A-MARK PRECIOUS METALS Investor Presentation May 2025 NASDAQ: AMRK A LEADING FULLY INTEGRATED PRECIOUS METALS PLATFORM Important Cautions Regarding Forward-Looking Statements and Non-GAAP Financial Measures Statements in this presentation 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 e ...

Company Overview - A-Mark is a leading full-service dealer of precious metals, including gold and silver bullion[8,46] - The company is the largest North American physical metal merchant[8,46] - A-Mark is an official distributor for all major sovereign mints and the largest distributor of bullion for the U S and Royal Canadian mints[8,46] Financial Performance - Total revenues (TTM) are $7.40 billion[5,41] - Gross profit (TTM) is $32.8 million[5,41] - Net income (TTM) is $6.9 million[5,41] - The company's cash position is $6.4 million[5,42] - Total assets amount to $523.0 million[5,42] Key Strategies and Opportunities - A-Mark hedges its price exposure and is not directly affected by changes in metals prices[25] - The company is focused on growing through business volume, geographic presence, and scope of complementary products and services[39]

Group 1 - A-Mark (NASDAQ: AMRK) reported a strong revenue increase of 14.9%, but its stock fell over 50% from its peak [1] - The decline in stock price is attributed to a significant drop in gold sales by approximately 20% [1] - Silver sales also contributed to the overall negative performance, although specific figures were not provided [1] Group 2 - The analyst has over 10 years of experience researching various companies across multiple sectors, including commodities and technology [1] - The focus of the analyst's research has been on metals and mining stocks, with a comfort level in other industries such as consumer discretionary, REITs, and utilities [1]

Group 1 - The individual investor aims to build a long track record of compounded returns with a focus on low-risk investments [1] - The investor has achieved a cumulative return of +20% CAGR over five years, emphasizing the importance of discipline and patience in investing [1] - The investment strategy involves researching companies within a specific circle of competence and maintaining a portfolio of 5-15 ideas at a time to generate significant alpha [1] Group 2 - The investor does not provide financial advice but shares ideas and information to foster discussions [3] - There is a beneficial long position in the shares of AMRK, indicating a personal investment interest [2] - The investor's articles are intended to keep a public track record of successful investment ideas rather than serve as financial advice [1][4]

Core Viewpoint - Kaskela Law LLC is investigating the fairness of the proposed merger between A-Mark Precious Metals, Inc. and Spectrum Group International, Inc. to assess whether it is fair to A-Mark investors [1] Group 1: Merger Details - A-Mark announced an agreement to acquire Spectrum in a transaction valued at $92 million, intending to finance it with 50% cash and 50% A-Mark common stock [2] - Following the announcement, A-Mark's stock price has decreased from over $27.00 per share to less than $22.00 per share [2] Group 2: Legal Investigation - The investigation aims to determine if A-Mark's officers and/or directors violated securities laws or breached fiduciary duties in the acquisition agreement and whether all material information about the transaction is disclosed to investors [3]

Financial Performance - The Company reported revenues of $9.7 billion for the fiscal year 2024, indicating significant growth in its operations[329]. - Revenues for the three months ended March 31, 2025 increased by $398.5 million, or 15.3%, to $3.009 billion from $2.611 billion in 2024[365]. - Revenues for the nine months ended March 31, 2025 increased by $1.292 billion, or 18.0%, to $8.467 billion from $7.174 billion in 2024[368]. - Revenues for the Wholesale Sales & Ancillary Services segment for the three months ended March 31, 2025 were $2.4 billion, a 7.0% increase from $2.3 billion in 2024[399]. - Revenues for the nine months ended March 31, 2025 increased by $693.1 million, or 11.3%, to $6.835 billion from $6.142 billion in 2024[414]. - Revenues for the Direct-to-Consumer segment increased by 71.0% to $574.1 million in Q1 2025 from $335.7 million in Q1 2024[437]. - For the nine months ended March 31, 2025, revenues rose by 58.1% to $1.63 billion compared to $1.03 billion in the same period of 2024[447]. Sales and Volume Metrics - Gold ounces sold decreased by 14,000 ounces, or 3.1%, to 432,000 ounces in Q1 2025 from 446,000 ounces in Q1 2024[366]. - Silver ounces sold decreased by 10,020,000 ounces, or 39.0%, to 15,702,000 ounces in Q1 2025 from 25,722,000 ounces in Q1 2024[366]. - Gold ounces sold for the nine months ended March 31, 2025 decreased by 95,000 ounces, or 6.8%, to 1,296,000 ounces from 1,391,000 ounces in 2024[368]. - Silver ounces sold for the nine months ended March 31, 2025 decreased by 24,696,000 ounces, or 29.9%, to 57,979,000 ounces from 82,675,000 ounces in 2024[368]. - Gold ounces sold in Q1 2025 were 134,000, a 25.2% increase from 107,000 ounces sold in Q1 2024[437]. - Silver ounces sold increased by 18.7% to 3,771,000 in Q1 2025 from 3,177,000 in Q1 2024[439]. Customer Metrics - The Company has a diverse customer base, including financial institutions, bullion retailers, and e-commerce customers[330]. - The number of new customers surged by 1,489.4% to 899,600 in Q1 2025, up from 56,600 in Q1 2024[437]. - Total customers reached 4,087,100, a 63.7% increase from 2,496,500 in the previous year[447]. - The number of new customers for the nine months ended March 31, 2025 increased by 872,100, or 588.5%, to 1,020,300[469]. Profitability and Expenses - Net loss attributable to the Company for Q1 2025 was $8.546 million, compared to a net income of $5.013 million in Q1 2024, representing a change of $13.559 million or (270.5%) [365]. - Selling, general, and administrative expenses increased by $10.55 million, or 46.2%, in Q1 2025 compared to Q1 2024[365]. - Gross profit for the three months ended March 31, 2025 increased by $6.2 million, or 17.7%, to $41.0 million[371]. - Selling, general, and administrative expenses for the three months ended March 31, 2025 increased by $10.6 million, or 46.2%, to $33.4 million[377]. - Gross profit for the nine months ended March 31, 2025 decreased by $13.5 million, or 19.5%, to $55.6 million from $69.1 million in 2024[422]. - The profit margin percentage for the nine months ended March 31, 2025 decreased by 31.1 basis points to 0.813% from 1.124% in 2024[423]. Acquisitions and Growth - The Company acquired LPM in February 2024, enhancing its global reach in the precious metals market[312]. - In February 2025, the Company acquired Spectrum Group International, which includes Stack's Bowers Galleries, expanding its auction and retail capabilities[313]. - The increase in revenues was partially due to the acquisition of a controlling interest in SGB in June 2024 and the acquisitions of SGI and Pinehurst in February 2025[365]. Interest Income and Expenses - Interest income is generated from secured loans and financing structures with customers, secured by precious metals[340]. - Interest income for the nine months ended March 31, 2025 increased by $1.5 million, or 7.9%, to $20.6 million[383]. - Interest expense for the three months ended March 31, 2025 increased by $3.0 million, or 30.7%, to $13.0 million[385]. - Interest expense for the nine months ended March 31, 2025 decreased by $1.442 million, or 22.4%, to $4.992 million from $6.434 million in 2024[488]. Operational Efficiency - The Company’s inventory turnover ratio and customer metrics are key performance indicators for assessing operational efficiency[304]. - The inventory turnover ratio is a critical performance measure, reflecting how quickly inventory moves during periods of higher trading activity[348]. - Direct-to-Consumer segment ticket volume measures the number of product orders processed, which increases during periods of higher market volatility[347]. Market Conditions - The Company operates in a high volume/low margin industry, with revenues significantly impacted by product volume, market prices, and market volatility[338]. - The Company has seen increased trading revenues and gross profit due to macroeconomic volatility, which typically raises the spread between bid and ask prices[357].

Financial Performance - Q3 FY 2025 revenues increased 15% to $3.009 billion from $2.611 billion in Q3 FY 2024[8] - Q3 FY 2025 gross profit rose 18% to $41.0 million compared to $34.8 million in Q3 FY 2024[8] - Q3 FY 2025 net loss attributable to the company was $8.5 million, a decrease of 270% from a net income of $5.0 million in Q3 FY 2024[8] - Q3 FY 2025 diluted loss per share was $(0.36), a 271% decrease from $0.21 in Q3 FY 2024[8] - Non-GAAP adjusted net income for Q3 FY 2025 was $5.7 million, down 50% from $11.6 million in Q3 FY 2024[8] - EBITDA for Q3 FY 2025 decreased 90% to $1.3 million from $12.6 million in Q3 FY 2024[8] - Revenues increased 15% to $3.009 billion from $2.611 billion in the same year-ago quarter[40] - Gross profit increased 18% to $41.0 million, representing 1.36% of revenue, compared to $34.8 million, or 1.33% of revenue, in the same year-ago quarter[41] - Adjusted net income before provision for income taxes decreased 44% to $33.9 million from $60.1 million in the same year-ago period[57] - EBITDA for the nine months ended March 31, 2025 decreased 48% to $35.3 million from $68.2 million in the same year-ago period[58] - Net income attributable to the Company decreased by 81.4% to $6,996, down from $37,606 in the previous year[85] - Basic net income per share dropped by 81.6% to $0.30, compared to $1.63 for the same period in 2024[85] - Net income before provision for income taxes decreased by 83.1% to $8,250, compared to $48,803 in the same period last year[88] - Net income decreased by 85.1% to $5,684 from $38,098 in the previous year[89] Customer Metrics - Direct-to-Consumer new customers increased significantly to 899,600 in Q3 FY 2025 from 56,600 in Q3 FY 2024[12] - Total Direct-to-Consumer customers reached 4,087,100 in Q3 FY 2025, up from 2,496,500 in Q3 FY 2024[12] - Direct-to-Consumer new customers increased 1,489% to 899,600 from 56,600 for the same period last year, with 84% attributable to acquisitions[30] - Direct-to-Consumer average order value increased 45% to $3,084 from $2,133 for the same period last year[30] - Direct-to-Consumer total customers reached 4,087,100, up from 2,496,500 year-over-year[31] - Direct-to-Consumer new customers increased 588% to 1,020,300 from 148,200 for the nine months ended March 31, 2024[43] Expenses and Costs - Selling, general and administrative expenses increased 46% to $33.4 million from $22.9 million in the same year-ago quarter[42] - Selling, general, and administrative expenses increased by 46.2% to $(33,404) for the three months ended March 31, 2025, compared to $(22,854) in the same period of 2024[83] - Selling, general, and administrative expenses rose by 27.8% to $85,775, up from $67,095 in 2024[85] - Interest expense increased 31% to $13.0 million from $9.9 million in the same year-ago quarter[45] - Interest expense increased by 30.7% to $(12,951) for the three months ended March 31, 2025, compared to $(9,907) in the same period of 2024[83] - Interest expense increased by 11.4% to $33,301 from $29,898 in the previous year[89] - Acquisition costs rose by 95.0% to $5,389 from $2,763 year-over-year[88] - Amortization of acquired intangibles increased by 78.6% to $11,658 compared to $6,528 in the previous year[88] - Depreciation expense increased by 32.7% to $2,686 from $2,024 year-over-year[88] Assets and Liabilities - Total current assets increased to $1,757,875 as of March 31, 2025, from $1,442,203 as of June 30, 2024, representing a growth of 21.9%[78] - Total assets reached $2,183,548 as of March 31, 2025, compared to $1,827,820 as of June 30, 2024, indicating an increase of 19.5%[78] - Total liabilities increased to $1,486,677 as of March 31, 2025, from $1,165,964 as of June 30, 2024, reflecting a rise of 27.5%[78] Strategic Acquisitions - The company completed three strategic acquisitions during the quarter, enhancing market position and expanding into higher-margin segments[3] - The company has undertaken recent acquisitions aimed at achieving cost efficiencies and expanding market presence, although specific financial impacts were not detailed[74] - The company noted challenges in integrating recent acquisitions with existing operations, which may affect future performance[74] Cash Flow - For the nine months ended March 31, 2025, net cash provided by operating activities was $85,381, compared to a net cash used of $(21,916) in the same period of 2024[82] - Net cash provided by operating activities for the three months ended March 31, 2025, was $102,839, an increase of 29.0% from $79,751 in 2024[86] - The company experienced a net cash used in investing activities of $(43,461) for the nine months ended March 31, 2025, compared to $(58,508) in the same period of 2024[82] - The cash balance at the end of the period was $114,345, up from $35,167 at the end of the same period in 2024[82] Management Commentary - Management emphasized the importance of reviewing financial information in its entirety, including both GAAP and non-GAAP measures, to assess the company's performance accurately[74] - The company reported an adjusted net income before provision for income taxes, which excludes certain non-recurring items, to provide a clearer view of operational performance[75]

Company Performance - A-Mark Precious Metals (AMRK) reported quarterly earnings of $0.24 per share, missing the Zacks Consensus Estimate of $0.78 per share, and down from $0.49 per share a year ago, representing an earnings surprise of -69.23% [1] - The company posted revenues of $3.01 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 12.36%, compared to year-ago revenues of $2.61 billion [2] - A-Mark has not surpassed consensus EPS estimates over the last four quarters, but has topped consensus revenue estimates three times during the same period [2] Stock Performance - A-Mark shares have declined approximately 11.9% since the beginning of the year, while the S&P 500 has decreased by -4.7% [3] - The current consensus EPS estimate for the upcoming quarter is $0.87 on revenues of $2.86 billion, and for the current fiscal year, it is $2.83 on revenues of $11 billion [7] Industry Outlook - The Precious Metals and Jewels industry, to which A-Mark belongs, is currently ranked in the top 39% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the industry outlook can significantly impact stock performance [5][8]

Financial Data and Key Metrics Changes - Revenues for fiscal Q3 2025 increased 15% to $3,000,000,000 from $2,600,000,000 in the same year-ago quarter, with an 18% increase when excluding forward sales [7][8] - Gross profit for fiscal Q3 2025 increased 18% to $41,000,000, representing 1.36% of revenue, compared to $34,800,000 or 1.33% of revenue in Q3 of last year [8][9] - Net loss attributable to the company for Q3 2025 totaled $8,500,000 or $0.36 loss per diluted share, compared to net income of $5,000,000 or $0.21 per diluted share in Q3 of last year [14] Business Line Data and Key Metrics Changes - The DTC segment contributed 19% of consolidated revenue in Q3 2025, while JMB's revenue represented 10% compared to 12% in the prior year [7][8] - Gross profit from the DTC segment represented 61% of consolidated gross profit in Q3 2025, up from 52% in Q3 2024 [9][10] - SG&A expenses for fiscal Q3 2025 increased 46% to $33,400,000, primarily due to increased consulting and professional fees [10][11] Market Data and Key Metrics Changes - Gold sales in Q3 2025 were 432,000 ounces, down 3% from the previous year, while silver sales were 15,700,000 ounces, down 39% [17] - The number of new customers in the DTC segment increased 1489% in Q3 2025, with a total of approximately 4,100,000 customers at the end of the quarter, a 64% increase from the prior year [18][19] Company Strategy and Development Direction - The company executed three strategic acquisitions during the quarter, enhancing its competitive position and expanding into higher-margin luxury segments [4][5] - The company is optimistic about long-term growth opportunities in Asian markets and aims to scale the LPM brand alongside other portfolio assets [5] Management's Comments on Operating Environment and Future Outlook - Management noted that market conditions showed modest improvement, and they remain confident in the company's long-term growth trajectory [5] - The CEO highlighted that the company is focused on integrating recent acquisitions and driving efficiencies throughout the business [20] Other Important Information - The company amended its credit facility, now having a revolving commitment of $467,000,000, and maintained its regular quarterly cash dividend program [16] - The company reported a tangible net worth of $315,700,000 at the end of the quarter, up from $306,000,000 at the end of the prior fiscal year [15] Q&A Session Summary Question: Market activity post-April - Management observed increased activity post-April 2, with a solid month for the company despite some recent slowdown [22][23] Question: Collectible space progress - Management reported good integration of recent acquisitions in the collectible space, with impressive auction demand noted [24][25] Question: Impact of backwardation - Management explained that backwardation negatively impacted results, similar to conditions experienced post-COVID, but noted a return to more normalized market conditions [29][30][33] Question: Earnings power in macroeconomic uncertainty - Management indicated that the company historically performs well in active silver markets and noted the current dominance of gold in precious metals [35][36] Question: Current stance on acquisitions - Management remains open to acquisitions, particularly when market conditions are slow, and sees potential for significant customer base growth through these strategies [46][47] Question: Trends post-Liberation Day - Management reported elevated interest and activity across all business segments throughout April, with a correlation to stock market performance [48][49] Question: Visibility on long-term holders selling inventory - Management discussed the supply-demand dynamics when long-term holders sell back into the market, affecting trading performance [54][55] Question: Financial impact of Las Vegas facility improvements - Management expressed confidence that automation improvements will lead to higher volumes and efficiencies without adding more employees [58][60] Question: Thoughts on stock buybacks - Management stated that stock buybacks are considered alongside other capital deployment strategies, with flexibility to adapt based on market conditions [62][65]

Financial Data and Key Metrics Changes - Revenues for fiscal Q3 2025 increased 15% to $3,000,000,000 from $2,600,000,000 in the same year-ago quarter, with an 18% increase when excluding forward sales [6][8] - Gross profit for fiscal Q3 2025 increased 18% to $41,000,000, representing 1.36% of revenue, compared to $34,800,000 or 1.33% of revenue in Q3 of last year [8][9] - Net loss attributable to the company for Q3 2025 totaled $8,500,000 or $0.36 loss per diluted share, compared to net income of $5,000,000 or $0.21 per diluted share in Q3 of last year [15] Business Line Data and Key Metrics Changes - The DTC segment contributed 19% of consolidated revenue in fiscal Q3 2025, while JMB's revenue represented 10% of consolidated revenue, down from 12% in the prior year [6][7] - Gross profit from the DTC segment represented 61% of consolidated gross profit in Q3 2025, up from 52% in Q3 2024 [9] - SG&A expenses for fiscal Q3 2025 increased 46% to $33,400,000, primarily due to increased consulting and professional fees [10][11] Market Data and Key Metrics Changes - Gold sales in Q3 2025 were 432,000 ounces, down 3% from the previous year, while silver sales were 15,700,000 ounces, down 39% from the same period [18][19] - The number of new customers in the DTC segment increased significantly, with 899,600 new customers in Q3 2025, up 1489% from the previous year [20] - The average order value in the DTC segment was $3,084, up 45% from Q3 2024 [21] Company Strategy and Development Direction - The company executed three strategic acquisitions during the quarter, enhancing its competitive position and expanding into higher-margin luxury segments [4] - The company is focused on integrating recent acquisitions and driving operational efficiencies to enhance shareholder value [5][17] - The company remains optimistic about long-term growth opportunities in Asian markets across wholesale and e-commerce channels [5] Management's Comments on Operating Environment and Future Outlook - Management noted that market conditions showed modest improvement, and they remain confident in the company's long-term growth trajectory [5] - The management highlighted the impact of tariffs and backwardation on trading losses and interest expenses during the quarter [3][32] - Management expressed optimism about the demand for precious metals as a safe haven during periods of market volatility [40][50] Other Important Information - The company maintained its regular quarterly cash dividend program, with the most recent dividend paid in April 2025 [17] - The company had $114,300,000 in cash at the end of the quarter, up from $48,600,000 at the end of fiscal year 2024 [16] Q&A Session Summary Question: Market activity post-April - Management observed increased activity in early April, with a solid month overall, despite a slight slowdown in the last weeks [24] Question: Progress in the collectible space - Management reported successful integration of SGI and Pinehurst, with strong demand in the collectible market [26] Question: Impact of backwardation on results - Management explained that backwardation affected trading revenue and gross profit significantly during February and March [31] Question: Earnings power in macroeconomic uncertainty - Management noted that earnings power is historically stronger in active silver markets, but gold's recent performance has been favorable [36] Question: Current stance on acquisitions - Management remains open to acquisitions, particularly when market conditions are slow, and sees potential for further growth through M&A [46] Question: Trends post-Liberation Day - Management reported elevated interest and activity across all business segments throughout April [48] Question: Visibility on long-term holders selling inventory - Management indicated that increased selling by long-term holders could impact supply and demand dynamics [54] Question: Financial impact of improvements in Las Vegas facility - Management expressed confidence that automation improvements would lead to higher volumes and efficiencies [58] Question: Thoughts on stock buybacks - Management stated that stock buybacks are considered alongside other capital deployment strategies, but current focus is on integrating recent acquisitions [66]