A-Mark Precious Metals(AMRK)2025-02-10 19:51Financial Performance - The Company reported revenues of $9.7 billion for the fiscal year 2024, indicating significant growth in its operations [300]. - Revenues for the three months ended December 31, 2024, were $2,742,345, representing a 31.9% increase from $2,078,815 in 2023 [328]. - Revenues for the six months ended December 31, 2024 increased by $894.0 million, or 19.6%, to $5.457 billion from $4.563 billion in 2023 [340]. - Revenues for the three months ended December 31, 2024 increased by $465.2 million, or 27.2%, to $2.173 billion from $1.708 billion in 2023 [379]. - Revenues for the six months ended December 31, 2024 increased by $533.1 million, or 13.8%, to $4.400 billion from $3.867 billion in 2023 [384]. - Revenues for the Direct-to-Consumer segment increased by 51.8% to $1,057,112,000 for the six months ended December 31, 2024, compared to $696,177,000 in 2023 [411]. - Revenues for the three months ended December 31, 2024 increased by $198.4 million, or 53.5%, to $569.0 million from $370.6 million in 2023 [417]. Profitability - Gross profit decreased to $44,767, or 1.632% of revenue, down from $46,041, or 2.215% of revenue, reflecting a 2.8% decline [328]. - Gross profit for the six months ended December 31, 2024 decreased by $7.2 million, or 7.6%, to $88.2 million from $95.4 million in 2023 [346]. - Gross profit for the three months ended December 31, 2024 decreased by $4.2 million, or 17.4%, to $19.7 million from $23.9 million in 2023, primarily due to lower premium spreads and trading profits [388]. - For the six months ended December 31, 2024, gross profit decreased by $12.5 million, or 23.9%, to $39.7 million from $52.2 million in 2023, attributed to lower premium spreads and trading profits [391]. - The overall gross margin percentage for the six months ended December 31, 2024 decreased by 47.6 basis points to 1.616% from 2.092% in 2023 [347]. - The gross margin percentage for the three months ended December 31, 2024 decreased by 49.0 basis points to 0.908% from 1.398% in 2023 [388]. - The gross margin percentage for the six months ended December 31, 2024 decreased by 73.6 basis points to 1.798% from 2.534% in the prior year [392]. Net Income - Net income attributable to the Company fell by 52.4% to $6,558 compared to $13,766 in the prior year [328]. - Net income attributable to the Company for the six months ended December 31, 2024 was $15.542 million, a decrease of $17.051 million or 52.3% compared to $32.593 million in 2023 [332]. - Net income before provision for income taxes decreased by 21.1% to $11,195,000 for the six months ended December 31, 2024, down from $14,193,000 in 2023 [411]. - Net income for the six months ended December 31, 2024, was $14,392, a decrease of $18,552 or 56.3% compared to $32,944 in 2023 [465]. Customer Metrics - The number of new customers grew by 31.8% to 120,700 in the six months ended December 31, 2024, compared to 91,600 in 2023 [411]. - The total number of customers reached 3,187,500, a 30.6% increase from 2,439,900 in 2023 [411]. - The number of new customers increased by 12,900, or 24.6%, to 65,400, and the total number of customers increased by 747,600, or 30.6%, to 3,187,500 [421]. - The number of active customers increased by 27,200, or 11.2%, to 270,000 from 242,800 in 2023 [428]. Sales Volume - The number of gold ounces sold increased by 3.6% to 466,000, while silver ounces sold decreased by 17.9% to 21,828,000 [329]. - Gold ounces sold for the six months ended December 31, 2024 decreased by 81,000 ounces, or 8.6%, to 864,000 ounces from 945,000 ounces in 2023 [341]. - Silver ounces sold for the six months ended December 31, 2024 decreased by 14,676,000 ounces, or 25.8%, to 42,277,000 ounces from 56,953,000 ounces in 2023 [341]. - Gold ounces sold for the three months ended December 31, 2024 increased by 12,000 ounces, or 3.6%, to 346,000 ounces from 334,000 ounces in 2023 [380]. - Silver ounces sold for the three months ended December 31, 2024 decreased by 5,399,000 ounces, or 23.7%, to 17,410,000 ounces from 22,809,000 ounces in 2023 [380]. - Gold ounces sold for the six months ended December 31, 2024 decreased by 94,000 ounces, or 13.2%, to 618,000 ounces from 712,000 ounces in 2023 [385]. - Silver ounces sold for the six months ended December 31, 2024 decreased by 16,796,000 ounces, or 33.5%, to 33,370,000 ounces from 50,166,000 ounces in 2023 [385]. Expenses - Selling, general, and administrative expenses for the three months ended December 31, 2024 increased by $3.4 million, or 15.0%, to $25.8 million from $22.4 million in 2023 [349]. - Selling, general, and administrative expenses for the six months ended December 31, 2024 increased by $8.1 million, or 18.4%, to $52.4 million from $44.2 million in 2023 [350]. - Selling, general, and administrative expenses for the three months ended December 31, 2024 increased by $0.8 million, or 7.9%, to $11.4 million from $10.6 million in 2023 [393]. - Selling, general, and administrative expenses for the six months ended December 31, 2024 increased by $5.3 million, or 23.9%, to $27.6 million from $22.3 million in 2023 [438]. Interest Income and Expense - Interest income increased by 7.7% to $6,794, while interest expense rose by 1.9% to $10,363 [328]. - Interest income for the six months ended December 31, 2024 was $13.881 million, an increase of $1.468 million or 11.8% compared to $12.413 million in 2023 [332]. - Interest income for the three months ended December 31, 2024 increased by $0.6 million, or 15.4%, to $4.1 million from $3.6 million in 2023 [397]. - Interest expense for the three months ended December 31, 2024 increased by $1.1 million, or 16.0%, to $8.1 million from $7.0 million in 2023, primarily due to increased borrowings [399]. - Interest expense for the six months ended December 31, 2024 increased by $0.4 million, or 1.8%, to $20.4 million from $20.0 million in 2023 [359]. - Interest expense for the six months ended December 31, 2024 decreased by $0.7 million, or 37.7%, to $1.2 million from $1.9 million in 2023 [442]. Inventory and Turnover - The inventory turnover ratio improved to 2.2, up 15.8% from 1.9 [329]. - The inventory turnover ratio for the six months ended December 31, 2024 increased by 9.3% to 4.7 from 4.3 in 2023 [348]. Strategic Initiatives - The Company acquired LPM, one of Asia's largest precious metals dealers, in February 2024, enhancing its global reach [287]. - The Company focuses on growth through strategic acquisitions and expanding its geographic presence and product offerings [300]. - The Company operates in three reportable segments: Wholesale Sales & Ancillary Services, Direct-to-Consumer, and Secured Lending [280]. Market Conditions - The Company operates in a high volume/low margin industry, with revenues significantly impacted by product volume, market prices, and market volatility [308]. - The Company utilizes forward contracts for selling precious metals, which are included in revenues, impacting revenue recognition significantly [306]. Non-GAAP Measures - The Company utilizes non-GAAP measures such as adjusted net income before provision for income taxes and EBITDA to evaluate financial performance [323]. - Adjusted net income before provision for income taxes for the three months ended December 31, 2024 was $13.4 million, a decrease of $8.4 million or 38.5% from $21.7 million in 2023 [456]. - Adjusted net income before provision for income taxes for the six months ended December 31, 2024 was $28.1 million, a decrease of $20.4 million or 42.0% from $48.5 million in 2023 [456]. Cash Flow - Net cash provided by operating activities for the three months ended December 31, 2024 was $110.1 million, an increase of $167.5 million or 291.7% from $(57.4) million in 2023 [463]. - Net cash used in operating activities improved significantly, decreasing by $84,209 or 82.8%, from $(101,667) in 2023 to $(17,458) in 2024 [465]. Assets and Liabilities - As of December 31, 2024, approximately 79% of the company's assets were liquid, including cash and receivables [467]. - The Trading Credit Facility provides access to $422.5 million, with a maturity date of September 30, 2026 [471]. - Product financing arrangements increased by $34,193, from $517,744 in June 2024 to $551,937 in December 2024 [475]. - Liabilities on borrowed metals rose by $1,895, from $31,993 in June 2024 to $33,888 in December 2024 [474].