A-Mark Precious Metals, Inc. (NASDAQ:AMRK) Q4 2023 Earnings Call Transcript

A-Mark Precious Metals, Inc. (NASDAQ:AMRK) Q4 2023 Earnings Call Transcript August 31, 2023

A-Mark Precious Metals, Inc. misses on earnings expectations. Reported EPS is $1.71 EPS, expectations were $1.95.

Operator: Good afternoon, and welcome to the A-Mark Precious Metals Conference Call for the Fourth Quarter and Fiscal Year ended June 30, 2023. My name is John, and I will be your operator this afternoon. Before this call, A-Mark issued its results for the fourth quarter and fiscal year 2023 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 would like to remind everyone that this call is being recorded, and we will -- and will be made available for replay via 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, Mr. Greg Roberts. Sir, please proceed.

Greg Roberts: Thank you, John, and good afternoon to everyone. Thank you for joining our call today. As we reported in our earnings release, fiscal 2023 marked a record year of strong financial and operational performance for A-Mark, further demonstrating the strength of A-Mark's industry-leading, fully integrated precious metals platform. For the full fiscal year, we reported $156.4 million of net income and diluted EPS of $6.34 per share. Our full year gross profit grew 13% year-over-year, and we delivered record levels of EBITDA of $225 million and generated a 29% return on equity for the year. Our Direct-to-Consumer or DTC segment continues to contribute significantly to our overall financial performance, generating approximately 57% of our consolidated gross profit for the year.

New DTC customers grew by 46% year-over-year, highlighting the success of our strategic acquisitions and organic customer growth, including the acquisitions of BGASC and BullionMax, which further expanded our DTC customer base. During the year, we added minority interests in U.K.-based Atkinsons Bullion & Coin and Texas Precious Metals to our investment portfolios. We also bolstered our minting operations by investing in the expansion of our SilverTowne Mint facility in Indiana, which now has the capacity to produce over 1 million ounces of fabricated silver per week. SilverTowne also achieved ISO 9000 certification during the year, reaffirming the Company's reputation as a leading manufacturer of quality bullion products. Now I'll turn the call over to our CFO, Kathleen Simpson-Taylor, and she will walk you through our financials in more detail.

Then, A-Mark's President, Thor Gjerdrum, will discuss our key operating metrics. Afterwards, I will provide a further update on our business and growth strategy ahead as we progress into fiscal 2024. Kathleen?

Kathleen Simpson-Taylor: Thank you, Greg, and good afternoon, everyone. Our revenues for fiscal Q4 2023 increased 51% to $3.16 billion from $2.09 billion in Q4 of last year due to an increase in gold and silver ounces sold and higher average selling prices of gold and silver. The DTC segment contributed 19% of the consolidated revenue in fiscal Q4 2023 compared to 23% in Q4 of last year. Revenue contributed by JM Bullion, JMB, represented 17% of the consolidated revenues for fiscal Q4 of 2023 compared to 21% in Q4 of last year. For the full fiscal year, our revenues increased 14% to $9.32 billion from $8.16 billion in the prior fiscal year. Excluding a $1.2 billion increase in forward sales, our revenues increased by $2.6 million, driven primarily by an increase in silver ounces sold and higher average selling prices of gold, partially offset by a decrease in gold ounces sold and lower average selling prices of silver.

The DTC segment contributed 21% and 26% of the consolidated revenue in fiscal year 2023 and 2022, respectively. Revenue contributed by JMB represented 19% of the consolidated revenues for fiscal year 2023 compared to 24% in the prior year. Gross profit for fiscal Q4 2023 increased 16% to $78.6 million or 2.49% of revenue from $67.8 million or 3.24% of revenue in Q4 of last year. The increase in gross profit was due to higher gross profits earned from the Wholesale Sales and Ancillary Services and Direct-to-Consumer segments. Gross profit contributed by the DTC segment represented 60% of the consolidated gross profit in fiscal Q4 2023 compared to 57% in the same year-ago period. Gross profit contributed by JMB represented 49% of the consolidated gross profit in fiscal Q4 2023 compared to 46% in Q4 of last year.

For the full fiscal year, gross profit increased 13% to $294.7 million or 3.16% of revenue from $261.8 million or 3.21% of revenue in the prior fiscal year. Excluding a $1.2 billion increase in forward sales, which have a negligible impact to gross profit, the gross profit percentage increased to 4.27% from 3.79% in the prior fiscal year. The increase in gross profit was due to higher gross profits earned from the Wholesale Sales and Ancillary Services and DTC segments. Gross profit contributed by the DTC segment represented 57% of the consolidated gross profit in fiscal 2023 compared to 56% in the prior fiscal year. JMB contributed 49% to the consolidated gross profit for fiscal 2023 compared with 46% in the prior year. SG&A expenses for fiscal Q4 2023 increased 10% to $22.8 million from $20.7 million in Q4 of last year.

The increase was primarily due to an increase in compensation expense, including performance-based accruals of $1.3 million, higher advertising costs of $1.1 million, higher information technology costs of $0.9 million and higher consulting and professional fees of $0.4 million, partially offset by lower insurance costs of $2.1 million. For the full fiscal year, SG&A expenses increased 11% to $85.3 million from $76.6 million in fiscal year 2022. The increase was primarily due to an increase in compensation expense, including performance-based accruals of $6.4 million, higher advertising costs of $3.5 million, an increase in information technology costs of $1.7 million, partially offset by a decrease in insurance costs of $1.7 million and lower consulting and professional fees of $2 million.

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Depreciation amortization expense for fiscal Q4 2023 decreased 15% to $2.7 million from $3.2 million in Q4 of last year. The decrease was primarily due to a decrease in amortization of acquired intangibles related to JMB. For the full fiscal year, depreciation and amortization expense decreased 54% to $12.5 million from $27.3 million in the prior year. The decrease was primarily due to a $14.9 million decrease and amortization of acquired intangibles related to JMB. Interest income increased 7% to $6.1 million from $5.7 million in Q4 of last year. The increase in interest income was primarily due to higher finance product income from our Wholesale Sales and Ancillary Services segment, which was partially offset by a decrease in interest income earned by our Secured Lending segment.

For the full fiscal year, interest income increased 2% to $22.2 million from $21.8 million in fiscal year 2022. The increase was primarily due to higher finance product income from our Wholesale Sales and Ancillary Services segment, partially offset by a decrease in interest income earned by our Secured Lending segment. Interest expense for fiscal Q4 2023 increased 57% to $8.9 million from $5.7 million in Q4 of last year. The increase in interest expense was primarily driven by a $2.4 million increase associated with our trading credit facility, primarily due to an increase in interest rates, and notes payable, including amortization of debt issuance costs. In addition, a $0.8 million increase related to product financing arrangements. For the full fiscal year, interest expense increased 43% to $31.5 million from $22 million in fiscal year 2022.

The increase was primarily driven by $7.2 million associated with our trading credit facility, primarily due to an interest rate increase and notes payable, including amortization of debt issuance costs, $2.6 million related to product financing arrangements and $0.6 million in interest associated with liabilities on borrowed metals. And this was partially offset by a decrease of $0.9 million of loan servicing fees. Earnings from equity method investments in Q4 2023 increased 105% to $5.3 million from $2.6 million in the same year-ago quarter. The increase reflects our new investments made during the year as well as the higher percentage ownership in our existing equity method investments in comparison to the prior fiscal year. For the full fiscal year, earnings from equity method investments increased 82% to $12.6 million from $6.9 million in fiscal year 2022.

The increase of $5.7 million was primarily due to the additional 40% ownership interest in Silver Gold Bull, which was acquired in June 2022, as well as earnings from our other equity method investments. Net income attributable to the Company for the fourth quarter of fiscal 2023 totaled $41.8 million or $1.71 per diluted share. This compares to net income attributable to the Company of $37.3 million or $1.52 per diluted share in Q4 of last year. For the full fiscal year, net income attributable to the Company totaled $156.4 million or $6.34 per diluted share. This compares to net income attributable to the Company of $132.5 million or $5.45 per diluted share in the prior fiscal year. Adjusted net income before provision for income taxes, a non-GAAP financial performance measure which excludes acquisition expenses, amortization and depreciation for Q4 fiscal 2023 totaled $59.1 million, an increase of 17% compared to $50.6 million in the same year-ago quarter.

Adjusted net income before provision for income taxes for fiscal 2023 totaled $216 million, an increase of 11% compared to $195 million in the prior fiscal year. EBITDA, a non-GAAP liquidity measure, for Q4 fiscal 2023 totaled $61.8 million, a 23% increase compared to $50.3 million in Q4 of fiscal 2022. EBITDA for fiscal 2023 totaled $225 million, a 16% increase compared to $193.9 million in the prior fiscal year. Turning to our balance sheet. At fiscal year-end, we had $39.3 million of cash compared to $37.8 million at the end of fiscal year 2022. Our tangible net worth at the end of the fiscal year was $436.8 million, up from $321.6 million at the end of the prior fiscal year. A-Mark's Board of Directors has continued to maintain the Company's regular quarterly cash dividend program of $0.20 per common share.

The most recent quarterly cash dividend was paid in July. The Board of Directors has also declared the next regular quarterly cash dividend, which is payable on October 24, 2023, to stockholders of record as of October 10, 2023. In addition, the Board of Directors has declared a nonrecurring special cash dividend of $1 per common share, which will be paid on September 26, 2023, to stockholders of record as of September 12, 2023. That completes my financial summary. Now, I will turn the call over to Thor, who will provide an update on our key operating metrics. Thor?

Thor Gjerdrum: Thank you, Kathleen. Looking at our key operating metrics for the fiscal fourth quarter and full year 2023, we sold 814,000 ounces of gold in Q4 fiscal 2023, which was up 27% from Q4 of last year and up 24% from the prior quarter. For the full fiscal year, we sold 2.7 million ounces of gold, which was relatively unchanged from fiscal 2022. Sorry, one correction. I said 814,000 ounces of gold, that was silver, 814,000 ounces of silver. We sold 45.3 million ounces of silver in Q4 fiscal 2023, which was up 20% from Q4 of last year and up 23% from the prior quarter. For the full fiscal year, we sold 156.2 million ounces of silver, which is up 18% from fiscal 2022. The number of new customers in the DTC segment, which is defined as the number of customers that have registered or set up a new account or made a purchase for the first time during the period was 90,400 in Q4 fiscal 2023, which was up 85% from Q4 of last year and up 40% from the prior quarter.

Approximately 32% of the new customers in Q4 fiscal 2023 were attributable to the acquired customer list of BullionMax in June 2023. For the full fiscal year, the number of new customers in the DTC segment was 335,300, which is up 46% from the prior year. Approximately 31% of the new customers in fiscal 2023 were attributable to the acquired customer list of BGASC and BullionMax in October '22 and June 2023, respectively. The number of total customers in the DTC segment at the end of fiscal 2023 was approximately 2.3 million, which is a 17% increase from the prior year. The year-over-year increase in total customers was due to organic growth of our GMV customer base as well as the acquired customer list of BGASC and BullionMax in October 2022 and June 2023, respectively.

The DTC segment average order value, which represents the average dollar value of products, excluding accumulation product program orders delivered to DTC segment customers during Q4 fiscal 2023 was $3,288, which was up 20% from Q4 of last year and up 34% from the prior quarter. For the full fiscal year, our DTC average order value was $2,606, which is up 3% from fiscal 2022. For the fiscal fourth quarter, our inventory turnover ratio was 3.2, which was a 19% increase from 2.7 in Q4 of last year and a 33% increase from 2.4 in the prior quarter. For the full fiscal year, our inventory turnover ratio was 10.5, which is down 20% from the same year-ago period. Finally, the number of secured loans at the end of June totaled 882, a decrease of 8% from March 31, 2023, and a decrease of 61% from June 30, 2022.

The dollar value of our loan portfolio at the end of June 2023 totaled $100.6 million, which is up 4% from the end of March, but down 20% from June 30, 2022. I apologize, one correction on my ounce statements. We sold 814,000 ounces of gold in Q4 fiscal 2023, and we sold 2.7 million ounces of silver in -- for the full -- excuse me, 2.7 million ounces of gold for the full fiscal year. That concludes my prepared remarks. I will now turn it over to Greg for closing remarks. Greg?

Greg Roberts: Thank you, Thor and Kathleen. Looking ahead to fiscal '24, we've seen a bit of premium compression since we commenced our new fiscal year, with the headwinds continuing from June into July. August has been a bit more active, and we are optimistic that this will continue into September. We continue to evaluate opportunities to further expand our geographic presence and market reach to create shareholder value. Our strategic focus remains on opportunities that will align with our business model and will create synergies with A-Mark's integrated platform, including our reliable access to supply and successful logistics footprint, along with strong customer relations. We will continue to invest in our minting and logistics operations to further increase capacity and enhance our operations.

We remain optimistic that our diversified and proven business model will allow us to sustain profitability and realize growth over the long term. That concludes my prepared remarks. Operator?

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Q&A Session

Operator: [Operator Instructions] Now our first question comes from Thomas Forte with D.A. Davidson. Thomas, please proceed.

Thomas Forte: Greg and team, congrats on the quarter and year, both were amazing. So two questions. I'll go one at a time. Greg, I consider A-Mark one of the most well-run companies I follow. You, Thor and everyone do a fantastic job. You had a management change recently at JM Bullion, with Robert replacing Michael. How should investors think about that change?

Greg Roberts: Well, I think it's a positive. Rob has proven over the last 10-plus years that he's been involved with JM Bullion that he has a grasp of all parts of the Company. He's done a great job, and he's -- in my mind, he's the right person going forward. Michael is still a tremendous asset to the Company. He's on the Board. He and I still consult weekly. And his -- his efforts and his focus for his expertise is, I feel like we're going to continue to have that -- the benefit of his abilities. Rob has been running the digital marketing and the client acquisition part of JM Bullion for a while. And I believe that Rob is the right person for the right person for the job. And Michael is still a part of A-Mark and still a part of JM Bullion, so I think it's a positive. And obviously, the move was something that I felt was the right move, and I'm very confident in the decision.

Thomas Forte: Great. And then for my second question, you announced another onetime special dividend. Can you give your current thoughts on capital allocation, including dividends, most regular quarterly and onetime, strategic M&A and investing back in the business?

Greg Roberts: Sure. Obviously, everybody can see we had a very strong fourth quarter and an even better full year, which is one of the main drivers. And when we look at capital allocation and what we -- where we put the money and what we do with it, the performance, as we've talked about before, certainly justified the special dividend. I will say that we are committed to the regular dividend, as well as always keeping in mind how the next three to six months looks as it relates to acquisitions, inventory opportunities and other factors that we look at. I would say that we're comfortable and optimistic that our pipeline for acquisitions right now is very good. There's a couple of things we're looking at. But the strength of last year and the strength of the quarter allowed us to continue and have the special dividend again this year.

As we've said before, as I've said before, I look to where we think we can get the best return. If we think we have excess capital that we can't put to use, we'll return it to the shareholders. And I think that continuing with the same special dividend that we had last year was indicative of the year's performance. And I feel like right now, our capital allocations are exactly where I want them to be, and I think we are in a great position going forward into the new fiscal year, that this should be a fairly active year for us in new opportunities.

Operator: The next question comes from Lucas Pipes with B. Riley. Please proceed.

Lucas Pipes: Thank you very much, operator. I would like to add my congratulations on a very strong quarter. Well done. Greg, I wanted to touch on your comments in the prepared remarks that the market softened a bit here during your fiscal first quarter. Could you elaborate kind of what changed in your opinion? Is it seasonal? Is it a summer lull? How do you describe the market today and a little bit more color versus where you ended the year?

Greg Roberts: Yes. I mean I think we indicated a little bit on our last call that the quarter -- our Q4 that just -- that we're reporting on here, had a very strong April and May. We carried a really big number in that period, with a good portion of the success and the profits coming in April and May. June did start to slow down a little bit. And I would say July, in general, had a number of things that, I guess, I would call light headwinds. We had, as you pointed out, July is usually our slowest month, so we had some seasonality. I think that the risk off atmosphere in the overall market, in July, you saw a complete change in sentiment as it relates to what's going on in the global equity market. And I think that risk off, as we have said in the past, does cause a bit of a slowdown on the demand side.

At the same time, we saw a bit more supply. And we had a bit more product coming into the marketplace. A lot of that, we created ourselves. We have a bit more capacity right now. So I think the combination of those things, particularly the last couple of weeks of June and throughout July, caused some, what I call, premium compression. And as a lot of people that follow our business knows, if they look around Silver Eagles in particular, are cheaper today than they were in May or in April as it relates to premium. So you've seen, like I said, a bit of compression there. And that can trickle down a little bit into our proprietary products and some of the other products that we sell. As I said in the prepared remarks, we have seen some improvement, which is good in August.

I think it coincides a bit with a change in sentiment in the overall market. I note that on August 1, it just felt completely different in the equities markets than it did in July. And I think we're seeing some customer response to that. In particular, the last couple of weeks of August, we've seen a significant increase in demand. Premiums still are fairly low, but it doesn't take a lot for us on the demand side to really take care of any excess inventory we may have. So not surprising to me after such a strong April and May that we would hit a little bit of a slowdown in June and July, but like I said, I think we're still very happy with the performance, and I think the overall business of A-Mark in total is operating as I would expect it to in this environment.

So hopefully, that answers the question.

Lucas Pipes: Very, very helpful. And -- and what I'm hearing is that premiums are maybe somewhat weaker, but volumes are stronger. Is that fair to say? And if so, is there any way to put some numbers around that?

Greg Roberts: Again, that's a specific question. It's a challenge to answer without a bit more context. We have been fortunate enough over the last 60 days to sell a tremendous amount of ounces in 100-ounce silver bars that we produce at SilverTowne. That demand has been very good, and the premiums have maintained. I think the one area that is out there, you can identify the information. It's public on the U.S. Mint's website is the United States Mint in July has been able to produce a few -- a significantly larger amount of Silver Eagles that it had in April and May. So you have had a little combination of a drop in demand, but you've had a little bit of extra supply on Silver Eagles. Now, we have been very active in the last couple of weeks, two weeks in particular that we have been testing the market on a number of products.

And we've been testing the premiums, and we have lowered a few premiums that -- with the intention of just gauging where the demand is. And I will say that over the last two weeks, we've seen very positive results from the lower -- slightly lower prices, both with ounces sold as well as with new customer acquisitions, that those lower prices have driven a significant amount of new customers to our DTC platforms. So, all in all, it's a little bit of a balance, but I -- the information and data that we're seeing is very positive. I mean, in a -- in what is theoretically a slightly slower demand environment for us to pick up new customers the way that we have been at least in the two weeks of August as we've been testing a little bit, is very good news for us.

Lucas Pipes: Good to hear. I'll add a second question. You mentioned that the pipeline of acquisition looks very strong. And I wondered, could you remind us where you'd like to spend your energies on the M&A side? Is it still domestic, internationally? Is it on vertical integration? Mint, for example, like you have could update us on your priorities? That would be very helpful.

Greg Roberts: I think we've focused before on international expansion. That can be in the DTC segment or it can also be in our trading business, our wholesale trading business. And we have -- we have identified a few opportunities that we're looking at in these areas. I think that as it relates to the DTC segment and our domestic businesses where we have found some opportunities over the last six months on some smaller deals, we're regularly looking for those. I think it's also important to note that towards the end of this year, as we've disclosed in our ownership interest in Silver Gold Bull out of Calgary, Canada, we do have an option window that opens in December that is contractual and allows us to increase our stake with them if we choose to.

So that would be -- if we decide to do that, there's no assurances we will or there's no -- I'm not defining the timing of that. I'm just noting that it's part of the agreement that we have with them. That could potentially affect our international business a bit more. So -- but I think we have a nice group of things we're looking at right now. And I think that what I really wanted to point out was even when we are balancing these things, we still felt very comfortable that the special dividend was good for the shareholders. And as we've said before, we want to reward the shareholders when we have a good year.

Operator: [Operator Instructions] The next question comes from Greg Gibas with Northland Securities. Please proceed, Greg.

Greg Gibas: Good afternoon, Greg, Kathleen. Congrats on the results. Great to see. I wanted to follow up on your comments regarding continued investment in your minting operations. Just wondering, if you can elaborate on that, given you -- you did expand your minting capabilities considerably in fiscal '23. Where do you intend on maybe expanding them further?

Greg Roberts: Well, a lot of it is equipment and -- and equipment that we can use to make products that we haven't made in the past. So I believe we have expanded at SilverTowne. We were very fortunate in this quarter to get online another new machine that is really, really right now turning out 100-ounce silver bars. It's, again, it's what we call a pizza oven. And it is perfect for us at this time. We were able to pick up a machine that had been ordered and being built for somebody that had been in process for another competitor of A-Mark's for about 18 months, and that competitor decided to pass on it, and we were able to pick it up. And it's a testament to our SilverTowne Mint people. They were able to add on a new structure and put this new machine in the structure and get it up online producing 100-ounce silver bars in about 120 days with -- from the time that we ordered it or paid for it.

And that is a very quick turnaround, and that has significantly increased our ability to turn our product there. On the Sunshine Mint side, they continue to expand. They've added a second melt line that's up and running right now that they invested in. They've invested in some -- some automated robotic striking machines, which is, from what I see when I look at them is just an incredible new addition to the Sunshine Mint line of production machines. So, it's not just capacity, although we like to add capacity. It's making sure we add capacity in the right product that we need as well as trying to stay ahead of the curve on machines and production assets that we think we're going to need a year or two from now.

Greg Gibas: Perfect. Very helpful. And relating to your comments, I think you said that you did see a little bit more activity in August relative to maybe the low point in July. And wondering if you could comment on maybe what the drivers are there? Is it purely just because July is maybe the seasonally slowest? What kind of drove maybe a recovery? And I guess along those lines, if there are any dynamics for the foreseeable future that -- maybe new product launches or releases that you expect to impact demand or premium that are worth mentioning?

Greg Roberts: Yes. I mean I think as I mentioned before, I think it has a little bit to do with this -- what the U.S. Mint and their ability to deliver a few more coins. Now I'm not exactly sure whether their production numbers have changed all that much. I think they may have intentionally held some coins back and decided to release some coins. But whenever you see a change in the supply-demand dynamics as it relates to the U.S. Mint, it's going to have some effects, either very positive as kind of a follow-on to the U.S. Mint product or it can have a little bit of a negative as it relates to premiums if Silver Eagles just become a bit more available. And I think it's important to note that the Silver Eagle continues worldwide and dominated in the U.S. to be the product of choice for one-ounce silver products.

And I think that drives a lot of choice in what products customers decide to buy. If they can't get enough Silver Eagles or if the Silver Eagle premiums just become too high, it's going to drive up the premiums on some of the other sovereigns and some of our private mint products. Vice versa, if the Silver Eagle premiums are lower, the Silver Eagle is a likely candidate for purchase because that's the most popular coin. So I think any change in those dynamics of the supply/demand in Silver Eagles is going to have effect on the overall market for the reasons described. I will say that as I have mentioned in the last few weeks, we've really been able to test the market, specifically on Silver Eagles. And we're very -- we have a very positive outlook as it relates to throughout the end of this year and our ability to maybe pick up our demand a little bit and take some of those coins that are on the market right now.

So it's been good for us. And like I said, I think the last couple of weeks of August, it's not a quarter, it's not a month, it's not a year. But I will say that we have seemingly handled this change in some of the dynamics very, very well. And I believe that we have continued to gain market share, and I believe we're keeping our market share that we have. So these are positives in my mind. The dynamics of how the market works, I gave you a fairly general answer. There's a lot more specifics that can go into it and that, we could have a discussion for an hour on that. But I think my response in general is what you need to hear.

Greg Gibas: Yes. Great. Very helpful, Greg.

Operator: [Operator Instructions] The next question comes from David Bastian with Kingdom Capital Advisors. Please proceed, David.

David Bastian: Thanks for your question. Two quick things. First, I was curious to hear a little bit more on your thoughts around buybacks. You guys had used the authorization time back in February and March. I do hear your stock right now you're trading around the $800 million market cap. You just posted about $225 million of EBITDA for this year. So you're trading a little bit under 4x that. So, it seems like in this environment, I don't think we've gotten a little softer, but buybacks will be very accretive to the valuation of the Company. So just curious a little bit more, I know you addressed capital allocation a little bit earlier. But just a little bit more about the decision to do a special here instead of putting some of that money towards buybacks, that valuation.

Greg Roberts: Yes. I mean I think it's a bit of a moving target. The last buyback that we did, we were very clear on the range and the price that we bought the stock back at. Since that time, we have not seen the stock approach that level again. And I think that we're always open to the changing capital allocation equation that we go through here from a management perspective. But I think that as it relates to the special dividend, we have said before that when we have a good year, we believe we should reward with a special dividend. As it relates to the buyback strategy and how we allocate to that, it's going to depend on all the circumstances and the moving targets that I just discussed. It has a lot to do with where we are, as I said, in the M&A pipeline.

And even though we look at a lot of deals, we don't close -- one of my big rules is never be in a situation where an opportunity is there, and we can't finance an opportunity efficiently and in all of the shareholders' best interest. So I will -- and historically, I have, I will be a bit more conservative and a bit more careful on the capital allocations as it relates to buybacks and dividends if I believe the horizon indicates that there's a better opportunity for our money. And that's just -- that's kind of something that Thor and I and Kathleen, we discuss regularly here. But it can change quickly. We can have three deals we're looking at that we think are great, and we don't close any of them. Or we can have three deals we're looking at, and we can get all the way down to the 20-yard line trying to close the deal and score a touchdown and we may close all of them.

So I think it's -- it's a little bit week-to-week, month-to-month. But in this case, we had a long discussion about the special dividend at our Board meeting two weeks ago. And we talked about everything I've just mentioned, and I felt really good where we came out of it. And if we believe [Technical difficulty] Hello?

Operator: You've been reconnected, Greg. Can you hear us?

Greg Roberts: Okay. I'm back. This is Greg. We had a little disconnect.

David Bastian: Well, thank you for that. That was helpful.

Greg Roberts: Okay. Next question?

David Bastian: The Direct-to-Consumer gross margin, it looks like it was down a little bit versus the third quarter even though volumes seem that they were up pretty healthily. Could you talk about a little what was driving that?

Greg Roberts: Yes. I mean I don't see a significant change in -- in just the overall environment between the two quarters. I think we do go through periods where you'll see some slight change in the margin at the DTC side, just depending on what products we're trying to move out and what the mix of products is. One thing that can throw off the numbers a bit is we make less money on big gold bars or kilo bars or even gold one-ounce coins from a pure dollar perspective than we do on silver. So it could be that we had a little bit higher mix of gold and silver, so it can show some anomalies. Just like if we sell a higher percentage of silver than gold, we're going to have a little bit higher margin from a percentage standpoint.

So I think those things can change. I don't think that between our Q3 and our Q4, I did not see a significant change in anything in the overall environment as it relates to margin. And then obviously, we've spent a good deal of time talking about the end of Q4 at June, July and August. And so you know what I think about that period. So -- but I -- there's a lot of things that can go in, and we can get some noise as it relates to just quarter-over-quarter on the DTC side.

Operator: Okay. We have no further questions in queue 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.

Greg Roberts: Thanks, John. Once again, just to thank you to all of our shareholders. We appreciate your support. Thank you for joining the call today and anybody that follows up and listens to the call later. Thank you for taking the time to hear about A-Mark and learn about A-Mark. I'd also like to thank our employees around the world for their dedication and commitment to A-Mark's success. Looking forward to talking to you again in a couple of months for an update on our Q1. Thank you very much.

Operator: 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. 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; changes in the current international political climate, which has favorably contributed to demand and volatility in the precious metals markets; 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 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 pressure may have on our business; the inability of the Company to expand capacity at SilverTowne Mint; the failure of our investee companies to maintain or address the preferences 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 would like to remind everyone that a recording of today's call will be available for replay via 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.