EPS of $0.21 decreased by 85.6% from previous year
Gross margin of 1.3%
Net income of 5.01M
"During the quarter, we faced a combination of softened demand, premium compression, and elevated gold and silver prices... we delivered $0.21 per diluted share and generated $12.6 million in non-GAAP EBITDA, including one-time acquisition costs of $2.2 million." - Greg Roberts, Chief Executive Officer
AMark Precious Metals Inc (AMRK) QQ3 2024 Results: Top-Line Growth Amid Margin Compression and Strategic M&A Momentum in a Volatile Precious Metals Market
Executive Summary
AMark Precious Metals reported Q3 FY2024 (quarter ended March 31, 2024) with revenue of $2.613 billion, up 13% year over year, driven by higher average selling prices for gold and silver. However, gross profit declined 54% to $34.8 million, yielding a gross margin of 1.33%, with the company attributing the compression to a higher carry cost on inventory and a shift in mix toward wholesale/retail monetization rather than DTC-driven margins. Net income was $5.0 million, or $0.21 per diluted share, and EBITDA (non-GAAP) was $12.6 million, down 76% year over year. The quarter included one-time acquisition costs of $2.2 million related to the LPM Group Limited acquisition completed in February 2024 and ongoing integration benefits. Management highlighted robust organic growth in the Direct-to-Consumer (DTC) channel, adding 56,600 new customers in Q3 (up 8% quarter over quarter), with total DTC customers approaching 2.5 million. AMRK also repurchased 204,396 shares for $5.0 million. The company reiterated its strategic focus on M&A and geographic expansion (notably Asia via LPM) and continued logistics automation to support higher SKU counts and volume. Looking ahead, management conveyed cautious optimism for improving premiums and demand in the near term, citing April as a positive inflection point, and maintained an active stance on acquisition opportunities. The near-term profitability remains challenged by market-wide premium compression and inventory carry, but the platform advantages—fully integrated supply, logistical scale, and a diversified mix of wholesale, DTC, and secured lending—support a constructive longer-term outlook with multiple catalysts, including Asia expansion, DTC growth, and ongoing capital allocation discipline.
Key Performance Indicators
Revenue
2.63B
QoQ: 26.42% | YoY:13.42%
Gross Profit
34.84M
1.33% margin
QoQ: -24.33% | YoY:-53.86%
Operating Income
14.21M
QoQ: -31.81% | YoY:-74.16%
Net Income
5.01M
QoQ: -63.58% | YoY:-86.04%
EPS
0.22
QoQ: -63.33% | YoY:-85.62%
Revenue Trend
Margin Analysis
Key Insights
Revenue: $2.613 billion in Q3 FY2024, up 13% YoY; excluding $622.1 million of forward sales, revenue declined 20% YoY due to lower ounces sold offset by higher average prices.
Gross profit: $34.84 million, a 54% YoY decline; gross margin 1.33% (vs 3.26% in the prior-year quarter).
EBITDA: $12.6 million, down 76% YoY; nine-month EBITDA $68.2 million, down 58% YoY.
Net income: $5.01 million; diluted EPS $0.21; annualized diluted EPS $0.22; nine months net income $37.6 million, EPS $1.56.
SG&A: $22.9 million in Q3, down 4% YoY; nine months $67.1 million, up 8% YoY.
Financial Highlights
Revenue and profitability:
- Revenue: $2.613 billion in Q3 FY2024, up 13% YoY; excluding $622.1 million of forward sales, revenue declined 20% YoY due to lower ounces sold offset by higher average prices.
- Gross profit: $34.84 million, a 54% YoY decline; gross margin 1.33% (vs 3.26% in the prior-year quarter).
- EBITDA: $12.6 million, down 76% YoY; nine-month EBITDA $68.2 million, down 58% YoY.
- Net income: $5.01 million; diluted EPS $0.21; annualized diluted EPS $0.22; nine months net income $37.6 million, EPS $1.56.
- SG&A: $22.9 million in Q3, down 4% YoY; nine months $67.1 million, up 8% YoY.
- Cash flow and liquidity: Net cash provided by operating activities $79.8 million; free cash flow $70.5 million; cash at end of period $35.2 million.
- Segments and mix: DTC contributed 13% of Q3 revenue (down from 23% YoY); JMB contributed 12% of revenue (vs 20% YoY). Nine-month revenue mix: DTC ~14% of total, JMB ~13%.
Balance sheet and liquidity:
- Total assets: $1.670 billion; total liabilities: $1.082 billion; total stockholders’ equity: $583.2 million.
- Cash and equivalents: $35.2 million; inventories: $579.4 million (down from $645.8 million year-end), reflecting higher commodity prices but lower overall ounces.
- Net debt: $800.9 million; total debt: $836.1 million; tangible net worth: $391.1 million.
- Dividend: Quarterly cash dividend of $0.20 per share; next expected in July 2024.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
2.63B
13.42%
26.42%
Gross Profit
34.84M
-53.86%
-24.33%
Operating Income
14.21M
-74.16%
-31.81%
Net Income
5.01M
-86.04%
-63.58%
EPS
0.22
-85.62%
-63.33%
Key Financial Ratios
currentRatio
1.76
grossProfitMargin
1.33%
operatingProfitMargin
0.54%
netProfitMargin
0.19%
returnOnAssets
0.3%
returnOnEquity
0.86%
debtEquityRatio
1.43
operatingCashFlowPerShare
$3.11
freeCashFlowPerShare
$3.09
dividendPayoutRatio
91.3%
priceToBookRatio
1.22
priceEarningsRatio
35.44
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Management and operational highlights from the QQ3 2024 earnings call:
- Strategy and execution: Greg Roberts emphasized the integrated platform’s resilience in a difficult market, noting liquidity-driven demand shifts and a mix that benefited inventory monetization. Key quote: “Our third quarter results continue to demonstrate the ability of our fully-integrated platform to generate profitable results even in a difficult market environment.”
- Financial performance and acquisitions: Kathleen Simpson-Taylor highlighted revenue growth and the forward-sale impact, including the LPM acquisition integration and related costs. Key quote: “Our revenues for fiscal Q3 2024 increased 13% to $2.611 billion from $2.317 billion in Q3 of last year.”
- Operating metrics and customer growth: Thor Gjerdrum reported gold ounces sold down 32% YoY and silver ounces down 30% YoY in Q3, with DTC new customers totaling 56,600 (up 8% QoQ) and total DTC customers around 2.5 million. Quote: “We sold 446,000 ounces of gold in Q3 fiscal 2024... 56,600 in new DTC customers in Q3.”
- M&A and expansion outlook: Greg Robts reiterated active M&A opportunities and Asia expansion (LPM integration in Hong Kong and Singapore potential). Quote: “One word answer, yes. We are actively pursuing M&A opportunities and expanding into Asia via LPM.”
During the quarter, we faced a combination of softened demand, premium compression, and elevated gold and silver prices... we delivered $0.21 per diluted share and generated $12.6 million in non-GAAP EBITDA, including one-time acquisition costs of $2.2 million.
— Greg Roberts, Chief Executive Officer
Our revenues for fiscal Q3 2024 increased 13% to $2.611 billion from $2.317 billion in Q3 of last year.
Outlook and expectations:
- Near-term demand and premiums: Management cited April as a positive inflection point after a challenging January–March period, with premiums beginning to re-expand on silver products and gold premiums showing early signs of strength. The company expects continued improvement in the near term but remains sensitive to gold/silver price dynamics and retail demand cycles.
- M&A and geographic expansion: The LPM acquisition completed in February 2024 is expected to yield synergies in supply, capital access, and logistics. Additional Asia-focused opportunities (e.g., Singapore region) are under review, reinforcing AMRK’s strategy to diversify revenue streams and improve geographic reach.
- Operational leverage and liquidity: Ongoing investments in AMGL logistics automation and SKU expansion are aimed at handling higher volumes and improving gross margins as premium environments recover.
- Key factors for investors to monitor: (1) Premium environment for gold and especially Silver Eagle products; (2) DTC growth trajectory and conversion efficiency; (3) Inventory carry cost and its impact on margin; (4) Integration progress and ROI from LPM; (5) Access to liquidity and debt levels, including any changes to forward sales exposure and funding facilities.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
AMRK Focus
1.33%
0.54%
0.86%
35.44%
PJT
26.50%
18.20%
13.90%
38.18%
SRL
66.10%
7.68%
0.08%
128.08%
PIPR
12.80%
5.07%
0.38%
141.50%
EVR
25.60%
12.60%
3.59%
25.00%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
AMRK faces a near-term margin headwind driven by inventory carry and premium compression in a volatile precious metals environment. Yet the company benefits from a resilient, diversified business model with three revenue streams, a strong liquidity profile, and the potential for meaningful upside from M&A and Asia expansion via LPM. The recent acceleration in DTC customer acquisition, ongoing logistics automation, and the Asia-focused post-LPM integration present tangible catalysts for better revenue mix and improved operating efficiency over the next 6–12 months. Risk factors to monitor include metal price volatility, forward-sales exposure, debt leverage, and the pace of premium normalization. Overall, the investment thesis rests on (i) execution of LPM integration and geographic expansion, (ii) a normalization or expansion of precious metal premiums, and (iii) disciplined capital allocation including buybacks and selective M&A that preserves the balance between Wholesale, DTC, and Secured Lending contributions.
Key Investment Factors
Growth Potential
Longer-term growth potential anchored by a fully integrated platform: wholesale, DTC, and secured lending synergies; LPM integration broadens product access and geographic footprint in Asia, with potential upside from expanded e-commerce and logistics improvements; ongoing M&A activity provides upside to revenue and market share as additional accretive deals close.
Profitability Risk
Key risks include continued premium compression and volatility in gold/silver prices, dependence on forward sales contributions, elevated indebtedness and working capital needs, regulatory and geopolitical risks, and potential execution risks from rapid M&A activity and integration in a volatile commodity cycle.
Financial Position
Strengths include a diversified revenue mix, strong cash generation in Q3 despite margin compression, and meaningful liquidity to fund acquisitions and buybacks. Risks include a high debt load (net debt around $801 million) and a relatively low gross margin that is sensitive to cost of carry and product mix.
SWOT Analysis
Strengths
Fully integrated platform enabling liquidity and inventory management across Wholesale, DTC, and Secured Lending
Exposure to rising demand in Asia through LPM integration and expansion opportunities
Significant free cash flow generation and stock repurchase activity supporting shareholder value
Escalating DTC customer base and robust logistics capabilities via AMGL and associated minting/logistics assets
Weaknesses
Q3 gross margin of 1.33% indicates sensitivity to carry costs and premium compression
High debt burden with net debt about $801 million and limited liquidity headroom at times
Reliance on forward sales for a portion of revenue; sensitivity to metal price volatility
Opportunities
Capitalizing on premium recovery in Silver Eagles and other silver products to lift gross margin
Acceleration of DTC growth and new product innovations (e.g., Silvercrest JV and Mine products) to attract new customers
Expansion in Asia (Singapore, greater APAC) and continued M&A activity to diversify product mix and revenue streams
Threats
Sustained premium compression and volatility in precious metals markets
Regulatory changes, supply chain disruptions, or macro shocks affecting liquidity and volumes
Competition for higher-margin services and possible financing or funding constraints