Gregory Roberts - Chief Executive Officer Thor Gjerdrum – EVP and Chief Operating Officer

Good morning, and welcome to A-Mark Precious Metals Fiscal Second Quarter 2015 Conference Call. My name is Diego and I will be your operator this afternoon. After the market closed today, the company issued the results of its fiscal second quarter of 2015 in a press release, a copy of which is available in the Investor Relations section of the company's website at www.amark.com. The link to the Investor Relations section is at the bottom of the A-Mark home page. Joining us for today's presentation is the company's CEO, Greg Roberts and COO, Thor Gjerdrum. Following their remarks we will open up the call for your questions. Then, before we conclude today's 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 will be recorded and made available for replay via a link available in the Investor Relations section of the company's website. Now I would like to turn the call over to A-Mark's CEO, Mr. Greg Roberts. Sir, please proceed.

Thank you, Diego. Welcome everyone. Thank you for joining us today. During the quarter we began to see some volatility return to the precious metals markets. This helped drive the increase in our revenues and gross margins to A-Mark’s fiscal second quarter. Gold and silver prices experienced some slight downward pressure with gold trading between $1,142 and $1,251 per ounce, while silver traded between $15.41 and $17.55 per ounce. Of note, today gold is trading at $1,242 and silver at $17.10. While we can’t control price or volatility, we can control our operational capacity to better capitalize on movements in the precious metals markets. Along those lines, during the second quarter, we continued to increase our operational capacity. This will allow us to accommodate increased trading volume as well as provide our customers with comprehensive services. These include logistics, financing, and other value-added services, which help drive increased gross margins in any type of market environment. Now, before I go further, I would like to turn the call over to Chief Operating Officer, Thor Gjerdrum, who will take us through the financial details for the period. Afterward, I will return to talk more about our operational highlights and business outlook for the balance of the year. Thor?

Thank you, Greg, and welcome, everyone. Now to our financial results for the fiscal second quarter six months ended December 31, 2014. For point of revenues, revenue in the second quarter totaled $1.54 billion, which is up 6% from $1.45 billion in the prior quarter and up 3% from $1.49 billion compared to the same year ago quarter. For the six month period, revenue was $2.99 billion, which is up slightly from $2.98 billion in the same period last year. The increase in revenue for both periods was due to an increase in silver ounces sold, partially offset by a slight decrease in gold ounces sold as well is a decrease at both gold and silver commodity prices. Gross profit in the second fiscal quarter of this year increased 26% to $7.2 million, or 0.47% of revenues, from $5.7 million or 0.39% of revenue in the prior quarter ended September 30, 2014. This improvement was due to an increase in silver ounces sold. Second quarter gross profit fiscal 2015 was down 9% from $7.9 million or 0.53% of revenue in the same quarter a year ago. The decrease was due to lower gross margins, which is driven by a decrease in premium spreads. For the six months ended December 31, 2014, gross profits decline 13% to $12.9 million or 0.43% of revenue than $14.9 million or 0.5% of revenue in the same period last year. Selling, general and administrative expenses for the second quarter of fiscal 2015 increased 13% to $4.8 million or $4.2 million in the prior quarter and were up 6% from $4.5 million in Q2 of prior year. For the six months period, selling, general and administrative expenses increased 10% to $9 million from $8.2 million in the same period last year. The increases were primarily due…

Thank you, Thor. Since we began trading on the NASDAQ in March of last year, we've reported five consecutive profitable quarters despite a relatively flat market environment for precious metals. As our financial results reflect for fiscal Q2 demonstrated, the overall demand for physical products was higher year-over-year, reflecting a slight increase in volatility which positively impacted our trading volumes and revenues. This volatility has been consistent with what we’ve seen thus far in our current quarter and positions us for another profitable quarter. We believe future increases to precious metal prices and volatility are highly likely and as a result, we have built our business to capitalize upon the significant opportunity that will present itself when volatility returns. In fact, subsequent to the quarter’s end, we started to see slight upward trends in precious metals prices combined with download pressure on the euro and the Swiss franc. These macro movements appear to be renewing interest in the precious metals markets and demand for our products in Europe and abroad. During periods of instability, we will see notable increases in trading volumes across our trading desk in Santa Monica and Vienna, which are open 17 hours a day, increases in trading spreads and increases in activity in our logistics and financing business. Each of these would result in increased revenues and gross profits for our company. We continue to make progress on strategic initiatives to enhance our baseline financial performance. This includes increasing our pipeline of value-added products, which enhances our margins in any type of market. Custom coin products continue to present an opportunity to enhance our gross margins and overall profitability. Our strong relationship with all of the top sovereign mints enables us to create new coins and meet the unique and growing needs of our customer base.…

[Operator Instructions] Our first question comes [Jack Nobert] [ph].

We just received the A-Mark Precious Metals’ annual report dated 2014. On page 14, you go into an outline on SGI insolvency proceedings and I was hoping if you might be able to shed some more detail on that matter?

I believe you’re referring to risk factors which are related to the company prior to spin off?

Correct.

Beyond what’s in there we don’t really have anything new to comment on other than we’re a year out from this spin off and there’s been nothing new that needs to be reported. Really, the risk factors speaks for itself. There’s been no additional information that I can really provide on that matter at this time.

[Operator Instructions] Ladies and gentlemen, there appears to be no questions at this time. So this now concludes our question-and-answer session. I’d now like to turn the call back over to Mr. Greg Roberts for his closing remarks. Thank you.

Thanks to everyone for joining us on our call today. I especially want to thank our investors for their continued support as we continue to build A-Mark into the global leader in precious metals trading. We look forward to updating you on our next call. Operator?

Before we conclude today’s call, I would like to provide A-Mark’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 including A-Mark’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 are identified in the company’s public filings with the Securities and Exchange Commission and include the following: our inability to execute our growth strategy; our inability to maintain the security of customer or company information; the impact of complying with laws and regulations relating to our trading and financing operations; changes in our liquidity and capital requirements; changes in the political or economic environments of the countries in which we do business; the loss of key management or trading personnel; our exposure to commodity price risks, concentration of credit risk and risk of default of our counterparties; the demand nature of the our credit facility; the possible loss of key government distributorship arrangements; potential losses in connection with our financing operations; the inability of our historical financial statements to be indicative of our future performance; the impact of increased cost associated with being a public company; our inability to maintain effective internal controls as a public company; our inability or determination not to pay dividends; low trading volume of our capital stock due to limited liquidity or lack of analyst coverage; and the ability of our principal shareholders to exert substantial control over us or prevent a change of control. 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 date on which they were made. Additionally any statements related to the 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 available in the Investors section of the company’s website. Thank you for joining us today for our presentation. You may now disconnect.