A-Mark Precious Metals Inc
NASDAQ:AMRK
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A-Mark Precious Metals Inc
Earnings Call Analysis
Q4-2024 Analysis
A-Mark Precious Metals Inc
In fiscal year 2024, A-Mark Precious Metals showcased resilience amidst a tough economic backdrop, generating $66.2 million in net income, or $2.75 per diluted share. While this represents a substantial drop from the previous year's figures—where net income was $156.4 million, translating to $6.34 per diluted share—A-Mark's adjusted EPS excluding a $14.4 million remeasurement gain was a promising $2.15. The business adaptation included a strategic focus on expanding their direct-to-consumer (DTC) base, which grew to over 3 million customers.
Total revenues for Q4 of fiscal 2024 saw a significant decrease of 19%, falling to $2.52 billion compared to $3.12 billion in the same quarter of the previous year. When factoring out a $47 million increase in forward sales, revenues decreased by 28%, primarily due to lower gold and silver ounces sold, even as average selling prices increased. For the full year, revenue rose 4% to $9.7 billion; however, adjusting for forward sales, actual sales reflected a 17% drop.
A-Mark's gross profit plummeted by 45% in Q4, down to $43 million, which is a mere 1.7% of revenue, compared to 2.52% in Q4 of last year. In the full fiscal year, gross profits decreased 41%, totaling $173.3 million. The DTC segment, once a significant contributor, accounted for only 48% of consolidated gross profit in 2024, down from 57% in 2023, adding pressure to overall profitability.
Throughout the year, A-Mark made notable strategic moves, including acquiring a controlling interest in Silver Gold Bull and expanding its footprint in Asia through the purchase of LPM. Such investments are viewed as key drivers for longer-term growth as they integrate new customer bases and enhance product offerings in the burgeoning international market.
A-Mark strengthened its balance sheet by repaying its notes payable and reorganizing credit facilities, thereby increasing liquidity. The company concluded the fiscal year with $48.6 million in cash, up from $39.3 million a year prior, and decreased inventories by $66.4 million, evidencing efficient cash management strategies.
Looking ahead to fiscal 2025, A-Mark anticipates ongoing elevated gold prices coupled with some demand compression. The leadership expressed optimism regarding M&A opportunities and plans to develop a trading hub in Singapore, which reinforces their strategy to seek growth avenues despite current market nuances.
The Board of Directors maintained a quarterly cash dividend of $0.20 per common share, highlighting A-Mark's commitment to returning value to shareholders amid challenging financial conditions. The next dividend payment is anticipated in October 2024, signaling continued dedication to shareholder returns as the business navigates through uncertainty.
In fiscal Q4, A-Mark attracted 570,300 new DTC customers, reflecting a staggering 530% increase year-over-year. This uptick is largely credited to the acquisition strategies employed, with approximately 92% of new customers resulting from the Silver Gold Bull purchase and the BullionMax customer list. The total customer base now stands at approximately 3.1 million, a noteworthy 31% increase from the previous year.
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Good afternoon, and welcome to A-Mark Precious Metals Conference Call for the fiscal fourth quarter and full year ended June 30, 2024. My name is John, and I will be your operator this afternoon.
Before this call, A-Mark issued its preliminary results for the fiscal fourth quarter and full year 2024 and 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. The company's results are preliminary because the company has not yet concluded its review of the valuation and related purchase accounting surrounding the increase in its investment in Silver Gold Bull Inc. The results presented include an estimate which management believes is reasonable of the amount of the remeasurement gain associated with the SGB transaction. The remeasurement gain may be adjusted once the company finalizes its review, but management does not expect any such adjustment to exceed $5 million.
Such adjustment if it occurs, would be reflected in the company's income statement and corresponding balance sheet items. The remeasurement gain is a noncash item, relates solely to the accounting treatment for the acquisition of a controlling interest in SGB, has no impact on taxes and is not related to the company's operating results.
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 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.
Thank you, John, and good afternoon to everyone. Thank you for joining our call today. As we reported in our earnings release today, our fiscal year 2024 results demonstrate the continued strength and adaptability of our fully integrated platform to generate profitable results even during slower market conditions.
Despite facing headwinds from less favorable macroeconomic environment and the softened demand compared with last fiscal year, we still reported $66.2 million of net income and diluted EPS of $2.75 per share. Excluding an estimated preliminary $14.4 million reimbursement gain from our incremental investment in Silver Gold Bull, our diluted EPS was $2.15. We also generated $89.9 million in non-GAAP EBITDA. Excluding the remeasurement gain and ended the fiscal year with over 3 million direct-to-consumer customers, reflecting the benefits of our strategic investments.
Our fourth quarter results improved from the previous quarter with a 23% increase in gross profit and diluted EPS of $0.60 per share, excluding the remeasurement gain compared with $0.21 last quarter.
Looking beyond the numbers, our fiscal year was highlighted by numerous strategic accomplishments, including broadening our international footprint by both our expansion into Asia through our acquisition of LPM and our increased investment in Silver Gold Bull Canada. In line with our growth strategy, we continue to enhance our asset portfolio through JMB's acquisition of gold.com, strengthening our precious metals digital presence.
Turning to our capital structure. During the year, we repaid our notes payable from our $100 million asset-backed securitization and amended our trading credit facility, resulting in increased liquidity. We also repurchased $22.4 million of our common stock.
Now I'd like to hand the call over to our CFO, Kathleen Simpson-Taylor, who will provide a more detailed financial overview of our preliminary results. 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 and take questions. Kathleen?
Thank you, Greg, and good afternoon, everyone. Our revenues for Q4 fiscal 2024 decreased 19% to $2.52 billion from $3.12 billion in Q4 of last year. Excluding an increase of $47 million of forward sales, our revenues decreased $641.4 million or 28%, which was due to a decrease in gold and silver ounces sold, partially offset by higher average selling prices of gold and silver.
The direct-to-consumer or DTC segment contributed 17% and 19% of the consolidated revenue in the fiscal fourth quarter of 2024 and 2023, respectively. JMB's revenue represented 15% of the consolidated revenues for the fiscal fourth quarter of 2024, compared with 17% for the prior year fiscal fourth quarter.
For the full fiscal year, our revenues increased 4% to $9.7 billion from $9.29 billion in the prior fiscal year. Excluding an increase of $1.6 billion of forward sales, our revenues decreased $1.1 billion or 17%, which was due to a decrease in gold and silver ounces sold, partially offset by higher average selling prices of gold and silver. The DTC segment contributed 15% and 22% of the consolidated revenue in the fiscal year ended 2024 and 2023, respectively. JMB's revenue represented 14% and 19% of the company's consolidated revenue for the fiscal years ended June 30, 2024, and 2023, respectively.
Gross profit for Q4 of fiscal 2024 decreased 45% to $43 million or 1.7% of revenue from $78.6 million or 2.52% of revenue in Q4 of last year. The decrease in gross profit was due to lower gross profits earned from both the wholesale sales and ancillary services and DTC segments. Gross profit contributed by the DTC segment represented 51% of the consolidated gross profit in Q4 of fiscal 2024 compared to 60% in the same year ago period. Gross profit contributed by JMB represented 42% of the consolidated gross profit in Q4 of 2024 compared to 49% in Q4 of last year.
For the full fiscal year, gross profit decreased 41% to $173.3 million or 1.79% of revenue, from $294.7 million or 3.17% of revenue in the prior fiscal year. The decrease in gross profit was due to lower gross profits earned from both the wholesale sales and ancillary services and DTC segments. The DTC segment contributed 48% and 57% of the consolidated gross profit in fiscal year 2024 and 2023, respectively. Gross profit contributed by JMB represented 41% and 49% of the consolidated gross profit during fiscal year 2024 and 2023, respectively.
SG&A expenses for Q4 fiscal 2024 decreased 1% to $22.7 million from $22.8 million in Q4 of last year. The overall decrease was primarily due to a decrease in compensation expense, including performance-based accruals of $1.1 million and a decrease in advertising costs of $0.3 million, partially offset by an increase in insurance costs of $0.6 million and increase in consulting and professional fees of $0.5 million and an increase in information technology costs of $0.2 million. SG&A expenses for the quarter also include $1.8 million of expenses incurred by LPM and SGB.
For the full fiscal year, SG&A expenses increased 5% to $89.8 million from $85.3 million in the prior fiscal year. The increase was primarily due to an increase in consulting and professional fees of $5.3 million, an increase in information technology costs of $1.0 million, partially offset by a decrease in insurance costs of $0.9 million, a decrease in compensation expense, including performance-based accruals of $0.7 million and a decrease in advertising costs of $0.7 million.
Fiscal year 2024 SG&A expenses include $2.3 million of expenses incurred by LPM and SGB.
Depreciation and amortization expense for Q4 fiscal 2024 increased 4% to $2.8 million from $2.7 million in Q4 of last year. The increase was primarily due to $0.4 million of amortization expense related to intangible assets acquired through our acquisitions of LPM and a controlling interest in SGB, a $0.2 million increase in depreciation expense related to our property, plant and equipment, and these were partially offset by a $0.5 million decrease in JMB's intangible asset amortization expense.
For the full fiscal year, depreciation and amortization expense decreased 9% to $11.4 million from $12.5 million last fiscal year. The decrease was primarily due to a $2.2 million decrease in JMB's intangible asset amortization expense. This was partially offset by a $0.6 million increase in depreciation expense related to property, plant and equipment and a $0.5 million increase in amortization expense related to intangible assets acquired through our acquisition of LPM and our increased investment, which resulted in a controlling interest in SGB.
Interest income for Q4 fiscal 2024 increased 33% to $8.1 million from $6.1 million in Q4 of last year. The increase in interest income was primarily due to an increase in other finance product income of $1.6 million and an increase in interest income earned by our Secured Lending segment of $0.4 million.
For the full fiscal year, interest income increased 22% to $27.2 million from $22.2 million in the prior fiscal year. The increase was primarily due to an increase in other finance product income of $3.2 million and an increase in interest income earned by our Secured Lending segment of $1.7 million.
Interest expense for Q4 fiscal 2024 increased 8% to $9.6 million from $8.9 million in Q4 of last year. The increase in interest expense was primarily driven by an increase of $1.5 million associated with our trading credit facility due to an increase in interest rates as well as increased borrowings. An increase of $0.6 million related to product financing arrangements, and this was partially offset by a decrease of $1.4 million related to the AMCS Notes, including amortization of debt issuance costs due to their repayment in December 2023.
For the full fiscal year, interest expense increased 25% to $39.5 million from $31.5 million last fiscal year. The increase was primarily driven by an increase of $8.4 million associated with our trading credit facility due to an increase in interest rates as well as increased borrowings, an increase of $3 million related to product financing arrangements. This was partially offset by a decrease of $3.2 million related to the AMCF Notes, including amortization of debt issuance costs due to their repayment in December 2023 and also a $0.5 million decrease in loan servicing fees.
Earnings from equity method investments in Q4 fiscal 2024 decreased 86% to $0.8 million from $5.3 million in Q4 of last year. For the full fiscal year, earnings from equity method investments decreased 68% to $4 million from $12.6 million last fiscal year. The decrease in both periods was due to decreased earnings of our equity method investees.
Net income attributable to the company for the fourth quarter of fiscal 2024 totaled $28.6 million or $1.20 per diluted share. This compares to net income attributable to the company of $41.8 million or $1.71 per diluted share in Q4 of last year. Net income for the fiscal fourth quarter of 2024 included an estimated $14.4 million remeasurement gain in connection with the acquisition of a controlling interest in SGB. This is preliminary and subject to change. Excluding the impact of the estimated preliminary remeasurement gain, diluted earnings per share was $0.60.
For the full fiscal year, net income attributable to the company totaled $66.2 million or $2.75 per diluted share which compares to net income attributable to the company of $156.4 million or $6.34 per diluted share last fiscal year. Net income attributable to the company for fiscal year 2024 included an estimated $14.4 million remeasurement gain in connection with the increased investment, resulting in a controlling interest in SGB. This is preliminary and subject to change. Excluding the impact of the estimated preliminary remeasurement gain, diluted earnings per share for fiscal year 2024 was $2.15.
Adjusted net income before provision for income taxes, a non-GAAP financial performance measure, which excludes depreciation, amortization, acquisition costs, remeasurement gains or losses and contingent consideration fair value adjustments, for Q4 fiscal 2024 totaled $20.1 million, a decrease of 66% compared to $59.1 million in the same year ago quarter. The decrease was principally due to lower net income before provision for income taxes.
Adjusted net income before provision for income taxes for the full fiscal year totaled $80.3 million, a 63% decrease from $216 million in the prior fiscal year. The decrease was principally due to lower net income before provision for income taxes. EBITDA, a non-GAAP liquidity measure for Q4 fiscal 2024 totaled $36.1 million, a 42% decrease compared to $61.8 million in Q4 2023. The decrease was principally due to lower net income of $13.3 million, lower income tax expense of $11.3 million and higher interest income of $2 million. Excluding the impact of the estimated preliminary remeasurement gain, preliminary EBITDA for the 3 months ended June 30, 2024, was $21.7 million.
EBITDA for the full fiscal year totaled $104.2 million, a 54% decrease compared to $225 million last fiscal year. The decrease was principally due to lower net income of $90 million, lower income tax expense of $32.7 million, higher interest expense of $8 million and higher interest income of $4.9 million. Excluding the impact of the estimated preliminary remeasurement gain, preliminary EBITDA for the fiscal year ended June 30, 2024, was $89.9 million.
Turning to our balance sheet. At fiscal year-end, we had $48.6 million of cash compared to $39.3 million of cash at the end of fiscal year 2023. Our nonrestricted inventories totaled $579.4 million, down $66.4 million from $645.8 million at the end of fiscal year 2023. Our tangible net worth, excluding noncontrolling interest at the end of the fiscal year was $304.8 million, down from $435.5 million at the end of the prior fiscal year. The reduction is due to share repurchase activity and dividends paid, combined with higher intangible assets and goodwill in connection with the acquisition of LPM and our increased investments, resulting in a controlling interest of SGB.
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 and it is expected that the next quarterly dividend will be paid in October 2024.
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?
Thank you, Kathleen. Looking at our key operating metrics for the fiscal fourth quarter and full year 2024, we sold 448,000 ounces of gold in Q4 fiscal 2024, which is down 45% from Q4 of last year and up 0.4% from the prior quarter. For the full fiscal year, we sold 1.8 million ounces of gold, which was down 31% from last fiscal year. We sold 25.4 million ounces of silver in Q4 fiscal 2024, which was down 44% from Q4 of last year and down 1% from last quarter. For the full fiscal year, we sold 108.1 million ounces of silver, which was down 31% from last fiscal year.
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 570,300 in Q4 fiscal 2024, which was up 530% from Q4 of last year and increased 908% from last quarter for the 3-month periods ended June 30, 2024, and 2023, approximately 92% and 32% of the new customers were attributable to the acquisition of a controlling interest in SGB and the acquired customer list of BullionMax respectively.
For the full fiscal year, the number of new customers in the DTC segment was 718,500, which is up 114% from 335,300 new customers in the prior fiscal year. Approximately 73% of the new customers in the fiscal year of 2024 were attributable to the acquisition of a controlling interest in SGB, and 31% of the new customers in fiscal year 2023 were attributable to the acquired customer list of BGASC and BullionMax.
The number of total customers in the DTC segment at the end of the fourth quarter was approximately 3.1 million, which was a 31% increase from the prior year. The year-over-year increase in total customers was due to organic growth of our JMB customer base as well as the acquisition of a controlling interest in SGB.
The DTC segment average order value, which represents the average dollar value of product orders, excluding the accumulation program orders, delivered to DTC segment customers during Q4 fiscal 2024 was $2,890 which is down 12% from Q4 fiscal 2023 and up 35% from the prior quarter. For the full fiscal year, our DTC average order value was $2,407, which is down 8% from fiscal year 2023.
For the fourth quarter, our inventory turn ratio was 2.3, which was a 28% decrease from 3.2% in Q4 of last year and consistent with last quarter. For the full fiscal year, our inventory turnover ratio was 9.2%, a 12% decrease from 10.5% last fiscal year.
Finally, the number of secured loans as of June 30, 2024, totaled 588 a decrease of 13% from March 31, 2024, and a decrease of 33% from June 30, 2023. Our secured loans receivable balance at the end of fiscal year was $113.1 million, a 2% decrease from March 31, 2024, and a 12% increase from June 30, 2023.
That concludes my prepared remarks. I will now turn it over to Greg for closing remarks. Greg?
Thank you, Thor and Kathleen. Looking ahead to fiscal 2025, we have seen continued elevated prices of gold and softened demand in premium compression during our first fiscal quarter.
During the first few weeks of August, we experienced increased volatility as the marketing customers reacted to the spike in the VIX Index above 38. Specifically, the week of August 5, we saw the VIX above 38 and continued elevated for that week. Our customers reacted to this, and we had a better than we expected increase in activity that week. We continue to monitor the macroeconomic environment and the impact of interest rates and the upcoming elections. We are evaluating opportunities to further expand our market reach to create value for our shareholders.
We are currently advancing our logistics automation initiatives at our AMGL facility in Las Vegas, which will support increased volume and lower our operational costs. We are also developing plans to broaden our reach in Asia, including establishing a trading hub in Singapore. We remain optimistic that our proven business model will allow us to sustain profitability and generate value for our shareholders over the long term.
This concludes my prepared remarks. John, we can now open the line for questions.
[Operator Instructions] The first question comes from Thomas Forte with Maxim Group.
So Greg, when I think about your performance in the last fiscal year, it feels like you did a very good job of generating profits. When I look at the chart for gold, it's pretty much straight up and to the right. So without thinking about fiscal '25, am I right in thinking that, generally speaking, when you have a one-way trade in gold, that can be challenging for you, and despite the challenges, you were able to generate a ton of profit?
Yes. I mean I think you hit the nail on the head. I mean we were at almost $90 million in EBITDA for the year which, as we have messaged in the past and today, it was certainly an environment with headwinds. I mean if you just look at what I mentioned earlier, the VIX Index, I mean if you look from January through the end of June, it was at a fairly small range low, and we just haven't had a great deal of volatility, which is what usually gives us tailwinds. So I think the performance in that environment was really good.
I think the improved performance in Q4 over Q3, where I don't think the macro environment was that much different to be able to improve and get to $0.60 from $0.21, I believe that the company and everybody with the company did a tremendous job. It was refreshing, as I said, in the first week of August to see our customer base and see our business really come to life and significantly outperform what we thought would happen. And I think that bodes well for the future.
The up and to the right on the price of gold, as I've talked about before, it stagnates demand, causes buyers and sellers to be a bit more conservative. And I think we have weathered that. I think we've done a very good job of managing our inventory, managing our buybacks. I believe we have continued to maintain our place as one of the larger providers of liquidity in the market for when our customers buy back product, and they need liquidity, and they count on A-Mark. So I think we've strengthened our relationship with our customers.
Certainly, I believe our initiatives that we started talking about following our Q3, where we have focused significantly -- significant assets and resources on new customers in our DTC segment, believe that has been hugely successful. As you can see from the numbers, for the first time, we're over 3 million customers in the DTC network.
So I believe we've outperformed in a lot of areas considering the environment. But I also believe we're investing for the future, and I think we're well prepared to take advantage of whatever environment there is going forward.
Great. And then just one follow-up and then I'll get back in the queue. So historically, the good news is, in this kind of environment, there may be more attractive M&A opportunities. Can you just talk about your current thoughts on M&A at a high level?
Yes. I think we are busier than ever right now reviewing and vetting different opportunities for us. I love what we have in the funnel and I think we have had a number of conversations where we have opportunities, both large and small. And I think that, that part of our strategy is acting like we have messaged in the past and how we expect it to develop in these kinds of market conditions.
So I'm very optimistic about that. I love some of the things that we're looking at. I love the ability to really vet and decide what's best for us. We continue to put acquisitions and M&A at the top of the 5 asset allocation items that we look at, which as I've said before, M&A, inventory, stock buybacks, dividends and repayment of debt. And my goal is to always have enough liquidity and to have the ability to take advantage of whichever 1 of those 5 rises to the best return for our shareholders.
I think our accomplishments and what Thor and Kathleen have been working on the last 4 to 6 months as it relates to our liquidity sources as well as our increased liquidity with our bank group has been a great accomplishment for A-Mark. So I believe we are very well positioned right now with our balance sheet to take advantage of whichever of our 5 spokes, as I say, become available to us.
[Operator Instructions] The next question comes from Andrew Scutt with ROTH Capital Partners.
I hopped on a couple of minutes late, so I apologize if you covered this, but we saw a nice pickup in gross margin sequentially. Can you just kind of talk through the drivers there, whether that's mix, kind of an improved spread environment, just in additional details would be great there.
Yes. I mean we saw an increase over most of our lines of business in this quarter versus the previous quarter. So although I believe the environments were similar, I believe we performed a bit better in Q4 than we did in Q3. So and that's reflected in the numbers.
I think on the DTC side, as I said before in the last call, we really pounded and tried very hard to invest in marketing and to take this opportunity to really add to our new customers, as well as an initiative to wake up our old customers that hadn't bought in the year. So that, I think, went very well.
I think on the wholesale side, we did have some larger transactions that drove the top line. And I think we just -- we performed a bit better in Q4 than we did in Q3.
Great. And then you also touched on briefly some enhancements you're making to the Vegas facility in Vegas. Can you just kind of talk about the -- what you're doing at AMGL?
Yes. We have been fortunate enough to have the space next door to us become available. We are building it out with some new automated technology that allows for a modernization of the pick and pack process and the packaging process. The equipment, it goes by the name of Kardex and it's used by a number of large operations that are in manufacturing, including SpaceX and a couple of others.
So we're well along the way. This has been about a 9-month project. We are now in the build-out phase. We are installing our new machines, and this will use technology as well as some great physical machinery that is going to allow us to greatly increase our capacity on how many packages we can ship the next time that we're pressed and markets allow for higher volumes of shipments.
Great. And the last one for me, if I may. Speaking of potential times of increased volume. Can you just kind of talk about how you're positioning yourself with inventory for possible volatility in the precious metals market before the election we have coming up?
Yes. And we have seen some increase in premiums and some selected inventory items that we have been holding. So we're happy with that. There's a few others that we've been holding. We haven't seen increased premiums yet. But I'm very comfortable with the inventory we're holding. I believe that we're well positioned in the event that we get more than just a week of multiples, week over week that we saw in the first week of August. I think we're very well positioned to take advantage of that.
I think we've also developed some new business with new customers on the wholesale side that we're turning inventory a little bit faster. And I think we have managed very well our production at both Silver Towne Mint and SMI that we've been very nimble at and we've talked about this before. We've been very nimble, particularly at Silver Towne, at being able to shift products quickly. We can shift a product run in 3 or 4 days.
Jamie and Brent have done a great job of being very nimble and when wholesale trading or DTC asks for a product, they've been able to shift production very quickly to that, which just allows us to have product in the marketplace that others don't. And although the premiums may be lower and the premiums aren't as they were a year or 2 ago, we are able to provide products and answer customer needs where we need to very quickly.
So we're very, very pleased at how we're managing our inventory at the moment.
Up next, we have Greg Gibas with Northland Securities.
Wanted to kind of follow-up on kind of macro related topics. Just to get your thoughts on kind of catalysts or drivers that can lead to improving spreads, would it be mostly macroeconomic related, relating to kind of volatility or anything on the supply side of the equation? And you noted the VIX earlier, Greg, and kind of impacting strength in August. Would you say that's a pretty good indicator of performance generally speaking?
Yes. I think we always say it, and we talk about this over the last few years is that generally, our markets are driven by a macro economic event, and it can be anything. Some are bigger than others, some affect our customer base differently than others. And it's not always consistent. What may have had an effect 2 years ago may not have the same effect today.
I think what we have talked about before is volatility in the spot price of gold and silver as well as volatility to the downside in equities. That generally will affect us positively. I think that at the moment, we continue to see what everybody sees in the country, which is a lot of polarization and a lot of uncertainty as to what's going to happen in the election, what's going to happen in Israel, what's going to happen in Russia and the Ukraine. I think all of these things are just tightening the string a little bit. And I think the string is tighter than it's been and where it actually breaks, I'm not going to predict the future, but I will say that for what we saw in the week of August -- the first week of August, I believe that we saw an outsized response across wholesale and DTC, more so than I would have expected. And on Monday -- of that first Monday of August, we had a pretty big drop in equities, and we also saw that combined with a fairly quick spike to the downside for gold and silver.
Now 3 or 4 days later, there was a recovery and we were back where we were the week before. But I think what I find very encouraging is that, what didn't probably to most people seem like that big of a deal on that Monday, it was a significant event for us and multiples of activity that we saw the week before. So that is consistent with what we've always talked about.
I think what I saw though was a little bit more like immediate knee-jerk reaction. And you can feel it very quickly. And I think that says a lot about where we're positioned to take advantage of these things. We still -- even after that week, August was -- August is looking elevated to July. So it has -- there has been some carry on. And I think we're seeing some -- a little bit of -- little more optimistic behavior, I would say, extending past the first week in August, I mean, certainly not to levels where we saw 18 months ago. But definitely, where we see events happening and our markets are reacting and our business is reacting favorably to the upside.
Now we still haven't seen enough demand that has really had an increased effect on premiums, which, as we've said before, is very important. So we're still, in my mind, performing very well with the somewhat depressed premiums that we're dealing with. But it's not going to take much. A lot of inventory, a lot of excess inventory has worked its way through our business as well as our competitors and it's not going to take much of a spike in demand to see premiums increase.
Sure. That makes sense, and that's very helpful. And I guess along those lines, as we think about the elections, just given you have quite a bit of operational history. And sure, I'm sure there's kind of variability. But I wanted to get a sense of kind of common trends and maybe how it's impacted election cycle, that is, how it's impacted the business in historical years?
Yes. I mean we have great history in '16 and -- 2016 and 2020, and we have historical data that we look at as well as just the knowledge and the intuition of being through it before.
I will say that this cycle starting on January 1 has been different than what we have seen in the past. I think that for the first 6 months of '24 in this election cycle, I think there was a -- whether it was real or perceived, there was a feeling that Trump was going to win the election. And I think that, that kind of lulled a lot of precious metal buyers into a comfort zone.
Certainly, if you take the end of July and the first of August, there has been quite a shift in the perception of how people believe the election cycle is going now. I think you can relate, not entirely, you can relate some of that to our performance and whether or not what we started to see at the end of July and the first of August, how much of that you can attribute to the election cycle.
I don't want to venture a guess there, but I will say that there has been some effect. And certainly, the uncertainty in where we sit today with it looks like 68, however many days it is till the election, there is a great deal more uncertainty in the cycle than maybe we saw in the first 6 months of this year. But it hasn't lined up exactly like what we've seen in the past. So we'll see how it plays out.
I think we're really well positioned for any outcome, and we'll -- just like I think we're positioned for whatever outcome happens as it relates to interest rates and how the equities markets perform over the next 6 months, so just feeling very good about where we're at.
[Operator Instructions] Next question comes from Sy Jacobs with Jacobs Asset Management.
I had a couple of questions for you, both related to M&A. Before we go back to your comments about what's in your pipeline, can you just do a kind of quick review of now that you're a full quarter into owning LPM and those related transactions? How it's playing out relative to how you modeled it? And then just a comment on that sort of Hong Kong Asian market. Is it sort of similarly depressed in activity and spread margin as your home market? Or is it just a different market with different conditions?
Yes. I would say that as it relates to the LPM acquisition, we're now about 5 months into it. I would say that we're very, very pleased with the assets that we purchased, we're very happy with the personnel that have integrated very well with A-Mark U.S. I think Kathleen and her team on the finance side have worked through the expected challenges that we had as it relates to integrating their business with ours on the finance side. I think she's nearly there and has made great -- it's a great accomplishment, and we're up and running and managing that very well.
I think that the nature of their business is similar to what our wholesale business is experiencing here. A large part of their business is sourcing products and creating products out of Asia, and selling them throughout the world, including in the U.S. So the demand drop-offs that we've seen in Europe and in the U.S. have definitely affected them.
From a straight P&L standpoint, I would say we're a little behind where we would hope to be today on the model, what we modeled out, but very optimistic about that we're going to see the results that we expected. I think -- and we're managing through that.
I believe that the opportunity for A-Mark, we've talked about it before, the opportunity to move our wholesale assets and expertise into the Asian market and develop a wholesale trading hub in Singapore as well as use the Hong Kong facility for -- to expand our wholesale trading to capture a bit more of that business in that time zone, we're very -- we're full speed ahead, and we're very optimistic. And Charlie from LPM and his team have been great about helping us integrate this. Thor from A-Mark is involved in this process as it relates to the Singapore facility. We've identified some talent in the region that we're enthusiastic about.
So that we believe is -- we're still very happy with the acquisition, and we believe it's going to -- it's definitely going to benefit A-Mark in a lot of different ways, once it gets rolling.
Great. So part two is you referenced really active, if not more active than ever pipeline or funnel of opportunities, large and small. If you could kind of think about, I don't know, the two that you think have the highest probability of actually crossing the finish line. Would that -- would those include popping up partially owned companies, exist that you already have minority or majority stakes in, or are they new targets? And then would they be North America, Asia or Europe.
And then lastly, the large ones, you said there's like large and small. With the largest likely to be done approach in drama, what JMB meant to A-Mark as its largest acquisition ever?
Well, I will quickly answer that. I don't -- JMB was a very unique opportunity for us, and the people at JMB are -- were extremely well versed at what they do. And it was transformational for A-Mark to go from a strict wholesale business with minority investment to a fully owned DTC business, which we have with JMB's help in a lot of ways, been able to grow that tremendously.
As it relates to topping off, I think that's probably not in the cards. I think that we did -- the LPM transaction was a new business. I think that the increased ownership and the consolidation of Silver Gold Bull again, was a little bit unique to that structure from the beginning and how we had negotiated it over time. So I think it was a bit of a timing opportunity for us as opposed to what I would call like a new deal in the funnel.
And then when I'm talking about new deals in the funnel, it's a little -- it's probably exclusively new deals. I don't have anything right now on the board that I would say is transformational or is of the size of what we did with JM Bullion. But still important, and I would say there's both wholesale and retail opportunities domestically. I think there's retail opportunities outside the U.S. in companies that I believe can benefit from JMB's expertise.
And then I think there are other deals that may be beneficial to our logistics business or our minting businesses. I'd say we're looking there. And in this particular market, part of management's goals are to make sure that all parts of our business can rise in a hot market. The goal is that our highest need to be higher than our previous highs and our lows need to be higher than our previous lows. And to do all that, you can't just focus on one area of our business. There has to be some thought that goes towards how to level up all parts of our business, which I think we're doing to accommodate both an acquisition but also accommodate a much hotter or higher volume market so that we can ship more packages, so that we can have more inventory, so that we can have more distribution, so that we can have more liquidity and financing for our customers.
I think all those things come to mind when we're looking at opportunities. And I think we're comfortable growing any of those areas. Like I've said before, the seller and the buyer have to match up at the right time and the price has to be right. But I will say that in all areas we're looking at, as you can see from our performance, we're now into what we would call a slower fiscal year, so you'll have a pretty good look at trailing 12 months and what's going on in the marketplace. And I do believe that as we progress forward, most targets in our business are going to have similar trailing 12 months' performance.
So I think it does it does put a more realistic view on what valuation should be. And I think that -- it plays to A-Mark's benefit that we have such a strong balance sheet, and we've built such a great liquidity situation and asset and capital situation and great shareholders. And we do -- we are unique and that we have the ability to actually still do an acquisition today. There's not a tremendous amount of competition out there right now with people that are looking to do the same thing we are. So it feels like it's setting up quite well for us.
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.
Great. Thank you, John. Again, as usual, I just said a few minutes ago, and I want to say it again, thank you to all of our shareholders. Great group. I love talking to you guys. It's been a great ride here with A-Mark and I can't thank you enough for your continued support. Thanks for joining our call today. I'd also like to thank our employees and our fantastic management team for their dedication and commitment to A-Mark's success, and we can't wait to keep you posted and apprised on what's coming next in the A-Mark world. So thank you again. 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 to A-Mark's future plans, objectives, expectations, performance, events and the like are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. These include statements regarding expectations with respect to future profitability and growth. International expansion, operational enhancements and the amount or timing of any future dividends.
Future dividends, risks and uncertainties individually or in the aggregate, could cause actual results or circumstances to differ materially from those expressed or implied in these statements. Factors that could cause actual results to differ, including the following failure to execute the company's growth strategy including the inability to identify the suitable or available acquisition or investment opportunities, greater-than-anticipated costs incurred to execute the strategy; government regulations that might impede growth particularly in Asia, the inability to successfully integrate recently acquired businesses; changes in the current international political climate, which historically has favorably contributed to demand and volatility in the precious metals markets, but also has posed certain risks and uncertainties for the company, particularly in recent periods, potential adverse effects of the current problems in the national and global supply chains, increased competition for the company's higher-margin services, which could depress pricing; the failure of the company's business model to respond to changes in the market environment as anticipated; changes in consumer demand and the preferences for precious metals products generally, potential negative effects that inflationary pressure may have on our business, the inability of the company to expand capacity at Silver Towne 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 risk and other factors 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 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.