Fiscal First Quarter 2022 Financial Highlights
- Revenues for the three months ended
September 30, 2021 increased 8% to$2.01 billion from$1.87 billion for the three months endedSeptember 30, 2020 and decreased 8% from$2.18 billion for the three months endedJune 30, 2021 - Gross profit for the three months ended
September 30, 2021 increased 55% to$56.0 million from$36.1 million for the three months endedSeptember 30, 2020 and decreased 36% from$87.1 million for the three months endedJune 30, 2021 - Gross profit margin for the three months ended
September 30, 2021 increased to 2.78% of revenue, from 1.94% of revenue for the three months endedSeptember 30, 2020 , and declined from 4.00% of revenue in the three months endedJune 30, 2021 - Net income attributable to the Company for the three months ended
September 30, 2021 totaled$26.0 million or$2.17 per diluted share, as compared to net income of$23.1 million or$3.09 per diluted share for the three months endedSeptember 30, 2020 , and net income of$51.0 million or$4.28 per diluted share for the three months endedJune 30, 2021 - Adjusted net income before provision for income taxes, depreciation, amortization and acquisition costs, a non-GAAP financial measure, for the three months ended
September 30, 2021 totaled$41.1 million , an increase of$10.4 million compared to$30.7 million for the three months endedSeptember 30, 2020 , and a decrease of$31.2 million compared to$72.3 million for the three months endedJune 30, 2021 - Gold ounces sold in the three months ended
September 30, 2021 decreased 7% to 669,000 ounces from 721,000 ounces for the three months endedSeptember 30, 2020 , and decreased 13% from 772,000 ounces for the three months endedJune 30, 2021
- Silver ounces sold in the three months ended
September 30, 2021 increased 16% to 28.1 million ounces from 24.2 million ounces for the three months endedSeptember 30, 2020 , and decreased 21% from 35.7 million ounces for the three months endedJune 30, 2021 - As of
September 30, 2021 , the number of secured loans increased 84% to 2,074 from 1,125 as ofSeptember 30, 2020 , and increased 10% from 1,881 as ofJune 30, 2021
Fiscal First Quarter 2022 Financial Results
Revenues increased 8% to
Gross profit increased 55% to
Selling, general and administrative expenses increased 76% to
Depreciation and amortization expense increased 1,551% to
Interest income increased 39% to
Interest expense increased 28% to
Earnings from equity method investments decreased 64% to
Net income attributable to the Company totaled
Adjusted net income before provision for income taxes, depreciation, amortization and acquisition costs, a non-GAAP financial measure, totaled
Management Commentary
“Our first quarter results illustrate the continued advantages of our integrated and diversified business model,” said A-Mark CEO
“Our vertically integrated businesses, coupled with our strategic DTC expansion, highlighted by JMB, continue to deliver strong results. JMB’s integration continues to go well, and we are encouraged by the business performance of our recently expanded strategic investments, where we are working to accelerate growth and synergies.
“We continue to see positive macro tailwinds persisting, including precious metals supply constraints and elevated demand for precious metals products in both the retail and wholesale segments. We remain optimistic that our platform and proven business model will assist us to generate profit in stable periods and opportunities for outsized returns in periods of volatility driving strong returns for A-Mark over the long term.”
Conference Call
A-Mark will hold a conference call today (
To participate, please dial the appropriate number at least five minutes prior to the start time and ask for the
International number: 1-631-891-4304
Conference ID: 10016895
The conference call will be broadcast simultaneously and available for replay via the Investor Relations section of A-Mark’s website at www.amark.com. If you have any difficulty connecting with the conference call or webcast, please contact A-Mark’s investor relations team at 1-949-574-3860.
A replay of the call will be available after
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Conference ID: 10016895
About A-Mark Precious Metals
Founded in 1965,
A-Mark’s Wholesale Sales & Ancillary Services segment distributes and purchases precious metal products from sovereign and private mints. As a
Through its A-M Global Logistics subsidiary, A-Mark provides its customers with a range of complementary services, including managed storage options for precious metals as well as receiving, handling, inventorying, processing, packaging, and shipping of precious metals and coins on a secure basis. A-Mark’s mint operations, which are conducted through its wholly owned subsidiary
A-Mark’s Direct-to-Consumer segment operates as an omni-channel retailer of precious metals, providing access to a multitude of products through its wholly owned subsidiaries,
The company operates its Secured Lending segment through its wholly owned subsidiaries, Collateral Finance Corporation (CFC) and AM Capital Funding. Founded in 2005, CFC is a California licensed finance lender that originates and acquires loans secured by bullion and numismatic coins. Its customers include coin and precious metal dealers, investors and collectors. AM Capital Funding was formed in 2018 for the purpose of securitizing eligible secured loans of CFC.
A-Mark is headquartered in
Important Cautions Regarding Forward-Looking Statements
Statements in this press release that relate to future plans, objectives, expectations, performance, events and the like are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. These include statements regarding future macroeconomic conditions and demand for precious metal products, and the Company’s ability to effectively respond to changing economic conditions. Future events, risks and uncertainties, individually or in the aggregate, could cause actual results or circumstances to differ materially from those expressed or implied in these statements. Factors that could cause actual results to differ include the following: the failure to execute the Company’s growth strategy as planned; greater than anticipated costs incurred to execute this strategy; changes in the current international political climate which has favorably contributed to demand and volatility in the precious metals markets; 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; general risks of doing business in the commodity markets; the effects of the COVID-19 pandemic and the eventual return to normalized business and economic conditions; and the strategic, business, economic, financial, political and governmental risks described in in the company’s public filings with the
The words "should," "believe," "estimate," "expect," "intend," "anticipate," "foresee," "plan" and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates on which they were made. Additionally, any statements related to future improved performance and estimates of revenues and earnings per share are forward-looking statements. The company undertakes no obligation to publicly update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements.
Use and Reconciliation of Non-GAAP Financial Measures
In addition to presenting the Company’s financial results determined in accordance with GAAP, management believes the following non-GAAP financial measure is useful in evaluating the Company’s operating performance. The Company presents “adjusted net income before provision for income taxes” because management believes it assists investors and analysts by facilitating comparison of period-to-period operational performance on a consistent basis by excluding items that management does not believe are indicative of the Company’s core operating performance. The items excluded from this financial measure may have a material impact on the Company’s financial results. Certain of those items are non-recurring, while others are non-cash in nature. Accordingly, this non-GAAP financial measure should be considered in addition to, and not as a substitute for or superior to, the comparable measures prepared in accordance with GAAP, and should be read in conjunction with the financial statements included in the Company’s Quarterly Report on Form 10-Q to be filed with the
In the Company’s reconciliation from its reported GAAP “net income before provision for taxes” to its non-GAAP “adjusted net income before provision for taxes,” the Company eliminates the impact of the following three amounts: (i) acquisition expenses; (ii) amortization expenses related to intangible assets acquired; and (iii) depreciation expense.
Management encourages investors and others to review the Company’s financial information in its entirety and not to rely on any single financial measure.
Company Contact:
1-310-587-1410
sreiner@amark.com
Investor Relations Contact:
Gateway Investor Relations
1-949-574-3860
AMRK@gatewayIR.com
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except for share data) (unaudited)
2021 | 2021 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash | $ | 29,609 | $ | 101,405 | ||||
Receivables, net | 104,522 | 89,000 | ||||||
Derivative assets | 69,785 | 44,536 | ||||||
Secured loans receivable | 110,323 | 112,968 | ||||||
Precious metals held under financing arrangements | 130,618 | 154,742 | ||||||
Inventories: | ||||||||
Inventories | 346,285 | 256,991 | ||||||
Restricted inventories | 219,420 | 201,028 | ||||||
565,705 | 458,019 | |||||||
Prepaid expenses and other assets | 4,074 | 3,557 | ||||||
Total current assets | 1,014,636 | 964,227 | ||||||
Operating lease right of use assets | 7,346 | 5,702 | ||||||
Property, plant, and equipment, net | 8,913 | 8,609 | ||||||
100,943 | 100,943 | |||||||
Intangibles, net | 85,761 | 93,633 | ||||||
Long-term investments | 29,683 | 18,467 | ||||||
Total assets | $ | 1,247,282 | $ | 1,191,581 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Lines of credit | $ | 194,000 | $ | 185,000 | ||||
Liabilities on borrowed metals | 74,618 | 91,866 | ||||||
Product financing arrangements | 219,420 | 201,028 | ||||||
Accounts payable and other current liabilities | 178,798 | 200,351 | ||||||
Derivative liabilities | 70,348 | 7,539 | ||||||
Accrued liabilities | 12,836 | 18,785 | ||||||
Income tax payable | 7,140 | 5,016 | ||||||
Total current liabilities | 757,160 | 709,585 | ||||||
Notes payable | 93,446 | 93,249 | ||||||
Deferred tax liabilities | 18,091 | 19,514 | ||||||
Other liabilities | 6,958 | 5,291 | ||||||
Total liabilities | 875,655 | 827,639 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock, and outstanding: none as of | — | — | ||||||
Common stock, par value and 11,229,657 shares issued and outstanding as of and | 114 | 113 | ||||||
Additional paid-in capital | 154,619 | 150,420 | ||||||
Retained earnings | 215,475 | 212,090 | ||||||
370,208 | 362,623 | |||||||
Noncontrolling interests | 1,419 | 1,319 | ||||||
Total stockholders’ equity | 371,627 | 363,942 | ||||||
Total liabilities, noncontrolling interests and stockholders’ equity | $ | 1,247,282 | $ | 1,191,581 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for share and per share data) (unaudited)
Three Months Ended | ||||||||
2021 | 2020 | |||||||
Revenues | $ | 2,013,971 | $ | 1,866,116 | ||||
Cost of sales | 1,957,962 | 1,829,971 | ||||||
Gross profit | 56,009 | 36,145 | ||||||
Selling, general, and administrative expenses | (16,677 | ) | (9,505 | ) | ||||
Depreciation and amortization expense | (8,271 | ) | (501 | ) | ||||
Interest income | 5,531 | 3,983 | ||||||
Interest expense | (5,473 | ) | (4,293 | ) | ||||
Earnings from equity method investments | 1,489 | 4,126 | ||||||
Other income, net | 409 | 359 | ||||||
Unrealized losses on foreign exchange | (224 | ) | (97 | ) | ||||
Net income before provision for income taxes | 32,793 | 30,217 | ||||||
Income tax expense | (6,669 | ) | (6,511 | ) | ||||
Net income | 26,124 | 23,706 | ||||||
Net income attributable to noncontrolling interests | 100 | 623 | ||||||
Net income attributable to the Company | $ | 26,024 | $ | 23,083 | ||||
Basic and diluted net income per share attributable to | ||||||||
Basic | $ | 2.31 | $ | 3.28 | ||||
Diluted | $ | 2.17 | $ | 3.09 | ||||
Weighted average shares outstanding: | ||||||||
Basic | 11,262,600 | 7,034,700 | ||||||
Diluted | 12,009,300 | 7,475,000 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands) (unaudited)
Three Months Ended | 2021 | 2020 | ||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 26,124 | $ | 23,706 | ||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||||||||
Depreciation and amortization | 8,271 | 501 | ||||||
Amortization of loan cost | 569 | 396 | ||||||
Deferred income taxes | (1,423 | ) | — | |||||
Interest added to principal of secured loans | (5 | ) | (4 | ) | ||||
Share-based compensation | 473 | 178 | ||||||
Earnings from equity method investments | (1,489 | ) | (4,126 | ) | ||||
Changes in assets and liabilities: | ||||||||
Receivables | (15,522 | ) | (26,526 | ) | ||||
Secured loans receivable | 25 | (358 | ) | |||||
Secured loans made to affiliates | 3,032 | 4,642 | ||||||
Derivative assets | (25,249 | ) | (67,275 | ) | ||||
Precious metals held under financing arrangements | 24,124 | 19,821 | ||||||
Inventories | (107,686 | ) | (91,900 | ) | ||||
Prepaid expenses and other assets | (689 | ) | (292 | ) | ||||
Accounts payable and other current liabilities | (21,553 | ) | 69,992 | |||||
Derivative liabilities | 62,809 | (11,917 | ) | |||||
Liabilities on borrowed metals | (17,248 | ) | (14,454 | ) | ||||
Accrued liabilities | (6,420 | ) | (1,227 | ) | ||||
Income tax payable | 2,124 | 771 | ||||||
Net cash used in operating activities | (69,733 | ) | (98,072 | ) | ||||
Cash flows from investing activities: | ||||||||
Capital expenditures for property, plant, and equipment | (709 | ) | (476 | ) | ||||
Purchase of long-term investments | (6,250 | ) | — | |||||
Secured loans receivable, net | (407 | ) | (24,793 | ) | ||||
Net cash used in investing activities | (7,366 | ) | (25,269 | ) | ||||
Cash flows from financing activities: | ||||||||
Product financing arrangements, net | 18,392 | 26,921 | ||||||
Dividends paid | (22,639 | ) | (10,553 | ) | ||||
Borrowings and repayments under lines of credit, net | 9,000 | 79,000 | ||||||
Debt funding issuance costs | (199 | ) | (398 | ) | ||||
Net settlement on issuance of common shares on exercise of options | 749 | 416 | ||||||
Net cash provided by financing activities | 5,303 | 95,386 | ||||||
Net decrease in cash, cash equivalents, and restricted cash | (71,796 | ) | (27,955 | ) | ||||
Cash, cash equivalents, and restricted cash, beginning of period | 101,405 | 52,325 | ||||||
Cash, cash equivalents, and restricted cash, end of period | $ | 29,609 | $ | 24,370 |
Overview of Results of Operations for the Three Months Ended
Condensed Consolidated Results of Operations
The operating results for the three months ended
in thousands, except per share data | ||||||||||||||||||||||||
Three Months Ended | 2021 | 2020 | $ | % | ||||||||||||||||||||
$ | % of revenue | $ | % of revenue | Increase/ (decrease) | Increase/ (decrease) | |||||||||||||||||||
Revenues | $ | 2,013,971 | 100.000 | % | $ | 1,866,116 | 100.000 | % | $ | 147,855 | 7.9 | % | ||||||||||||
Gross profit | 56,009 | 2.781 | % | 36,145 | 1.937 | % | $ | 19,864 | 55.0 | % | ||||||||||||||
Selling, general, and administrative expenses | (16,677 | ) | (0.828 | )% | (9,505 | ) | (0.509 | )% | $ | 7,172 | 75.5 | % | ||||||||||||
Depreciation and amortization expense | (8,271 | ) | (0.411 | )% | (501 | ) | (0.027 | )% | $ | 7,770 | 1,550.9 | % | ||||||||||||
Interest income | 5,531 | 0.275 | % | 3,983 | 0.213 | % | $ | 1,548 | 38.9 | % | ||||||||||||||
Interest expense | (5,473 | ) | (0.272 | )% | (4,293 | ) | (0.230 | )% | $ | 1,180 | 27.5 | % | ||||||||||||
Earnings from equity method investments | 1,489 | 0.074 | % | 4,126 | 0.221 | % | $ | (2,637 | ) | (63.9 | %) | |||||||||||||
Other income, net | 409 | 0.020 | % | 359 | 0.019 | % | $ | 50 | 13.9 | % | ||||||||||||||
Unrealized losses on foreign exchange | (224 | ) | (0.011 | )% | (97 | ) | (0.005 | )% | $ | 127 | 130.9 | % | ||||||||||||
Net income before provision for income taxes | 32,793 | 1.628 | % | 30,217 | 1.619 | % | $ | 2,576 | 8.5 | % | ||||||||||||||
Income tax expense | (6,669 | ) | (0.331 | )% | (6,511 | ) | (0.349 | )% | $ | 158 | 2.4 | % | ||||||||||||
Net income | 26,124 | 1.297 | % | 23,706 | 1.270 | % | $ | 2,418 | 10.2 | % | ||||||||||||||
Net income attributable to noncontrolling interests | 100 | 0.005 | % | 623 | 0.033 | % | $ | (523 | ) | (83.9 | %) | |||||||||||||
Net income attributable to the Company | $ | 26,024 | 1.292 | % | $ | 23,083 | 1.237 | % | $ | 2,941 | 12.7 | % | ||||||||||||
Basic and diluted net income per share attributable to | ||||||||||||||||||||||||
Per Share Data: | ||||||||||||||||||||||||
Basic | $ | 2.31 | $ | 3.28 | $ | (0.97 | ) | (29.6 | %) | |||||||||||||||
Diluted | $ | 2.17 | $ | 3.09 | $ | (0.92 | ) | (29.8 | %) |
Overview of Results of Operations for the Three Months Ended
Condensed Consolidated Results of Operations
The operating results for the three months ended
in thousands, except per share data | ||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||
$ | % | |||||||||||||||||||||||
$ | % of revenue | $ | % of revenue | Increase/ (decrease) | Increase/ (decrease) | |||||||||||||||||||
Revenues | $ | 2,013,971 | 100.000 | % | $ | 2,178,666 | 100.000 | % | $ | (164,695 | ) | (7.6 | %) | |||||||||||
Gross profit | 56,009 | 2.781 | % | 87,131 | 3.999 | % | $ | (31,122 | ) | (35.7 | %) | |||||||||||||
Selling, general, and administrative expenses | (16,677 | ) | (0.828 | )% | (16,693 | ) | (0.766 | )% | $ | (16 | ) | (0.1 | %) | |||||||||||
Depreciation and amortization expense | (8,271 | ) | (0.411 | )% | (8,294 | ) | (0.381 | )% | $ | (23 | ) | (0.3 | %) | |||||||||||
Interest income | 5,531 | 0.275 | % | 5,234 | 0.240 | % | $ | 297 | 5.7 | % | ||||||||||||||
Interest expense | (5,473 | ) | (0.272 | )% | (5,200 | ) | (0.239 | )% | $ | 273 | 5.3 | % | ||||||||||||
Earnings from equity method investments | 1,489 | 0.074 | % | 1,648 | 0.076 | % | $ | (159 | ) | (9.6 | %) | |||||||||||||
Other income, net | 409 | 0.020 | % | 176 | 0.008 | % | $ | 233 | 132.4 | % | ||||||||||||||
Unrealized (losses) gains on foreign exchange | (224 | ) | (0.011 | )% | 2 | 0.000 | % | $ | 226 | 11,300.0 | % | |||||||||||||
Net income before provision for income taxes | 32,793 | 1.628 | % | 64,004 | 2.938 | % | $ | (31,211 | ) | (48.8 | %) | |||||||||||||
Income tax expense | (6,669 | ) | (0.331 | )% | (12,933 | ) | (0.594 | )% | $ | (6,264 | ) | (48.4 | %) | |||||||||||
Net income | 26,124 | 1.297 | % | 51,071 | 2.344 | % | $ | (24,947 | ) | (48.8 | %) | |||||||||||||
Net income attributable to non-controlling interests | 100 | 0.005 | % | 66 | 0.003 | % | $ | 34 | 51.5 | % | ||||||||||||||
Net income attributable to the Company | $ | 26,024 | 1.292 | % | $ | 51,005 | 2.341 | % | $ | (24,981 | ) | (49.0 | %) | |||||||||||
Basic and diluted net income per share attributable to | ||||||||||||||||||||||||
Per Share Data: | ||||||||||||||||||||||||
Basic | $ | 2.31 | $ | 4.57 | $ | (2.26 | ) | (49.5 | %) | |||||||||||||||
Diluted | $ | 2.17 | $ | 4.28 | $ | (2.11 | ) | (49.3 | %) |
Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of Net income before provision for income taxes to Adjusted net income before provision for income taxes:
in thousands | ||||||||||||||||||||||||
Three Months Ended | 2021 | 2020 | $ | % | ||||||||||||||||||||
$ | % of revenue | $ | % of revenue | Increase/ (decrease) | Increase/ (decrease) | |||||||||||||||||||
Revenues | $ | 2,013,971 | 100.000 | % | $ | 1,866,116 | 100.000 | % | $ | 147,855 | 7.9 | % | ||||||||||||
Net income before provision for income taxes | $ | 32,793 | 1.628 | % | $ | 30,217 | 1.619 | % | $ | 2,576 | 8.5 | % | ||||||||||||
Adjustments: | ||||||||||||||||||||||||
Acquisition costs | 44 | 0.002 | % | — | — | $ | 44 | (— | %) | |||||||||||||||
Amortization of acquired intangibles | 7,872 | 0.391 | % | 154 | 0.008 | % | $ | 7,718 | 5,011.7 | % | ||||||||||||||
Depreciation expense | 399 | 0.020 | % | 347 | 0.019 | % | $ | 52 | 15.0 | % | ||||||||||||||
Adjusted net income before provision for income taxes (Non-GAAP) | $ | 41,108 | 2.041 | % | $ | 30,718 | 1.646 | % | $ | 10,390 | 33.8 | % |
Source:
2021 GlobeNewswire, Inc., source