A-Mark Precious Metals, Inc. Net Debt / EBITDA dropped on 145.1x from 152.5x to 7.4x in 2020 while Revenue surged on 14.2%
09/10/2020 • About A-Mark Precious Metals, Inc. (
$AMRK) • By InTwits
A-Mark Precious Metals, Inc. reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 0.6% in FY2020 vs. 0.0% in FY2019 vs. 0.2% in FY2016
- EBITDA Margin is quite volatile: 0.6% in FY2020, 0.0% in FY2019, -0.1% in FY2018, 0.1% in FY2017, 0.2% in FY2016
- A-Mark Precious Metals, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.0%.
- The company has business model with low profitability: ROIC is 7.3%
- It operates with high leverage: Net Debt/EBITDA is 7.4x while industry average is 7.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue surged on 14.2%. Revenue growth showed acceleration in FY20Q4 - it increased 95.9% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 7.9 pp from -1.9% to 6.0% in FY2020. During FY2016-FY2020 EBITDA Margin bottomed in FY2018 at -0.052% and was growing since that time.
Gross Margin increased slightly on 0.56 pp from 0.67% to 1.2% in FY2020. During the last 5 years Gross Margin bottomed in FY2018 at 0.39% and was growing since that time. SG&A as a % of Revenue showed almost no change in FY2020. SG&A as a % of Revenue stuck to a growing trend at 0.10 pp per annum in FY2016-FY2020.
Net Income margin increased slightly on 0.51 pp from 0.047% to 0.56% in FY2020. During FY2016-FY2020 Net Income margin bottomed in FY2018 at -0.045% and was growing since that time.
Investments (CAPEX, working capital and M&A)
A-Mark Precious Metals, Inc.'s CAPEX/Revenue was 0.015% in FY2020. CAPEX/Revenue showed almost no change from FY2017 to FY2020. Average CAPEX/Revenue for the last three years was 0.014%.
Return on investment
The company operates at good ROE (35.8%) while ROIC is low (7.3%). ROIC increased on 7.4 pp from -0.16% to 7.3% in FY2020. ROE surged on 32.5 pp from 3.3% to 35.8% in FY2020. During FY2016-FY2020 ROIC bottomed in FY2018 at -2.5% and was growing since that time. During the last 5 years ROE bottomed in FY2018 at -5.0% and was growing since that time.
Leverage (Debt)
Debt level is 7.4x Net Debt / EBITDA and 8.9x Debt / EBITDA. Net Debt / EBITDA dropped on 145.1x from 152.5x to 7.4x in FY2020. Debt dropped on 13.0% while cash surged on 529%.
A-Mark Precious Metals, Inc. has short term refinancing risk: cash is only 24.8% of short term debt.
Valuation and dividends
The company's trades at EV/EBITDA 14.1x and P/E 7.6x.
Financial and operational results
FY ended 06/30/2020
A-Mark Precious Metals, Inc. ($AMRK) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 6,784 | 6,990 | 7,606 | 4,783 | 5,461 | 14.2% |
| Gross Profit | 35 | 31 | 29 | 32 | 67 | 109.6% |
| SG&A | 22 | 23 | 33 | 33 | 37 | 13.1% |
| EBITDA | 14 | 10 | -4 | 2 | 35 | 1,425.3% |
| Net Income | 9 | 7 | -3 | 2 | 31 | 1,271.2% |
Balance Sheet
|
|---|
| Cash | 17 | 13 | 6 | 8 | 52 | 528.9% |
| Short Term Debt | 212 | 181 | 200 | 262 | 211 | -19.3% |
| Long Term Debt | 0 | 0 | 0 | 92 | 96 | 4.9% |
Cash flow
|
|---|
| Capex | 1 | 2 | 1 | 0 | 1 | 70.6% |
Ratios
|
|---|
| Revenue growth | 11.8% | 3.0% | 8.8% | -37.1% | 14.2% | |
| EBITDA growth | 63.4% | -29.6% | -141.9% | -156.8% | 1,425.3% | |
|
|---|
| Gross Margin | 0.5% | 0.4% | 0.4% | 0.7% | 1.2% | 0.6% |
| EBITDA Margin | 0.2% | 0.1% | -0.1% | 0.0% | 0.6% | 0.6% |
| SG&A, % of revenue | 0.3% | 0.3% | 0.4% | 0.7% | 0.7% | -0.0% |
| Net Income Margin | 0.1% | 0.1% | -0.0% | 0.0% | 0.6% | 0.5% |
| CAPEX, % of revenue | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
|
|---|
| ROIC | 5.1% | 3.0% | -2.5% | -0.2% | 7.3% | 7.4% |
| ROE | 15.5% | 10.7% | -5.0% | 3.3% | 35.8% | 32.5% |
| Net Debt/EBITDA | 14.4x | 17.6x | | 152.5x | 7.4x | -145.1x |
A-Mark Precious Metals, Inc. ($AMRK) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 1,481 | 1,056 | 1,259 | 1,666 | | -5.4% | -4.1% | -0.7% | 95.9% |
| EBITDA | 1 | 1 | 13 | 19 | | -21.7% | 34.1% | 1,055.9% | - |
| Net Income | 0 | 1 | 11 | 18 | | -91.4% | 113.9% | 1,043.5% | - |
Balance Sheet
|
|---|
| Cash | 12 | 12 | 96 | 52 | | -45.1% | -2.3% | 1,911.0% | 528.9% |
| Short Term Debt | 205 | 261 | 298 | 211 | | 14.7% | 87.8% | 100.3% | -19.3% |
| Long Term Debt | 97 | 97 | 96 | 96 | | 2.6% | 11.6% | 11.3% | 4.9% |
Ratios
|
|---|
| Gross Margin | 0.6% | 0.8% | 1.8% | 1.7% | | 0.0% | 0.0% | 1.1% | 0.9% |
| EBITDA Margin | 0.1% | 0.1% | 1.1% | 1.1% | | -0.0% | 0.0% | 1.0% | 1.3% |
| Net Income Margin | 0.0% | 0.1% | 0.9% | 1.1% | | -0.1% | 0.1% | 0.8% | 1.2% |
Peers in Specialized Finance
Below we provide A-Mark Precious Metals, Inc. benchmarking against other companies in Specialized Finance industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
