Contact:
Terry Badger
Director of Communications
210.308.1221
tbadger@usfunds.com
(USGI LOGO)
For Immediate Release
U.S. Global Investors attains record earnings in FY 2006
Revenue rises 164%, net income up more than sevenfold compared to 2005
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SAN ANTONIO--Sept. 8, 2006--U.S. Global Investors, Inc. (NASDAQ: GROW), a
boutique registered investment advisory firm, today reported that its fiscal
year 2006 revenue rose 164 percent and its earnings grew more than sevenfold
compared to the previous fiscal year.
The company recorded net income of $10.44 million, or $1.38 cents per diluted
share, on revenue of $44.85 million for the 12 months ended June 30, 2006. That
compares to earnings of $1.45 million, or 19 cents per diluted share, on revenue
of $16.98 million during the fiscal year ended June 30, 2005.
For the fourth fiscal quarter, U.S. Global posted net income of $5.62 million,
or 74 cents per diluted share, on revenue of $18.96 million. The company earned
$350,000, or 5 cents per diluted share, on revenue of $5.03 million during the
final three months of fiscal year 2005.
The growth in revenue and earnings is mostly due to fee increases associated
with the substantial rise of assets under management. U.S. Global's average
mutual fund assets grew 94.1 percent during the year, most of that coming in the
natural resources and emerging market sectors. In addition, the company expanded
its outside advisory services.
The company has scheduled a conference call for 10 a.m. Central time today to
discuss the financial results. Frank Holmes, chief executive officer and chief
investment officer, will be accompanied on the call by Susan B. McGee, president
and general counsel, and Catherine A. Rademacher, chief financial officer.
U.S. Global's mutual fund assets under management stood at $4.44 billion as of
June 30, 2006, more than double the $2.13 billion under management on June 30,
2005. The company also had $201.2 million under management for other advisory
clients. During the fourth quarter, the company averaged $5 billion in total
assets under management.
During the 2006 fiscal year, U.S. Global earned $7.06 million in fees for its
role in providing advisory services to Endeavour Mining Capital Corp., a
merchant banking company that invests in the natural resources sector. The
amount earned by U.S. Global included a $6.61 million annual performance fee.
For the year ended June 30, 2006, the company also earned $1.57 million in fees
for providing advisory services to other offshore funds.
Selected financial data (unaudited) for the year ended June 30
2006 2005
Revenue $44.85 million $16.98 million
Expenses $28.99 million $14.74 million
Tax expense $5.43 million $0.79 million
Net income $10.44 million $1.45 million
EPS (basic, in dollars) $1.39 $0.19
EPS (diluted, in dollars) $1.38 $0.19
Working capital $18.28 million $7.08 million
Total assets $29.05 million $12.10 million
Net cash from operations $5.46 million $0.99 million
Net cash from investing $0.27 million ($0.07 million)
Net cash from financing $0.52 million $0.06 million
Basic weighted avg. shares outstanding 7.52 million 7.48 million
Diluted weighted avg. shares outstanding 7.57 million 7.56 million
Avg. mutual fund assets under mgmt $3.44 billion $1.77 billion
As of June 30, 2006, the U.S. Global Investors fund family had several funds
among the leaders in their peer groups and the overall mutual-fund sector in
measures going back as far as five years, according to the rating company Lipper
Inc.
For the first six calendar months of 2006, U.S. Global's Gold Shares Fund
(USERX) was the top-performing gold fund and the company's World Precious
Minerals Fund (UNWPX) was #2. In the natural resources sector, the Global
Resources Fund (PSPFX) is ranked #1 for the same period.
In the year ended June 30, 2006, the Gold Shares Fund was ranked #2 and World
Precious Minerals Fund #3 in total return among all domestic funds, according to
Lipper.
For the five years ended June 30, 2006, the World Precious Minerals Fund ranked
#1 in total return among all domestic funds. The Gold Shares Fund was #3, U.S.
Global's Eastern European Fund (EUROX) was #4, and the Global Resources Fund
(PSPFX) was #5. No other fund family had more than one fund in Lipper's top 25
for the five-year period.
As of June 30, 2006, according to Lipper, the World Precious Minerals Fund
ranked #3 of 54, #1 of 48, #1 of 39, and #14 of 24 among gold-oriented funds for
total return for the 1-, 3-, 5-, and 10-year periods. The Gold Shares Fund
ranked #1 of 54, #2 of 48, #2 of 39 and #23 of 24 among gold-oriented funds for
the 1-, 3-, 5- and 10-year periods. The Eastern European Fund ranked #26 of 200,
#1 of 177 and #2 of 140 among emerging-market funds for the 1-, 3- and 5-year
periods. The Global Resources Fund ranked #16 of 101, #1 of 74, #1 of 69 and #12
of 29 among natural resources funds for the 1-, 3-, 5- and 10-year periods.
ABOUT U.S. GLOBAL INVESTORS, INC.
U.S. Global Investors, Inc. (www.us-global.com) is a registered investment
adviser that focuses 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.
With an average of $5 billion in assets under management in the quarter ended
June 30, 2006, U.S. Global Investors includes 13 no-load mutual funds that offer
a variety of investment options, from emerging markets to money markets. In
general, trends in assets are the critical drivers of revenue and earnings
trends.
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.
Performance data quoted above is historical. Past performance is no guarantee of
future results. Current performance may be higher or lower than the performance
data quoted. The principal value and investment return of an investment will
fluctuate so that your shares, when redeemed, may be worth more or less than
their original cost. Performance does not include the effect of any fees
described in the fund's prospectus (e.g. short-term trading fees) which, if
applicable, would lower your total returns. Obtain performance data current to
the most recent month-end at www.usfunds.com or 1-800-US-FUNDS, option 5.
Foreign and emerging-market investing involves special risks, such as currency
fluctuation and less public disclosure, as well as economic and political risk.
Gold funds may be susceptible to adverse economic, political or regulatory
developments due to concentrating in a single theme. The price of gold is
subject to substantial price fluctuations over short periods of time and may be
affected by unpredicted international monetary and political policies. We
suggest investing no more than 3% to 5% of your portfolio in gold or gold
stocks.
Lipper Disclaimer: Lipper ratings for Total Return reflect funds' historical
total return performance relative to peers as of June 30, 2006. Although Lipper
makes reasonable efforts to ensure the accuracy and reliability of the data
contained herein, the accuracy is not guaranteed by Lipper. Users acknowledge
that they have not relied upon any warranty, condition, guarantee, or
representation made by Lipper. Any use of the data for analyzing, managing, or
trading financial instruments is at the user's own risk. This is not an offer to
buy or sell securities.
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