Q3 2024 A-Mark Precious Metals Inc Earnings Call

Participants

Gregory Roberts; Chief Executive Officer, Director; A-Mark Precious Metals Inc

Kathleen Taylor; Chief Financial Officer, Executive Vice President, Controller, Assistant Secretary; A-Mark Precious Metals Inc

Thor Gjerdrum; President; A-Mark Precious Metals Inc

Michael Baker; Analyst; D.A. Davidson & Company

Lucas Pipes; Analyst; B. Riley Securities, Inc.

Andrew Scutt; Analyst; ROTH MKM Partners, LLC

Greg Gibas; Analyst; Northland Securities, Inc.

Presentation

Operator

Good afternoon, and welcome to A-Mark's Precision Metals conference call for the fiscal third quarter ended March 31st, 2020. For my name is Matthew, and I'll be your operator this afternoon before this call, A-Mark issued its results for the fiscal third quarter 2024 in a press release, which is available in the Investor Relations section of the company's website at www.a-mark.com. You can find the link to the Investor Relations section at the top of the homepage.
Joining us for today's call are A-Mark's CEO, Greg Roberts, President, Thor Gjerdrum, and CFO, Kathleen Simpson-Taylor. Following their remarks, we will open the call for your questions.
Then before we conclude the call, I'll provide the necessary cautions regarding the forward-looking statements made by management during the call, I'd like to remind everyone that this call is being recorded and will be made available for replay via link available in the Investor Relations section of A-Mark's website.
Now I'd like to turn the call over to A-Mark's CEO, Mr. Greg Roberts. So please proceed.

Gregory Roberts

Thank you, Matthew, and good afternoon, everyone. Thanks for joining our call today.
Our third quarter results continue to demonstrate the ability of our fully integrated platform to generate profitable results even in a difficult market environment. During the quarter, we faced a combination of softened demand, premium compression and elevated gold and silver prices, which led our traditional buyers to become sellers and provided us with an opportunity to purchase more inventory.
Despite the challenging environment, 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 we also increased the direct to consumer number of new customers by an impressive 8% compared to last quarter. Consistent with our commitment to generate shareholder value, the company also repurchased a total of 204,396 shares of our common stock for $5 million during the quarter.
As previously announced, we completed the acquisition of LPM. Group Limited in February 2024 and have substantially completed. The integration have LPMs business and operations with A-Mark LPM now has enhanced access to supplementary products and capital through A-Mark to broaden their offerings and to promote future growth.
Key technology upgrades have also been added to enhance LPMs logistics capabilities and to fully integrate LPM into AMGL.'s fulfillment and shipping system. Jmb has also collaborated closely with LPM to develop processes aimed at enhancing expanding LPMs e-commerce footprint. I'm happy to report that a month and a half or so into this. We are very pleased with the results we have seen.
We also continued to advance our logistics automation initiatives at our A-Mark global logistics or AMGL. facility in Las Vegas. These initiatives are designed to enhance our operational efficiency, enabling us to effectively manage a larger number of SKUs as well as increase volume taking and shipping out more packages, all the while minimizing operational costs.
Now I will turn the call over to our CFO, Kathleen Simpson, Taylor, who will provide a more detailed overview of our financial performance. Then our President, Thor Jordan, will discuss our key operating metrics. Finally, I will provide further insight into our business and growth strategy and happily take all of your questions. Kathleen?

Kathleen Taylor

Thank you, Greg, and good afternoon, everyone. Our revenues for fiscal Q3 2024 increased 13% to $2.611 billion from $2.317 billion in Q3 of last year. Excluding an increase of $622.1 million of forward sales, our revenues decreased $328.6 million or 20%, which was due to a decrease in gold and silver ounces sold, partially offset by higher average selling prices of gold and silver.
The DTC segment contributed 13% and 23% of the consolidated revenue in the fiscal third quarters of 2024 and 2023, respectively. Revenue contributed by JMB represented 12% of the consolidated revenues for Q3 of 2024 compared to 20% in Q3 of last year.
For the nine month period, our revenues increased 16% to $7.174 billion from $6.167 billion in the same year ago period, excluding an increase of $1.514 billion of forward sales revenues decreased $506.9 million or 11%, which was due to a decrease in gold and silver ounces sold, partially offset by higher average selling prices of gold and silver.
The DTC segment contributed 14% and 23% of the consolidated revenue for the nine months ended March 31st, 2024 and 2023, respectively. Revenue contributed by JMB represented 13% of the consolidated revenues for the nine months ended March 31st, 2024, compared with 21% in the same year ago period.
Gross profit for fiscal Q3 2024 decreased 54% to $34.8 million or 1.33% of revenue from $75.5 million, 43.26% of revenue in Q3 of last year. The decrease in gross profit was due to lower gross profits earned from both the wholesale sales and ancillary services and DTC segments.
Gross profit contributed by the GGC. segment represented 52% of the consolidated gross profit in fiscal Q3 2024 compared to 57% in the same year ago period. Gross profit contributed by JMB represented 45% of the consolidated gross profit in Q3 2024 compared to 47% in Q3 of last year. For the nine month period, gross profit decreased 40% to $130.3 million or 1.82% of revenue from $216.1 million or 3.5% of revenue in the same year-ago period.
The decrease in gross profit was due to lower gross profits earned from both the wholesale sales and ancillary services and DTC. segments. Gross profit contributed by the DTC. segment represented 47% of the consolidated gross profit for the nine months ended March 31st, 2024, compared to 56% in the same year ago. Period. Gross profit contributed by GMV represented 40% and 48% of the consolidated gross profit for the nine months ended March 31st, 2024 and 2023, respectively.
Sg&a expenses for fiscal Q3 2024 decreased 4% to $22.9 million from $23.8 million in Q3 of last year. The change was primarily due to a decrease in compensation expense, including performance-based accruals of $2.2 million, a decrease in insurance costs of $0.9 million and lower advertising costs of $0.4 million, which was partially offset by higher consulting and professional fees of $2.2 million related to M&A activities and an increase in information technology costs of $0.2 million.
For the nine month period, SG&A expenses increased 8%, $67.1 million from $62.4 million in the same year ago period. The change was primarily due to an increase in consulting and professional fees of $4.8 million, including $2.8 million related to M&A activities, an increase in information technology costs of $0.8 million and an increase in compensation expense, including performance-based accruals of $0.4 million. This was partially offset by a decrease in insurance costs of $1.4 million.
Depreciation and amortization expense for fiscal Q3 2024 decreased 12% to $2.9 million from $3.3 million in Q3 of last year. The change was primarily due to a $0.6 million decrease in amortization of acquired intangibles related to JM for the nine months period. Depreciation and amortization expense decreased 13% to $8.6 million from $9.8 million in the same year ago period. The change was primarily due to a $1.7 million decrease in amortization of acquired intangibles related to JMB.
Interest income for fiscal Q3 2024 increased 10%, $6.7 million from $6.1 million in Q3 of last year. The aggregate increase in interest income was primarily due to an increase in other finance product income of $0.1 million and an increase in interest income earned by our Secured Lending segment of $0.5 million for the nine month period. Interest income increased 18% to $19.1 million from $16.2 million in the same year ago period. The aggregate increase in interest income was primarily due to an increase in other finance product income of $1.6 million and an increase in interest income earned by our securities lending segment of $1.4 million.
Interest expense for fiscal Q3 2024 increased 7% to $9.9 million from $9.2 million in Q3 of last year. The increase in interest expense was primarily due to 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 an increase of $0.9 million related to product financing arrangements, partially offset by a decrease of $1.4 million related to the AMCF notes, including amortization of debt issuance costs due to the notes repayment in December 2023.
For the nine month period interest expense increased 32% to $29.9 million from $22.6 million in the same year ago period. The increase was primarily driven by an increase of $6.9 million associated with our trading credit facility due to an increase in interest rates as well as increased borrowings, an increase of $2.5 million related to product financing arrangements, partially offset by a decrease of $1.8 million related to the AMCS notes, including amortization of debt issuance costs due to their repayment in December 2023, as well as a $0.3 million decrease in loan servicing fees.
Losses from equity method investments in Q3 2024 increased 194% to $0.2 million from $0.1 million in the same year ago quarter. For the nine-month period, earnings from equity method investments decreased 55% to $3.3 million from $7.3 million in the same year ago period. The decrease in both periods was due to decreased earnings of our equity method investees.
Net income attributable to the company for the third quarter of fiscal 2024 totaled $5 million or $0.21 per diluted share This compares to net income attributable to the company of $35.9 million or $1.46 per diluted share and eight in Q3 of last year.
For the nine month period, net income attributable to the company totaled $37.6 million, or $1.56 per diluted share, which compares to net income attributable to the company of $114.5 million or $4.64 per diluted share in the same year ago period.
Adjusted net income before provision for income taxes. A non-GAAP financial performance measure, which excludes acquisition expenses, amortization and depreciation for Q3 fiscal 2024 totaled $11.6 million, a decrease of 76% compared to $49.2 million in the same year ago quarter. Adjusted net income before provision for income taxes for the nine month period totaled $60.1 million, a 62% decrease from $156.9 million in the same year ago period.
EBITDA, a non-GAAP liquidity measure for Q3 fiscal 2024 totaled $12.6 million, a 76% decrease compared to $52.3 million in Q3 fiscal 2023. EBITDA for the nine month period totaled $68.2 million, a 58% decrease compared to $163.2 million in the same year ago period.
Turning to our balance sheet at quarter end, we had $35.2 million of cash compared to $39.3 million at the end of fiscal 2023. Our nonrestricted inventories totaled $579.4 million, down $66.4 million from $645.8 million at the end of fiscal 2023 and this was despite rising commodity prices, which drove an overall increase in our inventory value of over 10% holding ounces constant from the fiscal year end.
Our tangible net worth at the end of the quarter was $391.1 million, down from $436.8 million at the end of the prior fiscal year. The reduction is due to share repurchase activity and dividends paid combined with higher intangible assets from the LPM acquisition.
Imarex Board of Directors has continued to maintain the company's regular quarterly cash dividend program of $0.2 per common share. The most recent quarterly cash dividend was paid in April. It is expected that the next quarterly dividend will be paid in July 2024.
That completes my financial summary. Now I will turn the call over to Thor, who will provide an update on our key operating metrics.

Thor Gjerdrum

So I think generally looking at our key operating metrics for the third quarter of fiscal 2020 fourth, we sold 446,000 ounces of gold in Q3 fiscal 2024, which was down 32% from Q3 of last year and down 1% from the prior quarter. For the nine month period, we sold 1.4 million ounces of gold, which was down 25% from the same year ago period.
We sold 25.7 million ounces of silver in Q3 fiscal 2024, which was down 30% from Q3 of last year and down 3% from last quarter. To the nine month period. We sold 82.7 million ounces of silver, which is down 26% from the same year ago period.
The number of new customers in the DTC. segment, which is defined as the number of customers that have registered or set up a new account or made a purchase for the first time during the period was 56,600 in Q3 fiscal 2024, which was down 13% from Q3 of last year, but increased 8% from last quarter. For the nine month period. The number of new customers in the DTC segment was 148,200, which is down 40% from 244,900 new customers in the same year ago period.
The number of total customers in the DTC segment at the end of the third quarter was approximately 2.5 million, which was an 11% increase from the prior year. The year-over-year increase in total customers was due to organic growth of our GMV customer base as well as from acquired customer lists.
The DTC segment average order value, which represents the average dollar value of product orders, excluding accumulation program orders delivered to DTC segment customers during Q3 fiscal 2024 was $2,133 which was down 13% from Q3 fiscal 2020 2023, and down 4% from the prior quarter.
For the nine month period, our TTC. average order value was $2,253, which was down 6% from the same year ago period. For the fiscal third quarter, our inventory turn ratio was 2.3, which is a 4% decrease from 2.4 in Q3 of last year and a 21% increase from 1.9 in the prior quarter. For the nine month period, our inventory turnover ratio was 6.8, a 3% decrease from 7.0 in the same year ago period.
Finally, the number of secured loans at the end of March totaled $675 million , a decrease of 30% from March 31st, 2023, and a decrease of 6% from the end of December. While the number of secured loans decreased, our secured loan receivable balance increased over the same period, bringing the value of our loan portfolio as of March 31st, 2024 to $115.6 million, a 19% increase from March 31st, 2023, and a 9% increase from December 31st, 2023.
That concludes my prepared remarks. I'll now turn it over to Greg as for his closing remarks. Greg?

Gregory Roberts

Thank you, Thor and Kathleen. We've made significant strides in our M&A growth strategy with our expansion into Asia through our acquisition of LPM. We are enthusiastic about the opportunities in the Asian market and continue to explore prospects to further expand our geographic presence and market reach that will create synergies with A-Mark's fully integrated platform, including our reliable access to supply successful logistics footprint and strong customer relationships. Our commitment to generating stockholder value remains firm, and we are confident in A-Mark's, diversified and proven business model.
That concludes my prepared remarks. Matthew?

Question and Answer Session

Operator

Thank you, everyone. And at this time, we'll be conducting a question and answer session. (Operator Instructions)
Mike Baker, D.A. Davidson.

Michael Baker

Hey, thanks, guys. Just wondering if you could talk about what you think what in this environment caused the compression in the spreads that happened so much in the calendar first quarter. Can you talk about maybe what you saw throughout the quarter by month? Did it get worse as it was the month as the quarter went on to get better. Any early thoughts on the fourth quarter of the calendar second quarter in terms of the spreads?

Gregory Roberts

Sure. Yes. I mean, I would start with just saying that probably the single biggest headwind for this particular quarter was a record number of days in the quarter that we saw all-time record prices in gold in particular. And I think it's important to note in our press release, we described a little bit that a lot of our customers that buy new product from us turned into sellers to A-Mark.
And I think it's important to note that A-Mark is really the terminal physical metals destination for wholesale product, seeking liquidity. And I think we have done a very good job in the quarter of balancing what we're buying back from the wholesale marketplace. It is versus what we're selling.
And I think our management of our inventory has been a key component of what we worked on in the quarter and we balanced our inventory. We better balanced our purchases and sales, and we also rotated out of inventory, which I mentioned last call when we rotated out of inventory that we didn't feel gave us, but enough upside if the market was to turn around and we liquidated that and we've held onto inventory on on products that we think give us more opportunity.
And I can say that since probably January and February and most of March, we have started to see a shift and a reduction from what we're buying off of the wholesale market, our buying back from customers versus what we're selling. So we have seen a bit of a shift there.
And I think it's important to remember that there are generations of people whose grandparents or parents are even further back than that held gold for their family and that you've gone through a period where many of the long-term holders of physical metals.
I've been given the opportunity to monetize and create liquidity and sell material, where everybody is in a profit position as it relates to your most generic lowest premium gold products. So I think that's something that we worked through. I think those and these sustained higher prices as we go through these periods, you're going to have waves of supply demand imbalance.
I think that as it relates to the and where what we see today and where we are today versus where we were at March 31st. And your question related to what we saw in the January, February, March period by month, I would say that December going back to December, which we talked a little bit about on our last call and January and February were probably three of the slowest months we've seen in a long time.
I think the company performed very well, I think that you look at how we worked through it and we have been doing this for almost 45 years or more. And no, there's not a whole lot that surprises me in the macro environment. And for the first time ever when you have two months of relief every day or every week, you have sustained new highs and spot prices.
That's just something that we haven't seen before. I give a tremendous amount of credit to four and the treasury team and Kathleen in managing our liquidity and making sure that we continue to be the dominant player. If if there's metal seeking liquidity, A-Mark wants to be the one to buy it. So I think we we went through a number of a couple of months there where we were adjusting to the new dynamic.
I can say that as we turn the calendar from March to April and some significant improvements that we saw both in demand as well as a slowdown in buybacks that we were buying back from wholesale customers. And we did see some expanding premiums in products that have continued and throughout most of April and into May. I would say the most dramatic increase in premiums that we saw over the last five or six weeks from today has been the premium on U.S. Silver Eagles.
And if anybody keeps track of premiums looking at websites and checking that you'll see a fairly noticeable increase. And as one of our more profitable products, any increase in premiums with Silver Eagles is welcome and is going to is going to result in higher GP for us. And what we have seen in the last three or four weeks as we have seen before when Silver Eagle premiums tend to rise.
We've seen other silver products, whether it be Maple Leaf's or Britannia is or even some of our SilverTowne products that we make at our Mint in Indiana, we've seen some some less dramatic, but still increases in some of those products. I would say that we're still looking to see some premiums in gold products, although in the last week or 10 days, we've seen Gold Eagles in particular, have a fairly material move in their premium.
So we are seeing the supply-demand imbalance, get back in place to what to what we're used to very optimistic, very, very much looking forward to this quarter, I feel like April was was we performed very well, and we were able to monetize a number of positions that we were able to take over the last six months. And I think you can look at Q. three as probably one of the worst quarters we're going to throw out there. I mean, we had our acquisition going on. We had some acquisition costs and we had what I've just described in the marketplace, but we're looking for improvement going forward from here. And I feel pretty good about what we were able to accomplish in our Q3.

Michael Baker

It will affect the yes, that that's consistent with some of the data that we track on. If I could follow up on one thing and you sort of answered it there at the end where you said you were able to monetize positions that you've taken in the last six months. But can you just highlight or remind us all the product you're able to buy in the March quarter. How does when how long does it take for that usually flow through and ultimately presumably benefit you because of the inventory that you guys were able to take in?

Gregory Roberts

It's not an exact science. I mean it doesn't happen overnight. We balance opportunistic inventory purchases all the time in very good markets. We pay a lot more and we pay higher premiums because we have confidence we're going to sell them. And those those opportunities that we take they monetize over three to six months after we after we take the positions.
I think that we view a lot of times as as inventory purchase opportunities as as you know, what I would call options or call options, which is more familiar to the financial sector where we pay a price and a premium to take a position.
Most of the time are opportunistic purchases that our trading teams make they turn out to be profitable depending on how fast we sell them and how long we carry the product and how the carry builds up determines how how profitable those trades are going to be and like options. Occasionally, we'll buy inventory, we'll pay a premium and we will pay the carry and the trade doesn't work out.
It happens all the time, not not frequently, but it does happen. And I view that a little bit as an expiring option that that people buy all the time and they believe in something they believe in a trade and sometimes that the option expires and it's not worth anything. In our case, it's always worth the metal content, but we do sometimes lose on the premium. And that's that's just the nature of our business.
We're doing that hundreds of times a month, and we're taking those positions trying to use our history used our DTC. segment to be the you have the ability to take these positions and to move them is one of the great parts of our integrated business. And I can say that we are we are really we have a great deal of momentum in volume right now and picking up new customers in our DTC segment.
And the inventory opportunities that we've been able to buy has given us an opportunity to go out and acquire new customers. And I think you know, when you look at 8% quarter over quarter as it relates to new customers that we put in the release, that's a very important number.
And those customers that we're able to bring into our funnel are right now are our most likely coming from new buyers new to the market. But we're also we also believe we're taking market share right now, and our inventory is allowing us to do that at 56,000 new customers in the quarter at the DTC. segment is a very important number for us. And we we have we've tried and we've made sure that we're getting as many new customers as we can and the ability to move through some inventory with these customers.
I'm just very optimistic about that. And we're seeing that payoff. And we've also had a a surprising increase in towards the end of our towards the end of March and through all of April, where we're using some of our opportunity inventory of opportunities to reactivate customers that have been bought in over a year and we track those metrics and we've seen in what I consider a fairly strong headwind in the macro environment.
We have been very pleased with new customers as well as the older customers we've been able to reactivate with some of our product offerings. So I think that's that's positive and we continue to find to find purchase opportunities, and we're very, very happy with our inventory at the moment.

Michael Baker

Yes. Great. Makes sense. I appreciate all the color and time.

Operator

Lucas Pipes, B. Riley.

Lucas Pipes

Thank you very much, operator. Good afternoon, everyone. I I'd like to understand the kind of lower gross margin during the quarter. A little bit better. Is it is it primarily related to the premium or is there kind of operational leverage coming through from the lower volume side to Craig, if you could help me understand that a bit better and where you think those gross margins could revert to in the last fiscal quarter of the year and maybe next year would really appreciate any insights you could share? Thanks.

Gregory Roberts

Yes, I think the gross margin percentage is a reflection of what it is in any business. It's it has to do with our cost of goods as well as our what we're able to sell sell material for. I think that my my rather long explanation of what happened in the quarter really really answers that question in that we have a fixed carry cost on our inventory that we book every month.
And that carry is is going to affect what the gross profit margin is. And we have to obviously, we have to achieve a profit and over and above our carry cost if premiums compress and we're selling something at a dollar premium that we've historically sold at $1.50 premium, the gross profit margin, the gross profit in pure dollars is not only going to go down, but the gross profit percentage is going to be materially affected by that.
I also think it's important to note that when we buy back product, we oftentimes have to sell that product both in a whole at a wholesale level or at a retail level. So when you look at our business and you look at the DTC. contribution, it's it's difficult for an outsider to really see what percentage of our product is being sold wholesale and what percentage is being sold?
Retail, as we all know, if we're selling at a Silver Eagle on JM Bullion at it's $4.50 premium over spot price, but we're selling that on a wholesale level at $3.50. The more points we can sell at JM Bullion, the better where our overall gross profit is going to be any coins. We don't have to wholesale.
We're going to make more money on, and that's a balancing act for us when we manage our inventory, all the time is what percentage of product that we sell wholesale and what percentage do we hold and pay carry on so that we can achieve the you know, the ultimate DTC. price for the product. And I think that in a very, very good market.
If you look back a year ago and you compare what happened a year ago versus what's happening in this quarter of this year. I would say last year, 90% of our product that we sold was being sold through the DTC. segment. I would say that, that that number today, a much much higher percentage is being sold wholesale and or monetized outside of our retailers.
And that's going to affect the gross profit negatively as it relates to what we can do in the future. I think there's enough data on the company to really go back and you can see what we can achieve. We just talked about what we achieved last quarter a year ago. What we achieved last quarter just two months ago, I made comments that I thought the January, February, March period of calendar '24 was was what we would view as a kind of a low watermark.
I feel like we are very optimistic and enthusiastic about what we've seen in the last four or five weeks. We'll see if that plays out in in May and June, but we know how much the company can generate the company can generate huge amounts of money in a good market.
The company continues to grow and grow through M&A and grow new customers and grow our our credit facilities and our liquidity. And so that the company, if given the opportunity, the company could could could do 50% more in top-line sales if we were given the opportunity.
So I I've been doing this a long time and I can I can can say that in January and February were probably a little bit a little bit worse than I would have expected them to be if I was sitting in November December but we still performed and we still have had a good return, and I feel like we're optimistic about how this quarter is going.

Lucas Pipes

Thank you. And just a follow up. Can you expand on on kind of those last four to five weeks, what do you think changed? Is it stronger demand, less supply? Just I know you commented earlier on it too. But if you could maybe zero in on this, I would I would appreciate your insights.

Gregory Roberts

I will say that there are probably 100 factors that go into answering the question, I'll tried to hit on the most basic ones. And if you see a high percentage of product being sold into the marketplace from retail investors who have stopped buying and have decided they're going to take their profits at these all-time record spot prices. There's a whole period of reckoning for that retail customer.
And I think that we went through a period in January and February where a high percentage of retail customers felt like it had the last 10 years where gold tried to make a new high and then it didn't do it and it fell back.
I think you had a high percentage of retail customers selling back into the marketplace and monetizing putting their money to work someplace else or just taking a profit and you had a little bit of a herd mentality there as gold continued to make new highs. What we've seen in the last five weeks is a reversal of that where you have a not an increased demand, but you've had a similar demand, which which has been it had been had been going on in the last couple of months.
But what you've seen is a drop in the buybacks or the wholesale purchases. And as the premiums have dropped over the last four months, it's just become less profitable for people to make product for sovereign mints to make product for private mints to make product. And so you're slowly seeing a little bit of a decrease in the supply side of the equation, and that's causing us to see some premium increases in Christina.
And as I pointed to, the Mint has been making the same amount of silver eagles and the allocation has been the same for the last five to six months. And what we've seen is premiums go up. So you can't attribute that too much anything other than as I said, buyers increasing their demand for silver eagles and sellers start maybe slowing down or not selling as many Silver Eagles into the marketplace.
So I think it's a number of things but I think that's what we've really seen is we've seen a slight slight uptick in demand, particularly of the last few weeks of April, and we've seen less product that we're buying back on from a wholesale standpoint.

Lucas Pipes

That is that is very helpful. I appreciate I appreciate that. Thank you and best of luck.

Operator

Andrew Scutt, Roth MKM.

Andrew Scutt

Yes, thank you for taking my question question a quick one for me. With kind of the market and the setbacks in slower over the last few months, is that kind of open up a unique opportunity in the M&A market. And yes, I mean, are you guys looking to be active?

Gregory Roberts

Yes, just starting, but I think what one word one word answer. Yes, I can say that after we close the LPM deal, I've probably got five calls of opportunities on the M&A side. I think I think it's important for everybody to remember how much how much liquidity A-Mark has, whether it be our book value, whether it be our tangible net worth, whether it be our repo facilities, our lease lines, our CAD facilities, we have as I said before, we are the ultimate destination when people need to monetize inventory.
But we are also are in the in the market looking for more deals. And we we don't have a tremendous amount of competition there. I think that as I've said before, as things slow down, it becomes harder to compete with A-Mark. And I've talked to a number of people who are just interested in exploring whether or not in a slower market, they might be able to do better with A-Mark than than competing with a market that could be on the DTC side, the wholesale side, the international side, we are really well positioned.
And I can I think that the closing the LPM deal as we as we talked about. And as we did last quarter, we're very pleased with Charlie and his people in Hong Kong. We're looking at possible expansion in that region. We're taking a taking sometimes taking a good look at the Singapore region and that this is a little bit slower market in the last six months.
It just opens up opportunities and I think it gives us a little bit more leverage to negotiate a better deal than we're going to be able to do when the markets are screaming and everybody is making millions of dollars and it just makes it harder to negotiate a deal. So I think as I said in the last call, we're going to continue to go with the with the four elements of how we deploy capital and we're regularly looking at where we get the best return for our capital.
And I feel like we're doing a really good job, whether it's buying back stock we know we bought back a very good chunk of stock in this last quarter. As we just reported, I felt like we were opportunistic at the price. We bought it out we closed an M&A transaction. I'm very, very happy with that. We look to pay down debt if possible. And we and we also look to make sure that we return value to shareholders through our dividends and that that is a continual I'm juggling act. We also we can throw in inventory opportunistic inventory purchases for our capital. We can look at that too.
But all of those things, as you know, I do spend a great deal of time talking to Thor and Kathleen and talking to the other team members here about just checking ourselves and regularly double checking are we spending our capital and investing our capital in areas that are going to create the best shareholder return, whether it be our Q4 right now or whether it be our cue for three years from now, we're very optimistic about this machine we've built.
We think it's set up great to take advantage of all market conditions. As we've said before, we're a very lumpy business. And you know, our biggest job here is to keep keep capital ready to deploy and never get caught short and to make sure that that if the machine is ready to take advantage of whatever the market gives us and I feel great about what we what we did last quarter, I know it may disappoint some people, and I feel even better about what I've seen the end of March and what I've seen in April. So we're looking forward, we're actually looking forward to the next few quarters.

Andrew Scutt

Well, thanks, and great here. Next year, I'll just one more from me. So kind of in a ramp in demand marketing, the minutes on how you leverage those assets in your push out product. But can you maybe speak to when when the market is quieter, how you're able to leverage these events on maybe in a different way?

Gregory Roberts

Yes, I mean, I think that both sunshine and SilverTowne are very adept at and we've built businesses there that are able to switch products very quickly, and we might be making 10 ounce silver bars one week, we might be making 100 ounce silver bars the next week, we can switch very quickly, and we're very good at that. And wherever the demand is out, we're going to fill it and we're going to fill it cheaper than anybody else.
And that's what this vertically integrated model does. And we've seen that right now of our ability to sell silver products through the DTC. channel and our ability to make the products cheaper than than most anybody. It is just part of our part of our advantage. And we're always viewing what we're going to make next week, what we're going to make next month. And I think we're very good at that.

Andrew Scutt

Well, great. Thanks, Ken, and I'll hop back in the queue.

Operator

Greg Gibas, Northland Securities.

Greg Gibas

Hey, good afternoon. Greg campaign for. Thanks for taking the questions on. I think you kind of fairly addresses what's kind of driving that softer demand in Q1? And nice to hear that it's picking up at least in April. And so I kind of wanted to direct my question first, on the fall on seems pretty attractive M&A opportunities is what it sounds like from.
Congrats on the expansion to Asia with LPM. I'm just wondering maybe if you could address how you're evaluating those markets? Like are you seeing anyone you're markets that are more favorable than others? And what kind of makes sense? Because it sounds like there's some attractive opportunities.

Gregory Roberts

Yes, I mean, I think we look at we really look at M&A, whether it in three kind of sections, whether it be in our minting, whether it be in our wholesale trading or whether we see it in DTC. one thing about A-Mark, we have to be thoughtful as it relates to not focusing on any one part of that segment too much because the three segments can then get a little out of whack. So I think LPM was a very intriguing opportunity for us because it combined retail in the region along with a good deal of wholesale business.
So we kind of we kind of hit to two areas there on that acquisition, which is good for us at this point, we feel like our minting. If our minting operations are able to keep up with demand, we're clearly expanding our logistics, which is also important that if we're selling, we're shipping 50,000 packages one month and we're going to ship 150,000 packages a year and a half from now because of our M&A growth in DTC., we need to balance and make sure that we can still handle all of the all of the logistics side of things. So I think we are right now.
I can say that the the areas that we see opportunity are focused on the wholesale and the DTC. And I think we're in a good position right now that we would take either and it's just cutting the best deal and finding the best opportunity for us.

Greg Gibas

Perfect. Thanks. That's helpful. I wanted to dive a little deeper. You don't agree, even though the challenging conditions to see customer growth, I think 8% on I think you've talked about just kind of newer products or offerings that are attracting those customers. I'm curious what if you could maybe discuss a little bit more on what's kind of on gaining traction with those new customers in terms of new product offerings or anything like that?

Gregory Roberts

Yes. I mean, I think if you if you register at the JM Bullion site, I think you'll see what we're offering. I think you'll you'll see we run a first a special on products that we believe are going to attract and be interesting to our customer base as well as attract new customers. We've been doing that now for us, probably eight to 10 weeks, and it's been very beneficial for us. I think that, yes, we we don't we move through old inventory that we've had. It's a bit we use DTC. to move their old inventory we move through new custom products.
We had an opportunity with a Canadian company, Silvercrest mines that we did a JV with them to create a one ounce silver around it. Silvercrest is a company in Mexico that has a single mine in Mexico of what I think to be a really good company that I talk to the to the principals there. And the management there.
And we sold a Silver Crest one ounce silver around that we developed for Silvercrest on on JM Bullion right now, it's being offered and it's a new product we've never done a mine product before on Silvercrest have bought a number of product coins from from A-Mark, which they're just carrying on their balance sheet for their for their business.
And for their shareholders if they want to ever distributed. And that's that's something that we were able to whip up fairly quickly. And it was it went on sale last Thursday, and it's been very successful. We could do a sovereign product. We could do private Mint product, and we tried it to vary what we're offering and then see how the customers respond.

Greg Gibas

Great. That's helpful. And I guess last one for me and sorry if you've maybe already addressed this. I've been jumping between calls, but Tom, Greg, I know you previously commented on Costco and how they're kind of it can be a benefit to the whole industry.
Our members drive interest in new customers that haven't considered it before is getting in front of a new audience just given it's kind of been in the news and there's been a lot of success with thaw, if you don't then selling that in stores. I'm curious if you have any updated thoughts on that, Greg, or if it's kind of the same?

Gregory Roberts

I think it would be the same. I think anytime you're introducing a new demographic or a new group of people to precious metals that's ultimately going to be great for for A-Mark. Am I I understand that there's some numbers thrown out there that are we've seen seem very high to me. I've seen some numbers that are what I would say is very optimistic on sales just based on my position in the marketplace.
And I feel like I touch a lot of transactions. I would say that it's good for the market. I think we are ultimately as we our job is to attract customers, retail customers to our DTC. segment. The more customers that are out there that are Googling buy, sell or buy gold or whatever they're Googling, they're going to find of our DTC. brands.
And our job is to make sure that we take care of them and we are the best company out there as it relates to customer service, whether we're there for liquidity if a customer wants to sell back their product. And if I don't know if anybody wants us to to do third-party shipping for them, we're very happy to do that. Also we're there to see the market grow. And ultimately, I believe A-Mark will be one of the better bigger beneficiaries have an expanding market. So I feel the same way I did last quarter.

Greg Gibas

Got it. I appreciate the thoughts, Greg.

Operator

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.

Gregory Roberts

Thank you, everybody. Once again, I appreciate being on the call and supporting A-Mark and learning and understanding what we're doing here and to all the employees of A-Mark around the world, appreciate what they're doing. And again, thanks, everybody, for their support. Have a great rest of the day.