U.S. Global Investors(US:GROW)2019-09-09 16:52Financial Data and Key Metrics Changes - Total operating revenues for fiscal year 2019 were $4.9 million, a decrease of $1.3 million or 22% from $6.3 million in 2018, primarily due to decreases in assets under management related to market depreciation and shareholder redemption [73] - Operating expenses for the year were $7.9 million, a decrease of $668,000 or 8%, mainly due to a decrease in employee compensation and benefits [75] - Net loss attributable to U.S. Global Investors after taxes for the year was $3.4 million or a loss of $0.22 per share, a decrease of $4 million compared to a net income of $647,000 or $0.04 per share in fiscal year 2018 [77] Business Line Data and Key Metrics Changes - The company experienced a significant operating loss of $3 million for fiscal year 2019, attributed to various factors including decreased performance fees and increased operating costs [75] - Investment income decreased by $3.1 million compared to fiscal year 2018, primarily due to net unrealized losses on investments [76] Market Data and Key Metrics Changes - The company noted a trend of outflows from domestic equity funds, with many investors shifting to lower-cost ETF options, impacting overall fund flows in the mutual fund industry [13][19] - The number of mutual fund sponsors is diminishing, indicating a challenging environment for traditional mutual funds [19] Company Strategy and Development Direction - The company aims to launch new ETFs to adapt to the changing mutual fund landscape and has approved a stock repurchase program of up to $2.75 million [8] - A strategic investment was made in GoldSpot, focusing on artificial intelligence to enhance exploration in the gold mining sector, indicating a pivot towards technology-driven solutions [48] Management's Comments on Operating Environment and Future Outlook - Management highlighted the volatility in stock prices driven by fund flows and the direction of gold prices, emphasizing the need for strategic adjustments in response to market conditions [5] - The management expressed optimism about the performance of their gold equity ETF, GOAU, which has seen significant fund flows due to its strong performance [12][27] Other Important Information - The company has maintained a strong balance sheet with no long-term debt and approximately $17.3 million in cash and unrestricted securities, representing 73% of total assets [78] - The company has consistently paid dividends for 10 years, indicating a commitment to returning value to shareholders despite recent challenges [7] Q&A Session Summary Question: What are the main challenges faced by the company in the current market? - Management noted that the mutual fund industry is facing significant challenges due to increased competition from lower-cost ETFs and regulatory changes impacting fund flows [13][19] Question: How is the company addressing the volatility in its earnings? - The company is adapting to new accounting standards that have increased earnings volatility and is focusing on cost management and strategic investments to stabilize its financial performance [70][72] Question: What is the outlook for the gold market and its impact on the company's performance? - Management expressed a bullish outlook for the gold market, driven by increased demand from central banks and consumers, which is expected to positively impact the company's gold-related products [28][33]