A-Mark Precious Metals, Inc. (NASDAQ:AMRK) Q4 2020 Earnings Conference Call - Final Transcript

Sep 10, 2020 • 04:30 pm ET


A-Mark Precious Metals, Inc. (NASDAQ:AMRK) Q4 2020 Earnings Conference Call - Final Transcript


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Good afternoon, and welcome to A-Mark Precious Metals Conference Call for the Fiscal Fourth Quarter and Full Year ended June 30, 2020. My name is Devin, and I will be your operator this afternoon. Before this call, A-Mark issued its results for the fourth quarter and full year 2020 in a press release, which is available in the Investor Relations section of the company's Web site at www.amark.com. You can find the link in the Investor Relations section at the top of the Home page.

Joining us for the call today are A-Mark's CEO, Greg Roberts; President, Thor Gjerdrum; and CFO, Kathleen Simpson-Taylor. Following their remarks, we will open the call to your questions. Then, before we conclude the call, I'll provide the necessary cautions regarding the forward-looking statements made by management during this call. I would like to remind everyone that this call is being recorded and will be available for replay via a link available in the Investor Relations section of A-Mark's Web site.

Now, I would like to turn the call over to A-Mark's CEO, Mr. Greg Roberts. Sir, please go ahead.

Gregory N. Roberts

Thanks, Devin and good afternoon to everybody. Thank you for joining our fiscal fourth quarter and full year 2020 earnings call. I want to take a moment to thank our employees and our shareholders for their support in what has been historically a challenging year. The fourth quarter capped-off a truly record year for A-Mark both from a financial results and operational efficiency standpoint.

Following the global macroeconomic events in mid-March that spurred the unprecedented volatility in the precious metals market, A-Mark's fiscal fourth quarter was characterized by sustained and heightened demand and related product volumes. This consistency helped to drive sequential improvements in our key financial metrics, including a 25% increase in gross profit to $28 million and a 58% increase in net income to $17.8 million or $2.49 per diluted share for the quarter. And full year, our net income of $30.5 million or $4.31 per diluted share.

Putting it altogether, we produced a company-wide return on equity of 18% for Q4 and 30% for the fiscal year. These figures and metrics not only demonstrate the scalability of our platform but also the incredible demand for our physical products, which increased significantly during the second half of fiscal 2020. They also reflect the attractiveness of our business model which is structured to generate continuing revenue streams in normal market conditions and outsized profitability during volatile market periods which we experienced in Q3 and Q4.

A real differentiator for A-Mark is our ecosystem of synergistic turn key solutions, which has allowed us to capture significant value across the precious metals market and enabled us to more effectively take advantage of supply constraints and volatile market conditions, like those we witnessed in the second half of the year. The strategic investments we've made over the last several years to expand capacity and operational capabilities have ideally positioned A-Mark to continue to capitalize on the current market