What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-09 compared with 2024-02-08 · 282 added, 261 removed, 964 unchanged (36% of the section changed)

12 unchanged sentences

All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained in this Form 10-Q.

In addition to the risks and uncertainties that may ordinarily influence our business, macroeconomic uncertainty and volatility in the financial markets generally have contributed to an increase in the business conducted by the Company, but also pose certain risks and uncertainties for the Company.

While macroeconomic uncertainty and market volatility have continued, its effects on our business have been less pronounced in recent periods.

The Company cannot predict the periods during which such increased volatility will occur or the level of such increased volatility, the effect of such volatility and macroeconomic uncertainty on the Company, or whether other effects on the Company and its businesses will materialize in the short or long term.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and notes contained elsewhere in this Form 10-Q, and in the consolidated financial statements and notes contained in the Form 10-K for the fiscal year ended June 30, 2023.

36 unchanged sentences

• Liquidity and financial condition .

This section provides an analysis of our cash flows, as well as a discussion of our outstanding debt as of December 31, 2023, sources of liquidity and the amount of financial capacity available to fund our future commitments and other financing arrangements.

This section provides an analysis of our cash flows, as well as a discussion of our outstanding debt as of March 31, 2024, sources of liquidity and the amount of financial capacity available to fund our future commitments and other financing arrangements.

• Critical accounting policies and estimates .

7 unchanged sentences

Wholesale Sales & Ancillary Services Segment

The Company operates its Wholesale Sales & Ancillary Services segment directly and through its wholly-owned subsidiaries, A-Mark Trading AG (“AMTAG”), Transcontinental Depository Services, LLC ("TDS" or “Storage”), A-M Global Logistics, LLC (“AMGL” or "Logistics"), and AM&ST Associates, LLC ("AMST" or the “Silver Towne Mint").

The Company operates its Wholesale Sales & Ancillary Services segment directly and through its wholly-owned subsidiaries, A-Mark Trading AG (“AMTAG”), Transcontinental Depository Services, LLC ("TDS" or “Storage”), A-M Global Logistics, LLC (“AMGL” or "Logistics"), AM&ST Associates, LLC ("AMST" or the “Silver Towne Mint"), and AM/LPM Ventures, LLC, which we formed in February 2024 to acquire LPM Group Limited ("LPM").

The Wholesale Sales & Ancillary Services segment operates as a full-service precious metals company.

2 unchanged sentences

Our Coin and Bar unit deals in over 1,800 coin and bar products in a variety of weights, shapes, and sizes for distribution to dealers and other qualified purchasers.

We have a marketing support office in Vienna, Austria, and a trading center in El Segundo, California.

We have a marketing support office in Vienna, Austria, a numismatics showroom in Hong Kong, and a trading center in El Segundo, California.

The trading center, for buying and selling precious metals, is available to receive orders 24 hours every day, even when many major world commodity markets are closed.

7 unchanged sentences

Our Silver Towne Mint operations allow us to provide greater product selection to our customers and greater pricing stability within the supply chain, as well as to gain increased access to fabricated silver products during volatile market environments, which have historically created higher demand for precious metals products.

In February 2024, the Company acquired LPM, one of Asia's largest precious metals dealers.

Headquartered in Hong Kong, LPM extends A-Mark's global reach by offering its full-service precious metals products and services in Asia and internationally.

Direct-to-Consumer

13 unchanged sentences

JMB is a leading e-commerce retailer providing access to a broad array of gold, silver, copper, platinum, and palladium products through its websites.

JMB currently operates eight separately branded, company-owned websites targeting specific niches within the precious metals retail market, including JMBullion.com, ProvidentMetals.com, Silver.com, BGASC.com, CyberMetals.com, BullionMax.com, GoldPrice.org, and SilverPrice.org.

JMB currently operates nine separately branded, company-owned websites targeting specific niches within the precious metals retail market, including JMBullion.com, ProvidentMetals.com, Silver.com, BGASC.com, CyberMetals.com, BullionMax.com, Gold.com, GoldPrice.org, and SilverPrice.org.

In April 2022, JMB commercially launched the CyberMetals online platform, where customers can purchase and sell fractional shares of digital gold, silver, platinum, and palladium bars in a range of denominations.

10 unchanged sentences

CFC's customers include coin and precious metal dealers, investors, and collectors.

As of December 31, 2023, CFC had approximately $106.6 million in secured loans outstanding, of which approximately 20.2% were acquired from third parties (some of which may be customers of A-Mark) and approximately 79.8% were originated by CFC.

As of March 31, 2024, CFC had approximately $115.6 million in secured loans outstanding, of which approximately 16.1% were acquired from third parties (some of which may be customers of A-Mark) and approximately 83.9% were originated by CFC.

CAI is a holding company that has an equity method interest in Collectible Card Partners, LLC (“CCP”).

85 unchanged sentences

We use the following three metrics as revenue growth indicators when assessing our customer base:

• New Direct-to-Consumer Customers means the number of customers that have registered or setup a new account or made a purchase for the first time during the period.

• New Direct-to-Consumer Customers means the number of customers that have registered or set up a new account or made a purchase for the first time during the period.

• Active Direct-to-Consumer Customers means the number of customers that have made a purchase during any month during the period.

37 unchanged sentences

Continued macroeconomic uncertainty and the volatility in the financial markets in recent years have positively affected the Company’s trading revenues and gross profit as the volatility of the price of precious metals and numismatics typically results in an increase in the spread between bid and ask prices on these products.

Although conditions may fluctuate from period to period, when volatility is high, we generally experience increased demand for products in each of our coin and bar, industrial, and retail businesses.

We attribute this to certain customers seeking to assure a supply of precious metals necessary for the operation of their businesses, and other customers, particularly in Goldline and our JMB retail units, seeking the safety of investments in precious metals.

In response to the heightened demand, in certain cases prices for the products we sell have also risen.

While macroeconomic uncertainty has continued, its effects on our business has been less pronounced in recent periods.

We are uncertain of the duration of these conditions, or their continuing effects on our business.

Although conditions may fluctuate from period to period, when volatility is high, we historically experience increased demand for products in each of our coin and bar, industrial, and retail businesses.

While macroeconomic uncertainty continues to impact our business, its effects have been less pronounced in the current fiscal year.

Recent Development

On May 6, 2024, the Company amended A-Mark's Code of Ethics and Business Conduct applicable to directors, officers and other employees, making the following changes:

• Stating that, when conflicts of interest arise, decisions on behalf of the Company must be made by disinterested persons having full information as to the circumstances;

• Strengthening prohibitions on (i) misleading or coercing the Company’s independent public auditors to render financial statements inaccurate, (ii) money laundering and (iii) human rights labor violations by the Company or suppliers;

• Authorizing the Company, when a prohibited gift has been directed to an individual, to donate it to charity;

• Clarifying that a person running for office or engaging in public advocacy may disclose their affiliation with the Company as a credential but not state that the Company is endorsing a candidacy or policy position;

• Stating the Company's intention to hire individuals from diverse cultures and backgrounds with wide ranging experience and academic achievement;

• Clarifying and making more specific the wording of various provisions consistent with the substance of those provisions.

RESULTS OF OPERATIONS

Overview of Results of Operations

Consolidated Results of Operations for the Three Months Ended December 31, 2023 and 2022

Consolidated Results of Operations for the Three Months Ended March 31, 2024 and 2023

The operating results of our business were as follows (in thousands, except per share and performance metrics data):

Three Months Ended December 31,

Three Months Ended March 31,

Selling, general, and administrative expenses

2 unchanged sentences

Interest expense

Earnings from equity method investments

Losses from equity method investments

Other income, net

18 unchanged sentences

(5) Number of outstanding secured loans to customers that are primarily collateralized by precious metals at the end of the period.

Consolidated Results of Operations for the Six Months Ended December 31, 2023 and 2022

Consolidated Results of Operations for the Nine Months Ended March 31, 2024 and 2023

The operating results of our business were as follows (in thousands, except per share and performance metrics data):

Six Months Ended December 31,

Nine Months Ended March 31,

Selling, general, and administrative expenses

24 unchanged sentences

in thousands, except performance metrics

Three Months Ended December 31,

Three Months Ended March 31,

Performance Metrics

1 unchanged sentence

Silver ounces sold

Revenues for the three months ended December 31, 2023 increased $129.1 million, or 6.6%, to $2.079 billion from $1.950 billion in 2022.

Revenues for the three months ended March 31, 2024 increased $293.5 million, or 12.7%, to $2.611 billion from $2.317 billion in 2023.

Excluding an increase of $622.1 million of forward sales, our revenues decreased $328.6 million, or 19.6%, which was due to a decrease in gold and silver ounces sold, partially offset by higher average selling prices of gold and silver.

Gold ounces sold for the three months ended December 31, 2023 decreased 115,000 ounces, or 20.4%, to 450,000 ounces from 565,000 ounces in 2022.

Silver ounces sold for the three months ended December 31, 2023 decreased 11,562,000 ounces, or 30.3%, to 26,575,000 ounces from 38,137,000 ounces in 2022.

On average, the selling prices for gold increased by 13.9% and selling prices for silver increased by 13.1% during the three months ended December 31, 2023 as compared to the prior year.

JMB's revenue represented 16.3% and 21.3% of the Company's consolidated revenue for the three months ended December 31, 2023 and 2022, respectively.

Gold ounces sold for the three months ended March 31, 2024 decreased 213,000 ounces, or 32.3%, to 446,000 ounces from 659,000 ounces in 2023.

Silver ounces sold for the three months ended March 31, 2024 decreased 11,184,000 ounces, or 30.3%, to 25,722,000 ounces from 36,906,000 ounces in 2023.

On average, the selling prices for gold increased by 8.3% and selling prices for silver increased by 3.8% during the three months ended March 31, 2024 as compared to the prior year.

JMB's revenue represented 11.9% and 20.4% of the Company's consolidated revenue for the three months ended March 31, 2024 and 2023, respectively.

in thousands, except performance metrics

Six Months Ended December 31,

Nine Months Ended March 31,

Performance Metrics

1 unchanged sentence

Silver ounces sold

Revenues for the six months ended December 31, 2023 increased $713.4 million, or 18.5%, to $4.563 billion from $3.850 billion in 2022.

Excluding an increase of $891.6 million of forward sales, our revenues decreased $178.2 million, or 6.1%, which was due to a decrease in gold and silver ounces sold, partially offset by higher average selling prices of gold and silver.

Gold ounces sold for the six months ended December 31, 2023 decreased 249,000 ounces, or 20.9%, to 945,000 ounces from 1,194,000 ounces in 2022.

Silver ounces sold for the six months ended December 31, 2023 decreased 17,101,000 ounces, or 23.1%, to 56,953,000 ounces from 74,054,000 ounces in 2022.

On average, the selling prices for gold increased by 12.0% and selling prices for silver increased by 13.9% during the six months ended December 31, 2023 as compared to the prior year.

JMB's revenue represented 13.9% and 20.9% of the Company's consolidated revenue for the six months ended December 31, 2023 and 2022, respectively.

Revenues for the nine months ended March 31, 2024 increased $1.007 billion, or 16.3%, to $7.174 billion from $6.167 billion in 2023.

Excluding an increase of $1.514 billion of forward sales, our revenues decreased $506.9 million, or 11.0%, which was due to a decrease in gold and silver ounces sold, partially offset by higher average selling prices of gold and silver.

Gold ounces sold for the nine months ended March 31, 2024 decreased 462,000 ounces, or 24.9%, to 1,391,000 ounces from 1,853,000 ounces in 2023.

Silver ounces sold for the nine months ended March 31, 2024 decreased 28,285,000 ounces, or 25.5%, to 82,675,000 ounces from 110,960,000 ounces in 2023.

On average, the selling prices for gold increased by 10.4% and selling prices for silver increased by 10.3% during the nine months ended March 31, 2024 as compared to the prior year.

JMB's revenue represented 13.2% and 20.7% of the Company's consolidated revenue for the nine months ended March 31, 2024 and 2023, respectively.

in thousands, except performance metric

Three Months Ended December 31,

Three Months Ended March 31,

Performance Metric

Inventory turnover ratio

Gross profit for the three months ended December 31, 2023 decreased $17.9 million, or 28.0%, to $46.0 million from $64.0 million in 2022.

Gross profit for the three months ended March 31, 2024 decreased $40.7 million, or 53.9%, to $34.8 million from $75.5 million in 2023.

The overall gross profit decrease was due to lower gross profits earned from both the Wholesale Sales & Ancillary Services and Direct-to-Consumer segments.

The Company’s overall gross margin percentage for the three months ended December 31, 2023 decreased by 106.6 basis points to 2.215% from 3.281% in 2022.

Excluding an increase of $231.6 million of forward sales that had a negligible impact to the amount of gross profit, our gross margin percentage for the three months ended December 31, 2023 decreased by 101.8 basis points to 3.532% from 4.550%, which was primarily due to lower premium spreads, partially offset by higher trading profits.

JMB’s retail market activity represented 41.1% and 50.7%, respectively, of the Company’s consolidated gross profit for the three months ended December 31, 2023 and 2022.

Our inventory turnover rate for the three months ended December 31, 2023 decreased by 20.8% to 1.9 from 2.4 in 2022.

The Company’s overall gross margin percentage for the three months ended March 31, 2024 decreased by 192.4 basis points to 1.334% from 3.258% in 2023.

Excluding an increase of $622.1 million of forward sales that had a negligible impact to the amount of gross profit, our gross margin percentage for the three months ended March 31, 2024 decreased by 191.7 basis points to 2.580% from 4.497%, which was primarily due to lower premium spreads, partially offset by higher trading profits.

JMB’s retail market activity represented 45.0% and 47.1%, respectively, of the Company’s consolidated gross profit for the three months ended March 31, 2024 and 2023.

Our inventory turnover rate for the three months ended March 31, 2024 decreased by 4.2% to 2.3 from 2.4 in 2023.

The decrease in our inventory turnover ratio was primarily due to higher average inventory balances held under product financing arrangements, partially offset by higher forward sales.

in thousands, except performance metric

Six Months Ended December 31,

Nine Months Ended March 31,

Performance Metric

Inventory turnover ratio

Gross profit for the six months ended December 31, 2023 decreased $45.1 million, or 32.1%, to $95.4 million from $140.6 million in 2022.

Gross profit for the nine months ended March 31, 2024 decreased $85.8 million, or 39.7%, to $130.3 million from $216.1 million in 2023.

The overall gross profit decrease was due to lower gross profits earned from both the Wholesale Sales & Ancillary Services and Direct-to-Consumer segments.

The Company’s overall gross margin percentage for the six months ended December 31, 2023 decreased by 155.9 basis points to 2.092% from 3.651% in 2022.

Excluding an increase of $891.6 million of forward sales that had a negligible impact to the amount of gross profit, our gross margin percentage for the six months ended December 31, 2023 decreased by 132.6 basis points to 3.462% from 4.788%, which was primarily due to lower premium spreads, partially offset by higher trading profits.

JMB’s retail market activity represented 38.3% and 49.2%, respectively, of the Company’s consolidated gross profit for the six months ended December 31, 2023 and 2022.

Our inventory turnover ratio for the six months ended December 31, 2023 decreased by 4.4% to 4.3 from 4.5 in 2022.

The Company’s overall gross margin percentage for the nine months ended March 31, 2024 decreased by 168.7 basis points to 1.816% from 3.503% in 2023.

Excluding an increase of $1.514 billion of forward sales that had a negligible impact to the amount of gross profit, our gross margin percentage for the nine months ended March 31, 2024 decreased by 151.1 basis points to 3.172% from 4.683%, which was primarily due to lower premium spreads, partially offset by higher trading profits.

JMB’s retail market activity represented 40.1% and 48.5%, respectively, of the Company’s consolidated gross profit for the nine months ended March 31, 2024 and 2023.

Our inventory turnover ratio for the nine months ended March 31, 2024 decreased by 2.9% to 6.8 from 7.0 in 2023.

The decrease in our inventory turnover ratio was primarily due to higher average inventory balances held under product financing arrangements, partially offset by higher forward sales.

Selling, General, and Administrative Expense

Three Months Ended December 31,

Three Months Ended March 31,

Selling, general, and administrative expenses

Selling, general and administrative expenses for the three months ended December 31, 2023 increased $1.6 million, or 7.6%, to $22.4 million from $20.8 million in 2022.

Selling, general, and administrative expenses for the three months ended March 31, 2024 decreased $1.0 million, or 4.1%, to $22.9 million from $23.8 million in 2023.

The change was primarily due to:

(i) an increase in compensation expense (including performance-based accruals) of $1.4 million, (ii) higher consulting and professional fees of $0.6 million, and (iii) an increase in information technology costs of $0.4 million, partially offset by (iv) a decrease in insurance costs of $0.9 million and (v) lower advertising costs of $0.4 million.

Six Months Ended December 31,

(i) a decrease in compensation expense (including performance-based accruals) of $2.2 million, (ii) a decrease in insurance costs of $0.9 million and (iii) lower advertising costs of $0.4 million, partially offset by (iv) higher consulting and professional fees of $2.2 million and (v) an increase in information technology costs of $0.2 million.

Nine Months Ended March 31,

Selling, general, and administrative expenses

Selling, general and administrative expenses for the six months ended December 31, 2023 increased $5.6 million, or 14.6%, to $44.2 million from $38.6 million in 2022.

Selling, general, and administrative expenses for the nine months ended March 31, 2024 increased $4.7 million, or 7.5%, to $67.1 million from $62.4 million in 2023.

The change was primarily due to:

(i) an increase in consulting and professional fees of $2.6 million, (ii) an increase in compensation expense (including performance-based accruals) of $2.6 million, and (iii) an increase in information technology costs of $0.7 million, partially offset by (iv) a decrease in insurance costs of $0.5 million.

(i) an increase in consulting and professional fees of $4.8 million, (ii) an increase in information technology costs of $0.8 million, and (iii) an increase in compensation expense (including performance-based accruals) of $0.4 million, partially offset by (iv) a decrease in insurance costs of $1.4 million.

Depreciation and Amortization Expense

Three Months Ended December 31,

Three Months Ended March 31,

Depreciation and amortization expense

Depreciation and amortization expense for the three months ended December 31, 2023 decreased $0.4 million, or 13.8%, to $2.8 million from $3.3 million in 2022 primarily due to a $0.6 million decrease in JMB’s intangible asset amortization expense.

Six Months Ended December 31,

Depreciation and amortization expense for the three months ended March 31, 2024 decreased $0.4 million, or 11.7%, to $2.9 million from $3.3 million in 2023 primarily due to a $0.6 million decrease in JMB’s intangible asset amortization expense.

Nine Months Ended March 31,

Depreciation and amortization expense

Depreciation and amortization expense for the six months ended December 31, 2023 decreased $0.8 million, or 13.1%, to $5.6 million from $6.4 million in 2022 primarily due to a $1.1 million decrease in JMB’s intangible asset amortization expense.

Depreciation and amortization expense for the nine months ended March 31, 2024 decreased $1.2 million, or 12.6%, to $8.6 million from $9.8 million in 2023 primarily due to a $1.7 million decrease in JMB’s intangible asset amortization expense.

Interest Income

in thousands, except performance metric

Three Months Ended December 31,

Three Months Ended March 31,

Interest income

1 unchanged sentence

Number of secured loans at period-end

Interest income for the three months ended December 31, 2023 increased $1.3 million, or 26.6%, to $6.3 million from $5.0 million in 2022.

Interest income for the three months ended March 31, 2024 increased $0.6 million, or 9.8%, to $6.7 million from $6.1 million in 2023.

The aggregate increase in interest income was primarily due to a increase in other finance product income of $0.1 million and a increase in interest income earned by our Secured Lending segment of $0.5 million.

1 unchanged sentence

The increase in interest income earned from the segment’s secured loan portfolio was primarily due to an increase in interest rates and higher average monthly loan balances, partially offset by fewer loans outstanding.

The number of secured loans outstanding decreased by 31.8% to 715 as of December 31, 2023, from 1,049 as of December 31, 2022.

The number of secured loans outstanding decreased by 29.9% to 675 as of March 31, 2024, from 963 as of March 31, 2023.

in thousands, except performance metric

Six Months Ended December 31,

Nine Months Ended March 31,

Interest income

1 unchanged sentence

Number of secured loans at period-end

Interest income for the six months ended December 31, 2023 increased $2.3 million, or 23.1%, to $12.4 million from $10.1 million in 2022.

Interest income for the nine months ended March 31, 2024 increased $2.9 million, or 18.1%, to $19.1 million from $16.2 million in 2023.

The aggregate 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 $1.4 million.

1 unchanged sentence

The number of secured loans outstanding decreased by 31.8% to 715 as of December 31, 2023, from 1,049 as of December 31, 2022.

The number of secured loans outstanding decreased by 29.9% to 675 as of March 31, 2024, from 963 as of March 31, 2023.

Interest Expense

Three Months Ended December 31,

Three Months Ended March 31,

Interest expense

Interest expense for the three months ended December 31, 2023 increased $2.9 million, or 40.5%, to $10.2 million from $7.2 million in 2022.

Interest expense for the three months ended March 31, 2024 increased $0.7 million, or 7.3%, to $9.9 million from $9.2 million in 2023.

The increase in interest expense was primarily due to (i) an increase of $1.3 million associated with our Trading Credit Facility due to an increase in interest rates as well as increased borrowings and (ii) an increase of $0.9 million related to product financing arrangements, partially offset by (iii) a decrease of $1.4 million related to the AMCF Notes (including amortization of debt issuance costs) due to the repayment in December 2023.

Six Months Ended December 31,

Nine Months Ended March 31,

Interest expense

Interest expense for the six months ended December 31, 2023 increased $6.6 million, or 49.6%, to $20.0 million from $13.4 million in 2022.

Interest expense for the nine months ended March 31, 2024 increased $7.3 million, or 32.3%, to $29.9 million from $22.6 million in 2023.

The increase in interest expense was primarily driven by each of the following components:

(i) an increase of $6.9 million associated with our Trading Credit Facility due to an increase in interest rates as well as increased borrowings and (ii) an increase of $2.5 million related to product financing arrangements, partially offset by (iii) a decrease of $1.8 million related to the AMCF Notes (including amortization of debt issuance costs) due to the repayment in December 2023 and (iv) a $0.3 million decrease in loan servicing fees.

Earnings from Equity Method Investments

Three Months Ended December 31,

Earnings from equity method investments

Earnings from equity method investments for the three months ended December 31, 2023 decreased $3.9 million, or 83.4%, to $0.8 million from $4.7 million in 2022 due primarily to decreased earnings of our equity method investees.

Six Months Ended December 31,

Earnings (Losses) from Equity Method Investments

Three Months Ended March 31,

Losses from equity method investments

Losses from equity method investments for the three months ended March 31, 2024 increased $0.1 million, or 194.3%, to $0.2 million from $0.1 million in 2023 due to decreased earnings of our equity method investees.

Nine Months Ended March 31,

Earnings from equity method investments

Earnings from equity method investments for the six months ended December 31, 2023 decreased $3.9 million, or 52.5%, to $3.5 million from $7.3 million in 2022 due primarily to decreased earnings of our equity method investees.

Earnings from equity method investments for the nine months ended March 31, 2024 decreased $4.0 million, or 54.9%, to $3.3 million from $7.3 million in 2023 due to decreased earnings of our equity method investees.

Other Income, Net

Three Months Ended December 31,

Three Months Ended March 31,

Other income, net

Other income, net for the three months ended December 31, 2023 decreased $0.3 million, or 31.7%, to $0.6 million from $0.8 million in 2022.

Other income, net for the three months ended March 31, 2024 increased $0.1 million, or 19.0%, to $0.8 million from $0.6 million in 2023.

The change in other income, net was not significant.

Six Months Ended December 31,

Nine Months Ended March 31,

Other income, net

Other income, net for the six months ended December 31, 2023 decreased $0.5 million, or 38.1%, to $0.8 million from $1.4 million in 2022.

The change in other income, net was not significant.

Other income, net for the nine months ended March 31, 2024 decreased $0.4 million, or 19.8%, to $1.6 million from $2.0 million in 2023.

The decrease in other income, net was primarily due to a decrease in royalties earned of $1.0 million, partially offset by a $0.6 million increase in gains on other investments.

Income Tax Expense

Three Months Ended December 31,

Three Months Ended March 31,

Income tax expense

Our income tax expense was $4.5 million and $9.6 million for the three months ended December 31, 2023 and 2022, respectively.

Our effective tax rate was approximately 24.2% and 22.1% for the three months ended December 31, 2023 and 2022, respectively.

For the three months ended December 31, 2023 and 2022, our effective tax rate differed from the federal statutory rate primarily due to the foreign derived intangible income special deduction and the excess tax benefit from share-based compensation, partially offset by Section 162(m) executive compensation disallowance, state taxes (net of federal tax benefit), and other normal course non-deductible expenditures.

Six Months Ended December 31,

Our income tax expense was $1.3 million and $9.8 million for the three months ended March 31, 2024 and 2023, respectively.

Our effective tax rate was approximately 20.0% and 21.4% for the three months ended March 31, 2024 and 2023, respectively.

For the three months ended March 31, 2024 and 2023, our effective tax rate differed from the federal statutory rate primarily due to the foreign derived intangible income special deduction and the excess tax benefit from share-based compensation, partially offset by Section 162(m) executive compensation disallowance, state taxes (net of federal tax benefit), and other normal course non-deductible expenditures.

Nine Months Ended March 31,

Income tax expense

Our income tax expense was $9.4 million and $22.3 million for the six months ended December 31, 2023 and 2022, respectively.

Our effective tax rate was approximately 22.2% and 22.1% for the six months ended December 31, 2023 and 2022, respectively.

For the six months ended December 31, 2023 and 2022, our effective tax rate differed from the federal statutory rate primarily due to the foreign derived intangible income special deduction and the excess tax benefit from share-based compensation, partially offset by Section 162(m) executive compensation disallowance, state taxes (net of federal tax benefit), and other normal course non-deductible expenditures.

Our income tax expense was $10.7 million and $32.1 million for the nine months ended March 31, 2024 and 2023, respectively.

Our effective tax rate was approximately 21.9% and 21.8% for the nine months ended March 31, 2024 and 2023, respectively.

For the nine months ended March 31, 2024 and 2023, our effective tax rate differed from the federal statutory rate primarily due to the foreign derived intangible income special deduction and the excess tax benefit from share-based compensation, partially offset by Section 162(m) executive compensation disallowance, state taxes (net of federal tax benefit), and other normal course non-deductible expenditures.

SEGMENT RESULTS OF OPERATIONS

2 unchanged sentences

Results of Operations — Wholesale Sales & Ancillary Services Segment

The Company operates its Wholesale Sales & Ancillary Services segment directly and through its wholly-owned subsidiaries, A-Mark Trading AG (“AMTAG”), Transcontinental Depository Services ("TDS"), A-M Global Logistics, LLC ("Logistics"), and AM&ST Associates, LLC ("AMST" or "Silver Towne" or the "Mint").

Also, the Wholesale Sales & Ancillary Services segment includes the consolidating eliminations of inter-segment transactions and unallocated segment adjustments.

Overview of Results of Operations for the Three Months Ended December 31, 2023 and 2022

The Company operates its Wholesale Sales & Ancillary Services segment directly and through its wholly-owned subsidiaries, A-Mark Trading AG (“AMTAG”), Transcontinental Depository Services ("TDS"), A-M Global Logistics, LLC ("Logistics"), AM&ST Associates, LLC ("AMST" or "Silver Towne" or the "Mint"), and AM/LPM Ventures, LLC which we formed in February 2024 to acquire LPM Group Limited ("LPM").

The Wholesale Sales & Ancillary Services segment includes the consolidating eliminations of inter-segment transactions and unallocated segment adjustments.

Overview of Results of Operations for the Three Months Ended March 31, 2024 and 2023

— Wholesale Sales & Ancillary Services Segment

The operating results of our Wholesale Sales & Ancillary Services segment were as follows (in thousands, except performance metrics data):

Three Months Ended December 31,

Three Months Ended March 31,

Selling, general, and administrative expenses

2 unchanged sentences

Interest expense

Earnings from equity method investments

Losses from equity method investments

Other income, net

14 unchanged sentences

(3) Wholesales Sales ticket volume represents the total number of product orders processed.

Overview of Results of Operations for the Six Months Ended December 31, 2023 and 2022

Overview of Results of Operations for the Nine Months Ended March 31, 2024 and 2023

— Wholesale Sales & Ancillary Services Segment

The operating results of our Wholesale Sales & Ancillary Services segment were as follows (in thousands, except performance metrics data):

Six Months Ended December 31,

Nine Months Ended March 31,

Selling, general, and administrative expenses

12 unchanged sentences

This segment’s gross sales before eliminations of inter-segment activity totaled $6.866 billion.

(b) Revenues are presented net of inter-segment transactions with the Direct-to-Consumer segment that totaled $643.2 million.

(b) Revenues are presented net of inter-segment transactions with the Direct-to-Consumer segment that totaled $1.052 billion.

This segment’s gross sales before eliminations of inter-segment activity totaled $5.819 billion.

6 unchanged sentences

in thousands, except performance metrics

Three Months Ended December 31,

Three Months Ended March 31,

Performance Metrics

6 unchanged sentences

This segment’s gross sales before eliminations of inter-segment activity totaled $2.204 billion.

Revenues for the three months ended December 31, 2023 increased $208.7 million, or 13.9%, to $1.708 billion from $1.500 billion in 2022.

Revenues for the three months ended March 31, 2024 increased $479.8 million, or 26.7%, to $2.275 billion from $1.795 billion in 2023.

Excluding an increase in forward sales of $622.1 million, our revenues decreased $142.3 million, which was due to a decrease in gold and silver ounces sold, partially offset by higher average selling prices of gold and silver.

Gold ounces sold for the three months ended December 31, 2023 decreased 101,000 ounces, or 23.2%, to 334,000 ounces from 435,000 ounces in 2022.

Silver ounces sold for the three months ended December 31, 2023 decreased 9,635,000 ounces, or 29.7%, to 22,809,000 ounces from 32,444,000 ounces in 2022.

On average, the selling prices for gold and silver increased by 14.2% and 14.5%, respectively, during the three months ended December 31, 2023 as compared to the prior year.

The Wholesale Sales ticket volume for the three months ended December 31, 2023 increased by 4,207 tickets, or 20.0% to 25,262 tickets from 21,055 tickets in 2022.

Gold ounces sold for the three months ended March 31, 2024 decreased 145,000 ounces, or 30.0%, to 339,000 ounces from 484,000 ounces in 2023.

Silver ounces sold for the three months ended March 31, 2024 decreased 8,298,000 ounces, or 26.9%, to 22,545,000 ounces from 30,843,000 ounces in 2023.

On average, the selling prices for gold and silver increased by 8.8% and 4.4%, respectively, during the three months ended March 31, 2024 as compared to the prior year.

The Wholesale Sales ticket volume for the three months ended March 31, 2024 decreased by 2,764 tickets, or 9.6% to 26,150 tickets from 28,914 tickets in 2023.

in thousands, except performance metrics

Six Months Ended December 31,

Nine Months Ended March 31,

Performance Metrics

4 unchanged sentences

This segment’s gross sales before eliminations of inter-segment activity totaled $6.866 billion.

(b) Revenues are presented net of inter-segment transactions with the Direct-to-Consumer segment that totaled $643.2 million.

(b) Revenues are presented net of inter-segment transactions with the Direct-to-Consumer segment that totaled $1.052 billion.

This segment’s gross sales before eliminations of inter-segment activity totaled $5.819 billion.

Revenues for the six months ended December 31, 2023 increased $895.4 million, or 30.1%, to $3.867 billion from $2.972 billion in 2022.

Excluding an increase in forward sales of $891.6 million, our revenues increased $3.8 million, which was due to higher average selling prices of gold and silver, partially offset by a decrease in gold and silver ounces sold.

Gold ounces sold for the six months ended December 31, 2023 decreased 199,000 ounces, or 21.8%, to 712,000 ounces from 911,000 ounces in 2022.

Silver ounces sold for the six months ended December 31, 2023 decreased 11,795,000 ounces, or 19.0%, to 50,166,000 ounces from 61,961,000 ounces in 2022.

On average, the selling prices for gold increased by 12.6% and selling prices for silver increased by 15.0% during the six months ended December 31, 2023 as compared to the prior year.

The Wholesale Sales ticket volume for the six months ended December 31, 2023 increased by 87 tickets, or 0.2% to 47,306 tickets from 47,219 tickets in 2022.

Revenues for the nine months ended March 31, 2024 increased $1.375 billion, or 28.8%, to $6.142 billion from $4.767 billion in 2023.

Excluding an increase in forward sales of $1.514 billion, our revenues decreased $138.5 million, which was due to a decrease in gold and silver ounces sold, partially offset by higher average selling prices of gold and silver.

Gold ounces sold for the nine months ended March 31, 2024 decreased 344,000 ounces, or 24.7%, to 1,051,000 ounces from 1,395,000 ounces in 2023.

Silver ounces sold for the nine months ended March 31, 2024 decreased 20,093,000 ounces, or 21.7%, to 72,711,000 ounces from 92,804,000 ounces in 2023.

On average, the selling prices for gold increased by 11.1% and selling prices for silver increased by 11.3% during the nine months ended March 31, 2024 as compared to the prior year.

The Wholesale Sales ticket volume for the nine months ended March 31, 2024 decreased by 2,677 tickets, or 3.5% to 73,456 tickets from 76,133 tickets in 2023.

Gross Profit — Wholesale Sales & Ancillary Services

Three Months Ended December 31,

Three Months Ended March 31,

(c) Gross profit percentage before elimination of inter-segment sales to the Direct-to-Consumer segment was 0.648% for the period.

(d) Gross profit percentage before elimination of inter-segment sales to the Direct-to-Consumer segment was 1.177% for the period.

Gross profit for the three months ended December 31, 2023 decreased $3.5 million, or 12.9%, to $23.9 million from $27.4 million in 2022.

Gross profit for the three months ended March 31, 2024 decreased $15.5 million, or 47.9%, to $16.8 million from $32.3 million in 2023.

The overall gross profit decrease was primarily due to lower premium spreads, partially offset by higher trading profit.

1 unchanged sentence

The decrease in gross margin percentage was mainly attributable to lower premium spreads and the impact of increased forward sales, partially offset by higher trading profits.

Excluding an increase of $231.6 million of forward sales that had a negligible impact to the amount of gross profit, this segment's gross margin percentage for the three months ended December 31, 2023 decreased by 30.8 basis points to 2.561% from 2.869%.

Excluding an increase of $622.1 million of forward sales that had a negligible impact to the amount of gross profit, this segment's gross margin percentage for the three months ended March 31, 2024 decreased by 113.1 basis points to 1.660% from 2.791%.

Forward sales increase revenues but are associated with negligible gross profit.

The Company enters into forward contracts to hedge its precious metals price risk exposure and not for speculative purposes.

Six Months Ended December 31,

Nine Months Ended March 31,

(c) Gross profit percentage before elimination of inter-segment sales to the Direct-to-Consumer segment was 0.942% for the period.

(d) Gross profit percentage before elimination of inter-segment sales to the Direct-to-Consumer segment was 1.602% for the period.

Gross profit for the six months ended December 31, 2023 decreased $9.7 million, or 15.7%, to $52.2 million from $61.9 million in 2022.

Gross profit for the nine months ended March 31, 2024 decreased $25.1 million, or 26.7%, to $69.1 million from $94.2 million in 2023.

The gross profit decrease was primarily due to lower premium spreads, partially offset by higher trading profits.

1 unchanged sentence

The decrease in gross margin percentage was mainly attributable to the impact of increased forward sales and lower premium spreads, partially offset by higher trading profits.

Excluding an increase of $891.6 million of forward sales that had a negligible impact to the amount of gross profit, this segment's gross margin percentage for the six months ended December 31, 2023 decreased by 47.6 basis points to 2.534% from 3.010% in the prior year.

Excluding an increase of $1.514 billion of forward sales that had a negligible impact to the amount of gross profit, this segment's gross margin percentage for the nine months ended March 31, 2024 decreased by 68.5 basis points to 2.246% from 2.931% in the prior year.

Forward sales increase revenues but are associated with negligible gross profit.

1 unchanged sentence

Selling, General, and Administrative Expenses — Wholesale Sales & Ancillary Services

Three Months Ended December 31,

Three Months Ended March 31,

Selling, general, and administrative expenses

Selling, general and administrative expenses for the three months ended December 31, 2023 increased $1.0 million, or 10.5%, to $10.6 million from $9.6 million in 2022.

Selling, general, and administrative expenses for the three months ended March 31, 2024 decreased $0.2 million, or 1.8%, to $12.2 million from $12.4 million in 2023.

The change was primarily due to:

(i) an increase in compensation expense (including performance-based accruals) of $0.8 million, (ii) higher consulting and professional fees of $0.7 million, and (iii) an increase in advertising costs of $0.3 million, partially offset by (iv) a decrease in insurance costs of $0.9 million.

Six Months Ended December 31,

(i) a decrease in compensation expense (including performance-based accruals) of $2.0 million and (ii) a decrease in insurance costs of $0.9 million, partially offset by (iii) higher consulting and professional fees of $2.3 million and (iv) an increase in advertising costs of $0.2 million.

Nine Months Ended March 31,

Selling, general, and administrative expenses

Selling, general and administrative expenses for the six months ended December 31, 2023 increased $4.2 million, or 24.9%, to $21.2 million from $16.9 million in 2022.

Selling, general, and administrative expenses for the nine months ended March 31, 2024 increased $4.0 million, or 13.6%, to $33.4 million from $29.4 million in 2023.

The change was primarily due to:

(i) an increase in consulting and professional fees of $2.5 million and (ii) an increase in compensation expense (including performance-based accruals) of $1.4 million, (iii) an increase in advertising costs of $0.7 million, and (iv) an increase in information technology costs of $0.2 million, partially offset by (v) a decrease in insurance costs of $0.6 million.

(i) an increase in consulting and professional fees of $4.8 million, (ii) an increase in advertising costs of $0.9 million, and (iii) an increase in information technology costs of $0.3 million, partially offset by (iv) a decrease in insurance costs of $1.5 million and (v) a decrease in compensation expense (including performance-based accruals) of $0.6 million.

Interest Income — Wholesale Sales & Ancillary Services

Three Months Ended December 31,

Three Months Ended March 31,

Interest income

Interest income for the three months ended December 31, 2023 increased $0.8 million, or 27.0%, to $3.6 million from $2.8 million in 2022.

The overall increase is primarily due to an increase in interest earned from repurchase arrangements with customers of $0.8 million.

Six Months Ended December 31,

Interest income for the three months ended March 31, 2024 increased $0.1 million, or 2.1%, to $3.7 million from $3.6 million in 2023.

The overall increase in interest income was not significant.

Nine Months Ended March 31,

Interest income

Interest income for the six months ended December 31, 2023 increased $1.5 million, or 27.4%, to $7.0 million from $5.5 million in 2022.

Interest income for the nine months ended March 31, 2024 increased $1.6 million, or 17.4%, to $10.7 million from $9.1 million in 2023.

The overall increase was primarily due to an increase in interest earned from repurchase arrangements with customers of $1.7 million.

Interest Expense — Wholesale Sales & Ancillary Services

Three Months Ended December 31,

Three Months Ended March 31,

Interest expense

Interest expense for the three months ended December 31, 2023 increased $2.6 million, or 57.8%, to $7.0 million from $4.4 million in 2022.

The overall increase was primarily due to (i) an increase of $1.4 million in connection with our Trading Credit Facility (due to an increase in interest rates as well as increased borrowings) and the AMCF Notes (including amortization of debt issuance costs), (ii) higher interest and fees from product financing arrangements of $1.1 million, and (iii) inter-segment eliminations related to JMB’s product financing activity with A-Mark of $0.2 million, partially offset by (iv) lower interest expense related to liabilities on borrowed metals of $0.1 million.

Six Months Ended December 31,

Interest expense for the three months ended March 31, 2024 increased $1.3 million, or 21.5%, to $7.3 million from $6.0 million in 2023.

The overall increase was primarily due to (i) higher interest and fees from product financing arrangements of $0.8 million, (ii) higher inter-segment eliminations related to JMB’s product financing activity with A-Mark of $0.7 million, and (iii) an increase of $0.3 million in connection with our Trading Credit Facility (due to an increase in interest rates as well as increased borrowings), partially offset by (iv) a decrease of $0.6 million related to our AMCF Notes (including amortization of debt issuance costs) due to the repayment in December 2023.

Nine Months Ended March 31,

Interest expense

Interest expense for the six months ended December 31, 2023 increased $6.0 million, or 77.8%, to $13.7 million from $7.7 million in 2022.

The overall increase was primarily due to (i) an increase of $4.5 million in connection with our Trading Credit Facility (due to an increase in interest rates as well as increased borrowings) and the AMCF Notes (including amortization of debt issuance costs) and (ii) higher interest and fees from product financing arrangements of $1.6 million, partially offset by (iii) inter-segment eliminations related to JMB’s product financing activity with A-Mark of $0.2 million.

Earnings from Equity Method Investments— Wholesale Sales & Ancillary Services

Three Months Ended December 31,

Earnings from equity method investments

Earnings from equity method investments for the three months ended December 31, 2023 decreased $3.9 million, or 83.4%, to a $0.8 million from $4.7 million in 2022 due to decreased earnings of our equity method investees.

Six Months Ended December 31,

Interest expense for the nine months ended March 31, 2024 increased $7.3 million, or 53.2%, to $21.0 million from $13.7 million in 2023.

The overall increase was primarily due to (i) an increase of $4.3 million in connection with our Trading Credit Facility (due to an increase in interest rates as well as increased borrowings), (ii) higher interest and fees from product financing arrangements of $2.5 million, and (iii) an increase in inter-segment eliminations related to JMB’s product financing activity with A-Mark of $0.6 million.

Earnings (Losses) from Equity Method Investments — Wholesale Sales & Ancillary Services

Three Months Ended March 31,

Losses from equity method investments

Losses from equity method investments for the three months ended March 31, 2024 increased $0.2 million, or 209.7%, to $0.2 million from $0.1 million in 2023 due to decreased earnings of our equity method investees.

Nine Months Ended March 31,

Earnings from equity method investments

Earnings from equity method investments for the six months ended December 31, 2023 decreased $3.9 million, or 52.5%, to $3.5 million from $7.3 million in 2022 due to decreased earnings of our equity method investees.

Earnings from equity method investments for the nine months ended March 31, 2024 decreased $4.0 million, or 55.0%, to $3.3 million from $7.3 million in 2023 due to decreased earnings of our equity method investees.

Other Income, Net — Wholesale Sales & Ancillary Services

Three Months Ended March 31,

Other income, net

Other income, net for the three months ended March 31, 2024 increased by $0.4 million primarily due to an increase in gains on other investments of $0.4 million.

Nine Months Ended March 31,

Other income, net

Other income, net for the nine months ended March 31, 2024 increased by $0.6 million primarily due to an increase in gains on other investments of $0.6 million.

Results of Operations — Direct-to-Consumer Segment

3 unchanged sentences

(“Goldline”), and through our 50%-owned subsidiary Precious Metals Purchasing Partners, LLC ("PMPP").

Overview of Results of Operations for the Three Months Ended December 31, 2023 and 2022

Overview of Results of Operations for the Three Months Ended March 31, 2024 and 2023

— Direct-to-Consumer Segment

The operating results of our Direct-to-Consumer ("DTC") segment were as follows (in thousands, except performance metrics data):

Three Months Ended December 31,

Three Months Ended March 31,

Selling, general, and administrative expenses

1 unchanged sentence

Interest expense

Other expense, net

Other income, net

Net income before provision for income taxes

16 unchanged sentences

(2) Silver ounces sold represents the ounces of silver product sold and delivered during the period.

(3) Number of new customers represents the number of customers that have registered or setup a new account or made a purchase for the first time during the period.

(3) Number of new customers represents the number of customers that have registered or set up a new account or made a purchase for the first time during the period.

(4) Number of active customers represents the number of customers that have made a purchase during any month during the period.

4 unchanged sentences

(9) Average Order Value ("AOV") represents the average dollar value of product orders (excluding accumulation program orders) delivered to the customer during the period.

Overview of Results of Operations for the Six Months Ended December 31, 2023 and 2022

Overview of Results of Operations for the Nine Months Ended March 31, 2024 and 2023

— Direct-to-Consumer Segment

The operating results of our Direct-to-Consumer ("DTC") segment were as follows (in thousands, except performance metrics data):

Six Months Ended December 31,

Nine Months Ended March 31,

Selling, general, and administrative expenses

1 unchanged sentence

Interest expense

Other expense, net

Other income (expense), net

Net income before provision for income taxes

16 unchanged sentences

(2) Silver ounces sold represents the ounces of silver product sold and delivered during the period.

(3) Number of new customers represents the number of customers that have registered or setup a new account or made a purchase for the first time during the period.

(3) Number of new customers represents the number of customers that have registered or set up a new account or made a purchase for the first time during the period.

(4) Number of active customers represents the number of customers that have made a purchase during any month during the period.

6 unchanged sentences

in thousands, except performance metrics

Three Months Ended December 31,

Three Months Ended March 31,

Performance Metrics:

9 unchanged sentences

JMB average order value

Revenues for the three months ended December 31, 2023 decreased $79.5 million, or 17.7%, to $370.6 million from $450.2 million in 2022.

Revenues for the three months ended March 31, 2024 decreased $186.3 million, or 35.7%, to $335.7 million from $522.0 million in 2023.

The decrease in revenue was due to a decrease in gold and silver ounces sold, partially offset by an increase in average selling prices of gold and silver.

For the three months ended December 31, 2023, JMB's revenue decreased $76.7 million, while revenue of Goldline and PMPP, in the aggregate, decreased by $2.8 million as compared to the prior year.

Gold ounces sold for the three months ended December 31, 2023 decreased 14,000 ounces, or 10.8%, to 116,000 ounces from 130,000 ounces in 2022.

Silver ounces sold for the three months ended December 31, 2023 decreased 1,927,000 ounces, or 33.8%, to 3,766,000 ounces from 5,693,000 ounces in 2022.

Gold ounces sold by JMB decreased 14,000 ounces for the three months ended December 31, 2023 compared to 2022.

Gold ounces sold by Goldline and PMPP, in the aggregate, remained flat compared to 2022.

Silver ounces sold by JMB decreased 1,780,000 ounces for the three months ended December 31, 2023 compared to 2022.

For the three months ended March 31, 2024, JMB's revenue decreased $161.6 million, while revenue of Goldline and PMPP, in the aggregate, decreased by $24.7 million as compared to the prior year.

Gold ounces sold for the three months ended March 31, 2024 decreased 68,000 ounces, or 38.9%, to 107,000 ounces from 175,000 ounces in 2023.

Silver ounces sold for the three months ended March 31, 2024 decreased 2,886,000 ounces, or 47.6%, to 3,177,000 ounces from 6,063,000 ounces in 2023.

Gold ounces sold by JMB decreased 61,000 ounces for the three months ended March 31, 2024 compared to 2023.

Gold ounces sold by Goldline and PMPP, in the aggregate, decreased 7,000 ounces compared to 2023.

Silver ounces sold by JMB decreased 2,685,000 ounces for the three months ended March 31, 2024 compared to 2023.

Silver ounces sold by Goldline and PMPP, in the aggregate, decreased 201,000 ounces compared to 2023.

On average, selling prices for gold increased by 10.9% and selling prices for silver increased by 7.3% during the three months ended December 31, 2023 as compared to the prior year.

The number of new customers for the three months ended December 31, 2023 decreased 78,700, or 60.0% to 52,500 from 131,200 in 2022.

The number of active customers for the three months ended December 31, 2023 increased 20,000, or 17.2% to 136,400 from 116,400 in 2022.

The number of total customers as of December 31, 2023 increased 246,700, or 11.2% to 2,439,900 from 2,193,200 as of December 31, 2022.

On average, selling prices for gold increased by 8.8% and selling prices for silver increased by 3.8% during the three months ended March 31, 2024 as compared to the prior year.

The number of new customers for the three months ended March 31, 2024 decreased 8,100, or 12.5% to 56,600 from 64,700 in 2023.

The number of active customers for the three months ended March 31, 2024 decreased 21,400, or 14.5% to 126,000 from 147,400 in 2023.

The number of total customers as of March 31, 2024 increased 238,600, or 10.6% to 2,496,500 from 2,257,900 as of March 31, 2023.

These changes in customer-based metrics were primarily due to JMB's activity.

As of December 31, 2023, the number of total CyberMetals customers was 26,200, and CyberMetals customer assets under management were $6.5 million.

For the three months ended December 31, 2023, the Direct-to-Consumer ticket volume related to new customers decreased by 9,008 tickets, or 19.8%, to 36,418 tickets from 45,426 tickets in 2022.

For the three months ended December 31, 2023, Direct-to-Consumer ticket volume related to pre-existing customers decreased by 12,718 tickets, or 8.7%, to 133,329 tickets from 146,047 tickets in 2022.

For the three months ended December 31, 2023, the Direct-to-Consumer total ticket volume decreased by 21,726 tickets, or 11.3%, to 169,747 tickets from 191,473 tickets in 2022.

For the three months ended December 31, 2023, the Direct-to-Consumer average order value decreased by $171, or 7.2%, to $2,218 from $2,389 in 2022.

As of March 31, 2024, the number of total CyberMetals customers was 28,100, and CyberMetals customer assets under management were $6.8 million.

For the three months ended March 31, 2024, the Direct-to-Consumer ticket volume related to new customers decreased by 3,631 tickets, or 8.5%, to 39,150 tickets from 42,781 tickets in 2023.

For the three months ended March 31, 2024, Direct-to-Consumer ticket volume related to pre-existing customers decreased by 52,070 tickets, or 30.1%, to 120,836 tickets from 172,906 tickets in 2023.

For the three months ended March 31, 2024, the Direct-to-Consumer total ticket volume decreased by 55,701 tickets, or 25.8%, to 159,986 tickets from 215,687 tickets in 2023.

For the three months ended March 31, 2024, the Direct-to-Consumer average order value decreased by $319, or 13.0%, to $2,133 from $2,452 in 2023.

in thousands, except performance metrics

Six Months Ended December 31,

Nine Months Ended March 31,

Performance Metrics:

9 unchanged sentences

JMB average order value

Revenues for the six months ended December 31, 2023 decreased $182.0 million, or 20.7%, to $696.2 million from $878.2 million in 2022.

Revenues for the nine months ended March 31, 2024 decreased $368.4 million, or 26.3%, to $1.032 billion from $1.400 billion in 2023.

The decrease in revenue was due to a decrease in gold and silver ounces sold, partially offset by higher average selling prices of gold and silver.

For the six months ended December 31, 2023, JMB's revenue decreased $172.5 million and revenue of Goldline and PMPP, in the aggregate, decreased by $9.5 million as compared to the prior year.

Gold ounces sold for the six months ended December 31, 2023 decreased 50,000 ounces, or 17.7%, to 233,000 ounces from 283,000 ounces in 2022.

Silver ounces sold for the six months ended December 31, 2023 decreased 5,306,000 ounces, or 43.9%, to 6,787,000 ounces from 12,093,000 ounces in 2022.

Gold ounces sold by JMB decreased 48,000 ounces for the six months ended December 31, 2023 compared to 2022.

For the nine months ended March 31, 2024, JMB's revenue decreased $334.1 million and revenue of Goldline and PMPP, in the aggregate, decreased by $34.3 million as compared to the prior year.

Gold ounces sold for the nine months ended March 31, 2024 decreased 118,000 ounces, or 25.8%, to 340,000 ounces from 458,000 ounces in 2023.

Silver ounces sold for the nine months ended March 31, 2024 decreased 8,192,000 ounces, or 45.1%, to 9,964,000 ounces from 18,156,000 ounces in 2023.

Gold ounces sold by JMB decreased 109,000 ounces for the nine months ended March 31, 2024 compared to 2023.

Gold ounces sold by Goldline and PMPP, in the aggregate, decreased 9,000 ounces compared to 2023.

Silver ounces sold by JMB decreased 4,939,000 ounces for the six months ended December 31, 2023 compared to 2022.

Silver ounces sold by JMB decreased 7,624,000 ounces for the nine months ended March 31, 2024 compared to 2023.

Silver ounces sold by Goldline and PMPP, in the aggregate, decreased 568,000 ounces compared to 2023.

On average, selling prices for gold increased by 9.6% and selling prices for silver increased by 12.4% during the six months ended December 31, 2023 as compared to the prior year.

The number of new customers for the six months ended December 31, 2023 decreased 88,600, or 49.2%, to 91,600 from 180,200 in 2022.

The number of active customers for the six months ended December 31, 2023 increased 54,300, or 28.8% to 242,800 from 188,500 in 2022.

The number of total customers as of December 31, 2023 increased 246,700, or 11.2% to 2,439,900 from 2,193,200 as of December 31, 2022.

On average, selling prices for gold increased by 8.7% and selling prices for silver increased by 9.4% during the nine months ended March 31, 2024 as compared to the prior year.

The number of new customers for the nine months ended March 31, 2024 decreased 96,700, or 39.5%, to 148,200 from 244,900 in 2023.

The number of active customers for the nine months ended March 31, 2024 increased 26,300, or 7.7% to 368,800 from 342,500 in 2023.

The number of total customers as of March 31, 2024 increased 238,600, or 10.6% to 2,496,500 from 2,257,900 as of March 31, 2023.

These changes in customer-based metrics were primarily due to JMB's activity.

As of December 31, 2023, the number of total CyberMetals customers was 26,200, and CyberMetals customer assets under management were $6.5 million.

For the six months ended December 31, 2023, the Direct-to-Consumer ticket volume related to new customers decreased by 3,637 tickets, or 5.6%, to 60,978 tickets from 64,615 tickets in 2022.

For the six months ended December 31, 2023, Direct-to-Consumer ticket volume related to pre-existing customers decreased by 68,392 tickets, or 21.8%, to 245,126 tickets from 313,518 tickets in 2022.

For the six months ended December 31, 2023, the Direct-to-Consumer total ticket volume decreased by 72,029 tickets, or 19.0%, to 306,104 tickets from 378,133 tickets in 2022.

For the six months ended December 31, 2023, the Direct-to-Consumer average order value decreased by $45, or 1.9%, to $2,316 from $2,361 in 2022.

As of March 31, 2024, the number of total CyberMetals customers was 28,100, and CyberMetals customer assets under management were $6.8 million.

For the nine months ended March 31, 2024, the Direct-to-Consumer ticket volume related to new customers decreased by 6,530 tickets, or 6.1%, to 100,403 tickets from 106,933 tickets in 2023.

For the nine months ended March 31, 2024, Direct-to-Consumer ticket volume related to pre-existing customers decreased by 121,200 tickets, or 24.9%, to 365,687 tickets from 486,887 tickets in 2023.

For the nine months ended March 31, 2024, the Direct-to-Consumer total ticket volume decreased by 127,730 tickets, or 21.5%, to 466,090 tickets from 593,820 tickets in 2023.

For the nine months ended March 31, 2024, the Direct-to-Consumer average order value decreased by $141, or 5.9%, to $2,253 from $2,394 in 2023.

Gross Profit — Direct-to-Consumer

Three Months Ended December 31,

Gross profit for the three months ended December 31, 2023 decreased by $14.4 million, or 39.4%, to $22.2 million from $36.6 million in 2022.

Three Months Ended March 31,

Gross profit for the three months ended March 31, 2024 decreased by $25.2 million, or 58.3%, to $18.0 million from $43.2 million in 2023.

The decrease in gross profit was mainly due to a decreased gross profit margin percentage as well as a lower ticket volume during the period.

For the three months ended December 31, 2023, the Direct-to-Consumer segment's profit margin percentage decreased by 214.2 basis points to 5.978% from 8.120% in 2022.

For the three months ended March 31, 2024, the Direct-to-Consumer segment's profit margin percentage decreased by 291.4 basis points to 5.364% from 8.278% in 2023.

The decrease in the gross profit margin percentage was primarily due to the lower gross profit percentages of JMB, but also to lower gross profit percentages of Goldline and PMPP.

Six Months Ended December 31,

Gross profit for the six months ended December 31, 2023 decreased by $35.4 million, or 45.0%, to $43.2 million from $78.6 million in 2022.

Nine Months Ended March 31,

Gross profit for the nine months ended March 31, 2024 decreased by $60.6 million, or 49.8%, to $61.2 million from $121.9 million in 2023.

The decrease in gross profit was mainly due to a decreased gross profit margin percentage as well as a lower ticket volume during the period.

For the six months ended December 31, 2023, the Direct-to-Consumer segment's profit margin percentage decreased by 274.7 basis points to 6.207% from 8.954% in 2022.

For the nine months ended March 31, 2024, the Direct-to-Consumer segment's profit margin percentage decreased by 276.9 basis points to 5.933% from 8.702% in 2023.

The decrease in the gross profit margin percentage was primarily due to the lower gross profit percentages of JMB, but also to lower gross profit percentages of Goldline and PMPP.

Selling, General, and Administrative Expense — Direct-to-Consumer

Three Months Ended December 31,

Three Months Ended March 31,

Selling, general, and administrative expenses

Selling, general and administrative expenses for the three months ended December 31, 2023 increased $0.7 million, or 6.7%, to $11.4 million from $10.7 million in 2022.

The change was primarily due to (i) an increase in compensation expense (including performance-based accruals) of $0.7 million and (ii) an increase in information technology costs of $0.4 million, partially offset by (iii) lower advertising costs of $0.7 million.

Six Months Ended December 31,

Selling, general, and administrative expenses for the three months ended March 31, 2024 decreased $0.6 million, or 5.9%, to $10.3 million from $10.9 million in 2023.

The change was primarily due to a decrease in advertising costs of $0.6 million.

Nine Months Ended March 31,

Selling, general, and administrative expenses

Selling, general and administrative expenses for the six months ended December 31, 2023 increased $1.6 million, or 7.6%, to $22.3 million from $20.7 million in 2022.

Selling, general, and administrative expenses for the nine months ended March 31, 2024 increased $0.9 million, or 3.0%, to $32.6 million from $31.6 million in 2023.

The change was primarily due to (i) an increase in compensation expense (including performance-based accruals) of $1.1 million and (ii) an increase in information technology costs of $0.5 million, partially offset by (iii) a decrease in advertising costs of $1.3 million.

Depreciation and Amortization Expense — Direct-to-Consumer

Three Months Ended December 31,

Three Months Ended March 31,

Depreciation and amortization expense

Depreciation and amortization expense for the three months ended December 31, 2023, decreased $0.5 million, or 17.9%, to $2.4 million from $2.9 million in 2022 primarily due to a $0.6 million decrease in JMB’s intangible asset amortization expense.

Six Months Ended December 31,

Depreciation and amortization expense for the three months ended March 31, 2024, decreased $0.6 million, or 20.4%, to $2.4 million from $3.0 million in 2023 primarily due to a $0.6 million decrease in JMB’s intangible asset amortization expense.

Nine Months Ended March 31,

Depreciation and amortization expense

Depreciation and amortization expense for the six months ended December 31, 2023, decreased $1.0 million, or 17.1%, to $4.8 million from $5.8 million in 2022 primarily due to a $1.1 million decrease in JMB’s intangible asset amortization expense.

Depreciation and amortization expense for the nine months ended March 31, 2024, decreased $1.6 million, or 18.2%, to $7.2 million from $8.8 million in 2023 primarily due to a $1.7 million decrease in JMB’s intangible asset amortization expense.

Interest expense — Direct-to-Consumer

Three Months Ended December 31,

Three Months Ended March 31,

Interest expense

Interest expense for the three months ended December 31, 2023 decreased $0.2 million to $0.8 million from $1.0 million in 2022.

The decrease in interest expense was not significant.

Six Months Ended December 31,

Interest expense for the three months ended March 31, 2024 decreased $0.7 million to $0.6 million from $1.3 million in 2023.

The decrease is related to JMB’s reduced product financing activity with A-Mark.

Nine Months Ended March 31,

Interest expense

Interest expense for the six months ended December 31, 2023 increased $0.2 million to $1.9 million from $1.7 million in 2022.

The increase in interest expense was not significant.

Interest expense for the nine months ended March 31, 2024 decreased $0.5 million to $2.5 million from $3.0 million in 2023.

The decrease is related to JMB’s reduced product financing activity with A-Mark.

Results of Operations — Secured Lending Segment

2 unchanged sentences

AMCF is currently inactive.

Overview of Results of Operations for the Three Months Ended December 31, 2023 and 2022

Overview of Results of Operations for the Three Months Ended March 31, 2024 and 2023

— Secured Lending Segment

The operating results of our Secured Lending segment were as follows (in thousands, except performance metrics data):

Three Months Ended December 31,

Three Months Ended March 31,

% of interest

4 unchanged sentences

Depreciation and amortization expense

Earnings from equity method investments

Other income, net

3 unchanged sentences

(1) Number of outstanding secured loans to customers at the end of the period.

Overview of Results of Operations for the Six Months Ended December 31, 2023 and 2022

Overview of Results of Operations for the Nine Months Ended March 31, 2024 and 2023

— Secured Lending Segment

The operating results of our Secured Lending segment were as follows (in thousands, except performance metrics data):

Six Months Ended December 31,

Nine Months Ended March 31,

% of interest

4 unchanged sentences

Depreciation and amortization expense

Earnings (losses) from equity method investments

Earnings from equity method investments

Other income, net

5 unchanged sentences

in thousands, except performance metric

Three Months Ended December 31,

Three Months Ended March 31,

% of interest

3 unchanged sentences

Number of secured loans at period-end

Interest income for the three months ended December 31, 2023 increased $0.6 million, or 26.2%, to $2.7 million from $2.2 million in 2022.

Interest income for the three months ended March 31, 2024 increased $0.5 million, or 20.9%, to $3.0 million from $2.5 million in 2023.

The number of secured loans outstanding decreased by 334, or 31.8%, to 715 from 1,049 as of December 31, 2022.

The number of secured loans outstanding decreased by 288, or 29.9%, to 675 from 963 as of March 31, 2023.

in thousands, except performance metric

Six Months Ended December 31,

Nine Months Ended March 31,

% of interest

3 unchanged sentences

Number of secured loans at period-end

Interest income for the six months ended December 31, 2023 increased $0.8 million, or 18.1%, to $5.4 million from $4.6 million in 2022.

Interest income for the nine months ended March 31, 2024 increased $1.4 million, or 19.1%, to $8.4 million from $7.1 million in 2023.

The number of secured loans outstanding decreased by 334, or 31.8% to 715 from 1,049 as of December 31, 2022.

The number of secured loans outstanding decreased by 288, or 29.9% to 675 from 963 as of March 31, 2023.

Interest Expense — Secured Lending

Three Months Ended December 31,

Three Months Ended March 31,

% of interest

1 unchanged sentence

Interest expense

Interest expense for the three months ended December 31, 2023 increased $0.6 million, or 29.8%, to $2.4 million from $1.9 million in 2022.

Interest expense for the three months ended March 31, 2024 increased $0.1 million, or 4.6%, to $2.1 million from $2.0 million in 2023.

The change in interest expense was not significant.

Six Months Ended December 31,

Nine Months Ended March 31,

% of interest

1 unchanged sentence

Interest expense

Interest expense for the six months ended December 31, 2023 increased $0.5 million, or 11.7%, to $4.4 million from $3.9 million in 2022.

The change in interest expense was not significant.

Interest expense for the nine months ended March 31, 2024 increased $0.5 million, or 9.3%, to $6.4 million from $5.9 million in 2023.

The increase in interest expense was primarily due to (i) an increase of $2.6 million associated with our Trading Credit Facility due to an increase in interest rates as well as increased borrowings, partially offset by (ii) a decrease of $1.7 million related to the AMCF

Notes (including amortization of debt issuance costs) due to the repayment in December 2023 and (iii) a $0.3 million decrease in loan servicing fees.

Selling, General, and Administrative Expenses — Secured Lending

Three Months Ended December 31,

Three Months Ended March 31,

% of interest

1 unchanged sentence

Selling, general, and administrative expenses

Selling, general, and administrative expenses for the three months ended December 31, 2023 decreased $0.1 million, or 27.6%, to $0.4 million from $0.5 million in 2022.

Selling, general, and administrative expenses for the three months ended March 31, 2024 decreased $0.1 million, or 23.4%, to $0.4 million from $0.5 million in 2023.

The change in selling, general, and administrative expenses was not significant.

Six Months Ended December 31,

Nine Months Ended March 31,

% of interest

1 unchanged sentence

Selling, general, and administrative expenses

Selling, general, and administrative expenses for the six months ended December 31, 2023 decreased $0.2 million, or 16.9%, to $0.8 million from $0.9 million in 2022.

Selling, general, and administrative expenses for the nine months ended March 31, 2024 decreased $0.3 million, or 19.2%, to $1.2 million from $1.4 million in 2023.

The change in selling, general, and administrative expenses was not significant.

Other Income, Net — Secured Lending

Three Months Ended December 31,

Three Months Ended March 31,

% of interest

1 unchanged sentence

Other income, net

Other income, net for the three months ended December 31, 2023 decreased $0.5 million, or 60.1%, to $0.3 million from $0.8 million in 2022 primarily due to lower royalties earned.

Six Months Ended December 31,

Other income, net for the three months ended March 31, 2024 decreased $0.3 million, or 47.4%, to $0.3 million from $0.6 million in 2023 primarily due to lower royalties earned.

Nine Months Ended March 31,

% of interest

1 unchanged sentence

Other income, net

Other income, net for the six months ended December 31, 2023 decreased $0.8 million, or 58.1%, to $0.5 million from $1.3 million in 2022 primarily due to lower royalties earned.

Other income, net for the nine months ended March 31, 2024 decreased $1.0 million, or 54.7%, to $0.9 million from $1.9 million in 2023 primarily due to lower royalties earned.

N ON-GAAP MEASURES

15 unchanged sentences

GAAP measure on our financial statements (in thousands):

Three Months Ended December 31,

Three Months Ended March 31,

Net income before provision for income taxes

3 unchanged sentences

Adjusted net income before provision for income taxes (non-GAAP)

Six Months Ended December 31,

Nine Months Ended March 31,

Net income before provision for income taxes

3 unchanged sentences

Adjusted net income before provision for income taxes (non-GAAP)

Acquisition expenses .

Acquisition costs .

We incur expenses for professional services rendered in connection with business combinations, which are included as a component of selling, general, and administrative expenses in the Company’s condensed consolidated statements of income.

23 unchanged sentences

Below is the reconciliation of net cash provided by or used in operating activities to EBITDA (in thousands):

Three Months Ended December 31,

Three Months Ended March 31,

Interest income

5 unchanged sentences

Reconciliation of Operating Cash Flows to EBITDA:

Net cash used in operating activities

Net cash provided by operating activities

Changes in operating working capital

2 unchanged sentences

Income tax expense

Earnings from equity method investments

Dividends and distributions received from equity method investees

Losses from equity method investments

Share-based compensation

2 unchanged sentences

Cash Flow Data:

Net cash used in operating activities

Net cash used in investing activities

Net cash provided by financing activities

Six Months Ended December 31,

Net cash provided by operating activities

Net cash (used in) provided by investing activities

Net cash used in financing activities

Nine Months Ended March 31,

Interest income

5 unchanged sentences

Reconciliation of Operating Cash Flows to EBITDA:

Net cash used in operating activities

Net cash (used in) provided by operating activities

Changes in operating working capital

8 unchanged sentences

Cash Flow Data:

Net cash used in operating activities

Net cash (used in) provided by operating activities

Net cash (used in) provided by investing activities

Net cash provided by financing activities

Net cash provided by (used in) financing activities

LIQUIDITY AND FIN ANCIAL CONDITION

3 unchanged sentences

A substantial portion of our assets are liquid.

As of December 31, 2023, approximately 82.1% of our assets consisted of cash, receivables, derivative assets, secured loans receivables, precious metals held under financing arrangements, and inventories, measured at fair value.

As of March 31, 2024, approximately 80.1% of our assets consisted of cash, receivables, derivative assets, secured loans receivables, precious metals held under financing arrangements, and inventories, measured at fair value.

Cash generated from the sales or financing of our precious metals products is our primary source of operating liquidity.

10 unchanged sentences

We may also raise funds through the public or private offering of equity or debt securities, although there is no assurance that we will be able to do so at the times and in the amounts required.

We have an effective universal shelf registration statement on file with the Securities and Exchange Commission, under which we may issue approximately $69.5 million worth of securities at this time through March 2024.

We continually review our overall credit and capital needs to ensure that our capital base, both stockholders’ equity and available credit facilities, can appropriately support our anticipated financing needs.

2 unchanged sentences

Lines of Credit

December 31, 2023

March 31, 2024

June 30, 2023

2 unchanged sentences

Effective December 21, 2021, A-Mark entered into a committed borrowing facility (the "Trading Credit Facility") with CIBC Bank USA, as agent and joint lead arranger, and a syndicate of banks.

As of December 31, 2023, the Trading Credit Facility provided the Company with access up to $350.0 million and has a maturity date of September 20, 2025.

As of March 31, 2024, the Trading Credit Facility provided the Company with access up to $350.0 million and has a maturity date of September 20, 2025.

The Trading Credit Facility was reclassified to long-term during the three months ended September 30, 2023 due to the elimination of provisions whereby lenders under certain conditions could require repayment of all obligations outstanding under the Trading Credit Facility within 10 days on demand.

3 unchanged sentences

Notes Payable

December 31, 2023

March 31, 2024

June 30, 2023

Notes payable

Notes payable — short-term

Notes payable — long-term

In September 2018, AMCF, a wholly-owned subsidiary of CFC, completed an issuance of Secured Senior Term Notes, Series 2018-1, Class A in the aggregate principal amount of $72.0 million and Secured Subordinated Term Notes, Series 2018-1, Class B in the aggregate principal amount of $28.0 million (collectively, the "AMCF Notes".) The AMCF Notes were repaid in full in December 2023.

2 unchanged sentences

The term of the CCP Note expires on April 1, 2026 and may be extended by mutual agreement.

As of December 31, 2023 and June 30, 2023 the outstanding principal balance of the CCP Note was $3.2 million and $0.5 million.

As of March 31, 2024 and June 30, 2023 the outstanding principal balance of the CCP Note was $4.0 million and $0.5 million.

See Note 14 to the Company’s condensed consolidated financial statements.

Liabilities on Borrowed Metals

December 31, 2023

March 31, 2024

June 30, 2023

5 unchanged sentences

Product Financing Arrangements

December 31, 2023

March 31, 2024

June 30, 2023

8 unchanged sentences

Secured Loans Receivable

December 31, 2023

March 31, 2024

June 30, 2023

8 unchanged sentences

The declaration of regular cash dividends in the future is subject to the determination each quarter by the board of directors.

Below is a summary of dividends paid to stockholders in the six months ended December 31, 2023.

Below is a summary of dividends paid to stockholders in the nine months ended March 31, 2024.

• On July 5, 2023, the Company's board of directors declared a regular dividend of $0.20 per share of common stock to stockholders of record at the close of business on July 17, 2023.

4 unchanged sentences

The dividend was paid to stockholders on October 24, 2023 and totaled $4.6 million.

• On January 4, 2024, the Company's board of directors declared a regular dividend of $0.20 per share of common stock to stockholders of record at the close of business on January 16, 2024.

The dividend was paid to stockholders on January 29, 2024 and totaled $4.6 million.

See Note 20 to the Company's condensed consolidated financial statements for more information regarding our dividends.

4 unchanged sentences

The following summarizes components of our consolidated statements of cash flows (in thousands):

Six Months Ended

December 31, 2023

December 31, 2022

Net cash used in operating activities

Nine Months Ended

March 31, 2024

March 31, 2023

Net cash (used in) provided by operating activities

Net cash (used in) provided by investing activities

Net cash provided by financing activities

Net cash provided by (used in) financing activities

For the periods presented, our principal capital requirements have been to fund (i) working capital and (ii) financing activity.

1 unchanged sentence

Net Cash Flows From Operating Activities

Operating activities used $101.7 million and used $48.5 million in cash for the six months ended December 31, 2023 and 2022, respectively, representing a $53.1 million change compared to the six months ended December 31, 2022.

The period over period change was primarily due to net changes in working capital, which includes deferred revenue and other advances, accounts payable and other payables, precious metals held under financing arrangements, liabilities on borrowed metals, and inventories, as well as a decrease in net income adjusted for noncash items.

Operating activities used $21.9 million and provided $43.2 million in cash for the nine months ended March 31, 2024 and 2023, respectively, representing a $65.2 million change compared to the nine months ended March 31, 2023.

The period over period change was primarily due to net changes in working capital, which includes deferred revenue and other advances, accounts payable and other payables, precious metals held under financing arrangements, receivables, net, liabilities on borrowed metals, and inventories, as well as a decrease in net income adjusted for noncash items.

Net Cash Flows From Investing Activities

Investing activities used $10.7 million and provided $15.1 million in cash for the six months ended December 31, 2023 and 2022, respectively, representing a $25.7 million change compared to the six months ended December 31, 2022.

This period over period change was primarily due to (i) higher outflows of $28.7 million associated with the net originations of secured loans in the current period and (ii) a $1.2 million increase in capital expenditures for property, plant and equipment, partially offset by (iii) a decrease in purchases of intangible assets and long-term investments of $5.0 million.

Investing activities used $58.5 million and provided $15.1 million in cash for the nine months ended March 31, 2024 and 2023, respectively, representing a $73.6 million change compared to the nine months ended March 31, 2023.

This period over period change was primarily due to (i) higher outflows of $38.3 million associated with the net originations of secured loans in the current period and (ii) $32.9 million of net cash paid to acquire LPM in February 2024, (iii) an increase in purchases of intangible assets of $4.0 million, and (iv) a $1.3 million increase in capital expenditures for property, plant and equipment, partially offset by (v) a decrease in purchases of long-term investments of $3.4 million.

Net Cash Flows From Financing Activities

Financing activities provided $101.5 million and provided $68.2 million in cash for the six months ended December 31, 2023 and 2022, respectively, representing a $33.3 million change compared to the six months ended December 31, 2022.

This period over period change was primarily due to (i) an increase in cash provided of $118.2 million related to our product financing arrangements, (ii) an increase in cash provided from our net borrowings and repayments of $31.0 million under our Trading Credit Facility, (iii) an increase in cash provided of $1.5 million related to the exercise and taxes related to share-based awards, (iv) a $1.0 million decrease in distributions paid to PMPP's noncontrolling interest holder, and (v) an increase of $0.9 million on net borrowings on related party notes.

Financing activities provided $76.3 million and used $18.0 million in cash for the nine months ended March 31, 2024 and 2023, respectively, representing a $94.3 million change compared to the nine months ended March 31, 2023.

This period over period change was primarily due to (i) an increase in cash provided of $165.0 million related to our product financing arrangements, (ii) an increase in cash provided from our net borrowings and repayments of $40.0 million under our Trading Credit Facility, (iii) an increase of $1.7 million on net borrowings on related party notes, (iv) an increase in cash provided of $1.1 million related to the exercise and taxes related to share-based awards, and (v) a $1.0 million decrease in distributions paid to PMPP's noncontrolling interest holder.

These increases in cash provided were partially offset by (i) the $95.0 million repayment of our AMCF Notes in December 2023, (ii) an increase of $12.5 million cash used to repurchase of our common stock under our share repurchase program, (iii) an increase in cash paid for dividends of $4.5 million, and (iv) an increase in debt issuance costs paid in the current year of $2.5 million primarily related to our Trading Credit Facility.

24 unchanged sentences

When these contracts are net settled, the unrealized gains and losses are reversed and the realized gains and losses for forward contracts are recorded in revenue and cost of sales and the net realized gains and losses for futures are recorded in cost of sales.

The Company’s net gains and losses on derivative instruments totaled losses of $57.3 million and losses of $15.2 million for the three months ended December 31, 2023 and 2022, respectively, and losses of $67.8 million and losses of $45.4 million, for the six months ended December 31, 2023 and 2022, respectively.

The Company’s net gains and losses on derivative instruments totaled losses of $18.7 million and gains of $49.5 million for the three months ended March 31, 2024 and 2023, respectively, and losses of $86.5 million and gains of $4.1 million, for the nine months ended March 31, 2024 and 2023, respectively.

These were substantially offset by the changes in fair market value of the underlying precious metals inventory and open sale and purchase commitments, which is also recorded in cost of sales in the condensed consolidated statements of income.

1 unchanged sentence

The following table summarizes the results of our hedging activities, showing the precious metal commodity inventory position, net of open sale and purchase commitments, which is subject to price risk, compared to change in the value of the derivative instruments (in thousands):

December 31, 2023

March 31, 2024

June 30, 2023

22 unchanged sentences

We regularly review the creditworthiness of our major counterparties and monitor our exposure to concentrations.

As of December 31, 2023, we believe our risk of counterparty default is mitigated based on our evaluation of the creditworthiness of our major counterparties, the strong financial condition of our counterparties, and the short-term duration of these arrangements.

As of March 31, 2024, we believe our risk of counterparty default is mitigated based on our evaluation of the creditworthiness of our major counterparties, the strong financial condition of our counterparties, and the short-term duration of these arrangements.

We had the following outstanding sale and purchase commitments and open forward and futures contracts, which are normal and recurring, in nature (in thousands):

December 31, 2023

March 31, 2024

June 30, 2023

68 unchanged sentences

The accounting for a business combination requires tangible and intangible assets acquired and liabilities assumed to be recorded at estimated fair value.

We valued intangible assets at their estimated fair values at the acquisition date based upon assumptions related to the future cash flows and discount rates utilizing the then currently available information, and in some cases, valuation results from independent valuation specialists.

We value intangible assets at their estimated fair values at the acquisition date based upon assumptions related to the future cash flows and discount rates utilizing the then currently available information, and in some cases, valuation results from independent valuation specialists.

The use of a discounted cash flow analysis requires significant judgment to estimate the future cash flows derived from the asset and the expected period of time over which those cash flows will occur and to determine an appropriate discount rate.

1 unchanged sentence

Those judgments and estimates also include determining the lives assigned to acquired intangibles, the resulting amortization period, what indicators will trigger an impairment, whether those indicators are other than temporary, what economic or competitive factors affect valuation, valuation methodology, and key assumptions including discount rates and cash flow estimates.

In circumstances where an acquisition involves a contingent consideration arrangement, we recognize a liability equal to the fair value of the expected contingent payments as of the acquisition date.

We remeasure this liability each reporting period, with the resulting changes recorded in earnings.

The assumptions used in estimating fair value of contingent consideration liabilities require significant judgment;

the use of different assumptions and judgments could result in a materially different estimate of fair value which may have a material impact on our results from operations and financial position.

Goodwill and Other Purchased Intangible Assets

6 unchanged sentences

If the Company concludes that the fair value of the reporting unit is less than its carrying value, a goodwill impairment will be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value.

The Company also performs impairment reviews on its indefinite-lived intangible assets (i.e., trade names and trademarks).

The Company also performs impairment reviews on its indefinite-lived intangible assets (i.e., trade names, trademarks and domain names).

In assessing its indefinite-lived intangible assets for impairment, the Company has the option to first perform a qualitative assessment to determine whether events or circumstances exist that lead to a determination that it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount.

52 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis