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spk08: Good afternoon and welcome to AMARC's Precious Metals conference call for the fourth quarter and fiscal year ended June 30, 2022. My name is John and I will be your operator this afternoon. Before this call, AMARC issued its results for the fourth quarter and fiscal year 2022 in a press release, which is available in the investor relations section of the company's website at www.amarc.com. Find the link to the investor relations section at the top of the homepage. Joining us for today's call are AMARC's CEO, Greg Roberts, President, Thor Jerdrum, and CFO, Kathleen Simpson-Taylor. Following their remarks, we will open the call to your questions. Then, before we conclude the call, I'll provide the necessary cautions regarding the forward-looking statements made by management during this call. I would like to remind everyone that this call is being recorded and will be made available for replay via a link available in the investor relations section of AMARC's website. Now, I would like to turn the call over to AMARC's CEO, Mr. Greg Roberts. Sir, please proceed.
spk02: Thank you, John, and good afternoon to everyone. Thank you again for joining our call today. We reported our fiscal fourth quarter and full fiscal year 2021 results this afternoon, which continue to demonstrate the strength of our fully integrated precious metals platform. For the full year, our revenues exceeded $8.1 billion, and gross profit and non-GAAP-adjusted net income grew 25% and 8% year-over-year, respectively, contributing to a return on equity of 27%. demonstrating the strong financial results our business model is capable of generating. Our direct-to-consumer or DTC segment contributed over half of our gross profit and pre-tax income during fiscal 2022. I'm very pleased with the progress AMARC has made integrating JM Bullion during the full year post-acquisition, as well as launching the CyberMetals platform. Over the past year, AMARC grew its DTC total customer base by 13% to 2 million customers and its active customer base by 270%, demonstrating our commitment to expanding the DTC business. Following the commercial launch of CyberMetals during Q4 of fiscal 22, we have continued to see interest from both existing JM customers as well as new customers unique to CyberMetals. leading to our assets under management of 3.7 million at June 30th, 22. Nearly 6,000 customers were added during the quarter. We are happy with the progress so far and have several key initiatives planned to continue to expand our marketing efforts and continue to grow the cyber metals business. Our minting business continues to generate impressive results. It is worth noting that fiscal 22 was our first year of 100% ownership in the Silvertown Mint, and combined with our strategic partner at the Sunshine Mint, we benefited greatly throughout the year from a steady source of product during what turned out to be industry-wide supply constraints. Silvertown produced an impressive 11.4 million ounces of silver during fiscal 22. Q4, which was more than the mint produced in any recent fiscal year. Additionally, weekly productions in the fiscal fourth quarter increased 35% year over year, allowing us to continue to provide a reliable source of supply to our wholesale customers as well as our DTC customers. Now, I'll turn it over to our CFO, Kathleen Simpson-Taylor, to walk you through our financials in more detail. Then our president, Thor Jerdam, will discuss our operating metrics. Afterwards, I will provide a further update on our business growth and strategy. Kathleen?
spk01: Thank you, Greg, and good afternoon, everyone. Our revenues for fiscal Q4 2022 decreased 4% to $2.1 billion from $2.2 billion in Q4 of last year. The decrease was attributable to a decrease in gold ounces sold and lower average selling prices of silver offset by an increase in silver ounces sold and forward sales and higher average selling prices of gold. The DTC segment contributed 23% and 30% of the consolidated revenue in fiscal Q4 2022 and Q4 of last year, respectively. Revenue contributed by JMB represented 21% of the consolidated revenues for Q4 of 2022 compared to 28% in Q4 of last year. For the full fiscal year, our revenues increased 7% to $8.2 billion from $7.6 billion last fiscal year. The increase was attributable to an increase in silver ounces sold higher average selling prices of gold and higher forward sales, offset by a decrease in gold ounces sold and lower average selling prices of silver. The DTC segment contributed 26% and 11% of the consolidated revenue in fiscal years 2022 and 2021, respectively. The increase in revenue from the DTC segment reflects the acquisition of JMB in March 2021 and the growth of the segment's customer base. Revenue contributed by JMB represented 24% of the consolidated revenues for fiscal year 2022 compared to 9% in the prior year. Gross profit for fiscal Q4 2022 decreased 22% to $67.8 million or 3.24% of revenue from $87.1 million or 4.0% of revenue in Q4 of last year. The decrease in gross profit was due to lower gross profits earned from the wholesale sales and ancillary services and DTC segments. Gross profit contributed by the DTC segment represented 57% of the consolidated gross profit in fiscal Q4 2022 compared to 50% in the same year-ago period. Gross profit contributed by JMB represented 46% of the consolidated gross profit in fiscal Q4 2022 compared to 43% in Q4 of last year. For the full fiscal year, gross profit increased 25% to $261.8 million or 3.21% of revenue from $210.2 million or 2.76% of revenue in the prior fiscal year. The increase in gross profit was due to higher gross profits earned from the DTC segment offset by lower gross profits earned from the wholesale sales and ancillary services segment. Gross profit contributed by the DTC segment represented 56% of the consolidated gross profit in fiscal 2022, compared to 34% in the prior fiscal year. JMB contributed 46% to the consolidated gross profit for fiscal year 2022, compared with 22% in the prior year, since JMB's results were included beginning only in March of the prior year after its acquisition. SG&A expenses for fiscal Q4 2022 increased 24% to $20.7 million from $16.7 million in Q4 of last year. The increase was primarily due to an increase of $2.2 million of expenses incurred by JMB, higher insurance costs of $1.7 million, and increased compensation expense, including performance-based accruals, of $1.0 million. This was partially offset by lower computer-related costs of $0.6 million. For the full fiscal year, SG&A expenses increased 60% to $76.6 million from $48 million in fiscal year 2021. The increase was primarily due to an increase of $21.6 million of expenses incurred by JMV, increased compensation expense, including performance-based accruals of $3.7 million, higher insurance costs of $2.6 million, and increased consulting and professional fees of $1.5 million. This was partially offset by lower computer-related costs of $0.6 million. Depreciation and amortization expense for fiscal Q4 2022 decreased 61%. to $3.2 million from $8.3 million in Q4 of last year. The decrease in depreciation and amortization expense was primarily due to a $5.1 million decrease in amortization of acquired intangibles related to JMB. For the full fiscal year, depreciation and amortization expense increased 153 percent to $27.3 million from $10.8 million in the prior year. The increase was primarily due to $16.4 million of higher amortization of acquired intangibles related to J&B. Interest income for fiscal Q4 2022 increased 8% to $5.7 million from $5.2 million in Q4 of last year. The aggregate increase in interest income was primarily due to higher interest income earned by our secured lending segment that was partially offset by lower other finance product income. For the full fiscal year, interest income increased 18% to $21.8 million from $18.5 million in fiscal 2021. The increase was primarily due to higher interest income earned by our secured lending segment and higher other finance product income. Interest expense for fiscal Q4 2022 increased 10% to $5.7 million from $5.2 million in Q4 of last fiscal year. The increase in interest expense was primarily driven by $0.6 million increase associated with our trading credit facility and notes payable, including amortization of debt issuance costs, and a $0.5 million increase related to product financing arrangements. This was offset by $0.6 million of lower interest costs from liabilities on borrowed metals. For the full fiscal year, interest expense increased 11% to $22 million from $19.9 million in fiscal 2021. The increase in interest expense was primarily driven by an increase of $1.3 million associated with our trading credit facility and notes payable, including amortization of debt issuance costs, $1.2 million related to product financing arrangements, $0.5 million of loan servicing fees, and this was offset by a decrease of $0.9 million associated with liabilities on borrowed metals. Earnings from equity method investments in Q4 2022 increased 57% to 2.6 million from 1.6 million in the same year-ago quarter. The increase reflects our higher percentage ownership in our equity method investments in comparison to the prior year. For the full fiscal year, earnings from equity method investments decreased 56% to 6.9 million from $15.5 million in fiscal 2021. The net decrease of $8.6 million includes an $11.7 million decrease related to JMV, a former equity method investment, which is now reported by the company as a wholly owned subsidiary, offset by increased earnings of $3.1 million from our other equity method investments. Net income attributable to the company for the fourth quarter of fiscal 2022 totaled $37.3 million or $1.52 per diluted share. This compares to net income attributable to the company of $51 million or $2.14 per diluted share in Q4 of last year. The prior year per share number has been adjusted for the effect of the two-for-one stock split in June 2022. Our diluted EPS for the fiscal fourth quarter of 2022 is based on the weighted average diluted shares outstanding of 24.5 million, compared with 23.8 million weighted average diluted shares outstanding during the fourth quarter of last year. This has also been adjusted for the effect of the two-for-one stock split that occurred in June 2022. Adjusted net income before provision for income taxes, a non-GAAP financial measure, which excludes free measurement gain, acquisition expenses, amortization, and depreciation for Q4 fiscal 2022, totaled $50.6 million. compared to $72.3 million in the same year-ago quarter. EBITDA, a non-GAAP liquidity measure for Q4 fiscal 2022, totaled $50.3 million compared to $72.3 million in Q4 fiscal 2021. For the full fiscal year, net income attributable to the company totaled $132.5 million or $5.45 per diluted share. This compares to net income attributable to the company of $159.6 million or $8.90 per diluted share in the prior year. Prior year net income attributable to the company included a one-time 26.3 million remeasurement gain on the company's pre-existing equity interest in JMB in connection with its acquisition. Excluding this remeasurement gain in fiscal year 2021, net income attributable to the company decreased 0.8 million compared to the prior fiscal year. It is important to note that our diluted EPS for fiscal 2022 is based on weighted average diluted shares outstanding of 24.3 million compared to 17.9 million weighted average diluted shares outstanding in the prior fiscal year. And that prior year number has been adjusted for the effect of the two-for-one stock split in June 2022. Adjusted net income before provision for income taxes a non-GAAP financial measure for the full fiscal year totals $195 million, an increase of $15.1 million compared to $179.9 million in the prior year. EBITDA, a non-GAAP liquidity measure for fiscal 2022, totals $193.9 million compared to $205 million in the prior fiscal year. Now turning to our balance sheet. At fiscal year-end, we had $37.8 million of cash compared to $101.4 million at the end of the prior year. Our fiscal year-end 2021 cash balances were high due to our significant planned precious metals purchases in the first few days of July 2021, specifically due in part to the U.S. Mint's release of a new bullion coin design on July 1st. Our tangible net worth at the end of the fiscal year was $321.6 million, up from $169.4 million at the end of the prior fiscal year. Finally, as we announced in our earnings release, AMARC's Board of Directors has declared a non-recurring special cash dividend of $1 per common share, which will be paid on September 26, 2022, to stockholders of record as of September 12, 2022. Additionally, our Board of Directors has adopted a regular quarterly cash dividend policy of 20 cents per common share or 80 cents per share on an annual basis. The initial quarterly cash dividend under the policy will be paid in October 2022. The declaration of regular cash dividends in the future is subject to the determination each quarter by the Board of Directors based on a number of factors, including the company's financial performance, available cash resources, cash requirements, and alternative uses of cash, and applicable bank covenants. That completes my financial summary. Now I will turn the call over to Thor, who will provide an update on our key operating metrics. Thor?
spk09: Thank you, Kathleen. Looking at our key operating metrics for the fourth quarter and full year 2022, We sold 641,000 ounces of gold in Q4 fiscal 2022, which was down 17% from Q4 of last year and down 12% from the prior quarter. For the full fiscal year, we sold 2.7 million ounces of gold, which was down 3% from fiscal 2021. We sold 37.6 million ounces of silver in Q4 fiscal 2022, which was up 5% from Q4 of last year and up 9% from last quarter. For the full fiscal year 2022, we sold 132.2 million ounces of silver, which was up 16% for fiscal 2021. The number of new customers in the DTC segment, which is defined as the number of customers that have registered or set up a new account or may have purchased for the first time during the period, was 48,800 in Q4 fiscal 2022, which was down 30% from Q4 of last year and down 21% from last quarter. For the full fiscal year, the number of new customers in the DTC segment was up 230,400, which was up 173% from the prior year. The number of total customers in the DTC segment as of the end of fiscal 2022 was approximately 2 million, which was a 13% increase from the prior year. The year-over-year increases in the customer-based metrics were primarily due to the acquisition of GMB in March of 2021. The DTC segment average order value, which represents the average dollar value of third-party product orders delivered to DTC segment customers during Q4 fiscal 2022 was $2,742, which is up 14% from Q4 fiscal 2021. For the full fiscal year, the DTC average order value was $2,520, which was down 9% from fiscal 2021. For the fiscal fourth quarter, Our inventory turnover ratio was 2.7, which is a 34% decrease from 4.1 in Q4 of last year, and a 13% decrease from 3.1 in the prior quarter. For the full fiscal year, our inventory turn ratio was 13.2, which is down 31% from the same year-ago period. Finally, the number of secured loans at the end of June totaled 2,271, an increase of 21% from June 30, 2021, and a decrease of 16% from the end of March. The dollar value of our loan portfolio at the end of June totaled $126.2 million, an increase of 12% from June 30, 2021. Typically, the number of loans increased during periods of rising precious metals prices and decreased during periods of declining precious metals prices. That concludes my prepared remarks. I now turn it over to Greg for closing remarks. Greg?
spk02: Thank you, Thor and Kathleen. We continue to evaluate opportunities to expand our geographic presence and market reach while creating value for our stockholders. Our strategic focus remains on opportunities that will align with our business model and create synergies with AMARC's integrated platform, including our reliable access to supply, successful logistics footprint, and strong customer relationships. Now, our incremental investments such as Pinehurst Coins, Silver Gold Bull, and recently BJSC allow us to enhance our collaboration and extend supply agreements while evaluating opportunities for new initiatives that can foster further growth. Moving forward into our fiscal 2023, we remain optimistic that our industry-leading fully integrated precious metals platform and proven business model will allow us to realize growth and profitability over the long term. Operator?
spk08: Thank you. Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star 1 on your touchtone phone. Pressing star 2 will remove you from the queue should your question be answered. And lastly, while posing your question, please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we poll for questions. Once again, that's star 1 if you have a question or a comment. And the first question is coming from Thomas Forte with DA Davidson. Thomas, your line is live.
spk06: Great. Thank you. Greg and team, congrats on the quarter. I have four. I'm going to ask two, and then I'll get back in the queue. So for the first two, Greg, you talked a little about this at the end there, but can you talk about your decision to acquire the assets from BGASC, and can you provide your current thoughts on your M&A strategy overall?
spk02: Yeah, for sure. I mean, we had a press release today that, you know, described that we signed a definitive agreement just yesterday. And, you know, it was BJSC is a similar platform to JM Bullion, albeit much smaller. And we had an opportunity. The owner was looking to get out of the business. We were comfortable with the business and how it was run. We decided to do an asset purchase, and we acquired assets that would allow us to continue to run the platform as a standalone brand. We believe that the customer base is in the neighborhood of 70,000 customers. As we've noted in the press release, they did about $200 million in top-line sales in 2021. I view that as a fairly favorable number. Cost per dollar of revenue at 22.5 cents and cost per customer sub $70. So the deal fell within our parameters of what we look for. Rob Pacelli, Burt Briarley, and Michael Whitmire led the acquisition and did a great job on it. We think the customer base is going to be unique to BGSC with hopefully very little crossover. And, you know, we think it was a great opportunity.
spk06: Thank you. And then my second question, and then I'll get back in the queue. So thank you for providing the asset center management for CyberMetals. Can you discuss why you think that's the right metric to show the progress you're making with the effort? And how should investors think about what long-term success could look like from an asset center management standpoint?
spk02: Yeah, I mean, I'm enthusiastic about the box that many of you will note. A few of these boxes are a little bit different than what we have done in the past on the press releases. Kathleen and Thor and I worked quite diligently to get this information out there. So, yes, I believe that the metrics you're seeing in these boxes are very important, and it will give us a clearer picture picture of how we're progressing and what's going on within the business. So I think it's very valuable information as it relates specifically to cyber metals. We've come up with four metrics on cyber metals that we feel are important for investors and our followers to focus on. I feel good with where we're at right now. For the most part, the The response we've had in the new customers are focused mainly on existing JMB customers. As we've spoke before, we wanted to make sure the platform was stable and that we felt we could easily onboard people and the customer experience was as good as it could be. As we look out over the next 12 months, I feel like we're going to go outside of the JMB ecosystem and we're going to look towards other competitors that have similar products and look to market and give customers looking for this type of product, you know, a look into why we think we have the best product out there. So I think in the next six to 12 months, you know, we want to increase these numbers and we believe that there's, you know, quite a bit of upside. How fast we get to our target numbers is going to depend a little bit on the response, the overall precious metals environment, as well as our marketing efforts. So we're optimistic that this is going to be very good for the company, for AMARC, and I think these metrics are good ones to follow that we'll update as often as we can. I'll also say that there's a few other key metrics that we may or may not add to this box in the near future or in the next quarter. But I think that to start, this is what we feel is important to communicate.
spk06: Thank you. I'll get back in the queue, Greg.
spk08: Okay. Up next, we have Andrew Scott with Roth Capital Partners. Andrew, you're live.
spk03: Good afternoon. Thanks for taking my questions, and I just want to reiterate, congrats on a strong quarter. My first question here kind of has to do with your vision on the strength of consumer in your DTC business. While inflation is very good for precious metals investing, we see a lot of consumer spending is coming in, and we've seen some pinched wallets. Your metrics in the quarter showed that at Didn't really sell that much, but I just want to hear your thoughts, maybe what you've seen in the last couple months, specifically in the DTC business with your average customer.
spk02: Sure. I think that it's important to look at our metrics in the DTC segment year over year. Every year we've been doing this, we'll have a month or two or a quarter of a slower period of or a very robust period. I think it's important to note that when comparing year over year in Q4, as well as Q3 of last year, we were extremely active. We had a number of new customers being created through social media and a number of other platforms that came onto our platform And it was very busy. We also had, as we've discussed before, a switch in design for the Silver Eagle from the Type 1 to the Type 2, which happened right around the first week of July of last calendar year. But a good deal of our performance leading up to that was in Q4 of last year. I think that We're always going to have some ebbs and flows as it relates to the number of new customers we're acquiring. I think that, you know, even though our quarter-over-quarter numbers of new customers were slightly down, in my opinion, we still generated a huge amount of new customers. And I'm very, very positive about what we were able to generate. When you consider that the jambillion is 12 or 13, 14 years, or longer in existence. And we're still developing a number of new customers at a very high rate. But you will see some ebbs and flows on that number. I don't view a slight decline quarter over quarter in new customer total number. To me, it's just a little bit cyclical. And so I'm very happy with this quarter. As it relates to what we're seeing in the overall consumer pocketbook, inflation, slowing economy, whatever you want to call it, I think that we're dealing with a number of unknowns right now. This exact situation we probably haven't encountered. I feel good about our first quarter of this year, and I think we're definitely performing at – at a comfortable level and what I would expect in this quarter. So I think that that's good. And I'm not exactly sure how much precious metals investors pocketbooks are being affected right now and whether that's really affecting their spend. I mean, our average order value is still very strong in the DTC. In fact, we continue to see a higher percentage of gold buyers than silver buyers, which is reflected in our average order value. Every week, we continue to see a number of first-time customers with a very high initial order. So I'm optimistic and very happy with that. So I think time will tell. I don't think anybody really knows exactly how things are going to play out. The Fed made a very strong indication this last week that At all costs, they're going to kill inflation off. I don't think anybody knows exactly how that happens or what the process is or whether it's successful or when. I think we're pretty comfortable with where we're at right now. And in our crystal ball, at least in the near term, we feel pretty good about our model and what our customers are telling us.
spk03: Thank you very much for the detail. My second question here is to deal with the mints. It seems like you guys produce about a million ounces per week, which I believe encapsulates all the expansion plans you guys have laid out. So do you guys have any more expansion plans for the mints in the coming quarters? And do you expect the shortage in the industry to persist over the next couple of quarters as well?
spk02: I mean, I would take it, you know, two quarters out, you know, the quarter we're in and then our Q2. I think we have a pretty good idea of what we can expect from the U.S. Mint and the Royal Canadian Mint, and I think they will continue to struggle in production and not meet demand. We think that our million ounces a week at the Silvertown Mint plus our allocation of what Sunshine is making is is good. We're happy with it. We'd like to be able to make more or have more supply, but I think we've planned. We think as we look at this BJSC acquisition, we're looking to basically take over their demand. We had historically not gotten a great deal of wholesale trade with them over the last 12 to 18 months. So we believe we'll be able to fill their demand with our product. The guys at JM Bullion will manage that inventory and manage their demand. But we think we can fit them in pretty nicely here. As it relates to future growth or expansion at either Sunshine or the Silvertown Mint, Sunshine is on track to start producing gold in its Las Vegas facility in the next three to six months. So we'll get a little bit more production from them when they are able to do that. And then, you know, we're always looking at ways to squeeze a little bit more out at Silvertown. But for the most part, keeping all of our machinery up 24-7 will allow us to you know, to grow what we're getting out of them a little bit. And I think we're taking some steps to ensure that. So less down days, going longer with the machinery that we have are key to our production. And we had a really good quarter in Q4. And, you know, it's a very impressive number what Jamie and Brent have been able to do at the Mint and continue to supply as product when many of our competitors don't have that luxury.
spk07: Great. Thanks for the color, and now I'll jump back in the queue. Okay.
spk08: Up next, we have Greg Gibbous with Northland Securities. Please proceed.
spk04: Thanks. Hey, good afternoon, Greg, Kathleen, and Thor. Thanks for taking the questions. Congrats on the dividends and the quarter as well. Good milestone. You know, I wanted to follow up first on BGASC. you know, it seems like very attractive kind of acquisition of assets there. Wanted to ask if maybe the customer base with them differs at all relative to your existing DTC base and, you know, maybe relation to demographics or spend related metrics there. And I guess the second one there is, you know, should we assume maybe profitability with that business is pretty comparable to Jamby?
spk02: Yeah, I think, you know, We took a good look at this. We still have a little bit of work to do on the demographics of their customer base before we close the deal. But we do see a difference, a different customer. I think the customer is a little bit more price conscious. I think they're a little bit less interested in the customer service experience. I think it probably leans a little bit more towards price shopping. and probably a little bit smaller group of SKUs or products. So we look at it as a great opportunity to touch a new demographic and a new group of customers that want a little bit different experience than what JM or Goldline or Silver Gold Bull or Pinehurst offers. So we do believe this is a new a new niche for us, so a little different customer base. I don't have the exact numbers yet. We obviously hope to grow their top line through a number of things that our team at JM Bullion can do, and they're up for the task. We think we can bring some immediate synergies to their marketing, to their fulfillment, and to their product offerings and quantities available. So that's pretty much where we think we can grow their business. As their business has been historically, I would say that their gross margin is generally on most products slightly less than what JM Bullion is. So like I said, their demo seems to be a little bit more of a price shopping type customer. But we're enthusiastic to test that out. and see what else we can give to that customer base that they want. And like I said, picking up the wholesale trade with this customer is also a big added plus. So we think the timing and the opportunity was very good for us.
spk04: Yeah, makes sense. Appreciate the call there, Greg. Wanted to, I guess, get your updated thoughts on newer geographic markets that I know you're continuing to evaluate expansion opportunities there. You know, it just sounds like there's a lot of opportunities you're seeing domestically. And just wanted to kind of hear how you're thinking about, you know, weighing expansion maybe internationally versus kind of more of these acquiring customer bases domestically and that kind of thing.
spk02: Yeah, I think, you know, we've said before, We are looking internationally. Last quarter we announced and then this RQ4, we closed the deal with Silver Gold Bull, which is the largest, we believe is the largest online retailer in Canada. So I think that was a good move for us. We continue to see good results from them. And I think that we're We were always looking at opportunities. I think the BGSC deal presented itself. It was an opportunity for us. It was very good timing. The structure was favorable to both sides. We didn't have a lot of negotiating to do that took a long period of time. It seems we were able to come to an agreement fairly quickly. And then, like I said, the guys at Jamblin did a great job of getting the deal signed and handling the due diligence. And I just think it's, you know, we have a great team here along with, you know, Kathleen and her finance team here. You know, we were able to show and our team was able to put together a deal very quickly that was, you know, that made the seller very happy. That deal was, you know, was something that we didn't really even know about four months ago. So, It happened fairly quickly. Other deals, you know, take longer. You know, we've had deals that we've spent six or eight months on that didn't happen. And we've had deals, you know, that we've spent five or six months on that have happened. So I think it just depends on the deal. I think, you know, it's a combination between, you know, are we knocking on the door or are they knocking on our door? And that, you know, that opportunity, depending on how it plays out, is, you know, we think we can address anything. We are currently looking at a deal outside the United States that we've spent quite a bit of time on, and we think that, as we've said before, international expansion is important to us. We think we have a ton to offer as it relates to all of the intellectual assets that AMARC has, the execution, the past experience, the supply, the marketing. We feel that you know, we have a lot to offer if we can find the right deal outside the U.S., and as we've said before, we are working on something there, and we'll see how it plays out.
spk04: Okay. Yeah, makes sense. Thanks. And I guess just last one from me, if I could follow up on CyberMetals, you know, great to see kind of new metrics there. Wanted to ask on response maybe from your that you're seeing from your customer acquisition spend? Have you kind of been pleased with those early marketing efforts at this point and maybe just how payback from that spend is trending?
spk02: Yeah, I think that we're pleased. We're happy with what we've seen. I think it's important to remember that the JM Bullion customer base and the demographic of the JM customer base has been is very much in tune with taking physical possession of their product. And they particularly have been historically heavy on silver and taking physical possession and having it shipped to them. So, you know, we have had some success. I mean, we've had, you know, 6,000 total customers almost since inception, and I think that's – that's a good number so far, but I think that the real growth in this business is going to be from outside of the jam customer base. And we're, you know, we're taking what we've learned and the surveys we've done of the jam base. And we're trying to apply that to our marketing efforts. And, and Rob Pacelli at JM is, is, is working on that now. And, um, you know, I've, I've been able to, to give a little bit of input into it, but I, I think, you know, we will, we will, see a greater growth momentum in that business as we put ourselves in front of customers that are used to buying GLD or used to buying other non-physical precious metals exposure. And I think we're in the very early stages of just putting that plan together right now. And in the next six to nine months, I think we'll see see how those efforts turn out when we have what we expect to be a little more receptive group of targeted customers that we're going after. But to this point, I'm very happy with it. I think the upside is still tremendous. Obviously, $3.7 million in assets doesn't really move the needle much when you're making these small amounts on a transaction. But I think the You know, where I expect we can go is much, much higher than this. And, you know, we'll hope to – hopefully these metrics in this box will reflect our efforts there.
spk07: Got it. Thanks, Greg. Appreciate the call.
spk08: Once again, if there are any remaining questions or comments, please indicate so by pressing star one on your touchtone phone. Up next, we have Ronnie Sennin with Jam Partners. Ronnie, please proceed.
spk05: Hey, guys. Congrats on a great quarter. Thanks, Ronnie. So just wanted to kind of ask you about capital return. I guess, you know, firstly, it's You know, it's great to see you guys announce a small acquisition on the same day that you announced some meaningful capital return. You know, would love to just understand, obviously, you know, the regular, you know, dividend you're going to be paying out going forward. Would love to kind of just kind of get your thoughts on how you thought about sizing the dividend and adding the special and just kind of your overall thoughts on capital return over time going forward. And then I had another quick one.
spk02: Sure. Yeah. I mean, we look at this regularly all the time, making sure that we have enough capital in case we want to do a deal as an acquisition. This quarter, we felt like we had a tremendous quarter. We generated a ton of free cash flow. I think that we closed the Silver Gold Bull deal, which was a pretty good chunk of money that came out of the business last quarter. We're very happy with that acquisition, very happy with that asset allocation. We like to do deals and then kind of see how our capital needs are in running the business and see whether we forecasted it properly. And in this case, we're very comfortable that we did. I think we've historically on the special dividend If we had a great year, this is about the time that we have historically done a special dividend, which is a reflection of the performance of the year, as well as whether or not we have anything on the near-term horizon that we think is going to be a big spend for us. I think our inventory right now is running very efficiently across all of our customers, in particular our DTC needs. So I think Thor has been working on squeezing out as much revenue as we can per dollar of inventory, and I feel like we're in a pretty stable place there right now. We've also had a little drop in precious metals over the last six months in the actual spot price, which also just requires a little less capital for us to run the business with lower spot prices. So I think we factor all of those things in, and we look at, You know, we look at what we see as 100-plus million of after-tax profit and felt that, you know, giving the dollar, which is about 25% or, you know, actually a little less than 25, probably closer to 20% of what we generated, you know, in after-tax cash was good, a good reflection to reward the shareholders for a great year. The regular dividend, we've talked before in the past about should we have one, should we not have one. The board and management here, we decided that based on how we see our crystal ball and how we see how we're looking out over the next 12 to 24 months, we thought this was a good way to return some capital to shareholders and We started at $0.20. We'll see how that goes. It's about $0.80, and it's not a huge return on a percentage basis on our share price, but we feel that it's something, and I think the shareholders, both existing shareholders and potential new shareholders, will look at that as a plus.
spk05: Gotcha. That's that's super helpful. And then I just wanted to double check, make sure I got my math right. So if I take the 50 just on the adjusted net income, if I take the $50 million and apply your normal tax rate, I get something like a 66 per share.
spk07: Does that sound right to you guys on the adjusted? Yeah, I think let's see.
spk02: We, we, Net income, $37.3 million, $1.52 a share. And I think that, let's see, on an adjusted basis, we're at $50.6 million. So that's a little over $2 a share. On the non-GAAP adjusted number, you have $50.6. And that's fairly in line with the 54.3 apples to apples that we reported in the March 31st quarter of this year. Does that answer the question?
spk05: Yep. Thanks so much.
spk08: If there are any final questions, please press star 1 on your touchtone phone. We have a follow-up coming from Thomas Forte with D.A. Davidson. Thomas, please proceed.
spk06: Great. Thank you, Greg, for two quick follow-ups. So can you talk about what drove your gross profit performance for your direct-to-consumer effort in the fiscal fourth quarter? And then also, were your customer acquisition costs at all impacted by Apple's focus on privacy? Thanks.
spk02: I mean, I think that the privacy issues that we're having right now, we've been able to deal with them. I will say that overall, In this quarter, our cost per customer was up a little bit. Our spend was up a little bit. There were some fairly slow weeks in this quarter that we're reporting right now that we try to maintain as many new customers as we can every week. And I think that the spend can vary. And I don't know if I wouldn't attribute it directly to what Apple did. But certainly, you know, we and our guys at JM led by Rob Pacelli on the marketing side, continually looking at ways to be efficient and to adjust to any rule changes in the game. And I think, you know, we're doing a very good job on that. As it relates to the gross profit at the DTC, I think it was pretty consistent quarter over quarter. I think we I don't think there was a big change there. I don't have the numbers in front of me exactly, but it feels like the premiums on the products that we deal in have remained elevated. Our demand continues to outpace our available supply, which is favorable for us when that happens. But I think pretty much as we would expect, we saw within the quarter, we saw a a fairly significant drop in spot prices for both gold and silver early in the quarter. As we've said before, that generally will motivate buyers and can cause an increase in the gross percentage margin. And we did see that happen. As prices stabilized and we worked through towards the end of the quarter, it became more normalized. So Nothing really unusual that I saw in either of those numbers or metrics.
spk07: Great. Thank you, Greg.
spk08: At this time, this concludes our question and answer session. I'd now like to turn the call back over to Mr. Roberts for his closing remarks.
spk02: Thank you, John. Again, I'd like to thank our many shareholders for joining the call today. Thank you for your interest and continued support in AMARC. Many thanks to our employees for their dedication and commitment to AMARC's success, and we look forward to updating you again on our progress. So thanks, everybody, for joining, and thanks for your continued support of AMARC and being shareholders of AMARC.
spk08: Before we conclude today's call, I would like to provide AMARC's Safe Harbor Statement that includes important cautions regarding forward-looking statements made during this call. During today's call, there were forward-looking statements made regarding future events, statements that relate AMARC's future plans, objectives, expectations, performance, events, and the like are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. Future events, risks, and uncertainties individually or in the aggregate could cause actual results to differ materially from those expressed or implied in these statements. Factors that could cause actual results to differ include the following. The failure to execute the company's growth strategy as planned, greater than anticipated costs incurred to execute this strategy, changes in the current domestic and international political climate, increased competition for AMARC's higher margin services, which could depress pricing, the failure of the company's business model to respond to changes in the market environment as anticipated, general risks of doing business in the commodity markets and other business, economic, financial, and governmental risk as described in the company's public filings with the Securities and Exchange Commission. The words should, believe, estimate, expect, intend, anticipate, foresee, plan, and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates on which they were made. Additionally, any statements related to future improved performance and estimates of revenues and earnings per share are forward-looking statements. The company undertakes no obligation to publicly update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements. Finally, I would like to remind everyone that a recording of today's call will be available for replay via a link in the Investors section of the company's website. Thank you for joining us for AMARC's earnings call. You may now disconnect.
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