A-Mark Precious Metals Reports Fiscal Second Quarter 2016 Results
SANTA MONICA, Calif., Feb. 09, 2016 (GLOBE NEWSWIRE) -- A-Mark Precious Metals, Inc. (NASDAQ:AMRK), a full-service precious metals trading company and an official distributor for all the major sovereign mints, reported results for its fiscal second quarter and six months ended December 31, 2015.
Fiscal Q2 2016 Highlights (compared to the same year-ago quarter)
Fiscal Q2 2016 Financial Results
Revenues decreased 1% to $1.53 billion from $1.54 billion in the same year-ago quarter. The decrease in revenue was primarily due to an 8% decline in the average spot price for gold and a 10% decline in the average spot price for silver. The revenue decrease was partially offset by an increase in the total amount of gold ounces and silver ounces sold. The 26% increase in gold ounces sold and 27% increase in silver ounces sold was primarily driven by demand for the company’s industrial products from the mints.
Gross profit decreased 21% to $5.7 million (0.37% of revenue) from $7.2 million (0.47% of revenue) in the same year-ago quarter. The decrease in gross profit was primarily due to a change in product mix; the company sold more lower-margin industrial products as compared to the same year-ago period. Gross profit margin also decreased due to lower premium spreads on the company’s primary coin and bar products, coupled with lower volatility and demand for precious metals. Altogether, these factors resulted in a tightening of trading spreads and lower yields. The 25% decrease in trading tickets was primarily due to lower demand for our primary products, as customers sold through their substantial inventory positions acquired during fiscal Q1 2016.
Selling, general and administrative expenses decreased 5% to $4.5 million from $4.8 million in the same year-ago quarter. The decrease was due to lower performance-based compensation accruals offset by increased operational costs related to the Las Vegas logistics facility.
Interest income increased 56% to $2.2 million from $1.4 million in same year ago quarter, driven primarily by an increase in the size of the company’s loan portfolio, as well as improvement in certain finance products.
Net income decreased 20% to $1.3 million or $0.19 per diluted share from $1.7 million or $0.24 per diluted share in the same year-ago quarter. The decrease was primarily due to lower revenue and gross profit.
Fiscal Six Months Highlights (compared to the same year-ago period)
Fiscal Six Months 2016 Financial Results
Revenues increased 18% to $3.54 billion from $2.99 billion in the same period last year. The increase was primarily due to an increase in the total amount of gold ounces and silver ounces sold. A key contributor to the increase in demand was the volatility coupled with the decrease in commodity prices during fiscal Q1 2016.
Gross profit increased 56% to $20.1 million (0.57% of revenue) from $12.9 million (0.43% of revenue) in the same year-ago period. The increase in gross margin was due in part to higher premium spreads on the company’s primary products, particularly during fiscal Q1 2016.
Selling, general and administrative expenses increased 22% to $10.9 million from $9.0 million in the same year-ago period. The increase was due to performance-based compensation accruals and the overall operational cost of the Las Vegas logistics center.
Interest income increased 43% to $4.1 million from $2.9 million in the same year-ago period. The increase was primarily due to an increase in the size of the company’s loan portfolio, as well as improvement in certain finance products.
Net income increased 139% to $6.7 million or $0.94 per diluted share from $2.8 million or $0.40 per diluted share in the same period last year. The increase was primarily due to higher revenue and gross profits, offset by higher selling, general and administrative expenses..
“The results for our fiscal second quarter of 2016 were in line with our expectations," said A-Mark CEO, Greg Roberts. “Not only was our first fiscal quarter unusually strong, but historically our fiscal second quarter tends to be a slower quarter. We continue to be pleased with the execution of our business plan and are optimistic with respect to our performance for the second half of fiscal 2016.”
A-Mark will hold a conference call today (February 9, 2016) to discuss these financial results. The company's CEO Greg Roberts and COO Thor Gjerdrum will host the call at 4:30 p.m. Eastern time (1:30 p.m. Pacific time). A question and answer session will follow management's presentation.
To participate, please dial the appropriate number at least five minutes prior to the start time, and ask for the A-Mark Precious Metals conference call.
U.S. dial-in number: 877-407-0789
The conference call will be broadcast simultaneously and available for replay via the Investor Information section of A-Mark’s website at www.amark.com. If you have any difficulty connecting with the conference call or webcast, please contact Liolios Group at 949-574-3860.
A replay of the call will be available after 7:30 p.m. Eastern time on the same day through February 23, 2016.
About A-Mark Precious Metals
A-Mark Precious Metals, Inc. is a full-service precious metals trading company and an official distributor for many government mints throughout the world. The company offers gold, silver, platinum and palladium in the form of bars, plates, powder, wafers, grain, ingots and coins. Its Industrial unit services manufacturers and fabricators of products utilizing or incorporating precious metals, while its Coin & Bar unit deals in over 200 coin and bar products in a variety of weights, shapes and sizes for distribution to dealers and other qualified purchasers. The company operates trading centers in Santa Monica, California, and Vienna, Austria, for buying and selling precious metals.
In addition to wholesale and trading activity, A-Mark offers customers a variety of services, including financing, consignment and various customized financial programs. 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 in Australia, Austria, Canada, China, Mexico and South Africa. Customers of A‑Mark include mints, manufacturers and fabricators, refiners, coin and metal dealers, banks and other financial institutions, jewelers, investors and collectors. For more information about A-Mark Precious Metals, visit www.amark.com.
Through its subsidiary Collateral Finance Corporation, a licensed California Finance Lender, the company offers loans collateralized by numismatic and semi-numismatic coins and bullion to coin and metal dealers, investors and collectors. Through its Transcontinental Depository Services subsidiary, it offers a variety of managed storage options for precious metals products to financial institutions, dealers, investors and collectors around the world. Through its A-M Global Logistic subsidiary, the company offers storage and order fulfillment services to our retail customers.
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 Securities and Exchange Commission.
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.
A-MARK PRECIOUS METALS, INC.
Condensed Consolidated Results of Operations
The company’s operating results for the three months ended December 31, 2015 and 2014 are as follows:
A-MARK PRECIOUS METALS, INC.
Condensed Consolidated Results of Operations
Company Contact: Thor Gjerdrum, EVP & COO A-Mark Precious Metals, Inc. 310-587-1414 firstname.lastname@example.org Investor Relations Contact: Matt Glover Liolios Group, Inc. 949-574-3860 AMRK@liolios.com