Contact:
Rolf Gatlin
Public Relations
210.308.1268
rmgatlin@usfunds.com
For Immediate Release
U.S. Global Investors EPS Doubles and Revenues Grow 52% for
the Third Quarter, YoY
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SAN ANTONIO - May 16, 2005 - U.S. Global Investors, Inc. (NASDAQ: GROW) (the
Company), a registered investment advisory firm, announced it posted net income
for the quarter ended March 31, 2005, of approximately $450,000, or $0.06 net
income per share, unaudited, compared to a net income of approximately $240,000,
or $0.03 net income per share, unaudited, for the comparable period last year.
Revenues for the quarter ended March 31, 2005, increased 52 percent to
$4,885,699 compared to $3,216,977 for the quarter ended March 31, 2004, and
increased 19 percent compared to the previous quarter ending December 31, 2004.
"This increase is a combination of our relative investment performance and
commodity-based asset classes outperforming the general equity market," says
Chief Executive Officer Frank Holmes. "Also, we noted that resource-based
assets, in particular energy, have been winning respect from Wall Street as an
asset class to overweight in a diversified portfolio."
"Strong asset flows and new shareholder accounts have offset what is
historically our most challenging quarter, partially due to the annual purging
of closed accounts that typically causes our transfer agency fees to drop during
this period," says Mr. Holmes.
Assets under management increased to a record $2.2 billion as of March 31, 2005.
During the three-month period ended March 31, 2005, mutual fund assets under
management averaged $2.01 billion versus $1.54 billion for the same period ended
March 31, 2004, and $1.67 billion for the previous quarter ended December 31,
2004. These favorable trends were primarily due to significant increases in
foreign equity and natural resource funds under the Company's management. In
addition to hitting a record high in assets under management during the quarter,
the Company began advising the newly launched Global Emerging Markets Fund
(GEMFX) in February.
Expenses for the quarter ended March 31, 2005, were approximately $1.29 million
higher than the quarter ended March 31, 2004, and approximately $660,000 higher
than the quarter ended December 31, 2004.
"One of our larger increases in expenses was the fees associated with the
distribution costs from various mutual fund platforms like Schwab, Fidelity and
Pershing," says Mr. Holmes. "However, we understand the importance of these
distribution channels and are encouraged and pleased with the success our
products have had through them. As assets grow through these platforms, so do
expenses."
Current assets increased by approximately $1.3 million during the quarter ended
March 31, 2005. In addition, the Company invested $620,000 in its own funds
during the quarter ended March 31, 2005. These investments are included in
trading securities as part of current assets and reported at fair value on the
Consolidated Balance Sheets.
Generally accepted accounting principles (GAAP) require that holding gains and
losses on securities, which are categorized as trading, be reflected in
earnings. The trading securities held by the Company declined during the
quarter, which lowered reported earnings by $0.01 per share. Had the Company's
unrealized losses on trading securities been excluded, net income would have
been higher.The accounting for securities held by the Company is discussed in
greater detail in the Form 10-Q on pages 5, 6 and 13.
The following table, which includes non-GAAP earnings per share measures and
reconciliations to GAAP earnings per share, provides an additional meaningful
perspective regarding underlying trends of the business. It also provides a
comparison of historical information that excludes the holding gains and losses
on trading securities that impact overall comparability. Unrealized gains and
losses on trading securities are not representative of results from the
fundamental core operations of the Company. The presentation of this information
is not intended to be considered in isolation or as a substitute for GAAP
financial measures.
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Financial Highlights (Unaudited)
U.S. Global Investors, Inc.
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Quarter Ended
March 31, 2005 December 31, 2004 March 31, 2004
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Total Revenues $ 4,885,699 $ 4,105,898 $ 3,216,977
Total Expenses 4,155,139 3,495,481 2,869,649
Tax Expense 281,649 203,230 107,431
Net Income, as reported 448,911 407,187 239,897
Basic and Diluted Net Income Per Share, as reported 0.06 0.05 0.03
Non-GAAP reconciliation:
Exclude:
Unrealized gains (losses) on trading securities (79,920) 42,376 (224,381)
Tax effected at 34% 27,173 (14,408) 76,290
Non-GAAP Net income 501,658 379,219 387,988
Non-GAAP Basic and Diluted Net Income Per Share $ 0.07 $ 0.05 $ 0.05
Basic Weighted Average 7,481,600 7,480,792 7,468,496
Shares Outstanding
Diluted Weighted Average 7,577,374 7,546,380 7,551,696
Shares Outstanding
Mutual Fund Average Assets under Management $ 2.01 $ 1.67 $ 1.54
($ in billions)
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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 that invest in a variety of investment
options, from emerging markets to money markets. For more information about U.S.
Global Investors and a prospectus for any of our funds, visit us online at
www.usfunds.com, or call 1-800-US-FUNDS.
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.
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.
Foreign and emerging market investing involves special risks such as currency
fluctuation and less public disclosure, as well as economic and political risk.