Good afternoon and welcome to the A-Mark Precious Metals Conference Call for the Fiscal Third Quarter ended March 31st, 2024. My name is Matthew, and I will be your operator this afternoon. Before this call, A-Mark issued its results for the fiscal third quarter 2024 in a press release, which is available in the Investor Relations' section of the company's website at www.amark.com. You can find the link to the Investor Relations' section at the top of the home page. Joining us for today's call 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'd like to remind everyone that this call is being recorded, and we will be made available for replay via a link available in the Investor Relations' section of A-Mark's website. Now, I'd like to turn the call over to A-Mark's CEO, Mr. Greg Roberts. Sir, please proceed.

Thank you, Matthew, and good afternoon, everyone. Thanks for joining our call today. Our third quarter results continue to demonstrate the ability of our fully-integrated platform to generate profitable results even in a difficult market environment. During the quarter, we faced a combination of softened demand, premium compression, and elevated gold and silver prices, which led our traditional buyers to become sellers and provided us with an opportunity to purchase more inventory. Despite the challenging environment, we delivered $0.21 per diluted share and generated $12.6 million in non-GAAP EBITDA, including one-time acquisition costs of $2.2 million. We also increased the direct-to-consumer number of new customers by an impressive 8% compared to last quarter. Consistent with our commitment to generate shareholder value, the company also repurchased a total of 204,396 shares of our common stock for $5 million during the quarter. As previously announced, we completed the acquisition of LPM Group Limited in February 2024 and have substantially completed the integration of LPM's business and operations with A-Mark. LPM now has enhanced access to supplementary products and capital through A-Mark to broaden their offerings and to promote future growth. Key technology upgrades have also been added to enhance LPM's logistics capabilities and to fully integrate LPM into AMGL's fulfillment and shipping system. JMB has also collaborated closely with LPM to develop processes aimed at enhancing expanding LPM's e-commerce footprint. I'm happy to report that a month and a half or so into this, we are very pleased with the results we have seen. We also continue to advance our logistics automation initiatives at our A-Mark Global Logistics, or AMGL facility in Las Vegas. These initiatives are designed to enhance our operational efficiency, enabling us to effectively manage a larger number of SKUs as well as increased volume, taking in and shipping out more packages all the while minimizing operational costs. Now, I will turn the call over to our CFO, Kathleen Simpson Taylor, who will provide a more detailed overview of our financial performance. Then our President, Thor Gjerdrum will discuss our key operating metrics. Finally, I will provide further insight into our business and growth strategy and happily take all of your questions. Kathleen?

Thank you, Greg, and good afternoon everyone. Our revenues for fiscal Q3 2024 increased 13% to $2.611 billion from $2.317 billion in Q3 of last year. Excluding an increase of $622.1 million of forward sales, our revenues decreased $328.6 million or 20%, which was due to a decrease in gold and silver ounces sold, partially offset by higher average selling prices of gold and silver. The DTC segment contributed 13% and 23% of the consolidated revenue in the fiscal third quarter of 2024 and 2023, respectively. Revenue contributed by JMB represented 12% of the consolidated revenues for Q3 of 2024 compared to 20% in Q3 of last year. For the nine-month period, our revenues increased 16% to $7.174 billion from $6.167 billion in the same year ago period. Excluding an increase of $1.514 billion of forward sales, revenues decreased $506.9 million or 11%, which was due to a decrease in gold and silver ounces sold, partially offset by higher average selling prices of gold and silver. The DTC segment contributed 14% and 23% of the consolidated revenue for the nine months ended March 31st, 2024 and 2023, respectively. Revenue contributed by JMB represented 13% of the consolidated revenues for the nine months ended March 31st, 2024 compared with 21% in the same year ago period. Gross profit for fiscal Q3 2024 decreased 54% to $34.8 million or 1.33% of revenue from $75.5 million or 3.26% of revenue in Q3 of last year. The decrease in gross profit was due to lower gross profits earned from both the wholesale sales and ancillary services and DTC segment. Gross profit contributed by the DTC segment represented 52% of the consolidated gross profit in fiscal Q3 2024 compared to 57% in the same year ago period. Gross profit contributed by JMB represented 45% of…

Thank you, Kathleen. Looking at our key operating metrics for the third quarter of fiscal 2024. We sold 446,000 ounces of gold in Q3 fiscal 2024, which was down 32% from Q3 of last year and down 1% from the prior quarter. For the nine-month period, we sold 1.4 million ounces of gold, which is down 25% from the same year ago period. We sold 25.7 million ounces of silver in Q3 fiscal 2024, which was down 30% from Q3 of last year and down 3% from last quarter. For the nine-month period, we sold 82.7 million ounces of silver, which is down 26% from the same year ago period. The number of new customers in the DTC segment, which is defined as the number of customers that have registered to set up a new account or made a purchase for the first time during the period was 56,600 in Q3 fiscal 2024, which was down 13% from Q3 of last year, but increased 8% from last quarter. For the nine-month period, the number of new customers in the DTC segment was 148,200, which is down 40% from 244,900 new customers in the same year ago period. The number of total customers in the DTC segment at the end of the third quarter was approximately 2.5 million, which was an 11% increase from the prior year. The year-over-year increase in total customers was due to organic growth of our JMB customer base as well as from acquired customer list. The DTC segment average order value, which represents the average dollar value of products ordered excluding accumulation program orders delivered to DTC segment customers during Q3 fiscal 2024 was $2,133, which was down 13% from Q3 fiscal 2023 and down 4% from the prior quarter. For the nine-month period, our DTC average order value was $2,253 which was down 6% from the same year ago period. For the fiscal third quarter, our inventory turn ratio was 2.3, which is a 4% decrease from 2.4% in Q3 of last year and a 21% increase from 1.9% in the prior quarter. For the nine-month period, our inventory turnover ratio was 6.8%, a 3% decrease from 7.0% in the same year ago period. Finally, the number of secured loans at the end of March totaled $675 million, a decrease of 30% from March 31st, 2023, and a decrease of 6% from the end of December. While the number of secured loans decreased, our secured loan receivable balance increased over the same period, bringing the value of our loan portfolio as of March 31st, 2024, to $115.6 million, a 19% increase from March 31, 2023, and a 9% increase from December 31, 2023. That concludes my prepared remarks. I'll now turn it over to Greg for his closing remarks. Greg?

Thank you, Thor and Kathleen. We've made significant strides in our M&A growth strategy with our expansion into Asia through our acquisition of LPM. We are enthusiastic about the opportunities in the Asian market and continue to explore prospects to further expand our geographic presence and market reach that will create synergies with A-Mark's fully integrated platform, including our reliable access to supply, successful logistics footprint, and strong customer relationships. Our commitment to generating stockholder value remains firm, and we are confident in A-Mark's diversified and proven business model. That concludes my prepared remarks. Matthew?

Thank you. Everyone at this time, we'll be conducting a question-and-answer session. [Operator Instructions] Your first question is coming from Mike Baker from D.A. Davidson. Your line is live.

Hey thanks guys. Just wondering if you could talk about what do you think -- what in this environment caused the compression in the spreads to happen so much in the calendar first quarter? And can you talk about maybe what you saw throughout the quarter by month? Did it get worse as the month as the quarter went on? Did it get better? Any early thoughts on the fourth quarter, the calendar second quarter in terms of the spreads?

Sure. Yes. I mean I would start with just saying that probably the single biggest headwind for this particular quarter was a record number of days in the quarter that we saw all-time record prices in gold in particular. And I think it's important to note in our press release, we described a little bit that a lot of our customers that buy new product from us turned into sellers to A-Mark. And I think it's important to note that A-Mark is really the terminal physical metals destination for wholesale products seeking liquidity. And I think we have done a very good job in the quarter of balancing what we're buying back from the wholesale marketplace versus what we're selling. And I think our management of our inventory has been a key component of what we worked on in the quarter and we balanced our inventory. We balanced our purchases and sales. And we also rotated out of inventory, which I mentioned last call, when we rotated out of inventory that we didn't feel gave us enough upside if the market was to turn around, and we liquidated that and we've held on to inventory on products that we think give us more opportunity. I can say that since probably January and February and most of March, we have started to see a shift and a reduction from what we're buying off of the wholesale market or buying back from customers versus what we're selling. So, we have seen a bit of a shift there. And I think it's important to remember that there are generations of people whose grandparents or parents or even further back than that held gold for their family and that you've gone through a period where many of the long-term holders of physical metals have…

Well, thanks. Yes, that's consistent with some of the data that we track. If I could follow-up on one thing, and you sort of answered it there at the end where you said you were able to monetize positions that you've taken in the last six months. But can you just highlight or remind us all the products you were able to buy in the March quarter, how -- when -- how long does it take for that to usually flow through and ultimately presumably benefit you because of the inventory that you guys were able to take in?

Yes, it's not an exact science. I mean -- and it doesn't happen overnight. We balance opportunistic inventory purchases all the time. In very good markets, we pay a lot more and we pay higher premiums because we have confidence we're going to sell them and those opportunities that we take, they monetize over three to six months after we take the physicians. I think that we view a lot of times as inventory purchase opportunities as what I would call options or call options, which is more familiar to the financial sector, where we pay a price and a premium to take a position. Most of the time are opportunistic purchases that our trading teams make, they turn out to be profitable. Depending on how fast we sell them and how long we carry the product and how the carry builds up determines how profitable those trades are going to be. And like options, occasionally, we'll buy inventory, we'll pay a premium, and we will pay the carry and the trade doesn't work out. It happens all the time, not frequently, but it does happen. And I view that a little bit as an expiring option that people buy all the time, and they believe in something, they believe in a trade and sometimes the option expires and it's not worth anything. In our case, it's always worth the metal content, but we do sometimes lose on the premium, and that's just the nature of our business. We're doing that hundreds of times a month, and we're taking those positions, trying to use our history, use our DTC segment to be the -- to have the ability to take these positions and to move them is one of the great parts of our integrated business. And I can say…

Yes. Great. Makes sense. I appreciate all the color and time.

Sure.

Thank you. Your next question is coming from Lucas Pipes from B. Riley. Your line is live.

Thank you very much, operator. Good afternoon everyone. I'd like to understand the kind of lower gross margin during the quarter a little bit better. Is it primarily related to the premium? Or is there kind of operational leverage coming through from the lower volume side to, Greg, if you could help me understand that a bit bet and where you think those gross margins could revert to in the last fiscal quarter of the year and maybe next year? Would really appreciate any insights you could share. Thank you.

Yes, I think the gross margin percentage is a reflection of what it is in any business. It has to do with our cost of goods as well as our -- what we're able to sell material for. I think that my rather long explanation of what happened in the quarter really answers that question in that we have a fixed carry cost on our inventory that we book every month. And that carry is going to affect what the gross profit margin is. And we have to -- obviously, we have to achieve a profit over and above our carry cost. If premiums compress, and we're selling something at $1 premium that we've historically sold at $1.50 premium, the gross profit margin -- the gross profit in pure dollars is not only going to go down, but the gross profit percentage is going to be materially affected by that. I also think it's important to note that when we buy back product, we oftentimes have to sell that product, both at a wholesale level or at a retail level. So, when you look at our business and you look at the DTC contribution, it's difficult for an outsider to really see what percentage of our product is being sold wholesale and what percentage is being sold retail. As we all know, if we're selling a Silver Eagle on JM Bullion at $4.50 a premium over spot price, but we're selling that at a wholesale level at $3.50. The more points we can sell at JM Bullion, the better our overall gross profit is going to be any coins we don't have to wholesale, we're going to make more money on. And that's a balancing act for us when we manage our inventory all the time is what percentage of…

Thank you. And just a follow-up, can you expand on kind of those last four to five weeks, what do you think changed? Is it stronger demand, less supply? Just -- I know you commented earlier on it, too, but if you could maybe zero in on this, I would appreciate your insights?

I will say that there are probably 100 factors that go into answering the question. I'll try to hit on the most basic ones. If you see a high percentage of product being sold into the marketplace from retail investors who have stopped buying and have decided they're going to take their profits at these all-time record spot prices. There's a whole period of reckoning for that retail customer. And I think that we went through a period in January and February where a high percentage of retail customers felt like it had the last 10 years where gold tried to make a new high and then it didn't do it, and it fell back. I think you had a high percentage of retail customers selling back into the marketplace and monetizing, putting their money to work someplace else or just taking a profit, and you had a little bit of a herd mentality there. As gold continued to make new highs, what we've seen in the last five weeks is a reversal of that where you have not an increased demand, but you've had a similar demand, which had been going on in the last couple of months. But what you've seen is a drop in the buybacks or the wholesale purchases. And as the premiums have dropped over the last four months, -- it's just become less profitable for people to make product for sovereign mints to make product for private mints to make product. And so you're slowly seeing a little bit of a decrease in the supply side of the equation, and that's causing us to see some premium increases. And as I pointed to, the mint has been making the same amount of Silver Eagles and the allocation has been the same for the last five to six months. And what we've seen is premiums go up. So, you can't attribute that to much anything other than, as I said, buyers increasing their demand for Silver Eagles and sellers stop may be slowing down or not selling as many Silver Eagles goes into the marketplace. So, I think it's a number of things, but I think that's what we've really seen is we've seen a slight uptick in demand, particularly in the last few weeks of April, and we've seen less product that we're buying back from a wholesale standpoint.

That is very helpful. I appreciate that. Thank you, and best of luck.

Thank you.

Thank you. [Operator Instructions] Your next question is coming from Andrew Scutt from ROTH MKM. Your line is live.

Hey guys. Thank you for taking my question, Quick one for me. With kind of the market and the [Indiscernible] slower over the last few months, does that kind of open up a unique opportunity in M&A market -- and I mean, are you guys looking to be active? Sorry--

One word answer, yes. I can say that after we closed the LPM deal, I probably got five calls of opportunities on the M&A side. I think it's important for everybody to remember how much liquidity A-Mark has, whether it be our book value, whether it be our tangible net worth, whether it be our repo facilities, our lease lines, our dollar facilities. We have -- as I said before, we are the ultimate destination when people need to monetize inventory. But we also are in the market looking for more deals. And we don't have a tremendous amount of competition there. I think that, as I've said before, as things slow down, it becomes harder to compete with A-Mark. And I've talked to a number of people who are just interested in exploring whether or not in a slower market, they might be able to do better with A-Mark than competing with any market. And that could be on the DTC side, the wholesale side, the international side. We are really well-positioned, and I can -- I think that closing the LPM deal, as we talked about and as we did last quarter, we're very pleased with Charlie and his people in Hong Kong. We're looking at possible expansion in that region. We're taking some -- taking a good look at the Singapore region. And that -- this little bit slower market in the last six months. just opens up opportunities. And I think it gives us a little bit more leverage to negotiate a better deal than we're going to be able to do when the markets are screaming and everybody is making millions of dollars, and it just makes it harder to negotiate a deal. So, I think as I said in the last call, we're going…

Thanks. And great to hear. And actually, I have just one more for me. So, kind of in a rampant demand market, the mine, how you leverage those assets and you push out product. But can you maybe speak to when the market is acquired or how you're able to leverage these mints maybe in a different way?

Yes, I mean I think that both Sunshine and Silvertown are very adept and we've built businesses there that are able to switch products very quickly. We might be making 10 ounce silver bars one week, we might be making 100-ounce silver bars the next week. We can switch very quickly, and we're very good at that. And wherever the demand is at, we're going to fill it and we're going to fill it cheaper than anybody else. And that's what this vertically integrated model does. And we've seen that right now. Our ability to sell silver products through the DTC channel and our ability to make the products cheaper than most anybody is just part of our advantage. And we're always viewing what we're going to make next week, what we're going to make next month. And I think we're very good at that.

Great. Thanks again and I'll hop back in the queue.

Okay.

Thank you. [Operator Instructions] Your next question is coming from Greg Gibas from Northland Securities. Your line is live.

Hey good afternoon, Greg, Kathleen, Thor. Thanks for taking the question. I think you kind of fairly addressed what's kind of driving that softer demand in Q1 and nice to hear that it's picking up at least in April. So, kind of, wanted to direct my question. First on the follow-up on seeing pretty attractive M&A opportunities is what it sounds like. Congrats on the expansion into Asia with LPM. Just wondering maybe if you could address how you're evaluating those markets? Like are you seeing any more markets that are more favorable than others? And what kind of makes sense? Because it sounds like there's some attractive opportunities there?

Yes, I mean I think -- we look at -- we really look at M&A whether in three kind of sections, whether it be in our minting, whether it be in our wholesale trading or whether we see it in DTC. One thing about A-Mark, we have to be thoughtful as it relates to not focusing on any one part of that segment too much because the three segments can then get a little out of whack. So, I think LPM was a very intriguing opportunity for us because it combined retail in the region, along with a good deal of wholesale business. So, we kind of we kind of hit two areas there on that acquisition, which is good for us. At this point, we feel like our minting operations are able to keep up with demand. We're clearly expanding our logistics, which is also important that if we're selling -- we're shipping 50,000 packages one month, and we're going to ship 150,000 packages a year and a half from now because of our M&A growth in DTC. We need to balance and make sure that we can still handle all of the logistics side of things. So, I think we're -- right now, I can say that the areas that we see opportunity are focused on the wholesale and the DTC. And I think we're in a good position right now that we would take either, and it's just cutting the best deal and finding the best opportunity for us.

Perfect. Thanks. That's helpful. And I wanted to dive a little deeper. Greg, even though the challenging conditions to see the customer growth, I think, 80%. I think you talked about just kind of newer products or offerings that are attracting those customers. I'm curious what -- if you could maybe discuss a little bit more on what's kind of gaining traction with those new customers in terms of new product offerings or anything like that?

Yes. I mean I think if you register at the JM Bullion site, I think you'll see what we're offering. I think you'll see we run a Thursday special on products that we believe are going to attract and be interesting to our customer base as well as attract new customers. We've been doing that now for probably eight to 10 weeks, and it's been very beneficial for us. I think that we don't -- we move through old inventory that we've had. It's a good -- we use DTC to move through old inventory. We moved through new custom products. We had an opportunity with a Canadian company, Silvercrest Mines that we did a JV with them to create a one-ounce silver round and Silvercrest is a company in Mexico that has a single mine in Mexico, what I think to be a really good company that I talked to the principles there and the management there. And we sold a Silvercrest one ounce silver round that we developed for Silvercrest on JM Bolon right now. It's being offered, and it's a new product. We've never done a mine product before. Silvercrest bought a number of coins from A-Mark, which they're just carrying on their balance sheet for their business and for their shareholders if they want to ever distribute it. And that's something that we were able to whip up fairly quickly, and it was -- it went on sale last Thursday, and it's been very successful. We could do a sovereign product. We could do private men product. We try to vary what we're offering and then see how the customers respond.

Great. That's helpful. I guess last one for me, and sorry if you maybe already addressed this, I'm in jumping between a few calls. But Greg, I know you previously commented on Costco and how other kind of can be a benefit to the whole industry and just drive interest in new customers that haven't considered it before, just getting in front of a new audience. Just given it's kind of been in the news and there's been a lot of success with them selling them in stores. Curious if you have any updated thoughts on that, Greg, or if it's kind of the same?

I think it would be the same. I think any time you're introducing a new demographic or a new group of people to precious metals, that's ultimately going to be great for A-Mark. I understand that there's some numbers thrown out there that are -- seem very high to me. I've seen some members that are what I would say is very optimistic on sales just based on my position in the marketplace, and I feel like I touch a lot of transactions. I would say that it's good for the market. I think we are -- ultimately, as we -- our job is to attract customers -- retail customers to our DTC segment, the more customers that are out there that are googling buy silver or by gold or whatever they're googling, they're going to find our DTC brands. And our job is to make sure that we take care of them and we are the best company out there as it relates to customer service, whether we're there for liquidity if a customer wants to sell back their product. And if anybody wants us to do third-party shipping for them, we're very happy to do that also. We're there to see the market grow. And ultimately, I believe A-Mark will be one of the better bigger beneficiaries of an expanding market. So, I feel the same way I did last quarter.

Got it. Appreciate the thoughts Greg.

At this time, this concludes our question-and-answer session. I'd now like to turn the call back over to Mr. Roberts for his closing remarks.

Thank you, everybody. Once again, I appreciate being on the call and supporting A-Mark and learning and understanding what we're doing here and to all the employees of A-Mark around the world, I appreciate what they're doing. And again, thanks, everybody for their support. Have a great rest of the day.

Before we conclude today's call, I would like to provide A-Mark's Safe Harbor statement that includes important cautions regarding forward-looking statements made during this call. During today's call, there were forward-looking statements made regarding future events. Statements that relate to A-Mark's future plans, objectives, expectations, performance, events, and the like are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. These include statements regarding expectations with respect to the dividend declarations, the amount or timing of any future dividends, future macroeconomic conditions, and demand for precious metals products, and the company's ability to effectively respond to changing economic conditions. Future events, risks, and uncertainties individually or in the aggregate could cause actual results to differ materially from those expressed or implied in these statements. Factors that could cause actual results to differ include the following; the failure to execute the company's growth strategy, including the inability to identify suitable or available acquisition or investment opportunities; greater-than-anticipated costs incurred to execute the strategy; the inability to successfully integrate recently acquired businesses; changes in the current international political climate, which historically has favorably contributed to demand and volatility in the precious metal markets, but also poses certain risks and uncertainties for the company, particularly in recent periods; potential adverse effects of the current problems in the national and global supply chains; increased competition for the company's higher-margin services, which could depress pricing; the future -- the failure of the company's business model to respond to changes in the market environment as anticipated; changes in consumer demand and preferences for precious metal products generally -- potential negative effects that inflationary pressures may have on our businesses; the ability to companies to expand capacity at SilverTowne Mint; the failure of our investee companies to maintain or address the preference of their customer bases; general risks of doing business in the commodity markets; and the strategic business, economic, financial, political and governmental risks, and other risk factors described in the company's public filings with the Securities and Exchange Commission. The company undertakes no obligation to publicly update or revise any forward-looking statements. Listeners are cautioned not to place undue reliance on these forward-looking statements. Finally, I'd like to remind everyone that a recording of today's call will be available for replay via a link in the Investors' section of the company's website. Thank you for joining us today for A-Mark's earnings call. You may now disconnect.