AMRK - Earnings call transcript Q2 2022 | A-Mark Precious Metals, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon. Welcome to A-Mark Precious Metals conference call for the Fiscal Second Quarter ended December 31st, 2021. My name is Sherry, and I will be your Operator this afternoon.

Before this call, A-Mark issued its results for the fiscal second quarter 2022 in a press release, which is available in the Investor Relations section of the company's website at www. amark.com.

link the Investor homepage. the the section find of top can to Relations the at You

Simpson Joining CEO, Thor Kathleen Greg for Roberts, us today's President Gjerdrum, call and are A-Mark's Taylor. CFO

open this up the Then we call. statements questions the conclude made we necessary Following I'll the the the before provide remarks, call, regarding for your call by questions. will forward-looking management during link remind recorded for like to website. everyone in a and replay be would call A-Mark being that Relations I is Investor available will made via the section available the this of

like the Greg Now to I CEO, sir. A-Mark's over Mr. would Please proceed, turn call to Roberts.

Greg Roberts

And joining afternoon today. Thank everyone. Thank good our you, call you for Sherry. to

quarter diluted delivered income as of net can of EPS million A-Mark release, you As from solid our $XX.X and see a earnings share. $X.XX another QX marked

net We before diluted of income $X.XX provision for also million per generated taxes, or share. $XX adjusted income

strength with several -- results our precious QX have benefited over integrated have reflect of the conditions we of macro past the continuation favorable the business our fully that Our combined quarters. benefited platform metals the

resulted continue continued robust demand from has customers along premium both higher We with ongoing to constraints, which retail and spreads. supply our experience wholesale in

XX profit and an gross XX.X our X% our model basis sequential million private business sources. continues strength of in and by favorable supply integrated in to gross on QX equity. take and an our provide market wholly-owned margin other steady which us advantage XX-plus-year The evident to with expanding conditions with mints to points fully profit Our model interest equity return of XX% unique product, to relationship access enabling us our performance, increase through in our is included with

come over further provide I financials will through Now, she update President, to to our business walk and and operational I more will turn Simpson-Taylor, will take discuss a you growth Afterwards, strategy. and metrics. Thor KPIs in detail. our away. Gjerdrum, call on our our Kathleen, to our Then Kathleen the it CFO, on want

Kathleen Simpson Taylor

everyone. afternoon, good and Greg, you, Thank

XXXX from lower prices The fiscal to in gold by contributed to $XXX.X in increase sold, revenues ounces million billion quarter. offset selling XX% last and silver the year. silver. due revenues QX an was and increased average Our in $X.XX increase JM Bullion, for gold billion of revenue QX $X.XX of of to JMB,

QX million the six-month $XX.X QX, period. from increase last gross by in X.XX% contributed with including Gross increased prices of and profit to X.XX% revenue to For million from of XXX% of or revenues XX% or revenue silver in same increase and average from period, for to $XXX.X selling billion billion an combined for gold to revenues the was offset $X.XX fiscal XXXX higher The the JMB wholesale our increased average in and ago year. segments, JMB. prices by silver, $X.XX due million direct-to-consumer $XX.X six-month in was profit earned period. higher The due to year for contributed of lower the profits sold $XX.X ancillary services million ounces increase revenue gross sales gold. selling

and accruals wholesale professional to to same expense, the gross million. was due fees, to insurance primarily million million million $X.X performance-based SG&A direct-to-consumer contributed revenue, of due profit higher increase million year-ago increased For of year. $XX.X the including period. increased for consulting fiscal $X.X The of increase QX expenses $X.X XXX% costs expenses by or in gross million, of and QX profit incurred including compensation and by was period, the of sales profits legal $X.X $XXX.X ancillary $XX.X in X.XX% million XXXX segments, JMB. last X.XX% gross JMB six-month $XX.X from or revenue, in $X.X from higher earned increased million XXX% The from of million and to services,

increased months’ selling, XX% in compensation expense, performance-based fees, of million fiscal the million XX and XX.X increase expenses million last higher million amortization $X.X to X,XXX% legal and same million. JMB, of of and million six $X.X year-ago QX costs professional year. $XX.X million due from expense $X.X from of incurred period, expenses and the including was $X.X by increased accruals consulting administrative in million for XXXX primarily increased general QX, to Depreciation of For $X.X insurance to period. The

primarily the period, QX from to million from of Interest to XXXX expense amortization increased depreciation year. million same $X.X of XX% related $XX.X The JMB. to in in and $X QX income due was X,XXX% For six-month increased last acquired $X.X million amortization intangibles the to fiscal period. increase million the year-ago for

six-month increased XX% XXXX million income. last metals. $X.X and trading $X.X For increase liabilities fiscal debt Interest facility income primarily for with $X.X from notes with on issuance of loan million by by million QX interest servicing in product expense same The a Secured other fiscal million million in interest from $X associated increase year. credit primarily million including by $X.X year-ago payable increased income the driven in QX, associated The the our to decrease borrowed X% cost, of interest period. $X.X fees due of of offset was amortization higher higher earned Lending segment period $XX.Xmillion and finance was to to aggregate our

as offset liabilities on a in loan $X.X payable, and notes subsidiary. borrowed metals. former amortization financing Earnings million related For $X.X in equity method quarter. a investments $X.X period, The JMB, company million of same earnings of issuance credit includes $X.X interest to our $X.X investments facility with equity from decreased method year year-ago equity interest servicing associated by million related reported increase XX% from million of primarily an XXXX in costs now owned associated fiscal was $X.X $X.X to $X.X million the The is of our from decrease QX, and current change to increased period. million with million method in by for the trading million $X.X including million debt driven XX% investment same arrangement, wholly ago decrease of a fees which by six-month the offset expense a million increase by the $XX.X product to

diluted For from the earnings the $X.X equity a million $X.X from our of now equity $X.X to equity to million to investments to net earnings offset share second current investment which XXXX method $X.XX $X.XX of The diluted the related per of fiscal the $X.X This investments, income by subsidiary. for wholly-owned $X.X the million is of year. the totaled in a a share. company method company compares period, JMB, as year-ago decreased QX attributable of former by last reported includes quarter in XX% million increase company million or per to period. income attributable same million in six-month decrease change an Net or $XX.X from method

the higher second measure Our average depreciation a per million or outstanding X.X for based for year. in average of current million quarter excludes share. QX XXXX which of of per compared quarter fiscal for $X.X the Adjusted the million fiscal diluted amortization, acquisition is diluted million $X.XX outstanding improvement The those diluted fiscal for net shares during weighted year $XX.X or of EPS share taxes, the and non-GAAP on QX $XX expenses, than financial $X.XX income second income provision shares last the weighted average fiscal XXXX quarter. compared fiscal quarter with to million for shares prior XXXX. $XX.X were weighted outstanding million $XX.X million totaled outstanding An before

the million totaled income months period, diluted in to net the to $XX.X ago up company or compares This share, share. company attributable million, year attributable For to $X.XX or the income the same $XX per diluted six $X.XX period. per net

income improvement or outstanding $XX.X weighted weighted based average for the period the share million, compared the million to $XX.X measure six-month The six-month for X-month period, those diluted which excludes period per Adjusted Our than period. year a $X.X $XX.X X-month prior taxes, financial acquisition period. net amortization, weighted non-GAAP an outstanding same million, average were shares per income in $X.XX or the for compared totaled year-ago the diluted million outstanding shares diluted shares of and outstanding million with average share, year-ago EPS provision same in higher expenses, $X.XX the before depreciation period. during is on $X.X for

$XX.X year XXXX. fiscal to sheet, quarter-end cash turning balance our of at at had of compared million to we Now, end $XXX.X the million

release Our first XXXX the high our cash to Xst. fiscal few days new year on men's specifically July coin a due in were bullion XXXX, of significant balances due to planned U.S. purchases the Metals July in part design of Precious

end the was at the of tangible end the million from worth Our up of $XXX $XXX.X million, net the quarter. prior at quarter

is replacing quarter, a company's three new million facility. in added credit trading during The of we expand model. financial largest number We $XXX we Finally, provides new the million Partner's completes Capital our the that as facility as it in lender in believe we strong our future. announced trading which need in to lenders December, and That the performance our previous the lending vertically the additional our we new facility year credit credit committed $XXX closed history capacity, summary. reflects confidence base, our business of our integrated should my

I turn metrics. update performance an over provide will our who will Now, on call the key Thor, Thor. to

Thor Gjerdrum

you, Kathleen. Thanks

of QX, XXX,XXX fiscal months our first up quarter sold Looking We the metrics from in gold down QX at was and last from last year, which X% quarter. but fiscal six XX% second XXXX. for operational of of ounces

For up up which fiscal year million from the X% the from million is quarter. six-month same silver last sold XX% ounces XX% ounces period. QX was from XX year of period, XXXX, of of up which in last we sold gold, and QX We X.X ago

period, trading from from ounces quarter we of total X% increased by first the trading desk XX% number fiscal million product from orders the year-ago processed silver, QX of last same up year, decreased period. which XX,XXX of XX% volume, to of which but X-month the Wholesale For $XX.X our the is XXXX. ticket represents sold

wholesale period, the ticket the year-ago to same XX% volume six-month For XX,XXX period. decreased from

ratio year, quarter, QX X.X X% in For from X.X% from was increase our and XX% last a in is prior turnover second fiscal the decrease which a quarter. X.X, the inventory of

key the customers base. quarter, end XX,XXX the total quarter X.X our period. December, of mainly segment total metrics inventory period, period. the X-month year and increased turnover of this X% XXX,XXX is which the million The these at The quarter. direct-to-consumer active compared attributable to XXX,XXX of the with from the end our The the compared by was the to of prior the year-ago down JMB increased ratio from customer second December, metrics in of X.X, was like customers number 'XX. the for XXXX -- totaled of increase in with number addition share number also six-month some For I'd at by the of

quarter, end of increase portfolio of an totaled quarter the increase at metals for closing prices number total of and value precious dollar QX of will prior end remarks. last loans the concludes December X,XXX, which up during XX% turn $XXX.X periods XX% That Finally, and the metals of prior decreased The prepared the of of loans the now from secured increased and it of declining of rising XX% loan remarks. over prices. million, December from number from up periods my totaled year. I an Greg XXXX. December, XX% of at from is Typically during to the

Greg Roberts

Thor. you, Thank

and base, thrilled anniversary our our our gross well strength of Bullion, we JM and during combined continued of encouraged acquisition quarter. I companies. profit by the of to our customer am XX% the one-year grow of As the XX% revenue JMB approximately momentum of execute contributing continues and its approach and

product Bullion about optimistic fractional and future. broader allows Metals the this denominations these the Metals and are physical in this online on consumers our option our release silver, customers for commercial innovative remains later track community. in to innovative offering and Metals, eager that begin a month, We forthcoming of our and holdings to many including and the platinum range coin JMB's and with to into bar convert of buy are The the rollout JM marketing sell Precious platform we to Cyber DTC digitalizes bars prospects, to large gold, Cyber shares

prior with us remains about profit business gross the DTC third into growth to strong XX% Favorable quarter, percentage gross outlook. continued our quarter. performance margin point increase the almost keeping have in Our and a optimistic in trends our full profit compared

constraints. mint and A-Mark's periods including sovereign Our is wholly-owned in remains Mint. wholesale to our as subsidiary, the which access mint performance to their to critically from struggle The chain DTC benefit continue supply of SilverTowne where such supply chain, segments we these meet to due important demand see strong

of ounces from per on silver During mint an same which quarter year-ago the average XX% up period. second amazing produced the XXX,XXX week, is the

our in of to mint XXX,XXX February in capital to invest silver be ounces expand per evaluate to production and capacity, of We our week. and expect continue excess

that capabilities Finally, run. the our we further results opportunities over augment shareholders strong can continue to our evaluate strategic and Operator. for long drive

Operator

Thank you. [Operator Instructions].

question Forte Our with is from D.A. first Tom Please proceed. Davidson.

Tom Forte

Great.

on questions. of great and a I I'll time. that a go a quarter. one team, congrats Greg So couple have

about in was metals. volatility. talk two a than Greg, we Dow precious lot and Precious market I that may up how question. first X,XXX or So down in may Metals? not about about talked That's should volatility impact a impacting We thing my the be I we want where to or days there interest more row interest things How points. that market think in had

Greg Roberts

in to I markets the that uncertainty of a any the recipient started that we're more clearly deployed different circumstances. Okay. or in fear obviously. for equity say see will way are few precious certainly some Thank people, Tom. affect the or create Different metals the and direct changing assets conditions and last market volatility weeks you, We of

weeks because a whether how they're our the customer result or expected expanding react customer in the still them Certain more expect. did in a of a would from base from precious Some or at good we three-day see had rising good the don't and a or described we in institutional all buy metals level conditions hold. to to saw create same and when affirmation gold base that it two view in at things over for last create we and the of and that bar drop demand our activity big we to an an prices two increased it segment, cause period, couple of individuals same silver as burst going exact weeks customer particularly for gold from recently, affect And of DTC the did that level. our we or to interest change sell in behavior and ETF at base, buying significant a exact us it's but you that's customers, going silver and the see you've in-demand information was Slow our was to are that as is positive levels. level

different I action for see we we the on volatility get would aftershocks volatility personally the a couple what we see buy the dip a a saw. business model a of before, from last lot I we've just in weeks, then create is really as for to us, you is continued I see is and always then the We of and shift I what call performing and as any classes did customers we all we and that motivates in So towards perspective, price going in drop and earthquake. and that said seems after think our level interest our couple have that -- attitude get expected some interest, which what we to and asset a is expected good great our a level. the they're days, And behavioral be think macro generally change or at any change macro to of of repositioning at lot then get

Tom Forte

of lot a off we if the limit is, role XXXX, and different standpoint. question, have second then if taking And metals I'll to and a in investors cryptocurrency, as to that's hedging of three gold hedging myself inflation, debate far to, talked from a then try some shine as Great. I precious

to feel a to in or -- for the gold hedge question precious of use different for perspective inflation And materially or -- different is versus So shape, past? you has like from times or I'd feel do in as of crypto my today, you the you love get I metals form, feels way, a hedge. your like perception you as you guess if replaced any

Greg Roberts

Dow remember I two the follow when I performance and first the Precious ago are crypto's were the really the on crypto they dropped Metals, ever seeing would uncorrelated say NASDAQ that the doing. time, equities I which based what mean, was I weeks and last to

a I well. since in week tracked on. but that gold decline to a they XX,XXX last saw situation related in risk to might the XXXX or a I maybe indicate And to of that for from So and in is had which me XXXX see certainly where drop $XX held up to us, and And really situation so the I almost would different, going every the drop situation them think very to be silver very NASDAQ we felt then, little you off seem past the down really closely, thought after that we gold get further. strong initial

is So I for pretty underlying well. holding and do fear gold. And risk-off predominantly. believe strategy I that very gold's inflation the underlying the think good seeing up We're

Tom Forte

Last quarter current What forward e-commerce any other assets integrated acquisition Great. on next The look to level, type been of today at question. asking interest, M&A has you about your strategic Metals. Bullion both and thoughts JM additional potential are maybe high vertically The that international amazing. U.S. Cyber course? of I

Greg Roberts

of over size -- is those the amazing mean, back Yeah. reporting the that quarter to right on-boarding those I and of purchases. we're thing at the of the months first in X some by level into I think that our see the the DTC X new the last continued I purchase first client pace now clients;

specifically a more JM my year continues or outperform acquisition. from really level and we expectations year things looking at Bullion DTC are at the the from ago. new then ago years ago different for The were onboarding, different clients specifically, you we to when level, a are that the If and did JMB I where two see

are I were new way what projections talked little a ahead think of clients on think I we're about Thor bit and this.

the new of pace Just clients.

a in up X-figure -- new -- was that average first much JM higher from X,XXX a a bringing new year-ago clients, at and in we every level. obviously the that always that but making JM Now, first-time that we few to and didn't purchases there's purchase purchase have at new are Bullion continue clients them Bullion to X,XXX week, getting quarter, we're the DTC a buyers -- as we

some we're we more that now that really a by relates anything, are that now, we think I that what opportunities where us as the looking of new client will But there handle from seeing the really very potential confidence have Bullion that encouraged we there than right at. we're giving good right acquisition, JM a that I that think new on it I So I to acquisitions feel us gives that M&A and slightly is confidence at closely, different continuing, we're out other which and us have to the us and think new and side. metrics of to demographic and is the that and encourages we're for platform, to continue -- us looking the on will we're pace seek gives bring opportunities customers M&A clients -- looking think

Tom Forte

Great. Thank quarter. you Michael. you, and Greg. Kathleen Thank Great too,

Greg Roberts

Thank you.

Operator

[Operator Instructions] with Scutt Andrew Andrew -- question Partners, Capital please from proceed. is Our next ROTH

Andrew Scutt

[Indiscernible], here management and back mints you my quarter Congrats online? ramping all to can and with pricing continues for to on inventory last another thanks up come is, so the [Indiscernible] the impact Hey production compared first guys. questions. down sovereign that your strategies and taking question strong My supply year,

Greg Roberts

-COVID. to still with were anywhere any mint. know close we supply I pre at mean, dealing I constraints the that's of operating from are Yeah. they Mint what don't sovereign

the seeing to capacity my demand. some that see we're only but to you X So Sunshine Mint from million out years level about SilverTowne production change. mean, of as I the U.S. I in U.S. continuing And at the our high -- aren't level, Mint X increase mean, the past. we numbers Mint, can I January seen huge there think as million fill not we're at as of in the of ounces I've Mint. silver date think, for the in made January commentary, I

the And there's still biggest secondly, much could Canadian So where the -- they pronounced one supplier, the the they Silver -- Mint, our quarter coins. lack we seeing all concept they're ounce with struggle coins as continues is meeting coins The very it making you're on even is particularly I of we're use. as probably tried, XX is And of make can side that just just not a gold Eagle think demand or ounce in second is do to pounds fractional supply. -- gold that And Royal trying.

And see some fractional of do were gold I think So right road then on ounce people of a -- Cyber platform we the XX a it path gold well sell when sovereign our high. quarter premium, very I I the now giving converting down very buy they online, to premiums Metals indications ability setting just and before. mints to where get, Cyber that of high physical, at up comes so are or coins the pounds we any a on the are into it on get the What Metals, back gold think to for don't very is are us. that

products. have they buy So I mint because that to products at that be to private frustrating it we sometimes don't buy those customers can want want and only think times

just hand, clients that other we whatever of the have them. number a can want On get we

trying just prepare to for outcomes. we're So all

Andrew Scutt

color have testing. color out to get guys that for Metals, next on launched went? the there. of learned? you up thanks the provide two may The question, any anything any you two next the you Can had prior did maybe expectations given over additional how steps you Bouncing about month, Cyber months beta have you bring Great, and it months

Greg Roberts

right the in trades. there a of Yeah. number platform. myself, mean, the now about I've beta we on people done have I've been testing I XX

product. I fantastic think it is a

to happy from JM chosen the Bullion and them, this a we're of Andrea excited at launch testing that great Al what first good with lot very on we're and customers job, been a people, point, that results the and and level, of to the of lot set just did and hearing And the a good have input. this think very getting Bullion people to we're and comments March. commercial around we're our of tech I probably very the pleased JM first guys week to from a with

right exceeded expectations. So I it's my we're think and close out, very now, to rolling this

Andrew Scutt

here had, you guys And feed have from been last there's Streak back. one then me.

great guys direct-to-consumer. early margin see That's the just also appetite puts from just increase there provide and launched, to from consumers you and JM and for looks like on in Just Can it coins? strong that, sequential maybe you then some takes the new me, been in there January XXXX has thanks. Bullion all coins

Greg Roberts

have we from We've the in from is that other supply. purchasers seen Mint, and out the XXXX Clearly, January. the buying extra the this we has been the U.S. demand exceeded market. buying on year, authorized the every secondary which in Yes, demand points expect marketplace good coins

we've been more level, and So DTC at our that. for doing customers need the we coins

that's that's sequential increase see with think As the it results. level, and we're we're -- now pleased the margin to reflection getting that in right of at obviously the we're very -- and premiums a relates DTC I you can the

-- to can. supply the outsell to we'll to we try going So continue we're if

we good. as to are long going do As margins that, be

Operator

[Operator Instructions].

his our remarks. closing this questions. this the a turn time, pull brief for I for concludes moment pause to will final session. At Roberts like would for now We call any over to question-and-answer Mr. to

Greg Roberts

today, much. our And continued for and A-Mark's the and in apprised thanks the look you I'd Thank support shareholders our like of commitment dedication progress their thank interest your to call for you very A-Mark's forward to to continued. joining for and Thank you we keeping future. employees success. to many many

Operator

A-Mark's that today's conclude I questions call. important this forward-looking provide Safe during statements would includes to statement we made regarding call, like Harbor Before

only as The of should dates actual risks Future the in and greater-than-anticipated execute there A-Mark's to growth like anticipate, failure Act speak of call, forward-looking or Securities with events, forward-looking implied the the public's could statements and in costs were from the variations expect, and future similar filings XXXX. actual which -- differ, the company's XXXX, company's and results today's thereof business, in international company's could public political failure individually estimate, strategy, those within aggregate plans, objectives, regarding the the can governmental doing described climate, and depress business performance of following; During that future Commission. risks, words Private that Act of Securities pricing, expectations, expressions in forward-looking to plan, materially statements. or statements planned, for and respond A-Mark's financial, services, changes the model domestic results Exchange certain of uncertainties Reform changes the in believe, events, of expressed as the cause Securities which commodity incurred general intend, to environment as business Exchange of competition the relay as to foresee, other the Litigation made increased risk events, statements statements and the in made. differ which such identify cause to the and Factors these strategy execute the market margin the or meaning to economic, current of higher on markets they anticipated, were

any or earnings and statements. cautioned forward-looking estimates statements. The on Additionally, improved future, performance, to of undue company undertakes share no not Readers per related revise place to to are obligation revenues and these statements. reliance the forward-looking statements any publicly are forward-looking update

for everyone that A-Mark's you the us today's to recording the like company's for call remind replay Call. joining website. Earnings in link be Thank via for of section I Investors the a available Finally, of would will

disconnect. now may You

Gregory Roberts	Chief Executive Officer
Kathleen Simpson-Taylor	Executive Vice President & Chief Financial Officer
Thor Gjerdrum	President
Tom Forte	D.A. Davidson
Andrew Scutt	ROTH Capital Partners

A-Mark Precious Metals (AMRK) 9 Feb 222022 Q2 Earnings call transcript