Greg Roberts: Certainly, we feel here at A-Mark management that there are a number of events in the future and a number of situations that will be favorable to A-Mark. We try not to predict the future, but we do see a number of situations that seem to be lining up that historically have shifted the supply and demand equation for us in our products. And I think that personally, I don’t want to speak for everybody, but personally, I do feel there are a number of things, the election, the continuing bank situation, the commercial real estate issues, what is really going to happen to interest rates and inflation. So, I do see a lot of, just kind of what I would say yellow lights that are flashing. I think our job is to balance. And as I mentioned earlier, we’re looking at the balance and the mix of our inventory right now, and we want to make sure that as we increase inventory and as we look towards the future, we want to make sure we have the inventory that gives us the greatest potential if an event occurs.
So we are consciously looking to the mix of inventory, repositioning inventory, selling inventory that we don’t think currently has potential, and acquiring new inventory that will give us that opportunity. In conjunction with that, you may see our inventories rise over the next six months and you will most likely see our carry cost rise a little bit as we look to position ourselves like we have in the past to hopefully be in a position if the supply and demand equation changes that we have the product that everybody wants. That’s how we do the best when we are well positioned and have product because production, manufacture, financing of inventory and being able to do that and pivot quickly, in our business, you just can’t do that overnight.
So, we are investing in ourselves, we’re investing in all the different areas that I’ve talked about, but we are currently looking to invest in the right inventory that will make us the most money when we sell it.
Andrew Scutt : Thanks again. Congrats on the quarter and the acquisitions.
Operator: The next question is coming from Greg Gibas from Northland Securities.
Greg Gibas: I wanted to first asks, how do LPM’s margins maybe compared to A-Mark’s, should we think of them as relatively comparable?
Greg Roberts: I think it’s a mix. It is a mix between retail and wholesale, and I think you should look at it as a mix, and that I think the product mix of what they sell is a little bit skewed more towards licensed specialty products that do carry a little higher margin even at a wholesale level. It’s important to note that all of our DTC brands, whether it be JM Bullion or Silver Gold Bull or Pinehurst, are customers of LPM. So LPM through their licensing and their exclusive products are sellers of products that we have historically needed. Now we have had to share those products with other retailers. So I think it’s fair to say that we haven’t historically got as much of LPM’s wholesale sales of product that we would like. So we see that as an opportunity to expand and be a great distributor for LPM on their specialty products. I think that their margins should skew a little bit higher than A-Mark Wholesale, but probably not as high as our DTC businesses.
Greg Gibas: And just as we think about modeling, hard to say where things move. But have you seen, just as we think about fiscal Q3 so far, have you seen similar spreads relative to fiscal Q2?
Greg Roberts: Yes. I think that in some areas, I would say, January and February, we saw some slight strength. I think right now we’re seeing a little bit of strength in the Silver Eagle market, which generally does bode well for our private mint product or our other sovereign mint products. And I do feel at the moment a little more demand and a little less supply on the Silver Eagle market. So I would say that’s probably the plus side of things. As it relates to 1 ounce, 5 ounce, 10 ounce private label product, I think that we’re seeing similar premiums as what we saw in Q2. Some products a little bit lower, some products a little bit higher. But we’re trying our best to inventory as broad a mix of products as we can so that we’re able to fill any orders when they come in.
Operator: The next question is coming from Brandon Coffin from Praetorian Capital.
Brandon Coffin : I guess, we’re just curious, if maybe you could help us understand A-Mark’s relationship with big box retailers like Costco and Walmart, specifically where A-Mark kind of fits into that ecosystem. And if you could help us just by clarifying, which specific business segments are earning revenue from those two entities?
Greg Roberts: Yes, great question. Walmart has been selling into the market for a long time. We indirectly supply them. We have not seen the growth in Walmart that is material to A-Mark, but they have been there for a while. That big box comment is not really anything new for us. I think everybody is very interested in Costco. Costco has been in the news. What Costco is doing at the moment? I think that A-Mark is very well positioned for this. I will say that our partners at Silver Gold Bull in Calgary are currently supplying Costco. They are selling products in the Costco stores. Silver Gold Bull has a presence on the floor of Costco’s in Canada and as well as handling some of their logistics and some of their order fulfillment.
