What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-11-08 compared with 2024-05-09 · 237 added, 557 removed, 689 unchanged (54% 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.

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.

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 audited consolidated financial statements and notes contained in the Form 10-K for the fiscal year ended June 30, 2024.

This discussion contains forward-looking statements that reflect our plans, estimates and beliefs.

26 unchanged sentences

o Secured Lending

for the comparable periods.

comparing results for the periods presented.

• Non-GAAP Measures .

1 unchanged sentence

Generally Accepted Accounting Principles (“U.S.

GAAP”) measure reported on the condensed consolidated financial statements.

GAAP”) measure reported on the consolidated financial statements.

The Company uses the following two non-GAAP measures:

2 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 March 31, 2024, 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 September 30, 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 .

This section discusses critical accounting policies that are considered both important to our financial condition and results of operations and require management to make significant judgment and estimates.

All of our significant accounting policies, including the critical accounting policies, are also summarized in Note 2 to the Company’s condensed consolidated financial statements.

All of our significant accounting policies, including the critical accounting policies, are summarized in Note 2 to the Company’s condensed consolidated financial statements.

• Recent accounting pronouncements .

4 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"), 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 Company operates its Wholesale Sales & Ancillary Services segment directly and through its consolidated 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 to acquire LPM Group Limited ("LPM").

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

1 unchanged sentence

Our Industrial unit services manufacturers and fabricators of products utilizing or incorporating precious metals.

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.

Our Coin and Bar unit deals in approximately 2,100 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, a numismatics showroom in Hong Kong, and a trading center in El Segundo, California.

3 unchanged sentences

Mint, and it also purchases product from other sovereign mints, for sale to its customers.

Through its wholly-owned subsidiary AMTAG, the Company promotes its products and services to the international market.

Through its wholly-owned subsidiary AMTAG, the Company promotes its products and services to certain international markets.

Through our wholly-owned subsidiary TDS, we offer a variety of managed storage options for precious metals products to financial institutions, dealers, investors, and collectors around the world.

7 unchanged sentences

(“JMB”) and Goldline, Inc.

(“Goldline”).

JMB currently has six wholly-owned subsidiaries:

(“Goldline”), and through its investment in Silver Gold Bull, Inc.

JMB currently has several wholly-owned subsidiaries, including:

Buy Gold and Silver Corp.

4 unchanged sentences

("CyberMetals").

Goldline, Inc.

owns 100% of AMIP, LLC ("AMIP"), and has a 50% ownership interest in Precious Metals Purchasing Partners, LLC ("PMPP").

Goldline owns 100% of AMIP, LLC ("AMIP").

SGB and Goldline each have a 50% ownership interest in Precious Metals Purchasing Partners, LLC ("PMPP").

As the context requires, references to JMB may include BGASC, BullionMax, GPG, Silver.com, PMC, and CyberMetals and references to Goldline may include AMIP and PMPP.

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 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.

JMB owns and operates numerous websites targeting specific niches within the precious metals retail market, including JMBullion.com, ProvidentMetals.com, Silver.com, CyberMetals.com, GoldPrice.org, SilverPrice.org, BGASC.com, BullionMax.com, and Gold.com.

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.

4 unchanged sentences

AMIP manages Goldline’s intellectual property.

PMPP was formed in fiscal 2019 pursuant to terms of a joint venture agreement, for the purpose of purchasing precious metals from the partners' retail customers, and then reselling the acquired products back to affiliates of the partners.

PMPP was formed in fiscal 2019 pursuant to terms of a joint venture agreement between Goldline and SGB, for the purpose of purchasing precious metals from the partners' retail customers, and then reselling the acquired products back to affiliates of the partners.

PMPP commenced operations in fiscal 2020.

In 2014, the Company acquired its initial ownership interest in SGB, a leading e-commerce precious metals retailer in Canada, increasing its ownership to 55.4% in June 2024 at which time we obtained a controlling ownership interest in SGB, and SGB became a consolidated subsidiary of the Company.

Our investment in SGB expands our direct-to-consumer footprint in the international market.

Through its website, SilverGoldBull.com, SGB offers a variety of products from gold, silver, platinum, and palladium bars, coins and rounds, as well as certified coins from mints around the world.

Secured Lending

2 unchanged sentences

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

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.

As of September 30, 2024, CFC had approximately $101.9 million in secured loans outstanding, of which approximately 15.7% were acquired from third parties (some of which may be customers of A-Mark) and approximately 84.3% were originated by CFC.

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

CCP provides capital to fund commercial loans secured by graded sports cards and sports memorabilia.

CCP originates commercial loans secured by graded sports cards.

CCP commenced operations in fiscal 2022.

AM Capital Funding, LLC (“AMCF”), a wholly-owned subsidiary of CFC, was formed for the purpose of securitizing eligible secured loans of CFC.

AM Capital Funding, LLC (“AMCF”), previously a wholly-owned subsidiary of CFC, was formed for the purpose of securitizing eligible secured loans of CFC.

AMCF issued and administered Secured Senior Term Notes:

1 unchanged sentence

The AMCF Notes were repaid in full in December 2023.

AMCF is currently inactive.

See Note 15 to the Company’s condensed consolidated financial statements for additional information.

AMCF was dissolved in June 2024.

The Company was formed in 1965 and has grown into a significant participant in the bullion and coin markets, with $9.7 billion in revenues for fiscal year 2024.

We have remained active in seeking investment opportunities to strategically enhance our business, and also continue to focus on growth in the volume of our business, our geographic presence, the scope of complementary products, services, and technological tools that we offer to our customers.

In doing so, we seek to leverage off the strengths of our existing integrated operations, which span trading, distribution, logistics, minting, storage, hedging, financing, and consignment products and services, including:

We have remained active in seeking investment opportunities to strategically enhance our business, and also continue to focus on growth in the volume of our business, our geographic presence, and the scope of complementary products, services, and technological tools that we offer to our customers.

In doing so, we seek to leverage off the strengths of our existing integrated operations, which span trading, e-commerce, distribution, logistics, minting, storage, hedging, financing, and consignment products and services, including:

• our expertise in e-commerce and marketing;

15 unchanged sentences

This diverse base of wholesale customers purchases a variety of products from the Company in a multitude of grades, primarily in the form of coins and bars.

Our Direct-to-Consumer segment sells to (and, through JMB and PMPP, buys from) retail customers, with JMB focusing on e-commerce operations and Goldline marketing through various traditional and e-commerce channels to the investor community.

Our Direct-to-Consumer segment sells to (and, through JMB and PMPP, buys from) retail customers, with JMB and SGB focusing on e-commerce operations and Goldline marketing through various traditional and e-commerce channels to the investor community.

The Direct-to-Consumer segment offers these customers a variety of gold, silver, copper, platinum, and palladium products.

1 unchanged sentence

Set forth below are the key factors affecting the Company’s revenues, gross profit, interest income, and interest expense.

These factors can result from both the Company’s ongoing business activities as well as from Company acquisitions.

These factors may be attributable to both the Company’s ongoing business activities as well as from Company acquisitions.

The Company enters into transactions to sell and deliver gold, silver, platinum, and palladium to industrial and commercial users, coin and bullion dealers, mints, and financial institutions.

25 unchanged sentences

As a result, our results of operations generally are not materially impacted by changes in commodity prices.

Volatility also affects our gross profit.

Although conditions may fluctuate from period to period, greater volatility typically causes the premium spreads to widen resulting in an increase in the gross profit.

Product supply constraints during extended periods of higher volatility have historically resulted in a heightening of wider premium spreads and increases in gross profit.

Interest Income .

1 unchanged sentence

CFC originates loans and acquires loan portfolios that are secured by precious metal bullion and numismatic material owned by the borrowers and held by the Company for the term of the loan.

Additionally, AMCF acquired certain loans from CFC that were secured by precious metal bullion to meet the collateral requirements of the AMCF Notes.

Also, the Company offers a number of secured financing options to its customers to finance their precious metals purchases including consignments and other structured inventory finance products whereby the Company earns a fee based on the underlying value of the precious metal ("repurchase arrangements with customers").

3 unchanged sentences

In addition to financial statement indicators, management also utilizes key operational metrics to assess the performance of our business.

SGB's performance metrics have been included in our consolidated financial results from June 21, 2024, the date we obtained a controlling ownership interest in SGB, and SGB became a consolidated subsidiary of the Company.

Gold and Silver Ounces Sold and Delivered to Customers .

12 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 set up 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, made a purchase for the first time during the period, or acquired through investment activity.

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

4 unchanged sentences

We use the following three metrics indicators when assessing our ticket volume:

• Ticket Volume from New Direct-to-Consumer Customers means the number of product orders from new customers (refer to the definition of new customers above) processed by JMB, Goldline, and PMPP during the period.

• Ticket Volume from Pre-existing Direct-to-Consumer Customers means the number of product orders from pre-existing customers, processed by JMB, Goldline, and PMPP during the period.

• Total Ticket Volume from Direct-to-Consumer Customers means the aggregate number of product orders processed by JMB, Goldline, and PMPP during the period.

• Ticket Volume from Pre-existing Direct-to-Consumer Customers means the number of product orders from pre-existing customers, processed by JMB, Goldline, SGB, and PMPP during the period.

• Total Ticket Volume from Direct-to-Consumer Customers means the aggregate number of product orders processed by JMB, Goldline, SGB, and PMPP during the period.

Average Order Value.

24 unchanged sentences

For a reconciliation of these non-GAAP measures to the most directly comparable U.S.

GAAP measure reported in our condensed consolidated statements of income and condensed consolidated statements of cash flows and a discussion of certain limitations inherent in such measures, refer to the “Non-GAAP Measures” section below.

GAAP measure reported in our condensed consolidated statements of income and consolidated statements of cash flows and a discussion of certain limitations inherent in such measures, refer to the “Non-GAAP Measures” section below.

Our fiscal year end is June 30 each year.

Macroeconomic Volatility

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.

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 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.

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.

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.

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

The Company cannot predict the periods during which increased volatility will occur or the level of increased volatility, the effect of 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.

RESULTS OF OPERATIONS

Overview of Results of Operations

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 March 31,

Selling, general, and administrative expenses

Depreciation and amortization expense

Interest income

Interest expense

Losses from equity method investments

Other income, net

Unrealized gains on foreign exchange

Net income before provision for income taxes

Income tax expense

Net income attributable to noncontrolling interest

Net income attributable to the Company

Basic and diluted net income per share attributable to

A-Mark Precious Metals, Inc.:

Per Share Data:

Performance Metrics:

Gold ounces sold (2)

Silver ounces sold (3)

Inventory turnover ratio (4)

Number of secured loans at period end (5)

(1) See "Results of Segments" for a description of additional metrics not listed above.

(2) Gold ounces sold represents the ounces of gold product sold and delivered to the customer during the period, excluding ounces of gold recorded on forward contracts.

(3) Silver ounces sold represents the ounces of silver product sold and delivered to the customer during the period, excluding ounces of silver recorded on forward contracts.

(4) Inventory turnover ratio is the cost of sales divided by average inventory for the period presented above.

This calculation excludes precious metals held under financing arrangements, which are not classified as inventory on the condensed consolidated balance sheets.

(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 Nine Months Ended March 31, 2024 and 2023

Consolidated Results of Operations for the Three Months Ended September 30, 2024 and 2023

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

Nine Months Ended March 31,

Three Months Ended September 30,

Selling, general, and administrative expenses

4 unchanged sentences

Other income, net

Unrealized gains on foreign exchange

Unrealized gains (losses) on foreign exchange

Net income before provision for income taxes

Income tax expense

Net income attributable to noncontrolling interest

Net (loss) income attributable to noncontrolling interests

Net income attributable to the Company

14 unchanged sentences

in thousands, except performance metrics

Three Months Ended March 31,

Performance Metrics

Gold ounces sold

Silver ounces sold

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 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

Nine Months Ended March 31,

Three Months Ended September 30,

Performance Metrics

1 unchanged sentence

Silver ounces sold

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 March 31,

Performance Metric

Inventory turnover ratio

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 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.

Revenues for the three months ended September 30, 2024 increased $230.5 million, or 9.3%, to $2.715 billion from $2.485 billion in 2023.

Excluding an increase of $217.4 million of forward sales, our revenues increased $13.1 million, or 0.9%, 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 three months ended September 30, 2024 decreased 97,000 ounces, or 19.6%, to 398,000 ounces from 495,000 ounces in 2023.

Silver ounces sold for the three months ended September 30, 2024 decreased 9,929,000 ounces, or 32.7%, to 20,449,000 ounces from 30,378,000 ounces in 2023.

On average, the selling prices for gold increased by 26.5% and selling prices for silver increased by 24.5% during the three months ended September 30, 2024 as compared to the prior year.

JMB's revenue represented 11.3% and 11.8% of the Company's consolidated revenue for the three months ended September 30, 2024 and 2023, respectively.

in thousands, except performance metric

Nine Months Ended March 31,

Three Months Ended September 30,

Performance Metric

Inventory turnover ratio

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 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.

Gross profit for the three months ended September 30, 2024 decreased $6.0 million, or 12.1%, to $43.4 million from $49.4 million in 2023.

The overall gross profit decrease was due to lower gross profits earned from the Wholesale Sales & Ancillary Services segment, partially offset by an increase in gross profits earned by the Direct-to-Consumer segment.

The Company’s overall gross margin percentage for the three months ended September 30, 2024 decreased by 38.8 basis points to 1.600% from 1.988% in 2023.

Excluding an increase of $217.4 million of forward sales that had a negligible impact to the amount of gross profit, our gross margin percentage for the three months ended September 30, 2024 decreased by 43.6 basis points to 2.962% from 3.398%, which was primarily due to lower premium spreads and lower trading profits.

JMB’s retail market activity represented 37.1% and 35.6%, respectively, of the Company’s consolidated gross profit for the three months ended September 30, 2024 and 2023.

Our inventory turnover ratio for the three months ended September 30, 2024 decreased by 8.0% to 2.3 from 2.5 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 March 31,

Selling, general, and administrative expenses

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) 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,

Three Months Ended September 30,

Selling, general, and administrative expenses

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.

Selling, general, and administrative expenses for the three months ended September 30, 2024 increased $4.8 million, or 21.8%, to $26.6 million from $21.8 million in 2023.

The change was primarily due to:

(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 March 31,

(i) an increase in compensation expense (including performance-based accruals) of $2.6 million, (ii) an increase in advertising costs of $0.7 million, (iii) an increase in consulting and professional fees of $0.2 million, (iv) an increase in information technology costs of $0.2 million, and (v) an increase in insurance costs of $0.2 million.

Depreciation and Amortization Expense

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,

Three Months Ended September 30,

Depreciation and 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 March 31,

Depreciation and amortization expense for the three months ended September 30, 2024 increased $1.9 million, or 68.7%, to $4.7 million from $2.8 million in 2023 primarily due to an increase in amortization expense of $2.2 million relating to intangible assets acquired through our acquisition of LPM and acquisition of a controlling interest in SGB, partially offset by a decrease in JMB intangible asset amortization of $0.5 million.

Interest Income

Performance Metric

Number of secured loans at period-end

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.

The interest income from our Secured Lending segment increased by $0.5 million, or 20.9%, compared with the prior year period.

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 29.9% to 675 as of March 31, 2024, from 963 as of March 31, 2023.

in thousands, except performance metric

Nine Months Ended March 31,

Three Months Ended September 30,

Interest income

1 unchanged sentence

Number of secured loans at period-end

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.

Interest income for the three months ended September 30, 2024 increased $1.0 million, or 16.1%, to $7.1 million from $6.1 million in 2023.

The aggregate increase in interest income was primarily due to an increase in other finance product income of $0.6 million and an increase in interest income earned by our Secured Lending segment of $0.3 million.

The interest income from our Secured Lending segment increased by $0.3 million, or 12.1%, compared with the prior year period.

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 March 31,

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

The number of secured loans outstanding decreased by 30.0% to 562 as of September 30, 2024, from 803 as of September 30, 2023.

Interest Expense

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.

Nine Months Ended March 31,

Three Months Ended September 30,

Interest expense

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.

Interest expense for the three months ended September 30, 2024 increased $0.2 million, or 1.7%, to $10.0 million from $9.8 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 (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,

(i) an increase of $0.7 million associated with our Trading Credit Facility due to increased borrowings as well as an increase in interest rates and (ii) an increase of $0.7 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.

Earnings from Equity Method Investments

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 March 31,

Three Months Ended September 30,

Earnings from equity method investments

Earnings from equity method investments for the three months ended September 30, 2024 decreased $2.1 million, or 78.7%, to $0.6 million from $2.7 million in 2023 due to decreased earnings of our equity method investees.

Other Income, Net

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.

Nine Months Ended March 31,

Three Months Ended September 30,

Other income, net

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 March 31,

Other income, net for the three months ended September 30, 2024 decreased $0.1 million, or 26.7%, to $0.2 million from $0.3 million in 2023.

The decrease in other income, net was not significant.

Income Tax Expense

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,

Three Months Ended September 30,

Income tax expense

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.

Our income tax expense was $1.8 million and $5.0 million for the three months ended September 30, 2024 and 2023, respectively.

Our effective tax rate was approximately 17.3% and 20.7% for the three months ended September 30, 2024 and 2023, respectively.

Our effective tax rate varied from the federal statutory rate for the three months ended September 30, 2024 primarily due to the excess tax benefit from share-based compensation, partially offset by state taxes (net of federal tax benefit), foreign tax rate differential, Section 162(m) executive compensation disallowance, and other normal course non-deductible expenditures.

Our effective tax rate for the three months ended September 30, 2023 varied from the tax computed at the federal statutory rate primarily due to the excess tax benefit from share-based compensation and the foreign derived intangible income special deduction, partially offset by state taxes (net of federal tax benefit), Section 162(m) executive compensation disallowance, 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"), 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 Company operates its Wholesale Sales & Ancillary Services segment directly and through its consolidated 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 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 March 31,

Selling, general, and administrative expenses

Depreciation and amortization expense

Interest income

Interest expense

Losses from equity method investments

Other income, net

Unrealized gains on foreign exchange

Net income before provision for income taxes

Performance Metrics:

Gold ounces sold (1)

Silver ounces sold (2)

Wholesale Sales ticket volume (3)

(a) Revenues are presented net of inter-segment transactions with the Direct-to-Consumer segment that totaled $242.6 million.

This segment’s gross sales before eliminations of inter-segment activity totaled $2.518 billion.

(b) Revenues are presented net of inter-segment transactions with the Direct-to-Consumer segment that totaled $409.3 million.

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

(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.

(1) Gold ounces sold represents the ounces of gold product sold and delivered to the customer during the period, excluding ounces of gold recorded on forward contracts.

(2) Silver ounces sold represents the ounces of silver product sold and delivered to the customer during the period, excluding ounces of silver recorded on forward contracts.

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

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

Overview of Results of Operations for the Three Months Ended September 30, 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):

Nine Months Ended March 31,

Three Months Ended September 30,

Selling, general, and administrative expenses

4 unchanged sentences

Other income, net

Unrealized gains on foreign exchange

Unrealized losses on foreign exchange

Net income before provision for income taxes

5 unchanged sentences

This segment’s gross sales before eliminations of inter-segment activity totaled $2.548 billion.

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

(b) Revenues are presented net of inter-segment transactions with the Direct-to-Consumer segment that totaled $228.3 million.

This segment’s gross sales before eliminations of inter-segment activity totaled $2.387 billion.

6 unchanged sentences

in thousands, except performance metrics

Three Months Ended March 31,

Three Months Ended September 30,

Performance Metrics

6 unchanged sentences

This segment’s gross sales before eliminations of inter-segment activity totaled $2.387 billion.

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.

Revenues for the three months ended September 30, 2024 increased $67.9 million, or 3.1%, to $2.227 billion from $2.159 billion in 2023.

Excluding an increase in forward sales of $217.4 million, our revenues decreased $149.5 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 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

Nine Months Ended March 31,

Performance Metrics

Gold ounces sold

Silver ounces sold

Wholesale Sales ticket volume

(a) Revenues are presented net of inter-segment transactions with the Direct-to-Consumer segment that totaled $724.1 million.

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 $1.052 billion.

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

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.

Gold ounces sold for the three months ended September 30, 2024 decreased 106,000 ounces, or 28.0%, to 272,000 ounces from 378,000 ounces in 2023.

Silver ounces sold for the three months ended September 30, 2024 decreased 11,397,000 ounces, or 41.7%, to 15,960,000 ounces from 27,357,000 ounces in 2023.

On average, the selling prices for gold increased by 25.5% and selling prices for silver increased by 23.1% during the three months ended September 30, 2024 as compared to the prior year.

The Wholesale Sales ticket volume for the three months ended September 30, 2024 increased by 7,611 tickets, or 34.5% to 29,655 tickets from 22,044 tickets in 2023.

Gross Profit — Wholesale Sales & Ancillary Services

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 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.

This segment’s profit margin percentage decreased by 105.9 basis points to 0.740% from 1.799% in 2023.

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 $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.

Nine Months Ended March 31,

Three Months Ended September 30,

(c) Gross profit percentage before elimination of inter-segment sales to the Direct-to-Consumer segment was 0.777% for the period.

(d) Gross profit percentage before elimination of inter-segment sales to the Direct-to-Consumer segment was 1.093% for the period.

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.

Gross profit for the three months ended September 30, 2024 decreased $8.4 million, or 29.5%, to $20.0 million from $28.3 million in 2023.

The gross profit decrease was primarily due to lower premium spreads and lower trading profits.

This segment’s profit margin percentage decreased by 41.5 basis points to 0.898% from 1.313% in 2023.

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 $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.

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

Excluding an increase of $217.4 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 September 30, 2024 decreased by 47.0 basis points to 2.042% from 2.512% 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 March 31,

Selling, general, and administrative expenses

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) 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,

Three Months Ended September 30,

Selling, general, and administrative expenses

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 $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.

Selling, general, and administrative expenses for the three months ended September 30, 2024 increased $2.1 million, or 20.3%, to $12.7 million from $10.6 million in 2023.

The change was primarily due to an increase in compensation expense (including performance-based accruals) of $1.5 million.

Interest Income — Wholesale Sales & Ancillary Services

Three Months Ended March 31,

Interest income

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,

Three Months Ended September 30,

Interest income

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 income for the three months ended September 30, 2024 increased $0.6 million, or 17.8%, to $4.0 million from $3.4 million in 2023.

The overall increase was primarily due to (i) a $0.4 million increase in interest income earned from spot deferred trade orders and (ii) a $0.2 million increase in interest and fees earned related to margin orders.

Interest Expense — Wholesale Sales & Ancillary Services

Three Months Ended March 31,

Interest expense

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,

Three Months Ended September 30,

Interest expense

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,

Interest expense for the three months ended September 30, 2024 increased $0.7 million, or 10.6%, to $7.5 million from $6.8 million in 2023.

The overall increase was primarily due to (i) an increase in inter-segment eliminations related to the DTC segment's product financing activity with A-Mark of $0.7 million and (ii) higher interest and fees from product financing arrangements of $0.6 million, partially offset by (iii) a decrease of $0.8 million related to the AMCF Notes (including amortization of debt issuance costs) due to the repayment in December 2023.

Earnings from Equity Method Investments — Wholesale Sales & Ancillary Services

Three Months Ended September 30,

Earnings from equity method investments

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.

Earnings from equity method investments for the three months ended September 30, 2024 decreased $2.2 million, or 79.7%, to $0.6 million from $2.7 million in 2023 due to decreased earnings of our equity method investees.

Results of Operations — Direct-to-Consumer Segment

2 unchanged sentences

(“JMB”), Goldline, Inc.

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

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 March 31,

Selling, general, and administrative expenses

Depreciation and amortization expense

Interest expense

Other income, net

Net income before provision for income taxes

Performance Metrics:

Gold ounces sold (1)

Silver ounces sold (2)

Number of new customers (3)

Number of active customers (4)

Number of total customers (5)

DTC ticket volume from new customers (6)

DTC ticket volume from pre-existing customers (7)

DTC total ticket volume (8)

DTC average order value (9)

JMB average order value (9)

(a) Includes $2.9 million of inter-segment sales from the Direct-to-Consumer segment to the Wholesale Sales & Ancillary Services segment.

(b) Includes $2.1 million of inter-segment sales from the Direct-to-Consumer segment to the Wholesale Sales & Ancillary Services segment.

(c) Gross profit percentage, excluding inter-segment sales from the Direct-to-Consumer segment to the Wholesale Sales & Ancillary Services segment, was 5.390% for the period.

(d) Gross profit percentage, excluding inter-segment company sales from the Direct-to-Consumer segment to the Wholesale Sales & Ancillary Services segment, was 8.301% for the period.

(1) Gold ounces sold represents the ounces of gold product sold and delivered during the period.

(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 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.

(5) Number of total customers represents the aggregate number of customers that have registered or set up an account or have made a purchase in the past.

(6) Ticket volume from new customers represents the number of product orders from new customers processed by JMB, Goldline, and PMPP during the period.

(7) Ticket volume from pre-existing customers represents the total number of product orders from pre-existing customers processed by JMB, Goldline, and PMPP during the period.

(8) Total ticket volume represents the total number of product orders processed by JMB, Goldline, and PMPP during the period.

(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 Nine Months Ended March 31, 2024 and 2023

(“Goldline”), through our investment in Silver Gold Bull, Inc.

("SGB"), and through our subsidiary Precious Metals Purchasing Partners, LLC ("PMPP").

Overview of Results of Operations for the Three Months Ended September 30, 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):

Nine Months Ended March 31,

Three Months Ended September 30,

Selling, general, and administrative expenses

Depreciation and amortization expense

Interest income

Interest expense

Other income (expense), net

Unrealized gains on foreign exchange

Net income before provision for income taxes

12 unchanged sentences

(b) Includes $1.6 million of inter-segment sales from the Direct-to-Consumer segment to the Wholesale Sales & Ancillary Services segment.

(c) Gross profit percentage, excluding inter-segment sales from the Direct-to-Consumer segment to the Wholesale Sales & Ancillary Services segment, was 5.956% for the period.

(d) Gross profit percentage, excluding inter-segment company sales from the Direct-to-Consumer segment to the Wholesale Sales & Ancillary Services segment, was 8.711% for the period.

(1) Gold ounces sold represents the ounces of gold product sold and delivered during the period.

SGB's metrics are included after the Company acquired a controlling interest on June 21, 2024.