Fiscal Fourth Quarter 2020 Financial Highlights
- Revenues for the three months ended
June 30, 2020 increased 96% to$1.67 billion from$850.2 million for the three months endedJune 30, 2019 and increased 32% from$1.26 billion for the three months endedMarch 31, 2020 - Gross profit for the three months ended
June 30, 2020 increased 335% to$28.0 million (1.68% of revenue) from$6.5 million (0.76% of revenue) for the three months endedJune 30, 2019 and increased 25% from$22.5 million (1.79% of revenue) for the three months endedMarch 31, 2020 - Net income for the three months ended
June 30, 2020 totaled$17.8 million or$2.49 per diluted share, as compared to net loss of$823,000 or$(0.12) per diluted share for the three months endedJune 30, 2019 and net income of$11.3 million or$1.61 per diluted share for the three months endedMarch 31, 2020 - Gold ounces sold in the three months ended
June 30, 2020 increased 91% to 669,000 ounces from 350,000 for the three months endedJune 30, 2019 and increased 32% from 508,000 for the three months endedMarch 31, 2020 - Silver ounces sold in the three months ended
June 30, 2020 increased 136% to 29.6 million ounces from 12.5 million ounces for the three months endedJune 30, 2019 and increased 15% from 25.7 million from the three months endedMarch 31, 2020 - As of
June 30, 2020 , the number of secured loans decreased 74% to 717 from 2,806 as ofJune 30, 2019 and increased 67% from 429 as ofMarch 31, 2020
Fiscal Fourth Quarter 2020 Financial Results
Revenues increased 96% to
Gross profit increased 335% to
Selling, general and administrative expenses increased 21% to
Interest income decreased 38% to
Interest expense decreased 24% to
Net income totaled
Full Year 2020 Financial Highlights
- Revenues for the full year ended
June 30, 2020 increased 14% to$5.46 billion from$4.78 billion for the full year endedJune 30, 2019 - Gross profit for the full year ended
June 30, 2020 increased 110% to$67.0 million (1.23% of revenue) from$32.0 million (0.67% of revenue) for the full year endedJune 30, 2019 - Net income for the full year ended
June 30, 2020 totaled$30.5 million or$4.31 per diluted share, as compared to net income of$2.2 million or$0.31 per diluted share for the full year endedJune 30, 2019 - Gold ounces sold in the full year ended
June 30, 2020 increased 21% to 2,181,000 ounces from 1,799,000 for the full year endedJune 30, 2019 - Silver ounces sold in the full year ended
June 30, 2020 increased 34% to 90.4 million ounces from 67.6 million ounces for the full year ended June 30, 2019
Full Year 2020 Financial Results
Revenues increased 14% to
Gross profit increased 110% to
Selling, general and administrative expenses increased 13% to
Interest income increased 10% to
Interest expense increased 10% to
Net income totaled
Management Commentary
“The fourth quarter capped off a record year for A-Mark,” said company CEO
“Our ecosystem of synergistic turn-key solutions has allowed us to capture significant value across the precious metals market and enables us to more effectively take advantage of supply constrained and volatile market conditions like those we saw in in the second half of the year. The strategic investments we’ve made over the last several years to expand capacity and operational capabilities have ideally positioned A-Mark to continue capitalizing on the current market conditions while increasing our market share and driving growth over the long term.
“Our operational and financial success in Q4 allowed us to enter fiscal 2021 with significant momentum. The market dynamics and trends we experienced in the fourth quarter have continued to date into fiscal Q1, highlighted by sustained demand and high volatility. These factors give us optimism for the year ahead as we look to take advantage of the opportunities in front of us. We believe our strong competitive position, robust platform, expanding customer base and diversified business model will help drive growth and profitability in the years ahead.”
Special Dividend
A-Mark’s Board of Directors approved a special dividend of
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: 1-201-689-8562
Conference ID: 13709056
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: 13709056
About A-Mark Precious Metals
Founded in 1965,
A-Mark operates several business units in its Wholesale Trading & Ancillary Services segment, including Industrial, Coin and Bar, Trading and Finance, Storage, Logistics, and the Mint (as more fully described below). Its Industrial unit services manufacturers and fabricators of products utilizing precious metals, while its Coin and Bar unit deals in over 200 different products for distribution to dealers and other qualified purchasers. As a U.S. Mint-authorized purchaser of gold, silver and platinum coins, A-Mark purchases bullion products directly from the U.S. Mint for sale to customers. A-Mark also has distributorships with other sovereign mints, including Australia, Austria, Canada, China, Mexico, South Africa and the United Kingdom. Through its Transcontinental Depository Services subsidiary, A-Mark provides customers with a variety of managed storage options for precious metals worldwide. Through its A-M Global Logistics subsidiary, A-Mark provides customers an array of complementary services, including receiving, handling, inventorying, processing, packaging and shipping of precious metals and custom coins on a secure basis. A-Mark also holds a majority stake in a joint venture that owns the minting operations known as SilverTowne Mint (Mint), which designs and produces minted silver products which provide greater product selection to customers, price stability within the supply chain as well as more secured access to silver during volatile market environments.
The company operates its Secured Lending segment through its wholly-owned subsidiaries, Collateral Finance Corporation (CFC) and AM Capital Funding, LLC (AMCF). Founded in 2005, CFC is a 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. AMCF was formed in 2018 for the purpose of securitizing eligible secured loans of CFC.
A-Mark operates its Direct Sales segment primarily through its wholly-owned subsidiary Goldline Inc. (Goldline), a direct retailer of precious metals for the investor community. Goldline markets A-Mark’s precious metal products through various channels, including radio, television, and the Internet.
A-Mark is headquartered in El Segundo,
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. Future events, risks and uncertainties, individually or in the aggregate, could cause actual results 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 our 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 our higher margin services, which could depress pricing; the failure of our business model to respond to changes in the market environment as anticipated; general risks of doing business in the commodity markets; and other business, economic, financial and governmental risks as 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.
Company Contact:
1-310-587-1414
thor@amark.com
Investor Relations Contact:
Gateway Investor Relations
1-949-574-3860
AMRK@gatewayIR.com
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except for share data)
2020 | 2019 | ||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash | $ | 52,325 | $ | 8,320 | |||||
Receivables | 49,142 | 26,895 | |||||||
Derivative assets | 46,325 | 2,428 | |||||||
Secured loans receivable | 63,710 | 125,298 | |||||||
Precious metals held under financing arrangements | 178,577 | 208,792 | |||||||
Inventories: | |||||||||
Inventories | 246,603 | 198,356 | |||||||
Restricted inventories | 74,678 | 94,505 | |||||||
321,281 | 292,861 | ||||||||
Income tax receivable | — | 1,473 | |||||||
Prepaid expenses and other assets | 2,659 | 2,783 | |||||||
Total current assets | 714,019 | 668,850 | |||||||
Operating lease right of use assets | 4,223 | — | |||||||
Property, plant, and equipment, net | 5,675 | 6,731 | |||||||
8,881 | 8,881 | ||||||||
Intangibles, net | 4,974 | 5,852 | |||||||
Long-term investments | 16,763 | 11,885 | |||||||
Deferred tax assets | — | 3,163 | |||||||
Other long-term assets | 3,500 | — | |||||||
Total assets | $ | 758,035 | $ | 705,362 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||
Current liabilities: | |||||||||
Lines of credit | $ | 135,000 | $ | 167,000 | |||||
Liabilities on borrowed metals | 168,206 | 201,144 | |||||||
Product financing arrangements | 74,678 | 94,505 | |||||||
Accounts payable and other current liabilities | 140,930 | 62,180 | |||||||
Derivative liabilities | 25,414 | 9,971 | |||||||
Accrued liabilities | 10,397 | 6,137 | |||||||
Income tax payable | 2,135 | — | |||||||
Total current liabilities | 556,760 | 540,937 | |||||||
Notes payable | 92,517 | 91,859 | |||||||
Deferred tax liabilities | 62 | — | |||||||
Other liabilities | 3,802 | — | |||||||
Total liabilities | 653,141 | 632,796 | |||||||
Commitments and contingencies | |||||||||
Stockholders’ equity: | |||||||||
Preferred stock, | — | — | |||||||
Common stock, par value | 71 | 71 | |||||||
Additional paid-in capital | 27,289 | 26,452 | |||||||
Retained earnings | 73,644 | 43,135 | |||||||
101,004 | 69,658 | ||||||||
Non-controlling interests | 3,890 | 2,908 | |||||||
Total stockholders’ equity | 104,894 | 72,566 | |||||||
Total liabilities, non-controlling interests and stockholders’ equity | $ | 758,035 | $ | 705,362 |
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for share and per share data)
Years Ended | ||||||||
2020 | 2019 | |||||||
Revenues | 5,461,094 | $ | 4,783,157 | |||||
Cost of sales | 5,394,121 | 4,751,199 | ||||||
Gross profit | 66,973 | 31,958 | ||||||
Selling, general, and administrative expenses | (36,756 | ) | (32,502 | ) | ||||
Interest income | 21,237 | 19,270 | ||||||
Interest expense | (18,859 | ) | (17,146 | ) | ||||
Other income, net | 5,226 | 1,697 | ||||||
Unrealized gains on foreign exchange | 57 | — | ||||||
Net income before provision for income taxes | 37,878 | 3,277 | ||||||
Income tax expense | (6,387 | ) | (1,015 | ) | ||||
Net income | 31,491 | 2,262 | ||||||
Net income attributable to non-controlling interests | 982 | 37 | ||||||
Net income attributable to the Company | $ | 30,509 | $ | 2,225 | ||||
Basic and diluted net income per share attributable to | ||||||||
Basic | $ | 4.34 | $ | 0.32 | ||||
Diluted | $ | 4.31 | $ | 0.31 | ||||
Weighted average shares outstanding: | ||||||||
Basic | 7,031,500 | 7,031,400 | ||||||
Diluted | 7,080,500 | 7,085,300 |
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
Years Ended | 2020 | 2019 | ||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 31,491 | $ | 2,262 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
Provision (reversal) for doubtful accounts | — | (30 | ) | |||||
Depreciation and amortization | 2,900 | 2,807 | ||||||
Amortization of loan cost | 1,484 | 1,192 | ||||||
Deferred income taxes | 3,225 | 707 | ||||||
Interest added to principal of secured loans | (19 | ) | (19 | ) | ||||
Change in accrued earn-out | — | (588 | ) | |||||
Debt extinguishment costs | — | 45 | ||||||
Share-based compensation | 953 | 1,096 | ||||||
Earnings from equity method investments | (4,878 | ) | (1,198 | ) | ||||
Changes in assets and liabilities: | ||||||||
Receivables | (22,247 | ) | 8,992 | |||||
Secured loans receivable | 3,086 | (1,304 | ) | |||||
Secured loans made to affiliates | 5,261 | (1,535 | ) | |||||
Derivative assets | (43,897 | ) | 4,967 | |||||
Income tax receivable | 1,473 | 80 | ||||||
Precious metals held under financing arrangements | 30,215 | 53,774 | ||||||
Inventories | (28,420 | ) | (12,745 | ) | ||||
Prepaid expenses and other assets | 59 | (668 | ) | |||||
Accounts payable and other current liabilities | 78,750 | 16,183 | ||||||
Derivative liabilities | 15,443 | (10,486 | ) | |||||
Liabilities on borrowed metals | (32,938 | ) | (79,202 | ) | ||||
Accrued liabilities | 3,859 | 1,137 | ||||||
Income tax payable | 2,135 | — | ||||||
Net cash provided by (used in) operating activities | 47,935 | (14,533 | ) | |||||
Cash flows from investing activities: | ||||||||
Capital expenditures for property, plant, and equipment | (836 | ) | (490 | ) | ||||
Purchase of long-term investments | — | (2,300 | ) | |||||
Purchase of intangible assets | (150 | ) | — | |||||
Secured loans receivable, net | 53,260 | (12,015 | ) | |||||
Other loans originated | (3,500 | ) | — | |||||
Net cash provided by (used in) investing activities | 48,774 | (14,805 | ) | |||||
Cash flows from financing activities: | ||||||||
Product financing arrangements, net | (19,827 | ) | (19,435 | ) | ||||
Borrowings and repayments under lines of credit, net | (32,000 | ) | (33,000 | ) | ||||
Repayments on notes payable to related party | — | (7,500 | ) | |||||
Proceeds from issuance of notes payable | — | 95,000 | ||||||
Debt funding issuance costs | (761 | ) | (3,798 | ) | ||||
Non-controlling ownership interest contribution | — | 100 | ||||||
Net payments related to share-based award activities | (116 | ) | — | |||||
Net cash (used in) provided by financing activities | (52,704 | ) | 31,367 | |||||
Net increase in cash, cash equivalents, and restricted cash | 44,005 | 2,029 | ||||||
Cash, cash equivalents, and restricted cash, beginning of period | 8,320 | 6,291 | ||||||
Cash, cash equivalents, and restricted cash, end of period | $ | 52,325 | $ | 8,320 |
Overview of Results of Operations for the Years Ended
Consolidated Results of Operations
The operating results of our business for the years ended
in thousands, except per share data | ||||||||||||||||||||||||
Years Ended | 2020 | 2019 | $ | % | ||||||||||||||||||||
$ | % of revenue | $ | % of revenue | Increase/ (decrease) | Increase/ (decrease) | |||||||||||||||||||
Revenues | $ | 5,461,094 | 100.000 | % | $ | 4,783,157 | 100.000 | % | $ | 677,937 | 14.2 | % | ||||||||||||
Gross profit | 66,973 | 1.226 | % | 31,958 | 0.668 | % | $ | 35,015 | 109.6 | % | ||||||||||||||
Selling, general, and administrative expenses | (36,756 | ) | (0.673 | )% | (32,502 | ) | (0.680 | )% | $ | 4,254 | 13.1 | % | ||||||||||||
Interest income | 21,237 | 0.389 | % | 19,270 | 0.403 | % | $ | 1,967 | 10.2 | % | ||||||||||||||
Interest expense | (18,859 | ) | (0.345 | )% | (17,146 | ) | (0.358 | )% | $ | 1,713 | 10.0 | % | ||||||||||||
Other income, net | 5,226 | 0.096 | % | 1,697 | 0.035 | % | $ | 3,529 | 208.0 | % | ||||||||||||||
Unrealized gains on foreign exchange | 57 | 0.001 | % | — | — | $ | 57 | — | ||||||||||||||||
Net income before provision for income taxes | 37,878 | 0.694 | % | 3,277 | 0.069 | % | $ | 34,601 | 1055.9 | % | ||||||||||||||
Income tax expense | (6,387 | ) | (0.117 | )% | (1,015 | ) | (0.021 | )% | $ | 5,372 | 529.3 | % | ||||||||||||
Net income | 31,491 | 0.577 | % | 2,262 | 0.047 | % | $ | 29,229 | 1292.2 | % | ||||||||||||||
Net income attributable to non-controlling interests | 982 | 0.018 | % | 37 | 0.001 | % | $ | 945 | 2554.1 | % | ||||||||||||||
Net income attributable to the Company | $ | 30,509 | 0.559 | % | $ | 2,225 | 0.047 | % | $ | 28,284 | 1271.2 | % | ||||||||||||
Basic and diluted net income per share attributable to | ||||||||||||||||||||||||
Per Share Data: | ||||||||||||||||||||||||
Basic | $ | 4.34 | $ | 0.32 | $ | 4.02 | 1256.3 | % | ||||||||||||||||
Diluted | $ | 4.31 | $ | 0.31 | $ | 4.00 | 1290.3 | % |
Overview of Results of Operations for the Three Months Ended
Consolidated Results of Operations
The operating results of our business for the three months ended
in thousands, except per share data | |||||||||||||||||||||
Three Months Ended | 2020 | 2019 | $ | % | |||||||||||||||||
$ | % of revenue | $ | % of revenue | Increase/ (decrease) | Increase/ (decrease) | ||||||||||||||||
Revenues | $ | 1,665,768 | 100.000 | % | $ | 850,169 | 100.000 | % | $ | 815,599 | 95.9 | % | |||||||||
Gross profit | 28,027 | 1.683 | % | 6,450 | 0.759 | % | $ | 21,577 | 334.5 | % | |||||||||||
Selling, general, and administrative expenses | (10,228 | ) | (0.614 | )% | (8,422 | ) | (0.991 | )% | $ | 1,806 | 21.4 | % | |||||||||
Interest income | 3,269 | 0.196 | % | 5,260 | 0.619 | % | $ | (1,991 | ) | (37.9 | )% | ||||||||||
Interest expense | (3,585 | ) | (0.215 | )% | (4,699 | ) | (0.553 | )% | $ | (1,114 | ) | (23.7 | )% | ||||||||
Other income, net | 4,779 | 0.287 | % | 394 | 0.046 | % | $ | 4,385 | 1112.9 | % | |||||||||||
Unrealized gains on foreign exchange | 99 | 0.006 | % | 54 | 0.006 | % | $ | 45 | 83.3 | % | |||||||||||
Net income (loss) before provision for income taxes | 22,361 | 1.342 | % | (963 | ) | (0.113 | )% | $ | 23,324 | 2422.0 | % | ||||||||||
Income tax (expense) benefit | (4,036 | ) | (0.242 | )% | 128 | 0.015 | % | $ | 4,164 | 3253.1 | % | ||||||||||
Net income (loss) | 18,325 | 1.100 | % | (835 | ) | (0.098 | )% | $ | 19,160 | 2294.6 | % | ||||||||||
Net income (loss) attributable to non-controlling interests | 499 | 0.030 | % | (12 | ) | (0.001 | )% | $ | 511 | 4258.3 | % | ||||||||||
Net income (loss) attributable to the Company | $ | 17,826 | 1.070 | % | $ | (823 | ) | (0.097 | )% | $ | 18,649 | 2266.0 | % | ||||||||
Basic and diluted net income (loss) per share attributable to | |||||||||||||||||||||
Per Share Data: | |||||||||||||||||||||
Basic | $ | 2.54 | $ | (0.12 | ) | $ | 2,66 | 2216.7 | % | ||||||||||||
Diluted | $ | 2.49 | $ | (0.12 | ) | $ | 2.61 | 2175.0 | % |
Overview of Results of Operations for the Three Months Ended
Consolidated Results of Operations
The operating results of our business for the three months ended
in thousands, except per share data | |||||||||||||||||||||
Three Months Ended, | $ | % | |||||||||||||||||||
$ | % of revenue | $ | % of revenue | Increase/ (decrease) | Increase/ (decrease) | ||||||||||||||||
Revenues | $ | 1,665,768 | 100.000 | % | $ | 1,258,722 | 100.000 | % | $ | 407,046 | 32.3 | % | |||||||||
Gross profit | 28,027 | 1.683 | % | 22,475 | 1.786 | % | $ | 5,552 | 24.7 | % | |||||||||||
Selling, general, and administrative expenses | (10,228 | ) | (0.614 | )% | (10,388 | ) | (0.825 | )% | $ | (160 | ) | (1.5 | )% | ||||||||
Interest income | 3,269 | 0.196 | % | 5,968 | 0.474 | % | $ | (2,699 | ) | (45.2 | )% | ||||||||||
Interest expense | (3,585 | ) | (0.215 | )% | (5,051 | ) | (0.401 | )% | $ | (1,466 | ) | (29.0 | )% | ||||||||
Other income, net | 4,779 | 0.287 | % | 463 | 0.037 | % | $ | 4,316 | 932.2 | % | |||||||||||
Unrealized gains (losses) on foreign exchange | 99 | 0.006 | % | (45 | ) | (0.004 | )% | $ | 144 | 320.0 | % | ||||||||||
Net income before provision for income taxes | 22,361 | 1.342 | % | 13,422 | 1.066 | % | $ | 8,939 | 66.6 | % | |||||||||||
Income tax expense | (4,036 | ) | (0.242 | )% | (1,814 | ) | (0.144 | )% | $ | 2,222 | 122.5 | % | |||||||||
Net income | 18,325 | 1.100 | % | 11,608 | 0.922 | % | $ | 6,717 | 57.9 | % | |||||||||||
Net income attributable to non-controlling interests | 499 | 0.030 | % | 287 | 0.023 | % | $ | 212 | 73.9 | % | |||||||||||
Net income attributable to the Company | $ | 17,826 | 1.070 | % | $ | 11,321 | 0.899 | % | $ | 6,505 | 57.5 | % | |||||||||
Basic and diluted net income per share attributable to | |||||||||||||||||||||
Per Share Data: | |||||||||||||||||||||
Basic | $ | 2.54 | $ | 1.61 | $ | 0.93 | 57.8 | % | |||||||||||||
Diluted | $ | 2.49 | $ | 1.61 | $ | 0.88 | 54.7 | % |
Source:
2020 GlobeNewswire, Inc., source