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A-Mark Precious Metals Shares Rise on Record Yearly Earnings, Issues Special Dividend

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A-Mark Precious Metals shares traded 22% higher after the firm announced FY/20 financial results that included a 96% YoY increase in Q4/20 revenue and a special dividend of $1.50 per share.

Full-service precious metals trading company A-Mark Precious Metals Inc. (AMRK:NASDAQ) yesterday announced financial results for the fiscal fourth quarter and full year ended June 30, 2020.

The company reported that in Q4/20 total revenues increased 96% to $1.67 billion, compared to $850.2 million in Q4/19. A-Mark Precious Metals indicated that the year-over-year increase was primarily attributed to an increase in the total amount of gold and silver ounces sold and higher gold and silver market selling prices.

The firm stated that gross profit increased 335% to $28.0 million in Q4/20, compared to $6.5 million in Q4/19 and noted that the increase was from higher gross profits from its Wholesale Trading & Ancillary Services and Direct Sales segments.

For Q4/20, the company posted net income of $17.8 million or $2.49 per diluted share, which it commented was a significant improvement from the net loss of $823,000 or $0.12 loss per diluted share that it reported in Q4/19.

A-Mark reported that gold ounces sold in Q4/20 increased 91% to 669 Koz, up from 350 Koz in Q4/19, and 508 Koz in Q3/20. In addition, silver ounces sold in Q4/20 increased 136% to 29.6 Moz, up from 12.5 Moz in Q4/19, and 25.7 Moz in Q3/20.

The company that reported that FY/20 total revenues increased by 14% to $5.46 billion, compared to $4.78 billion for FY/19. The firm stated that the increase was largely due to an increase in volume of gold and silver ounces sold and higher price for gold and silver.

A-Mark indicated that gross profit for FY/20 increased 110% to $67.0 million, up from $32.0 million for FY/19 and that the increase was mostly due to higher gross profits achieved by its Wholesale Trading & Ancillary Services and Direct Sales segments.

The firm posted net income of $30.5 million or $4.31 per diluted share for FY/20, which it stated was a significant improvement versus net income of $2.2 million or $0.31 per diluted share for FY/19.

The company's CEO Greg Roberts commented, "The fourth quarter was a period 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 $28.0 million as well as a 58% increase in net income to $17.8 million or $2.49 per diluted share compared with our third quarter. The record financial results we realized for both Q4 and fiscal 2020 resulted in Return on Equity of 17.6% for the quarter and 30.2% for the fiscal year and demonstrate the attractiveness of our business model, which is designed to generate continuing revenue streams in normal market conditions and outsized profitability during volatile market periods."

"The strategic investments we've made over the last several years to expand capacity and operational capabilities have ideally positioned A-Mark to continue capitalizing on the current market conditions while increasing our market share and driving growth over the long term...We believe our strong competitive position, robust platform, expanding customer base and diversified business model will help drive growth and profitability in the years ahead," Roberts added.

The company mentioned that its Board of Directors has approved a special $1.50 per common share dividend that will be paid on or around September 25, 2020, to shareholders of record as of September 21, 2020.

A-Mark Precious Metals is a full-service precious metals trading company headquartered in El Segundo, Calif. The firm conducts operation as an active gold, silver, platinum and palladium bullion and related products wholesaler. The company noted that it has "its global customer base includes sovereign and private mints, manufacturers and fabricators, refiners, dealers, financial institutions, industrial users, investors, collectors, and e-commerce and other retail customers." The firm's business is divided into three main segments: Direct Sales, Secured Lending and Wholesale Trading & Ancillary Services.

The firm noted that it is a U.S. Mint-authorized purchaser of gold, silver and platinum coins and therefore it is licensed to purchase bullion products directly from the U.S. Mint for sale to customers. A-Mark advised that it also has similar agreements with other sovereign mints in Australia, Austria, Canada, China, Mexico, South Africa and the U.K.

A-Mark Precious Metals started the day with a market capitalization of around $183.2 million with approximately 7.031 million shares outstanding. AMRK shares opened 15% higher today at $30.01 (+$3.95, +15.16%) over yesterday's $26.06 closing price and reached a new 52-week high price this morning of $32.56. The stock has traded today between $29.50 and $32.56 per share and is currently trading at $32.30 (+$6.25, +23.96%).


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