Good afternoon and welcome to A-Mark Precious Metals Conference Call for the Fiscal Second Quarter 2016 ended December 31, 2015. My name is Manny and I will be your operator this afternoon. Earlier today A-Mark issued the results of its fiscal second quarter 2016 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 a link to the Investor Relations section at the bottom of the homepage. Joining us on today's call, are A-Mark's CEO, Mr. Greg Roberts, COO, Mr. Thor Gjerdrum and CFO, Mr. Cary Dickson. Following their remarks, we will open up the call to your questions. Then before we conclude today's call, I'll provide the necessary cautions regarding the forward-looking statements made by the management during this call. I would now like to remind everyone that this call will be recorded and it will be made available for replay via a link available on the Investor Relations section of the Company's Web site. Now, I would like to turn the call over to A-Mark's CEO, Mr. Greg Roberts. Sir, please proceed.

Thank you, Manny and welcome everyone. Thank you for joining us today. The results of our fiscal second quarter of 2016 were in line with our expectations. As we discussed on our last call, the second quarter has historically been a slower period of the fiscal year for us in terms of customer demand. This is why we encourage investors to take a more long-term view, when evaluating the performance of our business. Focusing on just the second quarter for right now, the slower period we experienced was reflected by a 42% reduction in trading ticket volume compared to that of the previous quarter. Revenue was down slightly compared to the same year ago quarter, largely due to the lower average spot prices for gold and silver, which was offset by greater ounce volumes. Our gross margin experienced some compression which was due to a less favorable product mix that we believe to be largely temporarily. Offsetting the typically slow quarter was a record number of shipments made from our new Las Vegas logistics facility. Our financing subsidiary CFC also serviced a record number of loans reflecting the growing number of borrowers in the marketplace seeking alternative financing. During the quarter, we also strengthened our management team with the addition of Cary Dickson, as our new CFO. Cary has a deep understanding of consumer products gained from his tenure at Mattel Toys. He also brings a tremendous level of financial and capital market experience which will help us in our strategic initiatives to drive growth, profitable growth. Before I discuss more about our operational results and business outlook for the rest of the fiscal year, I'd like our COO, Thor Gjerdrum to walk us through the financial details for the quarter and six months ended December 31, 2015. Thor? Hello?

Excuse me, I apologize. I got mute I will start over I apologize. Thank you, Greg and good afternoon everyone. Thank you. Looking at our financial results for the fiscal second quarter ended December 31, 2015 revenue totaled 1.53 billion which is down 1% from 1.54 billion in the same year ago quarter. This was driven primarily by an 8% decline in the average spot price for gold and a 10% decline in the average spot price for silver. The revenue decrease was partially offset by the increase in the total amount of gold ounces and silver ounces sold. The 26% increase in gold ounces sold and 27% increase in silver ounces sold during the quarter was driven by demand for our industrial products. Our gross profit decreased 21% to 5.7 million or 37 basis points -- or 0.3% of revenue from 7.2 million or 0.47% of revenue in the same year ago quarter. The decrease in gross profit was primarily due to a higher percentage of sales of our industrial products which carry a lower margin. Also gross profit margin decreased due to lower premium spreads on our primary coin and bar products, coupled with lower volatility and demand for precious metals. Altogether, these factors resulted in a tightening of trading spreads and lower yields. The 25% decrease in trading ticket volume during the quarter as compared to the same year ago period was primarily due to the unusually high volumes experienced in the prior quarter, as customer sold to their substantial inventory positions acquired in Q1 fiscal 2016. SG&A expenses for the second quarter of fiscal 2016 totaled 4.5 million, this was down 5% from 4.8 million in the same year ago quarter. The decrease was due to lower performance-based compensation accruals offset by increased operational cost related…

Thank you, Thor. When we reported the strong uptick in revenue and net income for the first quarter, we reminded everyone do not lose sight of the fact that our second quarter is traditionally a slower period for us. And as it turned out this year's quarter was no different. While there was some volatility in the equity markets during our second quarter this did not translate into a material increase in demand for Precious Metal. Where it typically occurs in the silver coin market this time of the year is many retail customers forgo the purchase of Previous Metal products with the current year date in favor of waiting to purchase those with new days. So we approached end of calendar 2015 many of our customers reduced their overall purchases of 2015 data products in anticipation of buying to 2016 product. There were also a few unusual factors that contributed to the relatively slow quarter. Concluding the fact our customer base reduced their purchasing due to excess inventory acquired during the previous quarter. Many of these customers were still adjusting to an over bad bought market during our fiscal Q2, and therefore for it didn’t drive the same level of demand as they had in prior quarters. In contrast our industrial customers ordered very high levels of silver and gold products in the second half of the quarter, this as the result of the unusually high consumer demand for product in the first quarter, which caused many of our Mint customers to increase their orders for industrial products in the second quarter. The Mint's operated at full capacity during Q2 producing finished product to fulfill back orders from Q1. As well as building new dated inventory for calendar 2016. So the severance means for us to catch up on…

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] And our first question is from Juan Molta of B. Riley. Please go ahead.

You made a comment Greg about the rise in the commodity prices so far this calendar year. Can you also comment on what you’re seeing in terms of volatility in premium spreads?

Generally we see a little more immediate reaction from our customers when we have a drop in price. Historically as prices rise the premiums tend to compress temporarily. And historically over the last couple of years, most rallies and particularly the price of gold they have been short lived and that’s been the goal has reacted negatively shortly thereafter. I think that we’re seeing a little bit different overall activity in the last few weeks in particular. If you look at since the end of 2015 calendar year gold is up almost $100 from December of last year. And it's been a fairly steady increase and it seems to us to be much healthier. And I think we look at it a little bit of coiled spring that’s kind of being compressed personally I feel that there is a lot more going on macro-economically today than maybe there was six months ago. In particular in Europe we feel that Europe is struggling the bank’s stock index over there of European banks is down significantly in the last six weeks. And I think that we see Europe as a fine opportunity for some increased activity in the next few months. We also look at $1,200 as a psychological barrier which we haven’t been able to get through in recent months. The macroeconomic conditions and the price above $1,200 we believe would bode very well. It's almost important to remember that a lot of our gold products are priced in percentages so a higher gold price reflects more dollars made per ounce by A-Mark as well as a number of our finance products are tied to value. So, we like volatility we also like long-term growth and a rise in the price of metals. And I think in just the last week or so we have started to see a significant increase in our activity. And one note from the data we look at and some of the information we can see there does appear to be a slight shift in the difference of gold buyers versus silver buyers and we’re seeing a little higher gold volume versus silver. And generally this is indicative of a more healthy buyer and a little more larger institutional or a larger level buyer that someone who is just buying silver. So I think there are particularly in the last couple of weeks with what we’ve seen in the U.S. equity markets, the Japanese market and the European market we’re very optimistic that we’re moving into a more active period.

And in regards to retail demand could we see based on what you’re seeing right now a retail demand as strong as we did in the summer of last year if these conditions in the market continue?

Well I think the first quarter of last -- our first quarter of fiscal year ’16 saw some unusual circumstances where you had a historically a very slow period in the summer coming off a previous year which was one of the slowest periods we’ve seen during the summer months. So you had a lack of supply naturally just due to those historical numbers. So you had a lack of ounces produced particularly in silver. And then you coupled that with in early July of last year you had a significant and sharp drop in the price of silver as well as both down to some very low numbers we haven’t seen for while. That created a very immediate response and disrupted the supply and demand equation so you saw some very from circumstances that created higher premiums as well as huge volumes which we saw in our Q1 results. I think what we're seeing today as we look at the market is that is a much different scenario you are seeing a sentiment due to higher Precious Metals you are seeing negative interest rates in Japan and you are seeing the prospects of either more fund of easing or possibly negative interest rates in Europe. These are things that are very positive for Precious Metals. So I think it's a complete shift from an environment for the last six months where you had the Fed raising rates and you had an anticipation that rates were going higher which could be negative for gold and particular and that's kind of reverse in the last few weeks. So I think it's the different animal but I think it's an I think that what we've historically seen when we see a fairly steady run up in the price of gold specifically is that A-Mark will see the reaction and the activity due to that move a little bit slower and it will take a little bit longer and then what we see more immediately when we have a significant drop in price. So that answers your question or should I be more specific.

And just a couple more of them and I'll jump off the queue. Regarding the industrial demand for the men’s events something that you expect will be more balanced in the third fiscal quarter and the March quarter?

Yes. I think that was again as I’d tried to explain earlier across a lot of our industrial customers the price of 400 ounce old bars or the price of industrial products had become fairly cheap compared to historical numbers and we saw a sharp in uptick in demand for large-large quantities of gold in large bars. That's a very as I've said that is a very low margin product for us you could look at it one of few ways I think you can look it that buying was because the demand was there in the first quarter and you had a lot of our customers kind of rebuilding their stock in that product or you could also look at it as when we started to sell larger quantities of large bar products it can also indicate a shift in sentiment where more institutional buyers of gold who aren’t buying one ounce gold coins they are buying 400 ounce gold bars that uptick in that specific products can also mean a little bit more activity in gold in general and that is what we think we're seeing right now so it's kind of a combination I believe of industrial customers who may believe that the price is moving higher as well as Mint's or other people are breaking large bars down into smaller fabricated products.

Okay, got it. And then my last question is regarding the question products are there any programs specifically about make you a little more excited for the balance of the year?

I think we've got three or four really cool products that we are working on so far initial orders and initial demand for those products new orders have been and we believe that these products continue to offer an opportunity of A-Mark to take market share and to grow this segment of our business so we're very happy with that and we are going to continue to develop those products over the next two to three quarters and try to increase our suite of unique product.

Okay. Can you mention what products those are right now or is that something that you won’t talk about today? [Multiple Speakers]

When we are ready to announce then we will announce them.

Thank you. [Operator Instructions] Thank you and the next question is from Robert Maltbie of Singular Research. Please go ahead.

Hi I wanted to ask you if regarding the interest income I saw that was up there very nicely firstly what is the trend there the outlook for the next 12 months or so as a contributor to your revenue line and then also I don’t know if you do this but can you provide any type of color to your segment breakout between your various lines be it industrial, logistics, warehousing and custom products?

Let me start with the interest income, there is -- we do differentiate in our 10-Q, our collateralized loan book as well as the number of loans that we currently have and we're very enthusiastic about this part of our business and if you just look at the numbers and you kind of get to that area of the Q, our loan book has grown significantly in the last 12 months and has picked up even stronger in the last three to six months and the number of loans, the loan value, the quality of the loans, and we are very enthusiastic about and we believe that this is an area that we've talked about in the past that is one of our ancillary products that is a higher margin product that helps our trading desk, it helps our storage business, it helps our logistics business and it's a very-very fast growing part of our business. And we've focused specifically on marketing this product and we were out there aggressively pricing to get loans we've a nice program in place right now where we have the third-party is creating some loans and then we're actually buying those loan that loan portfolio which is helping us to grow the overall book but I see that as we're very excited and enthusiastic this quarter about that the numbers are quite impressive and looking out as we've discussed before growing some of these steady everyday income producing businesses will be great to grow our core business and take a little bit of volatility and changes off of our core products or our trading desk. As far as the segment reporting Thor, Cary, do you guys want to answer that question, I know we don't generally break that out.

Yes, first of all we're single segment reporters for SEC reporting purposes and so when you talk about things like industrial [indiscernible] those are more specifically what we call our product types and we don't typically provide a breakdown of those so Greg and I'll say the interest income, we actually said, rather the interest income as I reported it has an interest income line and consists of the CFC and the finance product such as repo that we have on the A-Mark side of business. So, it's not a revenue line, the interest is separately captured as aligning them on the face of the face of the financials and Greg so there is some details about both throughout our Q but in regards to the product types we don’t typically provide breakdowns in that regard.

Okay. This is a follow-up question to that, regarding the interest in the leverage for the secured loan business can you provide some type of color asking the clientele and maybe any concentrated exposures to now-a-days everybody is worried about [Multiple Speakers].

Sure, our loan business is very unique and let me break it into two pieces CFC, all the CFC loans are fully secured and subject to margin call. So for example the bullion loans that we make to clients we are physically holding the gold and silver in an armored and shared facility, so we perfect our security interest through physical possession and as well as filing a UCC, and should the value of metal shift we have the right to margin call our customers and so as LTVs fall, we will actually put our customers in a margin call. On the A-Mark side all of the things we do there are subject to margin call or they are fully hedged financing instruments. So they are either fully hedged so that there is no market risk or they are subject to margin call and we margin call customers based on the closing spot price daily. So all those positions are tightly managed and fully secured at all times.

Great, and Greg I think, you mentioned the negative interests and the volatility that was kind of towards the equity market quite a challenging quarter, and obviously Japan just went negative and may not be too much longer before a part of Europe goes as well and you know, maybe even at some point here in the U.S. just depending. I'm just wondering what type of flow through you are seeing now in business volumes how it's been impacted by these trends and maybe I don't know if you would have type of forecast based on a scenario of a more negative interest rates?

I think looking out the next two to three years a negative interest rate environment or a lower interest rate environment, if you look back to 2008-2009 was very-very active for you. You had -- I was watching something this morning on CNBC, nobody is saying that there is another housing bubble out there or there is another banking crisis. But I was very surprised as I looked at the overall index of foreign banks there is an ETF for that now I think it's down almost 20% for the year. And you have somebody like Deutsche Bank who is kind of a defector of Central Bank of Germany and its -- they’re not painting a rosy picture right now as it relates to their capital reserves or their outlook and their stock too is down significantly. We feel we’re fully prepared for any kind of crisis in Europe and we believe that we’re set up pretty good for a -- if there is a problem over there. We’re kind of getting the best of both worlds right now and if interest rates were to become significantly higher and if there was inflation that would be good for our business. I think that what you’re seeing in Japan and what you’re seeing with this just inability to get the markets going and get the economies going is also good for us in general when gold is very cheap to hold and you have volatility in neither the euro or the yen or the dollar. Gold is a very safe currency and gold tends to hold its value very well. So, if you’re talking about paying a bank to hold your money and you don’t know for sure how that bank is going to perform gold is a very good alternative. So that’s good for us. To what extent and how it's going to affect our specific numbers and our ounce count and everything else that would not be good for us to speculate on right now. But I think we’re definitely checking the boxes right now. There is definitely good things on the precious metals side of the ledger and we’re looking forward to the next six to 12 months.

And finally when you think of A-Mark and the positioning overall and the secular upside speaking of so called market share, wallet share what have you. In terms of looking at that and the various products that contribute to that like the loans, the warehousing and the various customized products. Your path or your trajectory the long-term set for growth rate there based on current saturation levels over the course of the next several years. Can you give us any color on that on what you might expect, or have goals for?

I’ll go back to what we’ve said in the past. Our job is to build capacity and to build distribution and to make sure we have bank lines in place that we have storage facilities to store metal that we have the logistic capability of getting that metal delivered to customers efficiently. I think everything we’re doing is setting up for capacity to be able to take advantage of opportunities and imbalances in our market from a supply and demand standpoint. And I believe that today A-Mark is better positioned than we were in just September of last year we had a tremendous quarter in our Q1 but we also love some money on the table. There was still some business to be done in the last couple of weeks of September that we didn’t have quite enough capacity to do it. I think if circumstances were to repeat themselves exactly the same today I think we’ve built more capacity in the last six months. So I believe we would take advantage of those opportunities. And when we have product or we have capacity or we have lending capabilities that our competitors don’t in times of tight supply or in times of lack of liquidity A-Mark’s capacity and ability to write this business really allows us to take market share and to grow the business and that’s what we’re trying to do that’s been our kind of model and philosophy for the last couple of years. And I am very -- we’re very optimistic and very satisfied that we have greater capacity than anything we did six months ago, a year ago, two years ago. So we’re just trying to position ourselves because it's impossible to predict what’s going to happen tomorrow. We don’t know what’s going to happen in a lot of different areas that affect our market, the price of gold, supply and demand. But as long as we’re able to build capacity and we’re able to grow what we’re doing, it's good for us. We accomplished a lot in the second quarter. As we’ve said we increased our investment and one of our strategic partners. We believe they’re on track and they’re growing from a distribution standpoint. We’re actively growing our credit facility and we’re growing our lines of credit, so that we have liquidity when gold is $1,400 or whether gold is at $1,100 we want to make sure that we have the capacity to do the business and we’ve worked on that and then through our logistics and storage facility we have really built a machine that can get product delivered almost anywhere in the world so we’re very enthusiastic about that.

Thank you. Another question is from the line of Juan Molta from B. Riley. Please go ahead.

Can you provide an update as what you are seeing regarding sovereign Mint allocations I find news on the U.S. but not so much on the others?

Thor?

The Mint's continue to be on the allocation as you can [indiscernible] that U.S. Mint side that is generally the case with the others.

But it sounds like you guys are confident regarding the supply you can acquire for any type of rising demand that is unexpected?

I think we've taken some steps over the last six months and the last three months in particular to ensure that our allocation and pipeline of gold and silver products is at a greater capacity than it was six months ago.

Thank you. [Operator Instructions] Okay everyone it appears we have no further questions at this time. I would like to turn it back over to management for any additional comments.

Thanks to everyone for joining us today. I want to thank our investors for their continued support as we continue to build A-Mark into the global leader in precious metals trading. We look forward to updating you on our next call, operator?