A-Mark Precious Metals Inc (AMRK) 2020 Q3 法說會逐字稿

Good afternoon, and welcome to A-Mark Precious Metals Conference Call for the Fiscal Third Quarter ended March 31, 2020. My name is Ali, and I will be your operator this afternoon.

Before this call, A-Mark issued its results for the fiscal third quarter 2020 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 in the Investor Relations section at the top of the Home page.

Joining us for today's call are A-Mark's CEO, Greg Roberts; and President, Thor Gjerdrum; and CFO, Kathleen Simpson-Taylor. Following their remarks, we will open your call to the 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 this call is being recorded and will be made available for replay via a link available in the Investor Relations section of A-Mark's website.

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

Thank you, Ali, and good afternoon to everyone. Thank you for joining our fiscal third quarter 2000 (sic) [2020] earnings call.

Before we get into the business review, I would like to take a minute to express our sincere condolences as well as send our support to all of those who have been directly or indirectly impacted by the ongoing global pandemic. I think it's fair to say that nearly everyone has been affected in some way by the current environment. We are thankful for the frontline workers and health care providers for their dedication and sacrifice during this challenging time.

A-Mark and its subsidiaries have continued to operate effectively and at full capacity despite the unprecedented global slowdown caused by the pandemic. To safeguard our employees, we have instituted appropriate social distancing guidelines and practices, including work-from-home policies. We have suspended all nonessential business travel and implemented health screenings and taken sanitation measures. We are grateful to all of our employees for their dedication and commitment to our business during this time.

I am further encouraged to report that all of our business units, including trading, CFC, minting and logistics are operated at full capacity while adhering to state and federal government guidelines. This would not have been possible without our team's unwavering dedication as well as A-Mark's best-in-class technical innovation, which has allowed us to quickly and effectively adapt to the changing work structure.

I want to start with a few general thoughts about our results this quarter. Since A-Mark was spun off as an independent company, we have been profitable in all but 4 quarters. As you know, A-Mark tends to be more profitable in times of volatility, which is often generated by macroeconomic events. One of those events and the resulting volatility occurred this quarter, the key components of A-Mark, which we have assembled along the value chain, including our valued employees and customers work together to deliver outstanding result. Not everything worked perfectly, and like most businesses, we did encounter some challenges in this quarter, particularly with our secured lending segment. But overall, we were successful in delivering product and support to our customers and in generating outstanding financial results for our shareholders.

Our record financial results and operational performance in the third quarter not only demonstrate the scalability of our platform, but also the incredible demand for our physical products, which increased significantly during the quarter. The recent macroeconomic events have created significant demand, related supply constraints and unprecedented volatility, which have increased trading spreads in the precious metals market.

As I've discussed on prior calls, we have strategically structured our business model to maintain a baseline of profitability irrespective of the market conditions, but with the flexibility to adapt and capitalize on upside opportunities during periods of market volatility like we've experienced in this fiscal Q3. $22.5 million in gross profit and $11.3 million in net income we realized during the quarter exemplifies our business model. In fact, Q3's net income level was higher than any fiscal full year period since A-Mark became a publicly traded company in 2014.

Before I talk about our segment performance and outlook, I'll now turn the call over to our CFO, Kathleen Simpson-Taylor, to provide more details on the financials for the quarter and 9-month period. Kathleen, please take over.

Thank you, Greg, and good afternoon to everyone. Our revenues for fiscal Q3 2020 decreased 1% to $1.26 billion from $1.27 billion in Q3 of last year. For the 9-month period, our revenues decreased 4% to $3.8 billion from $3.93 billion in the same year ago period. The decrease in revenues for both the quarter and the 9-month period was mainly due to lower forward sales, offset by an increase in the total amount of gold and silver ounces sold and higher selling prices of gold and silver.

Gross profit for fiscal Q3 2020 increased 158% to $22.5 million or 1.79% of revenue from $8.7 million or 0.69% of revenue in Q3 of last year. For the 9-month period, gross profit increased 53% to $39 million or 1.03% of revenue from $25.5 million or 0.65% of revenue in the same year ago period. This increase for Q3 and 9-month period was due to higher gross profits earned by our wholesale trading and ancillary services and direct sales segment, and was driven primarily by significantly wider trading spreads as a result of increased demand and higher trading profits.

Looking at our expenses. SG&A expenses for fiscal Q3 2020 increased 26% to $10.4 million from $8.3 million in Q3 of last year. The increase was primarily due to increases in performance-based compensation accruals of $2.3 million and depreciation expense of $0.3 million, which were partially offset by decreases in consulting expenses of $0.1 million and operating expenses of $0.5 million associated with our direct sales segment.

For the first 9 months of the fiscal year, SG&A expenses increased 10% to $26.5 million from $24.1 million in the same year ago period. The increase was primarily due to increases in performance-based compensation accruals of $2.8 million and depreciation expense of $0.3 million, which were partially offset by decreases in consulting expenses of $0.2 million and operating expenses of $0.6 million associated with our direct sales segment.

Interest income for fiscal Q3 2020 increased 24% to $6 million from $4.8 million in Q3 of last year. For the 9-month period, interest income increased 28% to $18 million from $14 million in the same year ago period. The aggregate increase in interest income for both the third quarter and 9-month period was primarily due to higher interest income from our secured lending segment and other finance product income.

Interest expense for fiscal Q3 2020 increased 19% to $5.1 million from $4.2 million in Q3 of last year. The increase in interest expense was primarily related to our notes payable, liabilities on borrowed metals, product financing arrangements and loan servicing fees, which were partially offset by a reduction in interest expense related to our trading credit facilities.

Interest expense for the 9-month period increased 23% to $15.3 million from $12.4 million in the same year ago period. The increase in interest expense was primarily related to our notes payable, which became effective in September 2018, our liabilities on borrowed metals, product financing arrangements, loan servicing fees and trading credit facilities, partially offset by a reduction in interest expense related to the Goldline credit facility, which we paid off in December 2018.

Net income for the third quarter of fiscal 2020 totaled $11.3 million or $1.61 per diluted share. This was a significant improvement compared to net income of $990,000 or $0.14 per diluted share in Q3 of last year.

Our income tax expense for the third quarter of 2020 was $1.8 million compared to $0.4 million in fiscal Q3 last year. Our effective tax rate was 13.5% and 29.5% for the 3 months ended March 31, 2020, and 2019, respectively. The decrease in our effective tax rate was primarily due to the tax rate benefit of the carryback of our fiscal 2019 and 2018 net operating losses.

For the 9-month period, net income totaled $12.7 million or $1.80 per diluted share. This compares to net income of $3 million or $0.43 per diluted share in the same year ago period. Our income tax expense was $2.4 million and $1.1 million for the 9 months ended March 31, 2020, and 2019, respectively. Our effective tax rate was 15.2% and 27% for the 9 months ended March 31, 2020, and 2019, respectively. The difference in the effective tax rate was mainly due to the reason I previously mentioned.

Turning to our balance sheet. At quarter end, we had $95.5 million of cash compared to $8.3 million at the end of fiscal year 2019, $66 million of our cash balance at quarter end represented collateral for our asset-backed securitization. Our tangible net worth at the end of the quarter was $72.3 million, up from $57.8 million at the end of fiscal year 2019. Also, during the quarter, we renewed our existing $270 million credit facility, which consists of a $220 million revolving credit facility and a $5 million accordion feature.

This completes my financial summary. Now I would like to turn the call over to Thor, who will provide an update on our key performance metrics. Thor?

Thank you, Kathleen. Our key operational measures were strong across the board in the third quarter for the first 9 months of fiscal 2020. Let's look at it in more detail. We sold 508,000 ounces of gold in Q3, which was up 19% from prior quarter and up 7% from Q3 of last year. For the 9-month period, we sold 1.5 million ounces of gold, which was up 4% from the same period last year. On average, the selling price for gold for both the 3-month and 9-month period increased by 21% compared to the same period last year.

It was a particularly strong quarter in terms of silver sales in which we sold 25.7 million ounces in Q2, up 82% from the prior quarter and up 54% from Q3 of last year. The average selling price for silver during the quarter increased just over 2%. For the 9-month period, we sold 60.7 million ounces of silver, which is up 10% from the same period last year. The average selling price of silver for the 9-month period increased by 10%. It is important to understand these recent market conditions result in an expansion of premium spreads, which produced higher gross profit and gross profit percentages in the quarter.

Talking about our financial review, the gross profit percentage increased from 0.69% in Q3 of fiscal 2019 to 1.79% in Q3 of fiscal 2020. These improved results relate primarily to the premiums earned over the stock prices. The recent division highlights our profit potential during periods of volatility where the prices are trending higher or lower.

In terms of wholesale trading ticket volume, which represents the total number of product orders processed at our trading desk, we saw a 59% increase of 48,689 tickets from the prior quarter and increased 57% from Q3 of last year. For the first 9 months of fiscal 2020, trading ticket volume was up 20% to 115,491 to 95,986 last year. The increase in our trading ticket volume is indicative of the increased trading activity due to greater utilization of our trading portal and the higher demand we experienced in fiscal Q3 2020.

The third key metric we closely evaluate is inventory turnover defined as the cost of sales divided by the average inventory during the relevant period. Inventory turnover is a measure of how quickly inventory has moved during the period. In the third quarter, our inventory turn ratio was 3.7%, which is up 12% from 3.3% in the prior quarter and down 20% from 4.6% in Q3 of last year. For the first 9 months of fiscal 2020, our inventory turnover ratio was 10.6% compared with 14.2% last year. The decrease in our inventory turnover rate for the quarter and year-to-date ruling was primarily due to lower volumes of ounces sold on forward contracts compared to the same period last year.

Finally, the number of secured loans at the end of the quarter totaled 429, which is down 88% from the prior quarter and down 83% from Q3 of last year. The dollar value of our loan portfolio totaled $49.6 million, which was down 67% from the prior quarter and down 55% from Q3 of last year. Typically, the number of loans increase during periods of rising precious metals prices and decrease during periods of declining precious metals prices. Numerous CFC loans were paid off during the quarter, and the market experienced a rapid material drop in precious metals prices, primarily in silver. Our system is controlled, operating effectively, and we did not incur any related loan losses.

That concludes my prepared remarks. I'll now turn it back over to Greg to talk about the progress we've been making on our key operational initiatives. Greg?

Thank you, Thor. Our record financial performance and uninterrupted operational execution in Q3 is the direct result of the investments we have made over the years to increase capacity and operational capabilities. We benefited greatly not only from our expanded trading team, but also our 24/7 online portal, which allowed us to receive orders from approved customers, even when many major world commodity markets are closed. As I mentioned in my opening remarks, our team's commitment and effective contingency planning that allowed -- has allowed us to maintain uninterrupted services to all of our customers throughout these unprecedented times. This included keeping our logistics services operational and functioning effectively despite the many challenges in meeting the unprecedented levels of demand. We also benefited greatly in the quarter from our majority stake in the SilverTowne Mint, which provided us with greater price stability as well as access to silver products, even when supplies in the market were scarce.

Our retail segment also experienced increased levels of demand, and the cost optimization measures and strategies we implemented earlier in the year helped to drive profitability in the quarter. This performance gives us continued optimism about this segment's long-term potential.

Looking ahead, our strategy remains unchanged. We're focused on driving profitable growth through increasing the volume of our business, expanding our geographic presence and leveraging technology to further our competitive advantages. With one of the most expansive product and service offerings in the industry, we believe we are well positioned to continue to capitalize on the current market conditions while continuing to increase market share and drive growth over the long term.

Ali, please provide the appropriate instructions for the Q&A.

(Operator Instructions) And we'll take our first question from Chris Sakai from Singular Research.

Greg and Thor, I just had a question on -- I mean if you could shed some light, I know you might have mentioned it, the secured loans, the decrease there. What was going on there in the quarter?

Yes. Well, as we've said, it was a result of a flash crash in the price of silver. And if you go back, there was a day, a Monday, back in March, where we had silver touch $12 an ounce. And as always, when the price of silver goes down dramatically in a very short period of time, we have -- the result is, is that the collateral was less and the loans need to be paid off or there needs to be new collateral or more collateral brought in. And in this case, the price drop happened pretty dramatically on a very -- within a few hours, and we were -- we lost quite a few loans.

Okay. Also, I just wanted to sort of get the guys feeling going into April and May. I wanted to see how you -- how is the market for you guys now?

The market continues to be active. As you know, the overall market in equities has risen dramatically in the last 30 days, and that has certainly caused the demand to weaken a little bit on our side. I would say that the first 2 weeks of April had been quite good, and we are -- we have seen a little bit of a slowdown in the last few weeks. But it's a very fluid situation, and it would be -- I don't want to put too much emphasis on which direction things are going other than our business is strong and things continue to operate as we would like them to. And I believe that right now, the world seems to be indicating that there's a lot of uncertainty going forward, and that is generally good for us.

And we'll take our next question from Jayme Wiggins from Palm Valley Capital.

Greg, if you could go over that ScotiaMocatta was planning to shut down. And I believe there's still on the authorized purchase to move. So do you expect that closure, if that is true information, to have a beneficial impact on your business?

I think there's going to be pluses and minuses to us. I think when a bank, the size of Scotia, gets out of the market, there's going to be some negative effects on liquidity in the market, and that's likely to increase some of the spreads. The spreads are probably going to widen. They're not the only ones. There's been a couple of others that have announced they're going to cut back on their precious metals. So that's probably the negative.

On the plus side, I think we do. We have historically competed a little bit with Scotia in a couple of our products, so that could be a benefit to us. As well as there's a number of very talented people on that team, and there's a possibility that we might be able to pick up some talent if it becomes available. So they don't directly compete with us or we're not a direct customer of Scotia, so I would say we don't see a major issue either way.

Okay. And I had another question about the loan book. I understand kind of the pandemic, just how long this quarter, but you guys had an experience. I think it was back in 2015 where you had a drop. It wasn't nearly as sharp as what happened this quarter. But how did they work as far as those borrowers and their likelihood of coming back to you? Have you had any progress just in the short period since the decline to start to rebuild? How does that typically work?

Yes. I mean you hit the nail on the head. I would say that this situation is very similar to what happened in '16 in almost all aspects. You had a drop in price. As it relates to A-Mark's performance, you had a situation where we had our ABS, and we had just closed our ABS. So we did have cash in the ABS as collateral as a replacement for the loans, and that did have a negative impact then. It will have a negative impact now. I think that the environment is significantly different today than it was back then.

The environment today is lending itself much more to existing precious metals buyers purchasing more as well as new buyers coming into the marketplace. We've seen a significant material increase at Goldline, our retail segment, of new players and new customers coming into the market that we've never talked to you before as well as our retail online investments that we have. Those businesses have also seen a dramatic increase in new customers. So I would -- and we have seen those loans start to come back in over the last 4 weeks. So we have had a fairly good pickup with new loans. So I do think that we'll see the loan book grow again, and I believe that it's -- we're very optimistic about building that book back up.

Okay. And on the equity investments, can you remind us, is there any lag effect what you report in equity income or what we see in that line item, if that would happen over the 3 months period?

What you see in that line item is 30 days delayed. So it actually -- what you're seeing in this quarter is reflecting -- I guess, it would be January -- I mean, December, January and February. These results do not reflect that minority interest in March.

Okay. Great. And then just one more. You made a couple of references to Goldline. Just a minute ago, you said that you've seen a lot of new buyers. I think in the prepared remarks, you indicated it was profitable, but I couldn't tell if you were kind of tempering how profitable it was? Obviously, this was a very, very strong quarter for demand, and you guys did incredibly well. But given the fact that demand was so healthy this quarter, when you look at Goldline over an entire cycle, do you still feel like you can make money, you can make that profitable over the whole cycle?

I mean I think we've done a lot of hard work on that investment, and I think that we are currently -- we haven't sized, I believe, the leadership there and everybody that's involved and have been involved in turning it around. They've done a great job. I think we feel better than ever about the model, and I think that we're continuing to look for ways to improve it and take advantage of these market conditions as well as the market conditions. If things go back to normal and things slow down, I think we're well positioned either way. Just like A-Mark and our different -- our other segments, an environment like what we've had in the last 4 to 6 weeks is going to be better for all of our segments.

This quarter reflects all of them working together, but we're -- and you'll be able to see in our Q. You'll see the Goldline numbers broken out, and you'll be able to see them year-over-year, and the improvement has been fairly dramatic. So -- and we -- I think more than anything, this quarter really kind of highlighted that the changes we've made to the Goldline model and what we're doing as it relates to marketing and what we're doing as it relates to our retail gross margin that we have brought down over the last 1.5 years that Goldline really would able to take advantage where it had product at very favorable prices, that its competitors may not have been as fortunate. So I think we're very enthusiastic right now about that segment.

(Operator Instructions) And we'll take our next question from [Richard Grelic] from RED Capital Advisors.

So I understand your business a little better. If I remember right, at the last call, the SilverTowne Mint was operating at only a fraction of its capacity. Has that changed?

Yes, significantly. I can...

Can you...

Go ahead.

Could you give a ballpark estimate of what is the capacity, whether it's in production numbers or something like that?

I would say that the capacity on the top end is about 24 million ounces a year based on our current configuration. Now we are looking to increase that. I believe on the last call, we were in the range of about 16 million ounces a year, and I believe the quarter -- the last quarter was about 4 million ounces. So we...

I'm sorry, what? I'm sorry to interrupt you. So the last quarter, the 16 million was the capacity number, and the production was about 4 million?

No, no. We had been running at about $4 million -- I'm sorry, we had been running at about 175,000 ounces a week, and we're currently running at about 500,000 ounces a week.

Okay. Now if was -- are you able to capture much of that premium over spot that exists right now in the -- either the rounds or the bullion or the coins?

I mean you can tell from our results that our premium is certainly expanded. But as it relates to what portion of the retail markup we're getting, that would depend on whether it's a Goldline sale or it's a retailer that we have an equity interest in. So -- but we certainly are getting more for SilverTowne product and pretty much all of our products today as it relates to premium than we were getting 3 months ago.

If I recall, the premium on products was increasing, but it really didn't increase a lot until about mid-March in which the premium almost doubled.

Your first quarter results only were able to capture a fraction of that over the full quarter.

I mean I would answer it. Yes, you are correct that the premiums on silver products were much higher in the last few weeks of March than they were in the first few weeks of January, although the premiums in January did start to increase. If you go back to the comment I made, I believe, I was asked the question -- this question on the last call. And if you recall, I made mention of the fact that we did see some increases in January due to the conflicts with Iraq and the situation there. And that -- so this increase in premium and this increase in volume did start in January. But you would be correct in the action really started getting going in the middle of March. And if you go back to, particularly the Sunday night, where equities -- where oil first started to break down and equities had the major drop off, that Sunday night in March was the prelude to the Monday, the next Monday, where we had the big drop in silver that caused the loss of the loans. So that action really did take place in the middle of March, which was beneficial for us.

Now when I go on the SilverTowne retail website right now, it suggests that any orders may take as long as 6 months to fill. And in fact, you're out of stock of a lot of orders, but you've ramped up production quite a bit.

That's not really a fair comparison. There is a company that we've purchased the SilverTowne Mint from, and that company is SilverTowne LLP. And they operate a TV show, and they operate a website. That company is not affiliated other than a minority ownership interest in the SilverTowne Mint. So what you're looking at is a retailer under the name of SilverTowne, but not the SilverTowne Mint. That's not the case as it relates to -- if our customers are buying SilverTowne products right now for either -- depending on the product, it could be immediate delivery or it could be 2 to 3 weeks.

And I just had a curiosity. Again, I'm not that familiar with the operations of the company, but with the reduction of loans, did that come about because the customer paid off the loan? Or did you simply take the collateral and extinguish net retention?

In general, our remedy after a margin call is either to get more collateral from the customer to get cash from the customer or to liquidate the loan through a margin call, not dissimilar to what would happen in a margin account with equities. So in this case, I would say there was a higher percentage of liquidations just because of the fact that there was so much going on, and we were -- it was a fairly -- all markets were in kind of a crisis or a bit of a meltdown. So because of the severity of it, I would say a higher percentage of these loans were liquidated than maybe they were either -- they were -- the margin call was to fill with cash or more collateral.

And we'll take our next question from Mitch Almy from Wedbush Securities.

Needless to say, fantastic quarter. Help me understand the supply of coins because I know that they're going to need in which you buy gets sold out from time to time and how that plays into, I guess, business this quarter and going forward.

It is certainly a factor. If you're talking about the sovereign mints, the sovereign mints had -- they've been shut down off and on for the last 6 weeks. So the supply of both gold and silver from the major sovereign mints has been interrupted by just not being open or not being able to strike material. So specifically, the U.S. mint in West Point, New York has been off and on, open or closed for the last 6 -- 5 or 6 weeks. The Royal Canadian Mint also has been interrupted, and their product flow has been either 0 or has been on allocation or very limited supply, and that's just something we've had to work through.

The other almost historical event, and mostly it never happened before, but the supply of gold bars into the COMEX exchange as well as getting gold to the sovereign mints for them to use to strike coin had some major disruptions. And the spreads and the premiums and the backwardation on gold, which if you can go back in research, has been historical numbers off and on for the last 4 or 5 weeks. So you've had a combination of refiners shutting down in Switzerland and Europe because of the COVID-19. You've had delivery problems to fulfill short futures contracts, and you've had an inability for sovereign mints to get silver and gold through their facilities as well as keep their employees safe and keep them open. So from our perspective, we've been fortunate.

As we've talked about in the past, this situation, we've talked about many times, in the times of disruption, the SilverTowne Mint has been able to keep applying us with product and has been has been able to pivot quickly to products that we need and products that we can supply to our customers, and they've done a great job of building that. We don't strike gold at the SilverTowne Mint. So gold premiums have been up there, and we've been somewhat reliant upon third parties to dig gold supplies. But certainly, on the silver side, we've been the beneficiary of their ability to ramp up very quickly and get us more silver for our traders.

In sort of a related question, I understand you can't give us direct guidance and there's a lot of moving parts out there. In general, do we look at supply disruptions and mints being sold out and going to the websites of retailers and seeing them out of stock, is that -- that's a positive for your business because what you're going to -- my assumption would be the premiums would grow as the supply gets constricted. Would that be the right way to look at it?

Yes. But as you said, there's many components to it. And the perfect storm sometimes can turn into not a storm at all, and it can be negative. I think that you hit on the points that go into how we price and what the supply and demand is. But as delivery times and extend out into the future and as premiums rise, that has a significant negative effect on demand because customers just aren't willing to, A, pay the premium, and they're not really willing to put their money up to lock in a position if they can't get the physical metal fairly quickly.

And then remember from just some of the online retailers that had been mentioned that we talked about before out there, they've created a business model where most of their customers are used to placing an order, sending their money and getting delivery of their product within 2 or 3 days. That has become a very efficient, very cost-effective way for a retail customer to buy small amounts of precious metals, whether it be $1,000 or $10,000. Once those premiums increase and once those delivery times push farther and farther forward and that there's uncertainty as to exactly what that product is going to be, you're going to see the growth stunted a little bit and you're going to see the demand spending.

And I would say that those are just many challenges that we deal with here trying to price accordingly, trying to make sure we have plenty of product to deliver and just to make sure that we are doing everything we can to keep our logistics open and in place and our supply chain of metal in place because a sovereign mint can break down in a number of ways. They can break down in the striking process. They can break down in the logistics of shipping the material out, and they can break down in the raw bars that are being supplied to them, not being able to get to them efficiently. So you have a lot of components in your question. So far, everything has worked well for A-Mark, and we've been able to take our advantage in the marketplace and we've been able to keep a lot of customers happy.

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

Thank you, Ali. Thank you, everyone, for joining us on our call today. Thank you for your continued support and confidence in our mission. We wish all of you the best in these difficult times and have a great afternoon. Thank you.

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 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. Future events, risks and uncertainties individually or are aggregate could cause actual results to differ materially from those expressed or implied in those statements.

Factors that could cause actual results to differ include the following: the failure to execute the company's growth strategy as planned; greater-than-anticipated costs incurred to execute this strategy; changes in the current domestic and international political climate; increased competition for A-Mark's higher-margin services, which depressed pricing; the failure of the company's business model to respond to changes in the market environment as anticipated; general risks of doing business in the commodity markets; and other businesses, economics, financial and the governmental risks as described in the company's public filings with the Securities and Exchange Commission. The words should, believe, estimate, expect, intend, anticipate, foresee, plan and similar expressions and variations thereof identify such forward-looking statements, which speak only as of the date on which they were made.

Additionally, any statements related to future improved performance and estimates of revenues and earnings per share are forward-looking statements. The company undertakes no obligation to publicly update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements.

Finally, I would like to remind everyone that the recording of today's call will be available for replay via the link in the Investors section of the company website. Thank you for joining us for A-Mark's earnings call. You may now disconnect.