A-Mark Precious Metals Reports Preliminary Q4 and Full Year 2024 Results
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A-Mark Precious Metals Announces Preliminary Fiscal Fourth Quarter and Full Year 2024 Results
A-Mark Reports $9.7 Billion in Revenue for Fiscal Year 2024
A-Mark Precious Metals, Inc. (NASDAQ: AMRK), a leading fully integrated precious metals platform, has announced its preliminary financial results for the fourth quarter and the full fiscal year ending June 30, 2024. The company reported impressive total revenues of $9.7 billion for the year. Additionally, the diluted earnings per share stood at $2.75, though when adjusted to exclude an estimated remeasurement gain of $14.4 million, the diluted earnings per share came to $2.15. This strong performance underscores A-Mark’s ability to navigate challenging market conditions while continuing to generate significant revenue and maintain profitability.
Fiscal Year 2024 Financial and Operational Highlights
- Total Revenue: A-Mark achieved $9.7 billion in total revenue for the fiscal year, reflecting the company’s robust market presence and effective business strategies.
- Diluted Earnings Per Share: The company reported diluted earnings per share of $2.75 for the year. Excluding the estimated remeasurement gain, this figure is $2.15.
- Quarterly Cash Dividend: A-Mark reaffirmed its regular quarterly cash dividend of $0.20 per share, continuing its commitment to delivering value to shareholders.
- Credit Facility Expansion: A-Mark amended its credit facility, increasing the revolving commitment to $422.5 million, demonstrating the company’s strong financial position and strategic financial management.
The company’s financial stability is further highlighted by the amendment to its credit facility, which has increased the revolving commitment to $422.5 million. This expansion allows A-Mark to continue investing in growth opportunities and to better manage its working capital requirements.
Management Insights on Performance and Strategy
In his commentary on the fiscal year 2024 results, A-Mark’s CEO Greg Roberts emphasized the company’s resilience and adaptability in a challenging economic environment. Roberts noted that, “Despite less favorable macroeconomic conditions and a softened demand compared with the previous fiscal year, A-Mark successfully delivered preliminary earnings of $2.75 per diluted share and generated $104.2 million in preliminary non-GAAP EBITDA.” The company's strategic focus on maintaining a fully integrated platform has allowed it to continue performing well even during periods of slower market activity.
Excluding the estimated remeasurement gain related to the acquisition of a controlling interest in Silver Gold Bull (SGB), A-Mark’s diluted earnings per share were $2.15, and its preliminary non-GAAP EBITDA was $89.9 million. Roberts also highlighted the significant benefits of A-Mark’s strategic investments, which resulted in the company ending the year with over 3 million Direct-to-Consumer customers.
Strategic Acquisitions and Expansions
During fiscal year 2024, A-Mark made substantial progress in its international growth strategy. The acquisition of LPM Group Limited (LPM) and the increased investment in SGB, a leading online precious metals retailer in Canada, were key milestones. These acquisitions not only expanded A-Mark’s market reach but also enhanced its operational capabilities. The company also augmented its asset portfolio through JM Bullion’s acquisition of the gold.com domain, further strengthening its online presence and brand value.
Additionally, A-Mark repaid its Notes Payable from the $100 million Asset-Backed Securitization and amended its Trading Credit Facility, which resulted in increased liquidity. This financial maneuvering has positioned A-Mark to continue its strategic growth while maintaining a strong balance sheet.
Looking Ahead: Plans for Fiscal 2025
As A-Mark looks forward to fiscal year 2025, the company is focused on evaluating new opportunities to further expand its market reach and enhance shareholder value. Among the key initiatives is the advancement of logistics automation at the A-Mark Global Logistics (AMGL) facility in Las Vegas. This automation is expected to support increased volume while lowering operational costs, thus improving overall efficiency.
Moreover, A-Mark is developing plans to broaden its reach in Asia, with efforts underway to establish a trading hub in Singapore. This expansion into Asia is a strategic move to tap into one of the world’s fastest-growing markets for precious metals. Roberts expressed optimism about the future, stating, “We remain confident that our proven business model will allow us to sustain profitability and generate long-term value for our shareholders.”
Fiscal Fourth Quarter 2024: Detailed Performance Review
Financial Performance Overview
A-Mark reported revenues of $2.52 billion for the fiscal fourth quarter of 2024, representing a 19% decrease compared to $3.12 billion in the same quarter the previous year. This decline was primarily due to a decrease in the volumes of gold and silver ounces sold. Despite this, A-Mark achieved a 23% increase in gross profit from the previous quarter, reaching $43.0 million. The diluted earnings per share for the quarter stood at $1.20, a 30% decrease from the $1.71 reported in the same quarter last year. Excluding the impact of the estimated preliminary remeasurement gain, the diluted earnings per share for the quarter was $0.60.
Operational Highlights
- Gold Ounces Sold: A-Mark sold 448,000 ounces of gold during the quarter, marking a 45% decline from the same period last year but a slight increase from the previous quarter.
- Silver Ounces Sold: The company sold 25.4 million ounces of silver, a 44% decrease year-over-year.
- Direct-to-Consumer New Customers: The number of new Direct-to-Consumer customers surged by 530% to 570,300, largely driven by the acquisition of a controlling interest in SGB.
These figures reflect both the challenges and successes of A-Mark’s operations during the fourth quarter. The significant increase in new Direct-to-Consumer customers is particularly noteworthy and highlights the effectiveness of A-Mark’s recent acquisitions and customer acquisition strategies.
Fiscal Full Year 2024: Comprehensive Operational Summary
Key Metrics and Insights
- Gold Ounces Sold: Over the full fiscal year, A-Mark sold 1,839,000 ounces of gold, representing a 31% decrease compared to the previous year.
- Silver Ounces Sold: Silver sales also decreased by 31%, with a total of 108.1 million ounces sold.
- Direct-to-Consumer New Customers: The company saw a 114% increase in new Direct-to-Consumer customers, bringing the total to 718,500 for the year.
- Gross Profit: A-Mark’s gross profit for the year was $173.3 million, a 41% decrease from the previous year.
Despite the decreases in gold and silver sales, A-Mark’s strategic acquisitions, such as SGB and LPM, have significantly strengthened the company’s position in the market. The increased customer base and enhanced operational capabilities underscore the company’s resilience and its ability to adapt to changing market conditions.
Financial Summary for the Fiscal Year
Revenue and Profit Margins
A-Mark’s total revenue for fiscal year 2024 increased by 4% to $9.70 billion from $9.29 billion in the prior year. However, the gross profit margin decreased to 1.79% of revenue, down from 3.17% in the previous year. This decline in profit margin is primarily due to lower gross profits earned from both the Wholesale Sales & Ancillary Services and Direct-to-Consumer segments.
Net Income and Earnings Per Share
Net income attributable to A-Mark for the fiscal year was $66.2 million, a 58% decrease from the $156.4 million reported in the previous year. The diluted earnings per share for the year totaled $2.75, down 57% from $6.34 in fiscal year 2023. Excluding the impact of the remeasurement gain, diluted earnings per share for fiscal year 2024 were $2.15.
EBITDA and Adjusted Net Income
EBITDA for fiscal year 2024 totaled $104.2 million, a significant decrease of 54% compared to $225.0 million in the prior year. The adjusted net income for the year was $80.3 million, down 63% from $216.0 million in the previous year. These decreases were primarily driven by lower net income before provision for income taxes, as well as higher interest expenses.
Quarterly Cash Dividend Policy
A-Mark’s Board of Directors has reaffirmed the company’s regular quarterly cash dividend policy, maintaining a dividend of $0.20 per common share, which equates to $0.80 per share on an annual basis. The most recent dividend was paid on July 31, 2024, to stockholders of record as of July 18, 2024. It is expected that the next quarterly dividend will be paid in October 2024. The declaration of future dividends will be subject to the Board’s quarterly determination based on several factors, including the company’s financial performance, cash resources, and applicable bank covenants.
Conference Call Information
To discuss these financial results, A-Mark’s management hosted a conference call on August 29, 2024, at 4:30 p.m. Eastern Time. The call included a detailed presentation of the financial results, followed by a question-and-answer session. The call was also broadcast live and is available for replay through September 12, 2024.
About A-Mark Precious Metals
Founded in 1965, A-Mark Precious Metals, Inc. is a leading, fully integrated precious metals platform that offers a wide array of gold, silver, platinum, palladium, and copper bullion, as well as numismatic coins and related products. A-Mark caters to a broad customer base, including wholesale and retail customers, through a diversified portfolio of channels.
A-Mark operates its business through three complementary segments:
- Wholesale Sales & Ancillary Services: A-Mark distributes
and purchases precious metal products from sovereign and private mints globally. As a U.S. Mint-authorized purchaser of gold, silver, and platinum coins since 1986, A-Mark has long-standing relationships with several sovereign mints, including those in Australia, Austria, Canada, China, Mexico, South Africa, and the United Kingdom.
Direct-to-Consumer: A-Mark operates as an omni-channel retailer of precious metals, offering products through its wholly-owned subsidiaries, including JM Bullion and Goldline. The company’s Direct-to-Consumer segment includes several e-commerce platforms, such as JMBullion.com, ProvidentMetals.com, and Silver.com, which serve specific niches within the precious metals market.
Secured Lending: Through its subsidiary Collateral Finance Corporation (CFC), A-Mark provides loans secured by bullion and numismatic coins. This segment caters to coin and precious metal dealers, investors, and collectors.
A-Mark is headquartered in El Segundo, California, and has additional offices and facilities in Los Angeles, Dallas, Las Vegas, Winchester, Vienna, and Hong Kong. The company is known for its comprehensive range of services, including managed storage options for precious metals, secure handling, inventory management, packaging, and shipping.
A-Mark continues to expand its global footprint, driven by a commitment to innovation and excellence in the precious metals industry. With a proven business model and a strong track record of performance, A-Mark is well-positioned to continue delivering value to its shareholders in the years to come.
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