Susan Filyk - IR Frank Holmes - CEO and CIO Lisa Callicotte - CFO Susan McGee - President and General Counsel

Welcome to U.S. Global Investors Web cast, U.S. Global Investors Earnings Announcement for Fiscal Year 2014. If you have any questions during the webcast, simply enter your question in the dialogue box at the bottom of the screen and click submit. Also you may download a PDF of today's slides by clicking on the Resource tab in the top center of your screen. You can also download some of U.S. Global Investors' latest research on the Resources tab. To switch back to the presentation, just click the Slide tab. We would like to begin by introducing Susan Filyk, Investor Relations at U.S. Global Investors. Ms. Filyk.

Thank you. Welcome, everyone, to our webcast announcing results for the fiscal year ended June 30, 2014. The presenters for today's program are Frank Holmes, U.S. Global Investors' CEO and Chief Investment Officer; Susan McGee, President and General Counsel; and Lisa Callicotte, Chief Financial Officer. During this webcast, we may make forward-looking statements about our relative business outlook. Any forward-looking statements and all other statements made during this webcast that don't pertain to historical facts are subject to risks and uncertainties that may materially affect actual results. Please refer to our press release and corresponding Form 10-K filing for more detail on factors that could cause the actual results to differ materially from any described today in forward-looking statements. Any such statements are made as of today and U.S. Global Investors accepts no obligation to update them in the future. If you have a question for us, you can submit it at anytime during the webcast. Simply type your question in the dialogue box at the bottom of the screen and click submit. If we aren't able to answer your question during the live presentation, we will follow-up with you individually. Now let's go to Frank Holmes, CEO and CIO for an overview of the quarter and fiscal year. Frank?

Good morning. As U.S. Global is, I always would remind people that we are a boutique publicly-listed investment advisor, with a unique expertise in natural resources, emerging markets because both of those are highly correlated and domestic equities, municipal bonds and what are known as GARP investors when it comes to equities. And I'm going to talk little bit more about favorite product at this moment in this low interest rate environment. But as we go into the presentation, I’d like to talk about the strengths of GROW as a go to stock for exposure to emerging markets and resources. And we’re going to show that in how our stock price has balanced recently with the rise in gold in past nine months. We’re debt free, we have a strong balance sheet with reflective cost structure, monthly dividends and return on equity discipline and one of the key factors there is take a look at [indiscernible] and buying back our stock has been a discipline in down days. But our top institutional holders of GROW remain financial investment and management group, the Royce Funds, Vanguard, BlackRock and Century Investments, as you can see that on Slide No. 6. So paying monthly dividends six years now. Currently dividends are $0.05 per share per month and a modest yield of 1.7%, which is higher than a five year government bond. We continue with our share repurchase program. It’s in motion. The Board has approved to repurchase up to $2.75 million of this outstanding common stock on the open market through calendar year 2014. During the fourth quarter of 2014 the Company repurchased 16,840 Class A shares. We use an algorithm used to buy back shares in down days and of course with all applicable rules, regulations that restrict amounts of times of…

Thank you, Frank. Good morning. First, I'd like to talk about Galileo. We invested in Galileo beginning in March 2013 and we purchased a 50% interest in it and we accounted for that as an equity method investment and that yielded good returns over the year. Then on June 1, 2014, we purchased an additional 15%. With that we became controlling interest in the Company. Therefore now we are consolidating Galileo into our balance sheet and our income statement and you will see that we have that one month interest starting in June 2014. Now, I would like to summarize the results of our operations for fiscal year ended June 30, 2014. Beginning on Page 28, you can see that we recorded operating revenues of $11.4 million which is down about 34% from last year of $17.3 million. This is primarily due to the lower assets under management related to shareholder redemptions. Moving onto the Page 29, you can see that we have reduced our operating expenses also. They were $14.8 million. This is a decrease of $2.7 million or 15% and this is related to employee compensation and benefits decreasing $1.5 million or 18% and this is because we have fewer employees and lower performance based bonuses. Platform fees decreased $760,000 or 29% as a result of lower assets held through broker/dealer platform. We also reduced advertising $247,000 or 29% as we decreased sales and marketing cost. General and administrative expenses decreased $110,000 or 2% but also included in G&A are some one-time costs that Frank talked about, related to our strategic fund changes. We had approximately $525,000 that we paid in the second quarter of last year related to legal proxy filing and solicitation cost. One Page 30, you see our operating loss for fiscal year 2014 is…

Thank you, Lisa. You have just heard about many of the positive changes that we've made this past year and we're looking forward to our opportunities for future growth. In marketing and sales area, we are continuing to build the U.S. Global Investors brand through our personal interactions that we have with investors and also our far reach in distribution of our award winning educational communication. Our institutional sales team engages daily with financial advisors who are current and prospective asset holders. As many of our long time stockholders are aware, several of our funds have been recognized for their leadership in investment performance. Since 2000, the funds have received about 29 Lipper performance awards, certificates and top rankings. The Global Resources Fund continues to be highly ranked by Lipper for its long-term performance. As of June 30, this fund is in the top 5% out of the entire universe of mutual funds of the 10 year period and we're very proud of that. We're pleased that three of our funds hold the top Lipper leader rating. This rating is based on investor centered criteria and on the scale of 1 to 5 Lipper Leader funds that rate a 5 are in the top 20% of their category. The All American Equity Fund rates us 5 for preservation, the near term tax free fund rates us 5 for preservation and tax efficiency and the U.S. Government Securities Ultra-Short Bond Fund rates us 5 for preservation, expense and tax efficiency. And we believe investors value preservation and tax efficiency and so we're very pleased to offer funds that are highly ranked in these categories. We have three funds that continue to be highly ranked by Morningstar. At the end of June 2014, the All American Equity Fund had an overall rating…

Thank you Susan. Something else that I think is important that Susan McGee is also very committed to the industry, the fund industry, is on the board of the Small Fund Committee and she’s on the Board of Governors of the ICI and I think those factors all recognize particularly with the Money Management Executive Magazine honor 10 women in the finance industry and Susan was recognized for that. So as a small organization we’re committed to the industry and I think that that's just the key factor. In addition as I mentioned earlier that I would say that the shop here is dominated by women in all the key industries -- not key industry but key tasks that we have to deal with. But let’s hop over and take a look at what’s driving these markets in our stock and recent insights from the investor alert. The year-over-year percentage to change oscillator, we comment on this, we’ve written about this extensively in the past month to try to help people to manage expectations. We are big believers that there is no certainty except where life is filled with probabilities. The certainties as Benjamin Franklin said that we’re all going to pay taxes and die. After that it’s a life of probabilities. And within that you can measure what the volatility and probability of an event taking place and yes there are black swans et cetera but there'll always the anomalies that are out there. It’s more understanding is that our probability is going to rain today, is it going to be snowing in Texas in August, I don’t think so. I really don’t think so. But it’s just recognizing these differences and it can show up in capital markets. So we’ve written about cycles, understanding the long-term cycles, the…

Thank you Frank. Now we’ll take some questions. (Operator Instructions). First question is for Lisa Callicotte and it relates to the discussion of expenses related to the transition of the share. Would these expenses be non-cash expenses or were they out of pocket expenses.

These expenses were out of pocket expenses. They included legal expenses, proxy cost, solicitation cost. We also did still pay out in the first half of the year the yield maintenance related to the money market. So all of these were cash expenditures.

Thank you. I have no more questions at this time. So this concludes U.S. Global Investors earnings webcast for the fiscal year 2014. This presentation will be available for replay on our Web site at usfunds.com. Thank you all for your participation today.

Thank you.