A-Mark Precious Metals Inc (AMRK) 2020 Q2 法說會逐字稿

Good afternoon, and welcome to A-Mark Precious Metals conference call for the fiscal second quarter ended December 31, 2019.

My name is Rob, and I'll be your operator this afternoon.

Before this call, A-Mark issued its results for the fiscal second quarter 2020 in a press release, which is available on 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 would like to remind everyone that 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'd like to turn the call over to A-Mark's CEO, Mr. Greg Roberts.

Please go ahead.

Thank you, Rob, and good afternoon, everyone.

Thank you for joining our fiscal second quarter 2020 earnings call.

Q2 was highlighted by a double-digit growth in interest income and stabilized operating expenses, which helped to drive the second consecutive quarter of net income profitability.

This consistent performance is due to our diversified platform of products and services as well as the cost optimization measures we implemented last year.

One of the strong growth areas of our business is Secured Lending, which continued to perform well in the second quarter, as demonstrated by the record number of loans outstanding at quarter end, which was 93% year-over-year to a record 3,725.

Before I provide an update on our individual segments and outlook, I'll turn it over to our CFO, Kathleen Simpson-Taylor, who will walk you through our financial performance for the second quarter and 6 months ended December 31, 2019.

Kathleen?

Thank you, Greg, and good afternoon, everyone.

Our revenues for fiscal Q2 2020 decreased 4% to $1.06 billion from $1.1 billion in Q2 of last year.

The decrease in revenues was primarily due to lower forward sales and a decrease in the total amount of gold and silver ounces sold, offset by higher gold and silver prices.

For the 6-month period, our revenues decreased 5% to $2.54 billion from $2.67 billion in the same year ago period.

The decrease was primarily due to lower forward sales and lower silver ounces sold, offset by an increase in higher gold and silver prices and higher gold ounces sold.

Gross profit for fiscal Q2 2020 decreased 2% to $8.1 million or 0.8% of revenue from $8.3 million or 0.8% of revenue in Q2 of last year.

The decrease was primarily due to lower gross profit from the Wholesale Trading & Ancillary Services segment, offset by higher gross profit from the Direct Sales segment and higher trading profits.

For the 6-month period, gross profit decreased 2% to $16.5 million or 0.6% of revenue from $16.8 million or 0.6% of revenue in the same year ago period.

The decrease was primarily due to lower gross profit from the Wholesale Trading & Ancillary segment, offset by improved gross profit from the Direct Sales segment and higher trading profits.

Looking at our expenses.

SG&A expenses for fiscal Q2 2020 decreased 3% to $7.9 million from $8.1 million in Q2 of last year.

The decrease was primarily due to lower operating expenses incurred by the Direct Sales segment of $0.1 million, lower consulting expenses of $0.2 million and recoveries of insurance claims of $0.2 million, which were partially offset by increased overall compensation cost of $0.2 million.

The lower operating expenses incurred by the Direct Sales segment is inclusive of a $0.1 million nonrecurring severance charge.

For the first 6 months of the year, SG&A expenses increased 2% to $16.1 million from $15.8 million in the same year ago period.

The increase was primarily due to higher overall compensation cost of $0.3 million and deductibles on insurance claims of $0.2 million, which were partially offset by lower operating expenses incurred by the Direct Sales segment of $0.1 million and lower information technology costs of $0.2 million.

The lower operating expenses incurred by the Direct Sales segment is inclusive of a $0.1 million nonrecurring severance charge.

Interest income for fiscal Q2 2020 increased 34% to $6.2 million from $4.7 million in Q2 of last year.

The aggregate increase in interest income was primarily due to higher interest income from the Secured Lending segment and other finance product income.

For the 6-month period, interest income increased 30% to $12 million from $9.2 million in the same year ago period.

The aggregate increase in interest income was primarily due to interest income earned by the Secured Lending segment and other finance product income.

Interest expense for fiscal Q2 2020 increased 9% to $5.1 million from $4.7 million in Q2 last year.

The increase in interest expense was primarily due to the company's trading credit facility, product financing arrangements and loan servicing fees, which were partially offset by a reduction in interest expense related to liabilities on borrowed metals and the Goldline Credit Facility, which was paid off in full during the second quarter of fiscal year 2019.

Interest expense for the 6-month period increased 25% to $10.2 million from $8.2 million in the same year ago period.

The increase in interest expense was primarily related to our Trading Credit Facility, notes payable, product financing arrangements and loan servicing fees, partially offset by a reduction in interest expense related to liabilities on borrowed metals and the Goldline Credit Facility, which was paid off in Q2 of last year.

Net income for the second quarter of fiscal 2020 totaled $1.2 million or $0.17 per diluted share compared to net income of $577,000 or $0.08 per diluted share in Q2 of last year.

For the 6-month period, net income totaled $1.4 million or $0.19 per diluted share.

This compares to net income of $2.1 million or $0.29 per diluted share in the same year ago period.

Now looking at our balance sheet.

At quarter end, we had $11.6 million of cash compared to $8.3 million at the end of fiscal year 2019.

Our tangible net worth at the end of fiscal Q2 totaled $60.2 million, which compares to $57.8 million at the end of fiscal year 2019.

Also, as you may have seen from the 8-K we recently filed in mid-January, a new lender has been added to our credit facility, and the base amount of our facility has been increased from $210 million to $220 million.

That completes my financial summary.

Now I will call -- turn the call over to Thor, who will provide an update on our key performance metrics.

Thor?

Thanks, Kathleen.

Shifting gears to our operational metrics for the second quarter and 6 months of fiscal 2020.

We sold 428,000 ounces of gold in Q2, which is down 26% from the prior quarter and down 3% from Q2 of last year.

For the 6-month period, we sold 1 million ounces of gold, which was up 3% from the same period last year.

Turning to silver, we sold 14.1 million ounces in Q2, which was down 33% from the prior quarter and down 30% from Q2 of last year.

For the 6-month period, we sold 35 million ounces of silver, which is down 9% from the same period last year.

Wholesale trading ticket volume, our second metric, which represents the total number of product orders processed at our trading desks, decreased 16% to 30,554 tickets from the prior quarter and decreased 7% from Q2 of last year.

For the first 6 months of fiscal year, trading ticket volume was up 3% to 66,802 from 65,020 last year.

The third key metric we 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.

For the second quarter, our inventory turn was 3.3%, which is down 25% from 4.4% in the prior quarter and down 15% from 3.9% in Q2 of last year.

For the first 6 months of fiscal 2020, our inventory turn ratio was 9.1 compared to 9.5 last year.

Despite this quarter's moderate trading volumes and physical demand levels, quarterly net income represents our most profitable quarter since September of 2018.

And finally, the number of secured loans at the end of the quarter totaled 3,725, which is up 4% from the prior quarter and up 93% from Q2 of last year.

The dollar value of our loan portfolio totaled $152.3 million, which is up 1% from the prior quarter and up 45% from Q2 of last year.

That concludes my prepared remarks.

I 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.

As you can see from the financial results, A-Mark continues to benefit from its diversified platform and business model.

Consistent with our last quarter conference call, the strategic measures we implemented last year have increased the efficiency of A-Mark's overall operations while reducing some specific costs, enhancing the end customer experience and improving profitability at A-Mark Global Logistics.

In addition to our improved incremental financial performance, our team continues to pursue strategic initiatives to promote new business developments and identify additional revenue opportunities with our customers.

Our Secured Lending segment continues to stand out amongst our 3 segments.

Reflected by both the level of growth and profitability, it contributes to A-Mark's overall business.

We ended the second quarter with a record level of loans and overall portfolio, which exceeded $152 million.

In our retail segment, the metal buyback initiative we launched in July is performing well.

It is centered around technology and AMGL and provides a high-quality customer experience and is supported by our class-leading logistics.

We continue to invest in strategic growth areas to capitalize and further increase our market share within our industry.

We are focusing on expanding our Secured Lending segment to respond to favorable trends in the market as well as driving technology initiatives for increased operational and financial efficiencies across our business.

In summary, we're encouraged by our operational and financial performance in the second quarter and first half of fiscal 2020, giving the increased optimism about our prospects for the remainder of the year.

We believe our competitive position, robust platform, expanding customer base, diversified vertical business model and product offerings will continue to position us to drive growth and improve profitability.

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

(Operator Instructions)

Our first question comes from the line of Chris Sakai with Singular Research.

I just had a question on the Secured Lending portfolio, the loan growth, just wanted to kind of get a better understanding what's driving that growth.

Well, I think that we did have some increased precious metal prices which -- over the last 3 or 4 months.

So that's going to increase some activity as customers have the ability to borrow a little bit more against their portfolio or against their collateral if they choose to.

I think the other thing that we should keep in mind is that we had a big drop-off of loans about 15 months ago, which would have been in August or September of 2018, and we did have silver prices drop, which caused us to actually have to liquidate some loans.

And so the growth since then has been a little bit of catching back up as well as the volume and the pace of the loans has increased a little bit in our Q2 from what it was the previous quarter.

So I think it's just a combination of things.

But we're working very hard to promote this product and to originate loans as many loans as we can as well as some progress we've made on storage and different locations for storage, which just makes it a little bit easier for us to onboard loans.

Okay.

Great.

And then 1 question, I guess, it's in the current quarter.

But with all the stuff going on now with coronavirus, are you guys seeing increase -- an increase there in profitability?

I mean I think we're optimistic on this quarter.

Most of this particular crisis has occurred in January, so that would be in our Q3.

I think January benefited from 2 things.

At the very beginning of January, we saw some increased volatility and some increased activity due to the Iraq situation.

And then we did see for a few days -- last week and this week, we did see some sell-off in the equities markets due to the fear of the virus.

That fear appears to have abated because the equities have gone back to positive territory.

But certainly, January, we feel we benefited from some macro environment issues that were going on in January, which would not be reflected in this report.

(Operator Instructions)

Our next question is from the line of Rich Fearon with Accretive Capital Partners.

It's impressive to see the improvement in SG&A, and it sounds like there's still a little bit of noise in this past quarter with severance charge, is that fair to say?

Yes.

I mean we're still trying to size our retail Direct Sales segment properly.

I think we did -- there is some activity and noise, as you say, in this quarter that happened in November, where we did reduce some more SG&A., we did have another round of letting some people go that we didn't feel were long term productive for us or were going to be long-term positives.

So we've continued to weed out that portion of the SG&A.

And we're -- we did have a few other cost-cutting initiatives throughout the whole company that Kathleen has been spearheading, and she's been working hard on that, and we'll see some more of that activity this quarter.

So just trying to make sure we're careful about sizing the company, watching expenses that we can control.

We're very happy with our staff right now.

We're very happy with our team.

We feel like the team is well positioned long term, whether business continues to be challenging and a little bit slow as it has been in the last 12 to 18 months.

But also, we're very well positioned in the event that we get some tailwinds, and we need to manage increased volumes.

So for us, there's always a balancing act between the talent that we've invested in as well as expenses that we incur to continue to promote our brand and keep us able to handle increased volumes if they present themselves because it's very difficult for us to just flip a switch and turn things back on if we turn something off too soon.

So I think we're -- we can say that with Kathleen's help, Thor and I are seeing more and more analytics and data, and we're looking at a number of things closer every week just to be sure that we are tweaking and our plan is still sized properly for where we're at.

And so far, as you can see from this quarter and how things are progressing in our -- the start of Q3, we feel like we have a pretty good handle on that.

And I think our overall productivity and our overall gross profit that you're seeing reported here for Q2 was, as Thor said, it was one of our better quarters in quite some time.

And I would say, from a quality of earnings standpoint, we had more, I would say, better positive contributions across the company than maybe we've seen over the last few quarters where one segment excelled and another one really did not.

I think we -- the quality of these earnings were quite healthy for us this quarter.

No, that's helpful.

I always felt that one of the nice things about A-Mark historically is that even in times of low volatility, the company was able to generate a profit.

Then the company went out and made a couple of acquisitions, and there were some integration issues, and particularly, I think it sounds like rightsizing Goldline, some of the assets you brought in and ensuring that you could once again turn a profit.

Do you feel like that aspect of things is now behind you?

Or is there still some benefits to be realized going forward in terms of rightsizing things, reducing costs and creating that sort of predictable stream of revenue that will cover costs, provide profits and then in times of high volatility provide extraordinary profits?

I think there's still some work to be done.

I think we're always looking at areas of our business or products or things that may not be as profitable today as they were before.

And I think we're particularly careful right now with analyzing which products and services A-Mark is offering, and we're doing a really good job right now with Kathleen's help by analyzing specific product categories or specific areas of our business and just really looking at making sure that we're spending the right amount and that our margins in those areas are good.

As it relates to the retail segment and Goldline, one of the differences with Goldline than we've had historically as a pure wholesaler is that the retail public is a little more choppy and a little less predictable.

So I think where we're at now is we're -- we've continued to hold on to some marketing and advertising areas in the retail segment in anticipation of this being an election year, and historically, times leading up to elections have been good for Goldline.

So we are -- we're still taking a little bit of a wait-and-see approach in the next 4 to 5 months to see how things shake out, who the democratic candidate will be that will be up there against the current administration.

And so I think that we're careful with that.

I would say that we really didn't see too much activity or increased enthusiasm throughout this whole impeachment thing.

So it's not like we were benefiting from anything yet, but I think there's some possibilities that you will see some more volatility in the equities market and probably a little more activity in our -- in Goldline's customer base as you get closer to November.

So I guess, we're -- we've made the cuts we think we should make, and we're holding on to a little bit of capacity or a little bit of just waiting to see what happens here.

So I hope that answers the question.

It does.

It helps.

I guess maybe to simplify the question, is Goldline still a drag?

Or is -- are you kind of at a breakeven level, hoping that it begins turning a profit with the election coming up?

Yes.

I think we've gotten Goldline to a point where if you factor in all of the business that Goldline is doing on its own as well as the what we call cross benefits between the units, whether it be logistics, whether it be trading, whether it be CFC, finance, I think that if we look at -- we and management tend to look at Goldline macro as to how it affects the whole business and the benefits that some of the other business lines are getting from having Goldline.

And if we factor all of that in, I think we're very close to a breakeven at Goldline.

So I think that was kind of our first step to make sure that if we factor in the whole benefit to the company, get back to a breakeven and then, of course, the next step would be to get Goldline to profitability as a stand-alone.

Okay.

And it only seemed to me that on the retail side, one of the interesting things about A-Mark is that you physically took possession of the gold.

And certainly, with the advent of ETFs a couple of decades ago, but the extraordinary growth over the past decade, that is an alternative in accessing exposure to this asset class.

But when there's a lot of concern about the future, it would seem those who like gold would also like physically taking possession.

Is there a message that's being communicated at the retail side to retail customers that this is one of the things that really differentiates what Goldline and A-Mark together are doing?

I think that I can speak for Goldline, I can't speak for the rest of our customers that are -- in essence, we sell to a dealer who then sells to the public.

I think that certainly, there's a wide range of what causes or stimulates a gold buying customer to buy.

I think what I heard you say, which I would agree with completely, is that in times of peace and in times of low volatility and in times of when there isn't much fear in the market, an ETF is easy and people gravitate towards it.

And that is a definite headwind on anybody that's trying to sell physical metal because you're not really afraid that there's counterparty risk.

You're not really afraid that the ETF is going to blow up and the gold is not going to be there.

And you don't spend too much time looking at what kind of a drag or what kind of a load the ETF is charging you to basically buy gold and put it in storage for you.

So in those times, the ETF is probably a little more competitive to us, and it's just easy for customers to go there.

I think when things start to scare gold buyers that they might actually have to spend their gold or that they might actually have to barter with it or they might actually need it for protection.

I think you see the pendulum kind of go back to either our customers who are pitching physical ownership, it helps storage, and it certainly is going to help Goldline.

I mean I do believe that -- I've heard a number of things from our customers out there, and I've heard pitches before that you can try to make a correlation that if your Apple phone is no longer able to pay for your coffee in the morning and you don't have any cash in your pocket, then having something that's tangible that you can barter for your coffee is important.

Or if the virus comes and makes it impossible for us to pay for things, then having small gold coins or small silver coins to barter is a protection that might be prudent.

That -- those are the extremes that kind of we deal with every day.

And we're not really in the business of telling people how to manage their risk and fear gauge, but it's out there in our business.

So I think you're -- I hear the point you're making, and I think you're accurate that these are things that, in times of crisis, people pay attention to.

In times of relative -- where everything is going well, it may not be as important to certain people.

Right.

And we saw that back in 2008, 2009, we would hear, certainly in our industry, financial players wanting to stock their vaults with bars of gold because of that fear factor.

And it does seem like the fewer players out there actually providing the service like A-Mark as they fall away, fall by the wayside, provides really unique opportunity when that fear gauge hits that point and people are starting to look for that kind of hedge.

And I think you're spot on that.

I think that A-Mark's ability to provide logistics so that a customer can get metal to A-Mark at our Vegas facility and monetize it quickly.

The ability for us to store metal for people easily when they want to and then the ability to finance your metal if you need to move quickly or you need to take advantage of a situation or you're forced into needing liquidity, I think that, that, along with the relationship we have and the great liquidity we have with our banks, I think these are all things that in times of crisis are going to make A-Mark stronger and the barriers of entry are very difficult these days.

I think that certainly, 2008, 2009 was a period where you saw all of this happening.

And I think the key to remember is our customers are much more active when they're worried about protecting their dollar from becoming $0.60 as opposed to buying gold and a dollar to make it worth -- hoping it will be worth $1.05.

So I think it's important to note that we do much better when people are just looking for a safe place to put assets, whether it'd be to avoid negative interest rates, which is a big deal out there, or to keep the profits they've made in equities and then just looking to hold something that holds its value.

So I think that's kind of what we've always dealt with.

And we've been -- we are in a prolonged period of growth and good economic times here in the U.S. And so we're just trying to do everything we can, as you said, to stay in the game and try to make money no matter what the environment is.

But this quarter, we're reporting is a little bit more normalized to what we saw 3 or 4 quarters ago.

But this is still fairly quiet comparatively to what we've seen in the past.

So we just -- we feel we're very well positioned for that.

And we're trying to make sure that we are smart, and we make money in any environment and then take advantage of -- if the market gives us some bigger wins.

No, that makes sense.

And just seems like where you do have control of messaging and communicating with me is a very attractive proposal to physically hold -- own the gold versus some sort of derivatives of that gold and [continue to do that] throughout the retail network.

[It ought] to be sort of half of messaging.

They're very -- just it seems like especially in the types of prolonged prosperous times and people aren't necessarily thinking about Armageddon or the end of the world, there will be a price to pay for such a long period of prosperity, and it won't feel good and people -- the average retail investor in gold to understand that during those times, it's going to feel a lot better when you know you own something tangible when everyone's questioning everything.

And these times come and go.

(inaudible) when will it be.

But that message to me is profound and important.

But I know you've been working with Goldline to improve everything they're doing and to rightsize and to make it profitable.

And it'd nice to see that acquisition turn out as a win down the road.

Just 2 other quick questions.

And I guess, the first relates to the transformation that A-Mark made several years ago under your stewardship, right, where you started focusing on a higher-margin ancillary businesses that are providing most of the profit today versus just trading.

Are there any other opportunities out there or initiatives that are underway that you foresee sort of adding to those suite of higher-margin services provided by the company?

Yes.

I mean I think we see an opportunity to continue with technology.

I think that there's continued ways for us to make the moving of precious metals easier for customers, whether it's a customer selling back to us or a customer buying from us and whether it be with our online portal or with our new website at CFC.

I think technology is still something that we're very aware of that can help our business.

I think that there's a lot more opportunity for us with our lending business, and I think you can see with that growth there is just a lot of opportunity for us to continue to grow that loan portfolio, which is very good for our bottom line.

It's very consistent.

And I think we are still very much focused on growing our logistics and storage business.

I think there is -- there continues to be strong barriers of entry for our competitors to get into that.

And we've certainly made some good progress there, where it's continuing to be profitable and a little more profitable for us recently.

So I think that's probably where we see the most opportunity.

I don't see any other magical new products or services out there that we're missing.

I will say that we have made a great deal of progress at our SilverTowne Mint subsidiary that the quality of what that mint is able to turn out is just potentially better than it was 2, 3, 4 years ago.

We've been able to pick up some new equipment very favorably and take advantage of some buy opportunities to invest in some new capital improvements there, and we are turning our product today that is as good as any mint in the world.

So I'm very pleased with that.

I think that will open up some new opportunities for us to make some higher-quality, higher-margin products.

And that's something that we're focused on.

So overall, we're -- every week we're looking at every single unit and trying to add new things to our list of ways to expand it.

And we feel pretty good about all of our prospects right now.

That's great.

Thanks for those answers.

And I guess the last question I had just relates to what's assessed on past calls, and it's just that preparation for when the time is right and the company has proved what it can do in times of volatility to go to market and see what the market might value A-Mark as in sort of the private market than I would say private or strategic buyout market.

And I know your thinking on that was, it's -- these aren't the best times to do that just because the profits haven't been reflective of [what the] companies in general in times of volatility.

But are there preparations that can be made or things that can be done to have the company ready for that kind of event?

And is that part of the thinking that, that might be a good exit scenario?

Yes.

I think that's always in our mind.

I think we're always trying to be prepared for what's to come and trying to not be too fixated on what's in the past.

It's good when our crystal ball is really clear.

And sometimes when the crystal gets cloudy, it can be a little more challenging.

But I think we always feel like we're prepared for a change in market conditions, and I've been doing this for 40 years now.

And the one thing that I can say with certainty that happens all the time is when our markets turn and when the macro environment changes and people's attitudes change and their risk appetite changes, it happens overnight.

And I've seen it 10, 12 times in the last 40 years.

You never have any notice of it.

And it's like the light switches on and you wake up the next day and something is different or something has changed.

So I think that's something we're always managing.

So thank you very much, Rick.

Thanks for the comments and the questions.

(Operator Instructions) The next question we have is from the line of Jayme Wiggins with Palm Valley Capital.

I reviewed some transcripts from your quasi-competitor, INTL, and I was trying to focus on comments related to the metals division.

It looks like they've seen strong growth there since they launched their electronic trading platform in 2017.

And I was just wondering if it's had an impact on your trading volumes.

And maybe if you could just describe how your platform differs from theirs.

Well, INTL is -- has a precious metals segment which is in our world of competitors.

So they are there.

Their overall business, though, is not -- precious metals is a small portion of their overall business.

Also within their metals business is a base metals division.

They also do base metal.

So they're not -- we don't come across them all that often.

We actually do quite a bit of business with them.

So we're buying and selling with them.

Their platform is a little bit of a peer-to-peer platform on certain bigger products on a wholesale level.

And I think that we do -- we've seen it.

We look at it.

There is business to be done there.

I don't know that to this point, I would say they've -- we've lost business because of them.

I would say there's a chance we actually do more business with them than we did a couple of years ago.

So I think they're good for the market.

And -- but I think their business -- when you look at their transcripts and their business, they have a lot of different things.

They have a brokerage business.

They have an options business.

They have a wealth management business.

So they're a little -- they're not quite so focused on precious metals like we are.

Yes.

I was just -- they do report the gold ounces or the gold equivalent ounces that they trade and it seemed like it's kind of been creeping up.

Looks like it's tripled maybe over the last 3 or 4 years.

So it's good to hear that it's not eating into your business too much, if any.

No, no.

I mean they're very -- they're much more of a scrap-type business or a refining business on the precious side.

They do a lot of that around the world in different countries that have the need to convert gold from one form to another or to refine it or deport it or to move it around.

So they do a lot of financing, and they do it very well.

They're a very good company.

But their growth in that area generally has to do with the geographical location of where they're doing the business and what's going on in those areas.

And we're just not global that way.

We're just not doing business in small countries around the world.

We're much more North American focused.

Okay.

Good to know.

And then just to A-Mark specifically, have you guys disclosed roughly what percentage of your trading volume occurs electronically now versus over the phone?

I don't believe we do.

We do have it internally.

We look at it.

But we do not break it out in our reporting in our Qs of how much it is.

I can say that from where we started 3 or 4 years ago without any electronic trading or any portal at all, a bigger and bigger percentage of our trades are running through our portal.

And I would say that -- but it's still not the majority of our trades, but it certainly is growing.

And in our case, our portal is great for customers that do a lot of small trades every day.

So they might hit our portal every 15 minutes and buy 5 ounces of gold and 100 ounces of silver, and they might do 30 or 40 trades a day.

So that -- the portal is very useful for that, and it's good for us from allowing our live traders and our phone trading to be done on a little bit larger transactions, which is good for us.

So we continue to grow it, and we continue to open it up to more clients, and we continue to take advice and take input from our customers to try to make it better.

It's a definite -- it's what we call one of our IT focuses.

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, Rob.

Thanks, everyone, for joining our call today.

As always, we appreciate your interest and continued support.

We look forward to keeping you apprised of our company's progress.

Have a great afternoon or evening.

Thank you very much.

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 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 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 could depress 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 business, economic, financial and 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 certain of such forward-looking statements which speak only as of the dates 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 these forward-looking statements.

Finally, I would 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.