A-Mark Precious Metals Inc
For the period ended Mar 31, 2024. Filed May 9, 2024.
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Mar 31, 2024 · Filed May 9, 2024
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Segment results of operations
The Company conducts its operations in three reportable segments: (i) Wholesale Sales & Ancillary Services, (ii) Direct-to-Consumer, and (iii) Secured Lending.
Results of Operations — Wholesale Sales & Ancillary Services Segment
The Company operates its Wholesale Sales & Ancillary Services segment directly and through its wholly-owned subsidiaries, A-Mark Trading AG (“AMTAG”), Transcontinental Depository Services ("TDS"), A-M Global Logistics, LLC ("Logistics"), AM&ST Associates, LLC ("AMST" or "Silver Towne" or the "Mint"), and AM/LPM Ventures, LLC which we formed in February 2024 to acquire LPM Group Limited ("LPM"). The Wholesale Sales & Ancillary Services segment includes the consolidating eliminations of inter-segment transactions and unallocated segment adjustments.
— Wholesale Sales & Ancillary Services Segment
The operating results of our Wholesale Sales & Ancillary Services segment were as follows (in thousands, except performance metrics data):
| Three Months Ended March 31, · 2024 · 2023 · Change | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| $ · % of revenue · $ · % of revenue · $ · % | |||||||||
| Revenues | $2,274,977(a) | 100.000% | $1,795,140(b) | 100.000% | $479,837 | 26.7% | |||
| Gross profit | 16,834 | 0.740%(c) | 32,286 | 1.799%(d) | $(15,452) | (47.9%) | |||
| Selling, general, and administrative expenses | (12,202) | (0.536%) | (12,428) | (0.692%) | $(226) | (1.8%) | |||
| Depreciation and amortization expense | (474) | (0.021%) | (247) | (0.014%) | $227 | 91.9% | |||
| Interest income | 3,676 | 0.162% | 3,601 | 0.201% | $75 | 2.1% | |||
| Interest expense | (7,266) | (0.319%) | (5,979) | (0.333%) | $1,287 | 21.5% | |||
| Losses from equity method investments | (223) | (0.010%) | (72) | (0.004%) | $151 | 209.7% | |||
| Other income, net | 440 | 0.019% | 36 | 0.002% | $404 | 1,122.2% | |||
| Unrealized gains on foreign exchange | 73 | 0.003% | 35 | 0.002% | $38 | 108.6% | |||
| Net income before provision for income taxes | $858 | 0.038% | $17,232 | 0.960% | $(16,374) | (95.0%) | |||
| Performance Metrics: | |||||||||
| Gold ounces sold(1) | 339,000 | 484,000 | (145,000) | (30.0%) | |||||
| Silver ounces sold(2) | 22,545,000 | 30,843,000 | (8,298,000) | (26.9%) | |||||
| Wholesale Sales ticket volume(3) | 26,150 | 28,914 | (2,764) | (9.6%) | |||||
(a)
Revenues are presented net of inter-segment transactions with the Direct-to-Consumer segment that totaled $242.6 million. This segment’s gross sales before eliminations of inter-segment activity totaled $2.518 billion.
(b)
Revenues are presented net of inter-segment transactions with the Direct-to-Consumer segment that totaled $409.3 million. This segment’s gross sales before eliminations of inter-segment activity totaled $2.204 billion.
(c)
Gross profit percentage before elimination of inter-segment sales to the Direct-to-Consumer segment was 0.648% for the period.
(d)
Gross profit percentage before elimination of inter-segment sales to the Direct-to-Consumer segment was 1.177% for the period.
(1)
(2)
(3)
Wholesales Sales ticket volume represents the total number of product orders processed.
— Wholesale Sales & Ancillary Services Segment
The operating results of our Wholesale Sales & Ancillary Services segment were as follows (in thousands, except performance metrics data):
| Nine Months Ended March 31, · 2024 · 2023 · Change | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| $ · % of revenue · $ · % of revenue · $ · % | |||||||||
| Revenues | $6,142,233(a) | 100.000% | $4,766,981(b) | 100.000% | $1,375,252 | 28.8% | |||
| Gross profit | 69,065 | 1.124%(c) | 94,208 | 1.976%(d) | $(25,143) | (26.7%) | |||
| Selling, general, and administrative expenses | (33,366) | (0.543%) | (29,377) | (0.616%) | $3,989 | 13.6% | |||
| Depreciation and amortization expense | (1,084) | (0.018%) | (703) | (0.015%) | $381 | 54.2% | |||
| Interest income | 10,657 | 0.174% | 9,081 | 0.190% | $1,576 | 17.4% | |||
| Interest expense | (20,989) | (0.342%) | (13,696) | (0.287%) | $7,293 | 53.2% | |||
| Earnings from equity method investments | 3,269 | 0.053% | 7,272 | 0.153% | $(4,003) | (55.0%) | |||
| Other income, net | 736 | 0.012% | 106 | 0.002% | $630 | 594.3% | |||
| Unrealized gains on foreign exchange | 84 | 0.001% | 250 | 0.005% | $(166) | (66.4%) | |||
| Net income before provision for income taxes | $28,372 | 0.462% | $67,141 | 1.408% | $(38,769) | (57.7%) | |||
| Performance Metrics: | |||||||||
| Gold ounces sold(1) | 1,051,000 | 1,395,000 | (344,000) | (24.7%) | |||||
| Silver ounces sold(2) | 72,711,000 | 92,804,000 | (20,093,000) | (21.7%) | |||||
| Wholesale Sales ticket volume(3) | 73,456 | 76,133 | (2,677) | (3.5%) | |||||
(a)
Revenues are presented net of inter-segment transactions with the Direct-to-Consumer segment that totaled $724.1 million. This segment’s gross sales before eliminations of inter-segment activity totaled $6.866 billion.
(b)
Revenues are presented net of inter-segment transactions with the Direct-to-Consumer segment that totaled $1.052 billion. This segment’s gross sales before eliminations of inter-segment activity totaled $5.819 billion.
(c)
Gross profit percentage before elimination of inter-segment sales to the Direct-to-Consumer segment was 0.942% for the period.
(d)
Gross profit percentage before elimination of inter-segment sales to the Direct-to-Consumer segment was 1.602% for the period.
(1)
(2)
(3)
Wholesales Sales ticket volume represents the total number of product orders processed.
Revenues — Wholesale Sales & Ancillary Services
| in thousands, except performance metrics | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended March 31, · 2024 · 2023 · Change | |||||||||
| $ · % of revenue · $ · % of revenue · $ · % | |||||||||
| Revenues | $2,274,977(a) | 100.000% | $1,795,140(b) | 100.000% | $479,837 | 26.7% | |||
| Performance Metrics | |||||||||
| Gold ounces sold | 339,000 | 484,000 | (145,000) | (30.0%) | |||||
| Silver ounces sold | 22,545,000 | 30,843,000 | (8,298,000) | (26.9%) | |||||
| Wholesale Sales ticket volume | 26,150 | 28,914 | (2,764) | (9.6%) | |||||
(a)
Revenues are presented net of inter-segment transactions with the Direct-to-Consumer segment that totaled $242.6 million. This segment’s gross sales before eliminations of inter-segment activity totaled $2.518 billion.
(b)
Revenues are presented net of inter-segment transactions with the Direct-to-Consumer segment that totaled $409.3 million. This segment’s gross sales before eliminations of inter-segment activity totaled $2.204 billion.
Revenues for the three months ended March 31, 2024 increased $479.8 million, or 26.7%, to $2.275 billion from $1.795 billion in 2023. Excluding an increase in forward sales of $622.1 million, our revenues decreased $142.3 million, which was due to a decrease in gold and silver ounces sold, partially offset by higher average selling prices of gold and silver.
Gold ounces sold for the three months ended March 31, 2024 decreased 145,000 ounces, or 30.0%, to 339,000 ounces from 484,000 ounces in 2023. Silver ounces sold for the three months ended March 31, 2024 decreased 8,298,000 ounces, or 26.9%, to 22,545,000 ounces from 30,843,000 ounces in 2023. On average, the selling prices for gold and silver increased by 8.8% and 4.4%, respectively, during the three months ended March 31, 2024 as compared to the prior year.
The Wholesale Sales ticket volume for the three months ended March 31, 2024 decreased by 2,764 tickets, or 9.6% to 26,150 tickets from 28,914 tickets in 2023.
| in thousands, except performance metrics | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Nine Months Ended March 31, · 2024 · 2023 · Change | |||||||||
| $ · % of revenue · $ · % of revenue · $ · % | |||||||||
| Revenues | $6,142,233(a) | 100.000% | $4,766,981(b) | 100.000% | $1,375,252 | 28.8% | |||
| Performance Metrics | |||||||||
| Gold ounces sold | 1,051,000 | 1,395,000 | (344,000) | (24.7%) | |||||
| Silver ounces sold | 72,711,000 | 92,804,000 | (20,093,000) | (21.7%) | |||||
| Wholesale Sales ticket volume | 73,456 | 76,133 | (2,677) | (3.5%) | |||||
(a)
Revenues are presented net of inter-segment transactions with the Direct-to-Consumer segment that totaled $724.1 million. This segment’s gross sales before eliminations of inter-segment activity totaled $6.866 billion.
(b)
Revenues are presented net of inter-segment transactions with the Direct-to-Consumer segment that totaled $1.052 billion. This segment’s gross sales before eliminations of inter-segment activity totaled $5.819 billion.
Revenues for the nine months ended March 31, 2024 increased $1.375 billion, or 28.8%, to $6.142 billion from $4.767 billion in 2023. Excluding an increase in forward sales of $1.514 billion, our revenues decreased $138.5 million, which was due to a decrease in gold and silver ounces sold, partially offset by higher average selling prices of gold and silver.
Gold ounces sold for the nine months ended March 31, 2024 decreased 344,000 ounces, or 24.7%, to 1,051,000 ounces from 1,395,000 ounces in 2023. Silver ounces sold for the nine months ended March 31, 2024 decreased 20,093,000 ounces, or 21.7%, to 72,711,000 ounces from 92,804,000 ounces in 2023. On average, the selling prices for gold increased by 11.1% and selling prices for silver increased by 11.3% during the nine months ended March 31, 2024 as compared to the prior year.
The Wholesale Sales ticket volume for the nine months ended March 31, 2024 decreased by 2,677 tickets, or 3.5% to 73,456 tickets from 76,133 tickets in 2023.
Gross Profit — Wholesale Sales & Ancillary Services
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Three Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of revenue | $ | % of revenue | $ | % | |
| Gross profit | $16,834 | 0.740%(c) | $32,286 | 1.799%(d) | $(15,452) | (47.9%) |
(c)
Gross profit percentage before elimination of inter-segment sales to the Direct-to-Consumer segment was 0.648% for the period.
(d)
Gross profit percentage before elimination of inter-segment sales to the Direct-to-Consumer segment was 1.177% for the period.
Gross profit for the three months ended March 31, 2024 decreased $15.5 million, or 47.9%, to $16.8 million from $32.3 million in 2023. The overall gross profit decrease was primarily due to lower premium spreads, partially offset by higher trading profit.
This segment’s profit margin percentage decreased by 105.9 basis points to 0.740% from 1.799% in 2023. The decrease in gross margin percentage was mainly attributable to lower premium spreads and the impact of increased forward sales, partially offset by higher trading profits.
Excluding an increase of $622.1 million of forward sales that had a negligible impact to the amount of gross profit, this segment's gross margin percentage for the three months ended March 31, 2024 decreased by 113.1 basis points to 1.660% from 2.791%. Forward sales increase revenues but are associated with negligible gross profit. The Company enters into forward contracts to hedge its precious metals price risk exposure and not for speculative purposes.
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Nine Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of revenue | $ | % of revenue | $ | % | |
| Gross profit | $69,065 | 1.124%(c) | $94,208 | 1.976%(d) | $(25,143) | (26.7%) |
(c)
Gross profit percentage before elimination of inter-segment sales to the Direct-to-Consumer segment was 0.942% for the period.
(d)
Gross profit percentage before elimination of inter-segment sales to the Direct-to-Consumer segment was 1.602% for the period.
Gross profit for the nine months ended March 31, 2024 decreased $25.1 million, or 26.7%, to $69.1 million from $94.2 million in 2023. The gross profit decrease was primarily due to lower premium spreads, partially offset by higher trading profits.
This segment’s profit margin percentage decreased by 85.2 basis points to 1.124% from 1.976% in 2023. The decrease in gross margin percentage was mainly attributable to the impact of increased forward sales and lower premium spreads, partially offset by higher trading profits.
Excluding an increase of $1.514 billion of forward sales that had a negligible impact to the amount of gross profit, this segment's gross margin percentage for the nine months ended March 31, 2024 decreased by 68.5 basis points to 2.246% from 2.931% in the prior year. Forward sales increase revenues but are associated with negligible gross profit. The Company enters into forward contracts to hedge its precious metals price risk exposure and not for speculative purposes.
Selling, General, and Administrative Expenses — Wholesale Sales & Ancillary Services
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Three Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of revenue | $ | % of revenue | $ | % | |
| Selling, general, and administrative expenses | $(12,202) | (0.536%) | $(12,428) | (0.692%) | $(226) | (1.8%) |
Selling, general, and administrative expenses for the three months ended March 31, 2024 decreased $0.2 million, or 1.8%, to $12.2 million from $12.4 million in 2023. The change was primarily due to: (i) a decrease in compensation expense (including performance-based accruals) of $2.0 million and (ii) a decrease in insurance costs of $0.9 million, partially offset by (iii) higher consulting and professional fees of $2.3 million and (iv) an increase in advertising costs of $0.2 million.
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Nine Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of revenue | $ | % of revenue | $ | % | |
| Selling, general, and administrative expenses | $(33,366) | (0.543%) | $(29,377) | (0.616%) | $3,989 | 13.6% |
Selling, general, and administrative expenses for the nine months ended March 31, 2024 increased $4.0 million, or 13.6%, to $33.4 million from $29.4 million in 2023. The change was primarily due to: (i) an increase in consulting and professional fees of $4.8 million, (ii) an increase in advertising costs of $0.9 million, and (iii) an increase in information technology costs of $0.3 million, partially offset by (iv) a decrease in insurance costs of $1.5 million and (v) a decrease in compensation expense (including performance-based accruals) of $0.6 million.
Interest Income — Wholesale Sales & Ancillary Services
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Three Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of revenue | $ | % of revenue | $ | % | |
| Interest income | $3,676 | 0.162% | $3,601 | 0.201% | $75 | 2.1% |
Interest income for the three months ended March 31, 2024 increased $0.1 million, or 2.1%, to $3.7 million from $3.6 million in 2023. The overall increase in interest income was not significant.
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Nine Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of revenue | $ | % of revenue | $ | % | |
| Interest income | $10,657 | 0.174% | $9,081 | 0.190% | $1,576 | 17.4% |
Interest income for the nine months ended March 31, 2024 increased $1.6 million, or 17.4%, to $10.7 million from $9.1 million in 2023. The overall increase was primarily due to an increase in interest earned from repurchase arrangements with customers of $1.7 million.
Interest Expense — Wholesale Sales & Ancillary Services
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Three Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of revenue | $ | % of revenue | $ | % | |
| Interest expense | $(7,266) | (0.319%) | $(5,979) | (0.333%) | $1,287 | 21.5% |
Interest expense for the three months ended March 31, 2024 increased $1.3 million, or 21.5%, to $7.3 million from $6.0 million in 2023. The overall increase was primarily due to (i) higher interest and fees from product financing arrangements of $0.8 million, (ii) higher inter-segment eliminations related to JMB’s product financing activity with A-Mark of $0.7 million, and (iii) an increase of $0.3 million in connection with our Trading Credit Facility (due to an increase in interest rates as well as increased borrowings), partially offset by (iv) a decrease of $0.6 million related to our AMCF Notes (including amortization of debt issuance costs) due to the repayment in December 2023.
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Nine Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of revenue | $ | % of revenue | $ | % | |
| Interest expense | $(20,989) | (0.342%) | $(13,696) | (0.287%) | $7,293 | 53.2% |
Interest expense for the nine months ended March 31, 2024 increased $7.3 million, or 53.2%, to $21.0 million from $13.7 million in 2023. The overall increase was primarily due to (i) an increase of $4.3 million in connection with our Trading Credit Facility (due to an increase in interest rates as well as increased borrowings), (ii) higher interest and fees from product financing arrangements of $2.5 million, and (iii) an increase in inter-segment eliminations related to JMB’s product financing activity with A-Mark of $0.6 million.
Earnings (Losses) from Equity Method Investments — Wholesale Sales & Ancillary Services
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Three Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of revenue | $ | % of revenue | $ | % | |
| Losses from equity method investments | $(223) | (0.010%) | $(72) | (0.004%) | $151 | 209.7% |
Losses from equity method investments for the three months ended March 31, 2024 increased $0.2 million, or 209.7%, to $0.2 million from $0.1 million in 2023 due to decreased earnings of our equity method investees.
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Nine Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of revenue | $ | % of revenue | $ | % | |
| Earnings from equity method investments | $3,269 | 0.053% | $7,272 | 0.153% | $(4,003) | (55.0%) |
Earnings from equity method investments for the nine months ended March 31, 2024 decreased $4.0 million, or 55.0%, to $3.3 million from $7.3 million in 2023 due to decreased earnings of our equity method investees.
Other Income, Net — Wholesale Sales & Ancillary Services
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Three Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of revenue | $ | % of revenue | $ | % | |
| Other income, net | $440 | 0.019% | $36 | 0.002% | $404 | 1,122.2% |
Other income, net for the three months ended March 31, 2024 increased by $0.4 million primarily due to an increase in gains on other investments of $0.4 million.
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Nine Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of revenue | $ | % of revenue | $ | % | |
| Other income, net | $736 | 0.012% | $106 | 0.002% | $630 | 594.3% |
Other income, net for the nine months ended March 31, 2024 increased by $0.6 million primarily due to an increase in gains on other investments of $0.6 million.
Results of Operations — Direct-to-Consumer Segment
The Company operates its Direct-to-Consumer segment through our wholly-owned subsidiaries: JM Bullion, Inc. (“JMB”), Goldline, Inc. (“Goldline”), and through our 50%-owned subsidiary Precious Metals Purchasing Partners, LLC ("PMPP").
— Direct-to-Consumer Segment
The operating results of our Direct-to-Consumer ("DTC") segment were as follows (in thousands, except performance metrics data):
| Three Months Ended March 31, · 2024 · 2023 · Change | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| $ · % of revenue · $ · % of revenue · $ · % | |||||||||
| Revenues | $335,674(a) | 100.000% | $522,010(b) | 100.000% | $(186,336) | (35.7%) | |||
| Gross profit | 18,004 | 5.364%(c) | 43,212 | 8.278%(d) | $(25,208) | (58.3%) | |||
| Selling, general, and administrative expenses | (10,259) | (3.056%) | (10,900) | (2.088%) | $(641) | (5.9%) | |||
| Depreciation and amortization expense | (2,392) | (0.713%) | (3,005) | (0.576%) | $(613) | (20.4%) | |||
| Interest expense | (580) | (0.173%) | (1,287) | (0.247%) | $(707) | (54.9%) | |||
| Other income, net | 5 | 0.001% | — | —% | $5 | —% | |||
| Net income before provision for income taxes | $4,778 | 1.423% | $28,020 | 5.368% | $(23,242) | (82.9%) | |||
| Performance Metrics: | |||||||||
| Gold ounces sold(1) | 107,000 | 175,000 | (68,000) | (38.9%) | |||||
| Silver ounces sold(2) | 3,177,000 | 6,063,000 | (2,886,000) | (47.6%) | |||||
| Number of new customers(3) | 56,600 | 64,700 | (8,100) | (12.5%) | |||||
| Number of active customers(4) | 126,000 | 147,400 | (21,400) | (14.5%) | |||||
| Number of total customers(5) | 2,496,500 | 2,257,900 | 238,600 | 10.6% | |||||
| DTC ticket volume from new customers(6) | 39,150 | 42,781 | (3,631) | (8.5%) | |||||
| DTC ticket volume from pre-existing customers(7) | 120,836 | 172,906 | (52,070) | (30.1%) | |||||
| DTC total ticket volume(8) | 159,986 | 215,687 | (55,701) | (25.8%) | |||||
| DTC average order value(9) | $2,133 | $2,452 | $(319) | (13.0%) | |||||
| JMB average order value(9) | $2,003 | $2,252 | $(249) | (11.1%) | |||||
(a)
Includes $2.9 million of inter-segment sales from the Direct-to-Consumer segment to the Wholesale Sales & Ancillary Services segment.
(b)
Includes $2.1 million of inter-segment sales from the Direct-to-Consumer segment to the Wholesale Sales & Ancillary Services segment.
(c)
Gross profit percentage, excluding inter-segment sales from the Direct-to-Consumer segment to the Wholesale Sales & Ancillary Services segment, was 5.390% for the period.
(d)
Gross profit percentage, excluding inter-segment company sales from the Direct-to-Consumer segment to the Wholesale Sales & Ancillary Services segment, was 8.301% for the period.
(1)
Gold ounces sold represents the ounces of gold product sold and delivered during the period.
(2)
Silver ounces sold represents the ounces of silver product sold and delivered during the period.
(3)
Number of new customers represents the number of customers that have registered or set up a new account or made a purchase for the first time during the period.
(4)
Number of active customers represents the number of customers that have made a purchase during any month during the period.
(5)
Number of total customers represents the aggregate number of customers that have registered or set up an account or have made a purchase in the past.
(6)
Ticket volume from new customers represents the number of product orders from new customers processed by JMB, Goldline, and PMPP during the period.
(7)
Ticket volume from pre-existing customers represents the total number of product orders from pre-existing customers processed by JMB, Goldline, and PMPP during the period.
(8)
Total ticket volume represents the total number of product orders processed by JMB, Goldline, and PMPP during the period.
(9)
Average Order Value ("AOV") represents the average dollar value of product orders (excluding accumulation program orders) delivered to the customer during the period.
— Direct-to-Consumer Segment
The operating results of our Direct-to-Consumer ("DTC") segment were as follows (in thousands, except performance metrics data):
| Nine Months Ended March 31, · 2024 · 2023 · Change | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| $ · % of revenue · $ · % of revenue · $ · % | |||||||||
| Revenues | $1,031,851(a) | 100.000% | $1,400,225(b) | 100.000% | $(368,374) | (26.3%) | |||
| Gross profit | 61,219 | 5.933%(c) | 121,851 | 8.702%(d) | $(60,632) | (49.8%) | |||
| Selling, general, and administrative expenses | (32,569) | (3.156%) | (31,625) | (2.259%) | $944 | 3.0% | |||
| Depreciation and amortization expense | (7,209) | (0.699%) | (8,817) | (0.630%) | $(1,608) | (18.2%) | |||
| Interest expense | (2,475) | (0.240%) | (3,020) | (0.216%) | $(545) | (18.0%) | |||
| Other income (expense), net | 5 | 0.000% | (12) | (0.001%) | $17 | 141.7% | |||
| Net income before provision for income taxes | $18,971 | 1.839% | $78,377 | 5.597% | $(59,406) | (75.8%) | |||
| Performance Metrics: | |||||||||
| Gold ounces sold(1) | 340,000 | 458,000 | (118,000) | (25.8%) | |||||
| Silver ounces sold(2) | 9,964,000 | 18,156,000 | (8,192,000) | (45.1%) | |||||
| Number of new customers(3) | 148,200 | 244,900 | (96,700) | (39.5%) | |||||
| Number of active customers(4) | 368,800 | 342,500 | 26,300 | 7.7% | |||||
| Number of total customers(5) | 2,496,500 | 2,257,900 | 238,600 | 10.6% | |||||
| DTC ticket volume from new customers(6) | 100,403 | 106,933 | (6,530) | (6.1%) | |||||
| DTC ticket volume from pre-existing customers(7) | 365,687 | 486,887 | (121,200) | (24.9%) | |||||
| DTC total ticket volume(8) | 466,090 | 593,820 | (127,730) | (21.5%) | |||||
| DTC average order value(9) | $2,253 | $2,394 | $(141) | (5.9%) | |||||
| JMB average order value(9) | $2,093 | $2,216 | $(123) | (5.6%) | |||||
(a)
Includes $6.2 million of inter-segment sales from the Direct-to-Consumer segment to the Wholesale Sales & Ancillary Services segment.
(b)
Includes $2.7 million of inter-segment sales from the Direct-to-Consumer segment to the Wholesale Sales & Ancillary Services segment.
(c)
Gross profit percentage, excluding inter-segment sales from the Direct-to-Consumer segment to the Wholesale Sales & Ancillary Services segment, was 5.956% for the period.
(d)
Gross profit percentage, excluding inter-segment company sales from the Direct-to-Consumer segment to the Wholesale Sales & Ancillary Services segment, was 8.711% for the period.
(1)
Gold ounces sold represents the ounces of gold product sold and delivered during the period.
(2)
Silver ounces sold represents the ounces of silver product sold and delivered during the period.
(3)
Number of new customers represents the number of customers that have registered or set up a new account or made a purchase for the first time during the period.
(4)
Number of active customers represents the number of customers that have made a purchase during any month during the period.
(5)
Number of total customers represents the aggregate number of customers that have registered or set up an account or have made a purchase in the past.
(6)
Ticket volume from new customers represents the number of product orders from new customers processed by JMB, Goldline, and PMPP during the period.
(7)
Ticket volume from pre-existing customers represents the total number of product orders from pre-existing customers processed by JMB, Goldline, and PMPP during the period.
(8)
Total ticket volume represents the total number of product orders processed by JMB, Goldline, and PMPP during the period.
(9)
Average Order Value ("AOV") represents the average dollar value of product orders (excluding accumulation program orders) delivered to the customer during the period.
Revenues — Direct-to-Consumer
| in thousands, except performance metrics | |||||||
|---|---|---|---|---|---|---|---|
| Three Months Ended March 31, · 2024 · 2023 · Change | |||||||
| $ · % of revenue · $ · % of revenue · $ · % | |||||||
| Revenues | $335,674 | 100.000% | $522,010 | 100.000% | $(186,336) | (35.7%) | |
| Performance Metrics: | |||||||
| Gold ounces sold | 107,000 | 175,000 | (68,000) | (38.9%) | |||
| Silver ounces sold | 3,177,000 | 6,063,000 | (2,886,000) | (47.6%) | |||
| Number of new customers | 56,600 | 64,700 | (8,100) | (12.5%) | |||
| Number of active customers | 126,000 | 147,400 | (21,400) | (14.5%) | |||
| Number of total customers | 2,496,500 | 2,257,900 | 238,600 | 10.6% | |||
| DTC ticket volume from new customers | 39,150 | 42,781 | (3,631) | (8.5%) | |||
| DTC ticket volume from pre-existing customers | 120,836 | 172,906 | (52,070) | (30.1%) | |||
| DTC total ticket volume | 159,986 | 215,687 | (55,701) | (25.8%) | |||
| DTC average order value | $2,133 | $2,452 | $(319) | (13.0%) | |||
| JMB average order value | $2,003 | $2,252 | $(249) | (11.1%) | |||
Revenues for the three months ended March 31, 2024 decreased $186.3 million, or 35.7%, to $335.7 million from $522.0 million in 2023. The decrease in revenue was due to a decrease in gold and silver ounces sold, partially offset by an increase in average selling prices of gold and silver. For the three months ended March 31, 2024, JMB's revenue decreased $161.6 million, while revenue of Goldline and PMPP, in the aggregate, decreased by $24.7 million as compared to the prior year.
Gold ounces sold for the three months ended March 31, 2024 decreased 68,000 ounces, or 38.9%, to 107,000 ounces from 175,000 ounces in 2023. Silver ounces sold for the three months ended March 31, 2024 decreased 2,886,000 ounces, or 47.6%, to 3,177,000 ounces from 6,063,000 ounces in 2023.
Gold ounces sold by JMB decreased 61,000 ounces for the three months ended March 31, 2024 compared to 2023. Gold ounces sold by Goldline and PMPP, in the aggregate, decreased 7,000 ounces compared to 2023. Silver ounces sold by JMB decreased 2,685,000 ounces for the three months ended March 31, 2024 compared to 2023. Silver ounces sold by Goldline and PMPP, in the aggregate, decreased 201,000 ounces compared to 2023.
On average, selling prices for gold increased by 8.8% and selling prices for silver increased by 3.8% during the three months ended March 31, 2024 as compared to the prior year.
The number of new customers for the three months ended March 31, 2024 decreased 8,100, or 12.5% to 56,600 from 64,700 in 2023. The number of active customers for the three months ended March 31, 2024 decreased 21,400, or 14.5% to 126,000 from 147,400 in 2023. The number of total customers as of March 31, 2024 increased 238,600, or 10.6% to 2,496,500 from 2,257,900 as of March 31, 2023. These changes in customer-based metrics were primarily due to JMB's activity.
As of March 31, 2024, the number of total CyberMetals customers was 28,100, and CyberMetals customer assets under management were $6.8 million.
For the three months ended March 31, 2024, the Direct-to-Consumer ticket volume related to new customers decreased by 3,631 tickets, or 8.5%, to 39,150 tickets from 42,781 tickets in 2023. For the three months ended March 31, 2024, Direct-to-Consumer ticket volume related to pre-existing customers decreased by 52,070 tickets, or 30.1%, to 120,836 tickets from 172,906 tickets in 2023. For the three months ended March 31, 2024, the Direct-to-Consumer total ticket volume decreased by 55,701 tickets, or 25.8%, to 159,986 tickets from 215,687 tickets in 2023.
For the three months ended March 31, 2024, the Direct-to-Consumer average order value decreased by $319, or 13.0%, to $2,133 from $2,452 in 2023.
| in thousands, except performance metrics | |||||||
|---|---|---|---|---|---|---|---|
| Nine Months Ended March 31, · 2024 · 2023 · Change | |||||||
| $ · % of revenue · $ · % of revenue · $ · % | |||||||
| Revenues | $1,031,851 | 100.000% | $1,400,225 | 100.000% | $(368,374) | (26.3%) | |
| Performance Metrics: | |||||||
| Gold ounces sold | 340,000 | 458,000 | (118,000) | (25.8%) | |||
| Silver ounces sold | 9,964,000 | 18,156,000 | (8,192,000) | (45.1%) | |||
| Number of new customers | 148,200 | 244,900 | (96,700) | (39.5%) | |||
| Number of active customers | 368,800 | 342,500 | 26,300 | 7.7% | |||
| Number of total customers | 2,496,500 | 2,257,900 | 238,600 | 10.6% | |||
| DTC ticket volume from new customers | 100,403 | 106,933 | (6,530) | (6.1%) | |||
| DTC ticket volume from pre-existing customers | 365,687 | 486,887 | (121,200) | (24.9%) | |||
| DTC total ticket volume | 466,090 | 593,820 | (127,730) | (21.5%) | |||
| DTC average order value | $2,253 | $2,394 | $(141) | (5.9%) | |||
| JMB average order value | $2,093 | $2,216 | $(123) | (5.6%) | |||
Revenues for the nine months ended March 31, 2024 decreased $368.4 million, or 26.3%, to $1.032 billion from $1.400 billion in 2023. The decrease in revenue was due to a decrease in gold and silver ounces sold, partially offset by higher average selling prices of gold and silver. For the nine months ended March 31, 2024, JMB's revenue decreased $334.1 million and revenue of Goldline and PMPP, in the aggregate, decreased by $34.3 million as compared to the prior year.
Gold ounces sold for the nine months ended March 31, 2024 decreased 118,000 ounces, or 25.8%, to 340,000 ounces from 458,000 ounces in 2023. Silver ounces sold for the nine months ended March 31, 2024 decreased 8,192,000 ounces, or 45.1%, to 9,964,000 ounces from 18,156,000 ounces in 2023.
Gold ounces sold by JMB decreased 109,000 ounces for the nine months ended March 31, 2024 compared to 2023. Gold ounces sold by Goldline and PMPP, in the aggregate, decreased 9,000 ounces compared to 2023. Silver ounces sold by JMB decreased 7,624,000 ounces for the nine months ended March 31, 2024 compared to 2023. Silver ounces sold by Goldline and PMPP, in the aggregate, decreased 568,000 ounces compared to 2023.
On average, selling prices for gold increased by 8.7% and selling prices for silver increased by 9.4% during the nine months ended March 31, 2024 as compared to the prior year.
The number of new customers for the nine months ended March 31, 2024 decreased 96,700, or 39.5%, to 148,200 from 244,900 in 2023. The number of active customers for the nine months ended March 31, 2024 increased 26,300, or 7.7% to 368,800 from 342,500 in 2023. The number of total customers as of March 31, 2024 increased 238,600, or 10.6% to 2,496,500 from 2,257,900 as of March 31, 2023. These changes in customer-based metrics were primarily due to JMB's activity.
As of March 31, 2024, the number of total CyberMetals customers was 28,100, and CyberMetals customer assets under management were $6.8 million.
For the nine months ended March 31, 2024, the Direct-to-Consumer ticket volume related to new customers decreased by 6,530 tickets, or 6.1%, to 100,403 tickets from 106,933 tickets in 2023. For the nine months ended March 31, 2024, Direct-to-Consumer ticket volume related to pre-existing customers decreased by 121,200 tickets, or 24.9%, to 365,687 tickets from 486,887 tickets in 2023. For the nine months ended March 31, 2024, the Direct-to-Consumer total ticket volume decreased by 127,730 tickets, or 21.5%, to 466,090 tickets from 593,820 tickets in 2023.
For the nine months ended March 31, 2024, the Direct-to-Consumer average order value decreased by $141, or 5.9%, to $2,253 from $2,394 in 2023.
Gross Profit — Direct-to-Consumer
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Three Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of revenue | $ | % of revenue | $ | % | |
| Gross profit | $18,004 | 5.364% | $43,212 | 8.278% | $(25,208) | (58.3%) |
Gross profit for the three months ended March 31, 2024 decreased by $25.2 million, or 58.3%, to $18.0 million from $43.2 million in 2023. The decrease in gross profit was mainly due to a decreased gross profit margin percentage as well as a lower ticket volume during the period.
For the three months ended March 31, 2024, the Direct-to-Consumer segment's profit margin percentage decreased by 291.4 basis points to 5.364% from 8.278% in 2023. The decrease in the gross profit margin percentage was primarily due to the lower gross profit percentages of JMB, but also to lower gross profit percentages of Goldline and PMPP.
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Nine Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of revenue | $ | % of revenue | $ | % | |
| Gross profit | $61,219 | 5.933% | $121,851 | 8.702% | $(60,632) | (49.8%) |
Gross profit for the nine months ended March 31, 2024 decreased by $60.6 million, or 49.8%, to $61.2 million from $121.9 million in 2023. The decrease in gross profit was mainly due to a decreased gross profit margin percentage as well as a lower ticket volume during the period.
For the nine months ended March 31, 2024, the Direct-to-Consumer segment's profit margin percentage decreased by 276.9 basis points to 5.933% from 8.702% in 2023. The decrease in the gross profit margin percentage was primarily due to the lower gross profit percentages of JMB, but also to lower gross profit percentages of Goldline and PMPP.
Selling, General, and Administrative Expense — Direct-to-Consumer
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Three Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of revenue | $ | % of revenue | $ | % | |
| Selling, general, and administrative expenses | $(10,259) | (3.056%) | $(10,900) | (2.088%) | $(641) | (5.9%) |
Selling, general, and administrative expenses for the three months ended March 31, 2024 decreased $0.6 million, or 5.9%, to $10.3 million from $10.9 million in 2023. The change was primarily due to a decrease in advertising costs of $0.6 million.
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Nine Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of revenue | $ | % of revenue | $ | % | |
| Selling, general, and administrative expenses | $(32,569) | (3.156%) | $(31,625) | (2.259%) | $944 | 3.0% |
Selling, general, and administrative expenses for the nine months ended March 31, 2024 increased $0.9 million, or 3.0%, to $32.6 million from $31.6 million in 2023. The change was primarily due to (i) an increase in compensation expense (including performance-based accruals) of $1.1 million and (ii) an increase in information technology costs of $0.5 million, partially offset by (iii) a decrease in advertising costs of $1.3 million.
Depreciation and Amortization Expense — Direct-to-Consumer
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Three Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of revenue | $ | % of revenue | $ | % | |
| Depreciation and amortization expense | $(2,392) | (0.713%) | $(3,005) | (0.576%) | $(613) | (20.4%) |
Depreciation and amortization expense for the three months ended March 31, 2024, decreased $0.6 million, or 20.4%, to $2.4 million from $3.0 million in 2023 primarily due to a $0.6 million decrease in JMB’s intangible asset amortization expense.
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Nine Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of revenue | $ | % of revenue | $ | % | |
| Depreciation and amortization expense | $(7,209) | (0.699%) | $(8,817) | (0.630%) | $(1,608) | (18.2%) |
Depreciation and amortization expense for the nine months ended March 31, 2024, decreased $1.6 million, or 18.2%, to $7.2 million from $8.8 million in 2023 primarily due to a $1.7 million decrease in JMB’s intangible asset amortization expense.
Interest expense — Direct-to-Consumer
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Three Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of revenue | $ | % of revenue | $ | % | |
| Interest expense | $(580) | (0.173%) | $(1,287) | (0.247%) | $(707) | (54.9%) |
Interest expense for the three months ended March 31, 2024 decreased $0.7 million to $0.6 million from $1.3 million in 2023. The decrease is related to JMB’s reduced product financing activity with A-Mark.
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Nine Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of revenue | $ | % of revenue | $ | % | |
| Interest expense | $(2,475) | (0.240%) | $(3,020) | (0.216%) | $(545) | (18.0%) |
Interest expense for the nine months ended March 31, 2024 decreased $0.5 million to $2.5 million from $3.0 million in 2023. The decrease is related to JMB’s reduced product financing activity with A-Mark.
Results of Operations — Secured Lending Segment
The Company operates its Secured Lending segment through its wholly-owned subsidiaries, Collateral Finance Corporation, LLC ("CFC") and CFC Alternative Investments (“CAI”). AM Capital Funding, LLC (“AMCF”), a wholly-owned subsidiary of CFC, was formed for the issuance of certain notes, which were repaid in December 2023. AMCF is currently inactive.
— Secured Lending Segment
The operating results of our Secured Lending segment were as follows (in thousands, except performance metrics data):
| Three Months Ended March 31, · 2024 · 2023 · Change | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| $ · % of interestincome · $ · % of interestincome · $ · % | |||||||||
| Interest income | $3,006 | 100.000% | $2,486 | 100.000% | $520 | 20.9% | |||
| Interest expense | (2,061) | (68.563%) | (1,971) | (79.284%) | $90 | 4.6% | |||
| Selling, general, and administrative expenses | (393) | (13.074%) | (513) | (20.636%) | $(120) | (23.4%) | |||
| Depreciation and amortization expense | (83) | (2.761%) | (88) | (3.540%) | $(5) | (5.7%) | |||
| Earnings from equity method investments | 17 | 0.566% | 2 | 0.080% | $15 | 750.0% | |||
| Other income, net | 318 | 10.579% | 605 | 24.336% | $(287) | (47.4%) | |||
| Net income before provision for income taxes | $804 | 26.747% | $521 | 20.957% | $283 | 54.3% | |||
| Performance Metric: | |||||||||
| Number of secured loans at period end(1) | 675 | 963 | (288) | (29.9%) | |||||
(1)
Number of outstanding secured loans to customers at the end of the period.
— Secured Lending Segment
The operating results of our Secured Lending segment were as follows (in thousands, except performance metrics data):
| Nine Months Ended March 31, · 2024 · 2023 · Change | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| $ · % of interestincome · $ · % of interestincome · $ · % | |||||||||
| Interest income | $8,438 | 100.000% | $7,086 | 100.000% | $1,352 | 19.1% | |||
| Interest expense | (6,434) | (76.250%) | (5,887) | (83.079%) | $547 | 9.3% | |||
| Selling, general, and administrative expenses | (1,160) | (13.747%) | (1,436) | (20.265%) | $(276) | (19.2%) | |||
| Depreciation and amortization expense | (259) | (3.069%) | (264) | (3.726%) | $(5) | (1.9%) | |||
| Earnings from equity method investments | 11 | 0.130% | 4 | 0.056% | $7 | 175.0% | |||
| Other income, net | 864 | 10.239% | 1,907 | 26.912% | $(1,043) | (54.7%) | |||
| Net income before provision for income taxes | $1,460 | 17.303% | $1,410 | 19.898% | $50 | 3.5% | |||
| Performance Metric: | |||||||||
| Number of secured loans at period end(1) | 675 | 963 | (288) | (29.9%) | |||||
(1)
Number of outstanding secured loans to customers at the end of the period.
Interest Income — Secured Lending
| in thousands, except performance metric | |||||||
|---|---|---|---|---|---|---|---|
| Three Months Ended March 31, · 2024 · 2023 · Change | |||||||
| $ · % of interestincome · $ · % of interestincome · $ · % | |||||||
| Interest income | $3,006 | 100.000% | $2,486 | 100.000% | $520 | 20.9% | |
| Performance Metric | |||||||
| Number of secured loans at period-end | 675 | 963 | (288) | (29.9%) | |||
Interest income for the three months ended March 31, 2024 increased $0.5 million, or 20.9%, to $3.0 million from $2.5 million in 2023. The increase in interest income earned from the segment’s secured loan portfolio was primarily due to an increase in interest rates and higher average monthly loan balances, partially offset by fewer loans outstanding. The number of secured loans outstanding decreased by 288, or 29.9%, to 675 from 963 as of March 31, 2023.
| in thousands, except performance metric | |||||||
|---|---|---|---|---|---|---|---|
| Nine Months Ended March 31, · 2024 · 2023 · Change | |||||||
| $ · % of interestincome · $ · % of interestincome · $ · % | |||||||
| Interest income | $8,438 | 100.000% | $7,086 | 100.000% | $1,352 | 19.1% | |
| Performance Metric | |||||||
| Number of secured loans at period-end | 675 | 963 | (288) | (29.9%) | |||
Interest income for the nine months ended March 31, 2024 increased $1.4 million, or 19.1%, to $8.4 million from $7.1 million in 2023. The increase in interest income earned from the segment’s secured loan portfolio was primarily due to an increase in interest rates and higher average monthly loan balances, partially offset by fewer loans outstanding. The number of secured loans outstanding decreased by 288, or 29.9% to 675 from 963 as of March 31, 2023.
Interest Expense — Secured Lending
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Three Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of interestincome | $ | % of interestincome | $ | % | |
| Interest expense | $(2,061) | (68.563%) | $(1,971) | (79.284%) | $90 | 4.6% |
Interest expense for the three months ended March 31, 2024 increased $0.1 million, or 4.6%, to $2.1 million from $2.0 million in 2023. The change in interest expense was not significant.
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Nine Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of interestincome | $ | % of interestincome | $ | % | |
| Interest expense | $(6,434) | (76.250%) | $(5,887) | (83.079%) | $547 | 9.3% |
Interest expense for the nine months ended March 31, 2024 increased $0.5 million, or 9.3%, to $6.4 million from $5.9 million in 2023. The increase in interest expense was primarily due to (i) an increase of $2.6 million associated with our Trading Credit Facility due to an increase in interest rates as well as increased borrowings, partially offset by (ii) a decrease of $1.7 million related to the AMCF
Notes (including amortization of debt issuance costs) due to the repayment in December 2023 and (iii) a $0.3 million decrease in loan servicing fees.
Selling, General, and Administrative Expenses — Secured Lending
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Three Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of interestincome | $ | % of interestincome | $ | % | |
| Selling, general, and administrative expenses | $(393) | (13.074%) | $(513) | (20.636%) | $(120) | (23.4%) |
Selling, general, and administrative expenses for the three months ended March 31, 2024 decreased $0.1 million, or 23.4%, to $0.4 million from $0.5 million in 2023. The change in selling, general, and administrative expenses was not significant.
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Nine Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of interestincome | $ | % of interestincome | $ | % | |
| Selling, general, and administrative expenses | $(1,160) | (13.747%) | $(1,436) | (20.265%) | $(276) | (19.2%) |
Selling, general, and administrative expenses for the nine months ended March 31, 2024 decreased $0.3 million, or 19.2%, to $1.2 million from $1.4 million in 2023. The change in selling, general, and administrative expenses was not significant.
Other Income, Net — Secured Lending
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Three Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of interestincome | $ | % of interestincome | $ | % | |
| Other income, net | $318 | 10.579% | $605 | 24.336% | $(287) | (47.4%) |
Other income, net for the three months ended March 31, 2024 decreased $0.3 million, or 47.4%, to $0.3 million from $0.6 million in 2023 primarily due to lower royalties earned.
| in thousands | ||||||
|---|---|---|---|---|---|---|
| Nine Months Ended March 31, · 2024 · 2023 · Change | ||||||
| $ | % of interestincome | $ | % of interestincome | $ | % | |
| Other income, net | $864 | 10.239% | $1,907 | 26.912% | $(1,043) | (54.7%) |
Other income, net for the nine months ended March 31, 2024 decreased $1.0 million, or 54.7%, to $0.9 million from $1.9 million in 2023 primarily due to lower royalties earned.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.