A-Mark Precious Metals, Inc. (NASDAQ:AMRK) Q2 2025 Earnings Call Transcript

A-Mark Precious Metals, Inc. (NASDAQ:AMRK) Q2 2025 Earnings Call Transcript February 6, 2025

A-Mark Precious Metals, Inc. misses on earnings expectations. Reported EPS is $0.558 EPS, expectations were $0.65.

Operator: Good afternoon, and welcome to A-Mark Precious Metals, Inc. Conference Call for the Fiscal Second Quarter Ended December 31, 2024. My name is John, and I will be your operator this afternoon. Before this call, A-Mark Precious Metals, Inc. issued its results for the fiscal second quarter 2025 in a press release, which is available in the Investor Relations section of the company’s website at www.amark.com. You can find the link in the Investor Relations section at the top of the homepage. Joining us for today’s call are A-Mark Precious Metals, Inc.’s CEO, Greg Roberts, President, Thor Gjerdrum, and CFO, Kathleen Simpson Taylor. Following their remarks, we will open the call to your questions. Then before we conclude the call, I’ll provide the necessary cautions regarding forward-looking statements made by management during this call.

I would like to remind everyone that this call is being recorded and will be made available for replay via a link available on the Investor Relations section of A-Mark Precious Metals, Inc.’s website. Now, I would like to turn the call over to A-Mark Precious Metals, Inc.’s CEO, Mr. Greg Roberts. Sir, please proceed.

Gregory Roberts: Thank you, John, and good afternoon, everyone. I appreciate you taking the time to join us today. Our second quarter results continue to reflect the strength of our fully integrated platform even in slower market conditions, elevated precious metal prices, and subdued demand. During the quarter, A-Mark Precious Metals, Inc. delivered earnings of $0.27 per diluted share and made $16.2 million in non-GAAP EBITDA. We also made significant progress this quarter in our strategic plans for A-Mark Precious Metals, Inc.’s long-term success. We are nearing completion of our facility expansion and logistic initiatives at A-Mark Global Logistics in Las Vegas. We continue to execute our plans to advance our reach in Asia, and our now established DTC presence in Singapore.

We also continue to explore various M&A opportunities and as announced earlier this week, A-Mark Precious Metals, Inc. entered into a definitive agreement to acquire Spectrum Group International, the parent of Stacks Bowers Galleries. One of the largest rare coin, currency, and bullion dealers, and a leading wholesaler and retail dealer specializing in numismatic and bullion products. The proposed acquisition will expand our presence into the premium collectible market and the adjacent higher margin luxury markets. I’m truly excited for the cross-selling opportunities and synergies that Stacks will bring to the A-Mark Precious Metals, Inc. platform. I will now turn it over to our CFO, Kathleen Simpson Taylor, who will provide an overview of our financial performance.

Then our President, Thor Gjerdrum, will discuss key operating metrics. I will then provide further insights into our business and growth strategy, and take questions. Kathleen?

Kathleen Simpson Taylor: Thank you, Greg, and good afternoon, everyone. Our revenues for fiscal Q2 2025 increased 32% to $2.742 billion from $2.079 billion in Q2 of last year. Excluding an increase of $167.3 million of forward sales, our revenues increased $496.2 million or 38%, which was due to an increase in gold ounces sold and higher average selling prices of gold and silver, partially offset by a decrease in silver ounces sold. The DTC segment contributed 21% and 18% of the consolidated revenue in the fiscal second quarters of 2025 and 2024, respectively. JMB’s revenue represented 11% of the consolidated revenue for the fiscal second quarter of 2025 compared with 16% in Q2 of last year. For the six-month period, our revenues increased 20% to $5.457 billion from $4.563 billion in the same year-ago period.

Excluding an increase of $384.7 million of forward sales, our revenues increased $509.3 million or 18%, which was due to higher average selling prices of gold and silver, partially offset by a decrease in both gold and silver ounces sold. The DTC segment contributed 19% and 15% of the consolidated revenue for the six months ended December 31, 2024, and 2023, respectively. Revenue contributed by JMB represented 11% of the consolidated revenue for the six months ended December 31, 2024, compared with 14% in the same year-ago period. Gross profit for fiscal Q2 2025 decreased 3% to $44.8 million or 1.63% of revenue, from $46 million or 2.22% of revenue in Q2 of last year. The decrease in gross profit was due to lower gross profits earned from the Wholesale Sales and Ancillary Services segment, partially offset by an increase in gross profits earned by the DTC Segment.

Gross profit contributed by the DTC segment represented 56% and 48% of the consolidated gross profit in fiscal Q2. Gross profit contributed by JMB represented 38% of the consolidated gross profit in fiscal Q2 2025 compared to 41% in Q2 of last year. For the six-month period, gross profit decreased 8% to $88.2 million or 1.62% of revenue from $95.4 million or 2.09% of revenue in the same year-ago period. The decrease in gross profit was due to lower gross profits earned from the Wholesale Sales and Ancillary Services segment, partially offset by an increase in gross profits earned by the DTC segment. Gross profit contributed by the DTC segment represented 55% and 45% of the consolidated gross profit for the six-month period ended December 31, 2024, and 2023.

Gross profit contributed by JMB represented 37% and 38% of the consolidated gross profit for the six months ended December 31, 2024, and 2023, respectively. SG&A expenses for fiscal Q2 2025 increased 15% to $25.8 million from $22.4 million in Q2 of last year. The change was primarily due to an increase in consulting and professional fees, higher advertising costs of $0.9 million, an increase in compensation expense, including performance-based accruals of $0.6 million, and an increase in facilities expense of $0.4 million. SG&A expenses for the three months ended December 31, 2024, include $5.2 million of expenses incurred by LTM and SGB, which were not included in our prior year Q2 results as they were not yet consolidated subsidiaries. For the six-month period, SG&A expenses increased 18% to $52.4 million from $44.2 million in the same year-ago period.

The change was primarily due to an increase in compensation expense, including performance-based accruals of $3.1 million, an increase in advertising cost of $1.6 million, an increase in consulting and professional fees of $1.5 million, and an increase in facilities expense of $0.8 million. Also, an increase in insurance costs of $0.3 million and information technology costs of $0.2 million. SG&A expenses for the six months ended December 31, 2024, include $10.5 million of expenses incurred by LTM and SGB, which were not included in our prior year-to-date Q2 results as they were not yet consolidated subsidiaries. Depreciation and amortization expense for fiscal Q2 2025 increased 65% to $4.6 million from $2.8 million in the same year-ago quarter.

The change was primarily due to an increase in amortization expense of $2.2 million relating to intangible assets acquired through our acquisition of LTM and our acquisition of a controlling interest in SGB. This was partially offset by a decrease in JMB intangible asset amortization of $0.5 million. For the six-month period, depreciation and amortization expense increased 67% to $9.3 million from $5.6 million in the same year-ago period. The change was primarily due to an increase in amortization expense of $4.4 million relating to intangible assets acquired through our acquisition of LPM and our acquisition of a controlling interest in SGB, partially offset by a decrease in JMB intangible asset amortization of $1.9 million. Interest income for fiscal Q2 2025 increased 8% to $6.8 million from $6.3 million in Q2 of last year.

The aggregate increase in interest income was due to an increase in other finance product income of $0.6 million, partially offset by a decrease in interest income earned by our Secured Lending segment of $0.1 million. For the six-month period, interest income increased 12% to $13.9 million from $12.4 million in the same year-ago period. The aggregate increase in interest income was due to an increase in other finance product income of $1.2 million and an increase in interest income earned by our Secured Lending segment of $0.2 million. Interest expense for fiscal Q2 2025 increased 2% to $10.4 million from $10.2 million in Q2 of last fiscal year. The increase in interest expense was primarily due to an increase of $0.6 million associated with our trading credit due to increased borrowing, an increase of $0.5 million from liabilities on borrowed metals, an increase of $0.2 million related to product financing arrangements, partially offset by a decrease of $1.1 million related to the AMCF notes, including amortization of debt issuance due to their repayment in December 2023.

For the six-month period, interest expense increased 2% to $20.4 million from $20 million in the same year-ago period. The increase in interest expense was primarily due to an increase of $1.3 million associated with our trading credit facility due to increased borrowing as well as an increase in the weighted average effective interest rate, an increase of $0.9 million related to product financing arrangements, and an increase of $0.7 million from liabilities on borrowed metals. This was partially offset by a decrease of $2.5 million related to the AMCF notes, including amortization of debt issuance costs due to their repayment in December 2023. Earnings from equity method investments in Q2 2025 decreased 410% to a loss of $2.4 million from earnings of $0.8 million in the same year-ago quarter.

For the six-month period, earnings from equity method investments decreased 153% to a loss of $1.8 million from earnings of $3.5 million in the same year-ago period. The decrease in both periods was due to decreased earnings of our equity method investee. Net income attributable to the company for the second quarter of fiscal 2025 totaled $6.6 million or $0.27 per diluted share, compared to net income attributable to the company of $13.8 million or $0.57 per diluted share. For the six-month period, net income attributable to the company totaled $15.5 million or $0.65 per diluted share, which compares to net income attributable to the company of $32.6 million or $1.34 per diluted share in the same year-ago period. Adjusted net income before provision for income taxes, a non-GAAP financial measure, which excludes depreciation, amortization, acquisition costs, and contingent consideration fair value adjustments for fiscal Q2 2025 totaled $13.4 million, a decrease of 38% compared to $21.7 million in the same year-ago quarter.

Adjusted net income before provision for income taxes for the six-month period totaled $28.1 million, a 42% decrease from $48.5 million in the same year-ago period. EBITDA, a non-GAAP liquidity measure, for Q2 fiscal 2025 totaled $16.2 million, a 35% decrease compared to $25.1 million in Q2 fiscal 2024. EBITDA for the six-month period totaled $34 million, a 39% decrease compared to $55.5 million in the same year-ago period. Turning to our balance sheet. At quarter-end, we had $37.8 million of cash compared to $48.6 million at the end of fiscal year 2024. Our tangible net worth, excluding non-controlling interest at the end of the quarter, was $318.7 million, up from $306 million at the end of the prior fiscal year. Last week, we amended our trading credit facility to increase our revolving commitment to $457 million from $422.5 million.

We also returned capital to shareholders through the repurchase of $5.1 million of common stock during the quarter. A-Mark Precious Metals, Inc.’s Board of Directors has continued to maintain the company’s regular quarterly cash dividend program of $0.20 per common share. The most recent quarterly cash dividend was paid in January. It is expected that the next quarterly dividend will be paid in April 2025. That completes my financial summary. Now I will turn the call over to Thor, who will provide an update on our key operating metrics. Thor?

Thor Gjerdrum: Thank you, Kathleen. Looking at our key operating metrics for the second quarter of fiscal 2025, we sold 466,000 ounces of gold in Q2 fiscal 2025, which is up 4% from Q2 of last year, and up 17% from the prior quarter. For the six-month period, we sold 864,000 ounces of gold, which is down 9% from the same year-ago period. We sold 21.8 million ounces of silver in Q2 fiscal 2025, which is down 18% from Q2 of last year, and up 7% from last quarter. For the six-month period, we sold 42.3 million ounces of silver, which is down 26% from the same year-ago period. The number of new customers in the DTC segment, which is defined as the number of customers that we have registered or set up a new account or made a purchase for the first time during the period, was 65,400 in Q2 fiscal 2025, which was up 25% from Q2 of last year, and increased 18% from last quarter.

For the six-month period, the number of new customers in the DTC segment was 120,700, which increased 32% from 91,600 new customers in the same year-ago period. The number of total customers in the DTC segment at the end of the second quarter was approximately 3.2 million, which is a 31% increase from the prior year. The year-over-year increases in customer base metrics were primarily due to organic growth of our customer base and the acquisition of a controlling interest in SGB. The DTC segment average order value, which represents the average dollar value of product orders delivered to DTC segment customers during Q2 fiscal 2025, was $3,178, which is up 43% from Q2 2024, and up 7% from the prior quarter. For the six-month period, our DTC average order value was $3,077, which was up 33% from the same year-ago period.

For this fiscal second quarter, our inventory turn ratio was 2.2, which was a 16% increase from 1.9 in Q2 of last year and a 4% decrease from 2.3 in the prior quarter. For the six-month period, the inventory turnover ratio was 4.7, a 9% increase from 4.3 in the same year-ago period. Finally, the number of secured loans at the end of December totaled 518, a decrease of 28% from December 31, 2023, and a decrease of 8% from the end of September. The dollar value of our loan portfolio as of December 31, 2024, totaled $98.5 million, a decrease of 8% from December 31, 2023, and a decrease of 3% from September 30, 2024. That concludes my prepared remarks. I’ll now turn it over to Greg for closing remarks. Greg?

Gregory Roberts: Thanks, Thor and Kathleen. A-Mark Precious Metals, Inc.’s strategic focus continues to be on expanding our domestic and geographic reach and diversifying our customer base as well as expanding our DTC customer base. We are pleased with our recent accomplishments and remain committed to exploring additional opportunities to deliver value to our shareholders over the long term.

Q&A Session

Operator: Thank you. At this time, we will be conducting a question and answer session. You may press star two if you’d like to remove your question from the queue. It may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. The first question comes from Thomas Forte with Maxim Group. Please proceed.

Thomas Forte: Great. Thanks. So first off, Greg, congratulations on another profitable quarter in a challenging environment. I have two questions, and then I might get back in the queue. I’ll go one at a time. So first off, I was hoping, Greg, you could point out just for my own understanding our comparable period of low volatility and elevated gold prices. How far back in history do we have to go for something like today in your mind?

Gregory Roberts: I mean, we’re every day the last six months, we’ve been really in uncharted waters as it relates to comps. Just because gold continues to rise and every day, it seems like to us, it sets a new high. I mean, today, it was off $20 or $30. But yesterday and the day before, we’re new high prices as we know, we move in very comfortably to the $2,800 range. I feel like the circumstances are the same as they were last quarter or the quarter before. But I think that we continue to deal with a high percentage of our sales or buybacks, particularly in the DTC segment, where shorter-term vision retail customers are looking to take profits and take advantage of the higher spot prices. And that continues to have an effect on premiums.

So I don’t, you know, I mean, you would have to go all the way back really to 1980, particularly in silver, where you had a similar phenomenon where the flow back into the marketplace was a high percentage or exceeded the demand. And so we’re regularly dealing with most things we know. We know what we’re doing. We know how to handle this. We’re doing a very good job of managing our abilities to be a terminal destination for liquidity as it relates to metal. We continue to have great relationships with refiners. We’re able to regularly melt inventory or melt purchases we make that don’t have any ceiling for upside. But it is what it is, and the A-Mark Precious Metals, Inc. machine is performing and handling every new twist that we run into.

Thomas Forte: Alright. Thank you. That was very helpful, and I appreciate that. Alright. So one more question, and then time permitting, I might get back into you and ask more questions. So the thing that excites me about the deal you announced earlier this week is that you’re essentially looks like you’re gonna advance your efforts in numismatics and then you’re going to get into essentially wine collection. Wine collecting. So how should we think about the counter cyclicality of that numismatics effort and the wine efforts from the SGI deal?

Gregory Roberts: Well, the Spectrum Group or Stacks has been involved with a company called Spectrum Wine Auctions for a while, and it is a collectible, but it’s not particularly connected or adjacent to semi-numismatic bullion coins or some of the other things that Stack sells. We are excited that it’s a product that we believe has synergies within Stacks’ customer base, and we do see opportunities to cross-sell more bullion products both to the Stacks customers as well as we believe that our other DTC brands that have focused on straight bullion products. We have been testing over the last six months, and I’ve been very pleased with the success that JM Bullion in particular has had selling semi-numismatic coins to their very large customer base.

So I will say that that is an opportunity that we have been testing and we were enthusiastic about at JM Bullion prior to this acquisition being completed. I think it’s important to note that if you look at Stacks’ revenue mix, $535 million in revenue, of which $512 million of that was wholesale or retail direct sales of coins and bullion. So I believe that $500 million number is one of the largest in the industry as it relates to direct sales of bullion and numismatic properties. So very impressed with that. I believe that the higher margins that Stacks achieves in their business will be very complementary to A-Mark Precious Metals, Inc., particularly in times like we’re in right now where bullion margins are down and premiums are down. We believe this is a strategic opportunity for A-Mark Precious Metals, Inc.

to move into adjacent businesses. They still have the majority of their business has a precious metal component to it, albeit a smaller amount of gold, let’s say, in higher value coins. But we see a lot of synergies here. And what Stacks Bowers has accomplished over the last particularly the last ten years has been very impressive.

Thomas Forte: Thank you, Greg. I’ll get back in the queue. The next question comes from Andrew Scott with Roth Capital. Please proceed.

Andrew Scott: Good afternoon. Thanks for taking my questions and congrats on the continued execution. So my first question has to deal with the Stacks in particular, kind of the performance over the last six months. It looks like over the fiscal year ended June 30, 2024, the company generated about $11 million in EBITDA. And the company has already generated $10 million in the last six months. So I was wondering if there’s anything to call out there and what’s kind of driving the profitability here for Stacks.

Gregory Roberts: Yeah. I would caution on that that, generally, the first six months are front-loaded at Stacks. And they had a very good first six months, but I will say that there is some cyclicality to their business. I would point particularly to their August auction as it relates to their auction cycles. Their largest auction is every year in August. They’re in conjunction with the American Numismatic Association’s World’s Fair of Money. And we also were fortunate enough at Stacks this year to acquire the world’s greatest collection of Scandinavian coins. Stacks believes that the value of that collection will be $75 to $100 million in US value. It’s a collection called the Brunn Collection. And they had their first auction in fiscal Q2, and it brought some very impressive prices.

That auction was, I believe, $15 million to $20 million. So over the next couple of years, there’s going to be a series of collections continuing to distribute and auctions continuing to distribute these coins. I will say that the first six months were probably front-loaded a little bit due to those two events.

Andrew Scott: Great. Appreciate the color. Second one for me before I jump back in the queue. Last couple quarters, you guys have been talking about marketing efforts to increase the volume through your DTC channel as you guys post another quarter of impressive growth in new customers and active customers. So can you just kind of talk through how these marketing efforts are progressing and driving volume on your different DTC portals?

Gregory Roberts: Yeah. I mean, we are continuing the same strategy we talked about last quarter, looking for opportunities to increase our active customer numbers and to also reengage customers that have fallen out of what we define as our active customers. We continue to have very good results in that area. We’ve had a number of weeks over the last sixty days where we have very impressive numbers in our minds as to being able to offer products at prices that reactivate old customers that we haven’t seen in a while, as well as bringing in new customers that we believe are we’re taking market share by adding them. So I don’t have a whole lot more to report on that other than we continue to focus on new customers as well as old customers.

Our overall customer counts, over three million customers, continues to be very impressive. And we just believe that when the pendulum swings back to a larger wallet percentage or a larger wallet of these customers getting a piece of their wallet, we believe we’re gonna reap the benefit.

Andrew Scott: Great. Well, thanks, Greg. And I’ll jump back in the queue.

Operator: Up next, we have Greg Gibas with Northland Securities. Please proceed.

Greg Gibas: Good afternoon. Greg, Thor, thanks for taking the questions. Congrats on the execution in the quarter. I wonder if you could speak to the timing of the SGI acquisition given it has been a pretty long-standing relationship. What kind of led you to believe the acquisition made sense more recently? And I guess wondering if you could maybe expand on the synergies you expect to see with SGI and to what degree A-Mark Precious Metals, Inc. can benefit from the DTC expertise that SGI brings to the table?

Gregory Roberts: Well, I think it’s a different demographic as it relates to customers. I believe that Stacks has found a niche in the marketplace on the bullion side going downstream and servicing customers that aren’t quite big enough or aren’t worth onboarding at A-Mark Precious Metals, Inc. And I believe they’ve developed a very good wholesale and retail customer base to take advantage of. I think being part of A-Mark Precious Metals, Inc., they’re going to have access to A-Mark Precious Metals, Inc.’s balance sheet. They’re going to have access to being able to expand using A-Mark Precious Metals, Inc.’s existing inventory. Historically, Stacks’ balance sheet has limited them a bit in what they can hold in inventory. And their carry costs should improve with A-Mark Precious Metals, Inc.

So I’m looking forward to having another 100% owned subsidiary that’s working out of A-Mark Precious Metals, Inc.’s inventory, and I hope that will help our inventory turns as well as create some efficiencies there. Like I said, lower borrowing cost, lower inventory costs, lower logistic cost, and the benefit of the balance sheet. From a timing perspective, I think that both companies are a lot different than they were five years ago. I think that Stacks has grown alongside A-Mark Precious Metals, Inc., operating independently. I do believe that we’re getting a strong balance sheet in the transaction. From Stacks, I anticipate that we’re going to be acquiring $50 million in working capital and $70 million in shareholder equity in the acquisition, which along with their earnings was a very good opportunity for A-Mark Precious Metals, Inc., I felt.

And Stacks was starting to get to a point where they were hitting a bit of a ceiling on their growth just based on their balance sheet and how much business they were doing. And as opposed to going outside and looking for additional capital, the timing seemed right for A-Mark Precious Metals, Inc. to take a look at this and look at the opportunities of where Stacks can go, related to the balance sheet of A-Mark Precious Metals, Inc. So I think there were some opportunities there where we think the Stacks growth will be able to continue and maybe even move a little bit faster. Overall, I think we continue to have a very full funnel as it relates to our M&A. And as I said on the last call, we continue to look at a number of opportunities and expect to be very active in the next ninety days.

And I think the strategy with Stacks is we will continue to look at ways to look into more luxury goods, more DTC businesses that are adjacent to what A-Mark Precious Metals, Inc. is doing. And we think there’s a number of opportunities out there that we’re continuing to look at. So I would say that the A-Mark Precious Metals, Inc. holders, it was very good timing and a very good opportunity for us in a business that we’re very familiar with. It’s obviously, I’m very familiar with it. To put it together and give A-Mark Precious Metals, Inc. an opportunity to be involved in what I would consider is a little uncorrelated business and gross profit that we think that A-Mark Precious Metals, Inc. historically has not been able to achieve. And hopefully, we’re gonna see some higher gross profit margins that will be helpful to A-Mark Precious Metals, Inc.

Greg Gibas: Got it. That’s helpful, Greg. And, yeah, you’d be a follow-up question I had. So I guess as it relates to maybe geographic perspective, you know, you mentioned a full funnel on M&A. Now that you’ve established A-Mark Precious Metals, Inc.’s presence in the Singapore DTC market, in which other Asian markets make the most sense as maybe next steps for continual expansion in Asia?

Gregory Roberts: I know we don’t have anything on our plate right now that we’re looking at that is out. We’re continuing to develop our strategy down there. We’ve made a couple of key hires. We feel very good about our potential staffing and some new business in those two geographical areas. We did sign a lease for an office and retail space in Singapore, and we’ll start building that out this quarter. And so I wouldn’t anticipate that there’s any other moves into any other markets other than adjacent countries or markets that we believe will be able to do business with out of this Singapore facility. And so I think as we look at the funnel or as we look at other M&A opportunities right now, I think we’re currently focused on domestic opportunities.

As we digest and as we build out what we have in Asia and prove out the profitability of it and become comfortable with investing our capital down there. But I think we’re fine down there for right now. And the opportunities we have that we’re looking at right now, I think, are probably a little bit more on the domestic side.

Greg Gibas: Okay. Makes sense. Thanks, Greg.

Operator: Once again, if you have a question or a comment, the next question comes from Eugene Hawkes with D.A. Davidson. Please proceed.

Eugene Hawkes: Eugene, your line is live.

Kegan: Sorry. I was on mute. This is Kegan on for Mike at D.A. Davidson. I just had a question on Stack’s and you kind of mentioned the seasonality that it’s more front half loaded. So I was just wondering how this business, like, how accretive is this deal to your earnings? That’s probably the simplest way I can put it.

Gregory Roberts: Yeah. I mean, I think we’re comfortable that it’s accretive. I don’t think I’m comfortable at the moment when we’re not closed on the deal really going into how accretive it is, but I’m sure that we are looking to close this deal in the next thirty days. We have a couple more things to tie up, and we’re working on the financing approval, which we’ve indicated in the press release. I’m sure that when we do close it, as we probably next quarter, we’ll be able to give you a little bit more specifics on that. I will just say that I’m very comfortable with the accretiveness of the deal. I think the 2025, we’re looking and estimating about $16 million in EBITDA, I believe. And we’re very excited about this opportunity. So I think our timing was good. And we’ll give you more specifics on that as we digest the deal.

Kegan: And then just to follow-up on that, you mentioned that you’re expecting to be active in the next ninety days. Are other businesses you’re looking at going to have to meet the same threshold for accretiveness, or are you just looking to broaden your reach, I guess?

Gregory Roberts: I mean, I don’t want to do any dilutive deals, right? I don’t think I have to. I think this, you know, you guys have been very patient and our shareholders have been very patient in what I have said from the beginning. We passed on a lot of opportunities a year or two ago that would have been not accretive and would have turned out to be buying things at the top. It’s very hard to buy things with, you know, buy assets when things are going great. Our job right now is to understand that we are in a slow period and patience is important and finding the right deals is important and making sure that we’re buying deals and taking advantage of opportunities in our marketplace when things are slow. And clearly, we’re not particularly happy making $0.27, and we understand that if we’re not going to make more on an EPS basis, we better be buying things that are accretive that are going to be good for us in the long term and are going to build our brand in a slow market but also be very accretive if the market changes, which is not in our control.

We continue to deal with changes. We went through this period this quarter where we had a presidential election that has basically turned the world upside down. And there has been since November a significant catch of breath period, I think, across a lot of different asset classes. Ours in particular is dealing with a customer base that is very happy with the election results and have not up until maybe the last week or so with these tariffs. They have not really felt too threatened. The world seemed like it was just going to be a great place in December and January and the end of November and that everything was just gonna be great. It’s only really in the last couple of weeks that we’ve started to see a little bit of fear back in our customer base and a little bit of uncertainty as it relates to these tariffs.

And what that’s going to do to our market, you know, in the short term. It hasn’t been a great thing. It’s increased our borrowing costs a bit. And it’s caused just a little bit of uncertainty in exactly how gold and silver are going to enter the United States from Mexico and Canada, which are big suppliers as it relates to precious metals in the United States. So we feel very agile. We feel like we’re anticipating and learning and reacting to what’s going on. As it relates to acquisitions, I really believe that this uncertainty and the low premiums and buybacks and everything else, A-Mark Precious Metals, Inc. is really positioned for that. And I think just in the last few weeks as gold has hit another all-time high and silver has $33, we are starting to see better profits on our buybacks.

Competition is not as strong as they were ninety days ago or sixty days on the buyback. And we’re seeing good flow at good pricing actually below spot, that is starting to, you know, we’re starting to see a little bit more margin there. So we’ll look to take opportunities in this slow period where they’re available. Thank you.

Operator: If there are any remaining questions, the next question comes from Thomas Forte with Maxim Group. Please proceed.

Thomas Forte: Thank you. Two follow-up questions for me. So Greg, if you’re so inclined, sometimes on these earnings calls, you’ve discussed quarter-to-date trends. So if you’re so inclined, otherwise, pass. Up to you.

Gregory Roberts: I feel like I just said enough on that the last four or five minutes.

Thomas Forte: Okay. And then, you know, we’re continuing to execute on our plans. I think, you know, as you can see, we’re able to announce a transaction that we think is great for the company. We’re looking to continue to add through M&A targets and deals that we think are accretive and long-term gonna be good for the company. And, you know, as we’ve said for the last two quarters, at the moment, higher gold and silver prices are a headwind. They’re not actually helping us right now. And our cost of carrying, our cost of financing, our inventory, which we’ve talked about before, it costs more for us to hold an ounce of gold at $2,800 than it does at $2,200. So we’re optimistic. We feel like the company is functioning in this environment. And we’ll look for opportunities to take advantage of that.

Thomas Forte: Great. Alright. Then my last question, what I thought was interesting about the quarter and your comments, can you talk about from a capital allocation standpoint, your ability to pay a dividend, buy back shares, and engage in strategic M&A all at the same time?

Gregory Roberts: Well, I’ve talked about doing that for quite some time now. So if I say I’m gonna do it, I better do it. Right? I mean, it is a balancing act that we believe that there are opportunities in M&A. And as we manage our dividends and as we manage our stock buybacks, you’re going to see periods where if we have nothing going on in M&A, we’re likely to buy back more stock or we’re likely to pay higher dividends if we’re having good performance. We’ve talked about that before. You know, I think that you gotta kind of prepare when you go into this M&A that these deals can take four or six months. So you’re kind of planning and juggling well in advance of when you actually announce a deal. I think we’re aware of that.

And, you know, my job is to hopefully not waste our resources, our time, and energy on deals we’re not gonna close. So once we find deals we wanna do, it’s important to close them. But when we do spend $90 million in essence for this deal and we have other deals on the horizon, there is a decision, a fork in the road. Are you gonna buy back stock or are you going to do M&A, or are you gonna hold inventory, or are you gonna pay down debt? Those are the things that we talk about that we juggle here. In this case, we felt very comfortable and when we add Stacks to our balance sheet, it’ll be clear what we’re adding and how we feel that we got a very good balance sheet that is going to add to flexibility at A-Mark Precious Metals, Inc. and I’m optimistic that these types of transactions, whether we use stock or cash or how we do the mix, is going to continue to give us that flexibility that when an opportunity is there to buy back stock, we will.

But when we’re heavy into M&A transactions and we have the cone of silence going on at A-Mark Precious Metals, Inc. when we’re doing them, which is important to a success, but it’s very hard for us to buy back stock when we’re in that. And the stock we did buy back this quarter happened at the very beginning of the quarter. So we’ve been focusing on the M&A for the last few, like forty-five or sixty days.

Thomas Forte: Appreciate that. Thank you, Greg.

Operator: Thank you, Tom. I’d now like to turn the call back over to Mr. Roberts for his closing remarks.

Gregory Roberts: I’d like to thank our many shareholders again for joining the call today and for the continued interest and support in A-Mark Precious Metals, Inc. I feel like A-Mark Precious Metals, Inc. is going in the right direction, and I know it can you have to be patient with us sometimes when we have the volatility and how the business performs. But again, thanks to everybody. Thanks to our employees’ dedication and commitment to our success. And we have exciting times ahead, and we look forward to keeping you updated on our progress. So thank you very much.

Operator: Before we conclude today’s call, I would like to provide A-Mark Precious Metals, Inc.’s Safe Harbor statement that includes important cautions regarding forward-looking statements made during this call. During today’s call, there were forward-looking statements made regarding future events. Statements that relate to A-Mark Precious Metals, Inc.’s 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 expectations with respect to future profitability and growth, international expansion, operational enhancements, and the amount or timing of any future dividends.

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. These include the following with respect to the proposed transactions with Spectrum Group International: the failure of the parties to agree on definitive transaction documents, the failure of the parties to complete the contemplated transactions within the currently expected timeline or at all, the failure to obtain necessary third-party consents or approvals, and greater than anticipated costs incurred to consummate the transactions. Other factors that could cause actual results to differ include failure to execute the company’s growth strategy, including the inability to identify suitable or available acquisition or investment opportunities, greater than anticipated costs incurred to execute this strategy, government regulations that might impede growth, particularly in Asia, the inability to successfully integrate recently acquired businesses, changes in the current international political climate, which historically has favorably contributed to demand and volatility in the precious metals markets, but also has posed certain risks and uncertainties for the company, particularly in recent periods, potential adverse effects of the current problems in the national and global supply chains, 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, changes in consumer demand and preferences for precious metals products generally, potential negative effects that inflationary pressure may have on our business, the inability of the company to expand capacity at SilverTowne Mint, the failure of our investee companies to maintain or address the preferences of their customer bases, general risks of doing business in the commodity markets, and the strategic business, economic, financial, political, and governmental risks and other risk factors described in the company’s public filings with the Securities and Exchange Commission.

The company undertakes no obligation to publicly update or revise any forward-looking statements. Listeners are cautioned not to place undue reliance on these forward-looking statements. Finally, I would like to remind everyone that a recording of today’s call will be available for replay via a link in the Investors section of the company’s website. Thank you for joining us for A-Mark Precious Metals, Inc.’s earnings call. You may now disconnect.