net worth Inc. Excluding noncontrolling interest at the end of the quarter was $318 7 million upfront $306 million at the end of the.
Prior fiscal year.
Last week, we amended our trading credit facility to increase our revolving commitments to $457 million from $422 $5 million. We also returned capital to shareholders through the repurchase of $5 1 million of common stock during the quarter.
Amr's Board of Directors has continued to maintain the company's regular quarterly cash dividend program of <unk> 20 per common share. The most recent quarterly cash dividend was paid in January it is expected that the next quarterly dividend will be paid in April 2025.
That completes my financial summary, now I will turn the call over to Thor, who will provide an update on our key operating metrics.
Thor: Thank you Kathleen within our key operating metrics from the second quarter of fiscal 2021.
Thor: Sold 466000 ounces of gold in Q2 fiscal 2020, fog, which was up 4% from Q2 of last year and up 17% from the prior quarter.
Thor: For the six month period, we sold 864000 ounces of gold, which was down 9% from the same year ago period.
Thor: We sold $21 8 million ounces of silver in Q2 fiscal 2025, which was down 18% from Q2 of last year and up 7% from last quarter for the six month period, we sold $42 3 million ounces of silver, which was down 26% from the same year ago period.
Thor: The number of new customers in the DTC segment, which is defined as the number of customers that we have registered or set up a new account or made a purchase for the first time. During the period was $65 400 in Q2 fiscal 2025, which was up 25% from Q2 of last year and increased 18% from last quarter.
Thor: For the six month period, the number of new customers in the DTC segment was 120700, which increased 32% from 91600, new customers in the same year ago period.
Thor: The number of total customers in the DTC segment at the end of the second quarter was approximately $3 2 million, which was a 31% increase from the prior year.
Thor: Year over year increases in customer base measures were primarily due to organic growth of our customer base and the acquisition of a controlling interest in SUV the.
Thor: The DTC segment average order value, which represents the average dollar value of product orders.
Thor: <unk>.
Thor: <unk> delivered to DTC segment customers during Q2 fiscal 2025, with 3178, which was up 43% from Q2, 2024 and up 7% from the prior quarter for the six month period, our DTC average order value was $3 77, which was up 33% from the same year ago period.
Thor: For the fiscal second quarter, our inventory turn ratio was two <unk>, which was a 16% increase from one nine in Q2 of last year and a 4% decrease from Q3 in the prior quarter for the six month period, our inventory turnover ratio was $4, 7% to 9% increase from four three in the same year.
Thor: Ergo periods finally, the number of secured loans with the December totaled 518, a decrease of 28% from December 31, 2023, and a decrease of 8% from the end of September the dollar value of our loan portfolio as of December 31, 2024 totaled $98 5 million a decrease of eight.
Thor: Percent from December 31, 2023, and a decrease of 3%.
Thor: From September 32024 that concludes my prepared remarks, I'll now turn it over to Greg for closing remarks, Greg.
Greg: Thanks, Thor and carefully.
Greg: <unk> strategic focus continues to be on expanding our domestic and geographic reach and diversifying our customer base as well as expanding our DTC customer base.
Greg: We are pleased with our recent accomplishments and remain committed to exploring additional opportunities to deliver value to our shareholders over the long term.
Greg: Josh.
Josh: 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 tone will 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.
Josh: One moment, please while we poll for questions.
Speaker Change: Once again, please press star one if you have a question or comment. The first question comes from Thomas Forte with Maxim Group. Please proceed.
Thomas Forte: Great. Thanks, So first off Greg congratulations on another profitable quarter in a challenging environment I have two questions and then ill get back in the queue I'll go one at a time.
Speaker Change: So first off I was hoping Greg you could point out.
Thomas Forte: Just for my own understanding.
Thomas Forte: Comparable period of low volatility in gold prices, how far back in history, we do have to go for.
Thomas Forte: For something like today in your mind.
Thomas Forte: I mean, we.
Thomas Forte: We're everyday the last.
Thomas Forte: You know six months, we've been really in uncharted waters as it relates to comps just because gold continues to rise and.
Thomas Forte: Every day it seems like to us it sets a new high I mean today, I was off $20 or $30, but yesterday and the day before.
Thomas Forte: We're new high prices as we.
Thomas Forte: We move in very comfortably to the $2800 range.
Thomas Forte: I feel like the circumstances are the same.
Thomas Forte: As they were last quarter or the quarter before.
Thomas Forte: But I think that.
Thomas Forte: We continue to deal with.
Thomas Forte: A high high percentage of our sales are buybacks, particularly in the DTC segment.
Thomas Forte: We're there.
Thomas Forte: Shorter term vision retail customers are looking to take profits and take advantage of these.
Thomas Forte: The higher spot prices.
Thomas Forte: And that has continues to have an effect on premiums so I don't I mean.
Thomas Forte: You would have to go all the way back really to 1980.
Thomas Forte: Particularly in silver.
Thomas Forte: Where you had a similar phenomenon where.
Thomas Forte: The slow the flow back into the.
Thomas Forte: In the marketplace.
Thomas Forte: Was a high percentage or exceeded the demand.
Thomas Forte: And so we're we're regularly.
Thomas Forte: Irregularly dealing with.
Thomas Forte: Most things we know we know what we're doing we know how to handle this.
Thomas Forte: We're doing a very good job of managing.
Our abilities to.
Thomas Forte: To be a.
Thomas Forte: Terminal destination for liquidity.
Thomas Forte: As it relates to metal.
Thomas Forte: We continue to have.
Thomas Forte: Great relationships with refiners.
Thomas Forte: We're able to regularly.
Thomas Forte: Melt melt inventory or milk purchases, we make that don't have any.
Thomas Forte: Okay.
Thomas Forte: Our ceiling for upside.
Thomas Forte: But.
Thomas Forte: It is what it is in the.
Thomas Forte: Hey, Mark machine is performing and handling.
Every new twists that we run into.
Speaker Change: Alright. Thank you that was very helpful and I appreciate that all right. So one more question and then time permitting.
Speaker Change: Back in the queue and ask more questions. So the thing that excites me about the deal you announced earlier this week.
Speaker Change: Youre essentially it looks like Youre going to advance your efforts of numismatics, and then youre going to get into essentially widen collection one collecting.
Speaker Change: So how should we think about the counter cyclicality of that numismatics effort and the wine efforts from the STI deal.
Speaker Change: Well.
Speaker Change: So the spectrum group, our stocks has been involved with a company called spectrum wine auctions for a while and you know it.
It is a collectible but.
Speaker Change: It's not particularly connected or adjacent to semi numismatic.
Numismatic bullion coins or some of the other things that the stock sells.
Speaker Change: We are excited that it's a.
Speaker Change: It's a product that we believe has synergies within stocks as customer base.
Speaker Change: And we do see opportunities to cross sell more.
Speaker Change: More bullion products.
Speaker Change: Both to the stocks customers.
Speaker Change: Customers as well as we believe that our other DTC brands that have focused on straight bullion products. We have been testing over the last six months have been very pleased with the success that <unk> in particular has had selling semi numismatic and numismatic coins to there.
Speaker Change: A very large customer base, so I will say that that.
Speaker Change: As an opportunity to that.
Speaker Change: We have been testing and we were enthusiastic about at JM bullion prior to to this acquisition being completed.
Speaker Change: I think it's important to note that if you look at.
Speaker Change: <unk>.
Speaker Change: Stacks as revenue mix.
Speaker Change: $535 million in revenue of which.
Speaker Change: $512 million of that was.
Speaker Change: Yes.
Speaker Change: Wholesale or retail direct sales of coins and bullion so.
Speaker Change: I believe that $500 million number is.
Speaker Change: One of the largest in the industry as it relates to direct sales of bullion and semi numismatic and numismatic properties. So very impressed with that.
Speaker Change: Believe that the higher margins.
Speaker Change: Stocks.
Speaker Change: <unk> achieved in their business will be very complementary to a mark particularly in times like we're in right now where <unk> margins are down and premiums are down.
Speaker Change: We believe this is a strategic opportunity for a mark to move into adjacent businesses. They still have the majority of their business has.
Speaker Change: Precious metal component to it.
Speaker Change: Albeit a smaller amount of Av.
Speaker Change: <unk>, let's say.
Speaker Change: In higher value coins, but we.
Speaker Change: We see a lot of synergies here.
The.
Speaker Change: The what stacks borrowers has accomplished over the last particularly the last 10 years has been very impressive.
Greg: Thank you, Greg I'll get back in the queue.
Speaker Change: Yes.
Speaker Change: The next question comes from Andrew Scott with Roth Capital. Please proceed.
Andrew Scott: Hey, good afternoon, Thanks for taking my questions and congrats on the continued execution.
Speaker Change: So my first question.
Andrew Scott: To deal with that.
Andrew Scott: Stacks.
Andrew Scott: In particular.
Andrew Scott: The performance over the last six months it looks like over the fiscal year ended June 30.
Andrew Scott: 2024, the company generated about $11 million of EBITDA in the company's already generated $10 million in the last six months. So I was wondering if there was anything to call out there and what's kind of driving the profitability here for stacks.
Andrew Scott: Yes, I would I would caution on that that generally the first six months are frontloaded its stocks.
Speaker Change: And they had they had a very good first six months, but I will say that there is some cyclicality to their business I would point, particularly to.
Andrew Scott: There.
Andrew Scott:
Andrew Scott: August.
Andrew Scott: Auction.
Andrew Scott: As it relates to their auction cycles their largest auctions every year are in August there in conjunction with the American numismatic associations.
Andrew Scott: World's fair of money.
Andrew Scott: So.
Andrew Scott: And we also were fortunate enough enough it stacks this year to acquire.
Andrew Scott: The worlds greatest collection of.
Andrew Scott: Scandinavian coins stocks.
Andrew Scott: <unk> believes that the value of that collection will be.
Andrew Scott: $75 to $100 million in the U S value its a collection called the Bruun collection.
Andrew Scott: They had their first auction.
Andrew Scott: In.
Andrew Scott: Fiscal Q2.
Andrew Scott: It was brought some very impressive prices now thats that auction was I believe 15% to 20 million. So over the next couple of years Theres going to be a series of collections continuing to distribute and <unk>.
Andrew Scott: <unk> continuing distributes these coins, but I will say that the first six months, we're probably frontload a little bit due to those two those two events.
Speaker Change: Great I appreciate the color.
Andrew Scott: Second one for me before I jump back into queue.
Andrew Scott: Last couple of quarters, you guys have been talking about marketing efforts to.
Andrew Scott: Increase the volume through your DTC channel as you guys posted another quarter of <unk>.
Andrew Scott: Growth in new customers and inactive customers. So can you just kind of talk through.
Andrew Scott: These marketing efforts are progressing and driving volume on euro.
Andrew Scott: On your different PTC portals.
Andrew Scott: Yes.
Andrew Scott: We are continuing the same strategy, we talked about last quarter looking for.
Andrew Scott: Opportunities to increase our active customer numbers.
Andrew Scott: And to also re engage customers that have fallen out of what what we.
Andrew Scott: Define as our active customers.
Andrew Scott: We continue we continue to have very good results in that area.
Andrew Scott: No.
Andrew Scott: We've had a number of <unk>.
Andrew Scott: Number of weeks over the last 60 days, where where we have very impressive numbers.
Andrew Scott: In our minds as to being able to offer products at prices that reactivate.
Andrew Scott: Old customers that we haven't seen in a while as well as <unk>.
Andrew Scott: Bringing in new customers that we believe are.
Andrew Scott: We're taking market share by adding them so I.
Andrew Scott: I don't have a whole lot more to report on that other than we continue to focus on new customers as well as old customers.
Andrew Scott: Our overall customer counts.
Andrew Scott: Over 3 million customers is continues to be very impressive.
Andrew Scott: And we just we believe that.
Andrew Scott: When the pendulum swings back to.
Andrew Scott: No.
Andrew Scott: A larger wallet percentage or a large larger wallets.
Andrew Scott: These customers getting getting piece of their wallet, we believe we're going to reap the benefits of that by continuing to be engaged with them.
Speaker Change: Great well, thanks, Ken and ill jump back into queue.
Andrew Scott: Okay.
Andrew Scott: Up next we have Greg give us with Northland Securities. Please proceed.
Speaker Change: Hey, good afternoon, Greg door Kathleen Thanks for taking the questions congrats on the execution in the quarter.
Speaker Change: I Wonder if you could speak to the timing of the SGI acquisition, given it has been a long standing relationship.
Speaker Change: What kind of lead you to believe the acquisition made sense more recently.
Speaker Change: And I guess I'm wondering if you could maybe expand on the synergies you expect to see with SGI and.
Speaker Change: What degree day, Mark and benefit from the D to C expertise that Sci brings to the table.
Speaker Change: Well I think it's a different demographic as it relates to customers I.
Speaker Change: Believes that.
Speaker Change: Stacks has found a niche in the marketplace on the bullion side.
Speaker Change: Going downstream and servicing customers that arent quite big enough or arent worth Onboarding a day mark.
Speaker Change: And I believe they've developed a very good.
Speaker Change: Wholesale and retail.
Speaker Change: Customer base to take advantage of I think.
Speaker Change: Being part of a mark.
Speaker Change: They're going to have access to <unk> balance sheet, they're going to have.
Speaker Change: Access to being able to expand using a mark's existing inventory hit.
Speaker Change: Historically stacks as balance sheet has limited them a bit and what they can.
Speaker Change: Older inventory and Theyre carry costs should improve with mark.
Speaker Change: So I'm looking forward to having another.
Speaker Change:
Speaker Change: 100% owned subsidiary, that's working out of <unk> inventory and I hope that will.
Speaker Change: We will help our inventory turns as well as <unk>.
Speaker Change: Create some efficiencies there.
Speaker Change: Like I said lower borrowing cost lower inventory costs.
Speaker Change: Lower logistic cost.
Speaker Change: The benefit of the balance sheet.
Speaker Change: From a timing perspective, I think that.
Speaker Change: Both companies are are a lot different than they were five years ago I think that.
Speaker Change: <unk> has grown.
Speaker Change: Alongside Mark operating independently do.
Speaker Change: I do believe that we're getting a.
Speaker Change: Barry.
Speaker Change: Our strong balance sheet and the transaction from stocks.
I anticipate that we're going to be acquiring $50 million in working capital.
Speaker Change: And $70 million in shareholder equity and the acquisition.
Speaker Change: Which along with the earnings.
Speaker Change: A very good opportunity for a mark I felt and.
Speaker Change: It was probably a stocks was starting to get to a point, where they were hitting a bit of a ceiling on their growth just just based on their balance sheet and how much business they were doing.
Speaker Change: And as opposed to going outside and looking for additional capital.
Speaker Change: Timing seemed right for.
Speaker Change: Hey, Mark to take a look at this and look at the opportunities of where stocks can go.
Speaker Change: <unk> two.
Speaker Change: Yeah.
Speaker Change: The balance sheet of a mark so I think there was some some opportunities there where we think the stacked growth, we'll be able to continue and maybe even move a little bit a little bit faster overall I think.
Speaker Change: We continue to have a very full funnel as it relates to our M&A.
Speaker Change: And as I said on the last call. We continue to look at a number of opportunities and expect to be very active in the next 90 days.
Speaker Change: And I think the strategy with stocks is.
Speaker Change: We will continue to look at ways to.
Speaker Change: To look into more luxury goods more.
Speaker Change: DTC businesses that are adjacent to what what <unk> is doing.
Speaker Change: We think there is a number of opportunities out there that we're continuing to look at so I will I would say that.
Speaker Change: This isn't likely just a one off I think there is other other opportunities for us and.
We think our familiarity.
Familiarity with stocks.
Speaker Change: The ownership structure, there being very similar in some ways to the to the a mark holders.
Speaker Change: A very very good timing and a very good opportunity for us and a business that we're very familiar with it obviously I'm very familiar with it.
Speaker Change: To put it together.
Mark: And give give mark an opportunity to be involved in.
Mark: What I would consider as little uncorrelated.
Mark: Business and gross profit that we think that <unk>.
Mark: <unk> historically has not been able to achieve and hopefully we're going to see some some higher higher gross profit margins.
Mark: It will be helpful to a mark.
Mark: Got it that's helpful, Greg and <unk> a follow up question I had so.
Mark: I guess as it relates to maybe geographic perspective, you mentioned the full funnel on M&A now that you've established a market presence in the Singapore D C market.
Mark: Which other Asian markets make the most sense is maybe next steps towards.
Mark: Annual expansion in Asia.
Mark: Yeah.
Mark: I don't we don't have anything on our plate right now that we're looking at that is outside of Hong Kong and Singapore.
Mark: We are continuing to develop our strategy down there.
Mark: Made a couple of key hires.
Mark: We feel very good about.
Mark: Our potential staffing in some new business in those two geographical areas we.
Mark: We did sign a lease.
Mark: For our office and retail space in Singapore, and we will start building that out this quarter.
Mark: And so I wouldn't I wouldn't anticipate.
Mark: If there is any other.
Mark: Move into any other markets other than.
Mark: Adjacent countries or markets that we believe we will be able to do business with.
Mark: Out of this Singapore facilities.
Mark: And so.
Mark: I think as we look at the funnel or as we look at other M&A opportunities right now I think we are.
Mark: We're currently focused on domestic opportunities as we digest and as we build out what we have in Asia and prove out the profitability of it in <unk>.
Mark: Comfortable with investing our capital down there, but I think we're fine down there for right now.
Mark: And the.
Mark: The opportunities we have that we're looking at right now I think are probably a little bit more on the domestic side.
Speaker Change: Okay makes sense thanks, Greg.
Speaker Change: Once again, if you have a question or comment please indicate so by pressing star one. The next question comes from Eugene Hawks with D. A Davidson. Please proceed.
Speaker Change: Eugene Your line is live.
Speaker Change: Sorry, I was on mute.
Speaker Change: This is <unk> on for Mike at D. A Davidson.
Speaker Change: Just had a question on stack and you kind of mentioned the seasonality, it's more front half loaded.
Speaker Change: I was just wondering how this business like how accretive is it to your earnings.
Speaker Change: That's probably the simplest way I can put it.
Speaker Change: Yes, I mean, I think we're comfortable that it's accretive I don't think I am.
Speaker Change: I'm comfortable at the moment when we're not closed on the deal really going into how accretive it is but I'm sure that.
Speaker Change: We are looking to close this deal in the next 30 days, we have a couple more things to tie up.
Speaker Change: We're working on the financing approval, which which we've indicated in the press release I'm sure that when we do close it.
Speaker Change: As we probably next quarter, we will be able to to give you a little bit more.
Speaker Change: Specifics on that I will just say that I'm very comfortable with the accretive ness.
Speaker Change: The deal I think the.
Speaker Change: The 2025, we're looking in estimating about $16 million in EBITDA I believe.
Speaker Change: <unk>.
Speaker Change: We're very excited about this opportunity so I think our timing was good.
Speaker Change: And we will give you more specifics on that as we as we digest the deal.
Speaker Change: And then just to follow up on that you mentioned that you're expecting to be active in the next 90 days.
Speaker Change: Our other businesses Youre looking at going to have to meet the same threshold.
Speaker Change: For a creativeness or are you just looking to broaden your reach I guess.
Speaker Change: I mean, I don't want to do any dilutive deals right now I don't think I have two.
Speaker Change: You guys have been very patient and our shareholders have been very patient and what I have said from the beginning.
Speaker Change: As we passed on a lot of opportunities a year or two ago that would have been not accretive and would have turned out to be.
Speaker Change: Buying things.
Speaker Change: At the top it's very hard to buy things.
Speaker Change: Bye bye assets.
Speaker Change: When things are going great.
Speaker Change: Our job right now is to understand that we are in a slow period and patients is important and finding the right deals is important in making sure that we're buying deals and taking advantage of opportunities in our marketplace when things are slow.
Speaker Change: Clearly, we're not particularly happy making 2007 and.
Speaker Change: We understand that if we're not going to make more on an EPS basis, we better be buying things that are accretive that are going to be good for us in the long term and are going to build our brand in a slow market, but also be very.
Speaker Change: Very accretive if the market changes, which is not in our control.
Speaker Change: We continue to to deal with changes.
Speaker Change: We went through this period.
Speaker Change: This quarter, where we had a presidential election that has basically turned the world upside down and.
It.
Speaker Change: There has been since November.
Speaker Change: A significant.
Speaker Change: Catch our breath period.
Speaker Change: I think across a lot of different asset classes ours. In particular is is dealing with.
Speaker Change: Our customer base.
Speaker Change: Is very happy with the election results and.
Speaker Change: Have not up until maybe the last week or so with these tariffs they have not really felt.
Speaker Change: Two threatened.
Speaker Change: It seemed like it was just going to be a great place in December and January and the end of November and that everything was just going to be great.
Speaker Change: It's only really in the last couple of weeks that we've started to see a little bit of fear back in our customer base and a little bit of a little bit of.
Uncertainty as it relates to these tariffs and what that's going to do to our market.
Speaker Change: In the short term.
Speaker Change: It Hasnt been a great thing, it's increased our borrowing cost a bit and it's.
Speaker Change: It's caused.
Speaker Change: <unk>.
Speaker Change: Just a little bit of uncertainty in exactly how Goldman silver are going to enter the United States from Mexico, and Canada, which are big suppliers.
Speaker Change: As it relates to precious metals in the United States. So.
Speaker Change: We are we feel very agile we feel like we are.
Speaker Change: Anticipating in and learning and reacting to whats going on.
Speaker Change: But as it relates to acquisitions I really believe that this uncertainty and the low premiums in the the buybacks and everything else Mark is really really positioned for that and I think.
Speaker Change: Just in the last few weeks as gold has hit another all time high and silver is at $33.
Speaker Change: We are starting to see.
Speaker Change: Better profits on our buybacks. The competition is not as strong as they were 90 days ago or 60 days on the buyback and we are seeing.
Speaker Change: Good flow.
Speaker Change: Good good pricing actually below spot.
Speaker Change: <unk>.
Speaker Change: Is starting to we're starting to see a little bit little bit more margin there. So.
Speaker Change: We will look to take opportunities.
Speaker Change: In this slow period, where they are available.
Speaker Change: Thank you.
Speaker Change: If there are any remaining questions. Please indicate so by pressing star one on your Touchtone phone.
Speaker Change: The next question comes from Thomas Forte with Maxim Group. Please proceed.
Speaker Change: Okay.
Speaker Change: Thank you two follow up questions from me, so Greg if you're so inclined.
Thomas Forte: Sometimes on these earnings calls you've discussed quarter to date trends.
Speaker Change: <unk>.
Speaker Change: So if youre, so inclined otherwise pass up to you.
Speaker Change: I feel like I, just said enough on that the last four or five minutes.
Speaker Change: Okay and then.
Speaker Change: We are continuing.
Speaker Change: We're continuing to.
Speaker Change: Execute on our on our plans I think as you can see where.
Speaker Change: We're able to we were able to announce a transaction that we think is great for the company.
Speaker Change: We're looking to.
Speaker Change: We continue to add through M&A.
Speaker Change: Targets and deals that we think are are accretive and long term going to be good for the company in.
Speaker Change: As we've said for the last two quarters.
Speaker Change: At the moment higher gold and silver prices are a headwind there or not.
Speaker Change: They're not.
Speaker Change: They are not actually helping us right now.
Speaker Change: Our cost of carry in our cost of financing our inventory, which we've talked about before it costs more for us to to hold an ounce of gold at 2800 than it does at 22 hundreds so.
Speaker Change: We were optimistic we feel like the company is functioning.
In this environment.
Speaker Change: And we will look for opportunities to take advantage of that.
Speaker Change: Great Alright, and then my last question.
Speaker Change: What I thought was interesting about the quarter and your comments can.
Speaker Change: Can you talk about from a capital allocation standpoint, your ability to pay a dividend buy back shares and engage in strategic M&A.
Speaker Change: All at the same time.
Speaker Change:
Well I've talked about doing that for quite some time now so if I say I'm going to do what I better do it right I mean, it's.
Speaker Change: It is it is a balancing act that.
Speaker Change: We we believe that.
Speaker Change: There are opportunities in M&A and as we manage our dividends and as we manage our stock buybacks.
Speaker Change: Youre going to see periods, where.
Speaker Change: If we if we have nothing going on in M&A, we're likely to buyback more stock or we're likely to pay to pay higher dividends. If we're if we're having good performance we've talked about that before.
Speaker Change: I think that.
Speaker Change: Yeah.
Speaker Change: You've got to kind of prepare when you go into this M&A that.
These deals can take four to six months, so you're you're kind of planning and juggling.
Speaker Change: Well in advance of when you actually announce a deal I think.
Speaker Change: We're aware of that and.
Speaker Change: My job is to hopefully not waste our resources, our time and energy on deals we're not going to close so once we find deals we want to do it is important to close them.
Speaker Change: But when we do.
Speaker Change: When we do spend $90 million in essence for this deal and we have.
Speaker Change: Other deals on the horizon. There is a there is a decision.
Speaker Change: A fork in the road are you going to are you going to buy back stock or are you going to.
Speaker Change: Do M&A or are you going to hold inventory or are you going to pay down debt.
Speaker Change: Those are those are the things that we talk about that we juggle here.
Speaker Change: In this case, we felt very comfortable and when we when we add stocks to our balance sheet. It will be clear, what we're adding and how we feel that we got a very good balance sheet that that is going to add to our flexibility at a mark.
Speaker Change: And.
Speaker Change: I'm optimistic that that these types of transactions, whether we use stock or cash or how we do the mix.
Speaker Change: Is going to continue to give us that flexibility that when an opportunity is there to buy back stock.
Speaker Change: We will.
Speaker Change: But but when were heavy when we're heavy into M&A transactions and we have.
The cone of silence going on at <unk>, when we're doing them, which is important to a successful deals.
Speaker Change: It's very hard for us to buy back stock when we're in that in the stock we did buyback.
Speaker Change: This quarter.
Speaker Change: Happened at the very beginning of the quarter. So.
Speaker Change: <unk>.
Speaker Change: We've been focusing on the M&A for the last few feels like 45 or 60 days.
Speaker Change: I appreciate that thank you Greg.
Speaker Change: Thank you Tom.
Speaker Change: I'd now like to turn the call back over to Mr. Roberts for his closing remarks.
Roberts: I think I'd like to thank our many shareholders again for joining the call today and for the continued interest and support in a mark I feel like a mark's going in the right direction and I know it can and you have to be patient with us sometimes when we have the volatility and how the business how the business performs but.
Roberts: Again, thanks to everybody thanks to our employees dedication and commitment to our success and we have exciting times ahead, and we look forward to keeping you updated on our progress. So thank you very much.
Roberts: Before we conclude today's call I would like to provide a Mark's safe Harbor statement that includes important cautions regarding forward looking statements made during this call.
Roberts: During today's call. There were forward looking statements made regarding future events. These statements that relate to a mark's future plans objectives expectations performance events and alike are forward looking statements within the meaning of the private Securities Litigation Reform Act of $19 95, and the Securities Exchange Act of $19 34.
Roberts: These include statements regarding expectations with respect to future profitability and growth international expansion operational enhancements and the amount.
Roberts: Or timing of any future dividends future.
Roberts: Future events risks and uncertainties individually or in the aggregate could cause actual results to differ materially from those expressed or implied in these statements. These include the following with respect to the proposed transactions with spectrum group International.
Roberts: The failure of the parties to agree on definitive transaction documents.
Roberts: The failure of the parties to complete the contemplated transactions within the currently expected timeline or at all.
Roberts: Our failure to obtain necessary third party consents or approvals.
Roberts: And greater than anticipated costs incurred to consummate the transactions.
Roberts: Other factors that could cause actual results to differ include the failure to execute the company's growth strategy, including the inability to identify suitable or available acquisition or investment opportunities.
Roberts: Greater than anticipated costs incurred to execute this strategy.
Roberts: 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 favorable contributed to demand and volatility in the precious metals markets, but also has certain risks and uncertainties for the company, particularly in recent periods potential.
Roberts: 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.
Roberts: And consumer demand and preferences for precious metals precious metal products generally.
Roberts: Potential negative effects that inflationary pressure may have on our business. The inability of the company to expand capacity at silver to Amit the failure of our investing companies to maintain or address the preferences of.
Roberts: Their customer bases general risks of doing business in the commodity markets and the strategic business economic financial political and governmental risks and other risk factors described in the Companys public filings with the Securities and Exchange Commission the.
Roberts: 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. Finally, I would like to remind everyone that a recording of today's call will be available for replay via a link in the investors section of the company's website. Thank you for.
Roberts: Joining us for a Mark's earnings call you may now disconnect.