Contact:
Rolf Gatlin
Public/Media Relations
210.308.1268
rolf@usfunds.com
Valerie Kimball
Investor Relations
888.917.5109
vkimball@epochfinancial.com
For Immediate Release
U.S. Global Investors Reports
Positive Net Income of $0.05 Per Share For Second Quarter
************************************************************************
SAN ANTONIO - February 14, 2005 - U.S. Global Investors, Inc. (NASDAQ: GROW), a
registered investment advisory firm, announced it posted net income for the
quarter ended December 31, 2004, of approximately $407,000, or $0.05 income per
share, unaudited, compared to net income of approximately $1.25 million, or
$0.17 income per share, unaudited, for the comparable period last year.
Although U.S. Global Investors' (the "Company") earnings per share decreased
quarter-over-quarter, its revenues from core mutual fund operations were more
robust this quarter, increasing 35 percent to $4.0 million for the quarter ended
December 31, 2004, versus $3.0 million for the quarter ended December 31, 2003.
In addition, cash, cash equivalents and marketable securities have increased by
approximately $1.7 million, or 38 percent, from December 31, 2003, to December
31, 2004, to a total of $6.2 million.
The increase in mutual fund advisory fees is primarily the result of a 27.5
percent increase in average assets under management from $1.31 billion for the
quarter ended December 31, 2003, to $1.67 billion for the quarter ended December
31, 2004. Total assets have grown from $1.49 billion to $1.81 billion, or 21.5
percent year-over-year as of December 31, 2004.
The decline in earnings is primarily attributable to a decrease in the
unrealized gains on trading securities in the Company's investment portfolio. In
accordance with generally accepted accounting principles, changes in unrealized
gains and losses on trading securities are recorded in net income. As a result,
investment income decreased by $1.3 million to $57,000 for the quarter ended
December 31, 2004, compared to the same quarter last year.
"Although our investment income has declined in comparison to the same quarter
last year, we continue to see increases in management fees due to substantial
growth in assets in the foreign equity, gold and natural resource mutual funds
we manage," says Chief Executive Officer Frank Holmes. "At the end of 2004 our
Eastern European Fund (EUROX) had grown from roughly $68 million to $459
million, year-over-year. Our expertise in these unique asset classes and the
support of our fund shareholders has led us to launch the Global Emerging
Markets Fund, which will open this month."
Increased fund assets and strong fund performance have led to an increase in
certain sub-advisory fees, platform distribution costs and performance-driven
compensation costs. Total expenses for the quarter ended December 31, 2004, were
approximately $982,000, or 39% higher than the quarter ended December 31, 2003.
Financial Highlights (Unaudited)
U.S. Global Investors, Inc.
Quarter Ended Quarter Ended
December 31, 2004 December 31, 2003
----------------- -----------------
Total Revenues $ 4,105,898 $ 4,337,177
Total Expenses $ 3,495,481 $ 2,513,798
Tax Expense $ 203,230 $ 574,884
Net Income $ 407,187 $ 1,248,495
Basic and Diluted Net Income $ 0.05 $ 0.17
Per Share
Basic Weighted Average 7,480,792 7,473,542
Shares Outstanding
Diluted Weighted Average 7,546,380 7,542,424
Shares Outstanding
Mutual Fund Average Assets $ 1.67 $ 1.31
under Management
($ in billions)
About U.S. Global Investors, Inc.
U.S. Global Investors, Inc. is a registered investment adviser with a focus on
profitable niche markets around the world. Headquartered in San Antonio, Texas,
the company offers financial solutions and provides transfer agency and other
services to U.S. Global Investors Funds and U.S. Global Accolade Funds. The
groups consist of 13 no-load mutual funds, representing approximately $1.9
billion in assets that invest in a variety of investment options, from emerging
markets to money markets. Please consider carefully the fund's investment
objectives, risks, charges and expenses. For this and other important
information, obtain a fund prospectus by visiting www.usfunds.com or by calling
1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Distributed
by U.S. Global Brokerage, Inc.
Foreign and emerging market investing involves special risks such as currency
fluctuation and less public disclosure, as well as economic and political risk.
This news release may include certain "forward-looking statements" including
statements relating to revenues, expenses, and expectations regarding market
conditions. These statements involve certain risks and uncertainties. There can
be no assurance that such statements will prove accurate and actual results and
future events could differ materially from those anticipated in such statements.
#####