In a recent Securities and Exchange Commission (SEC) report, U.S. Global Investors Inc. (ticker: GROW) revealed a decrease in advisory fees and a reduction in operating expenses for the nine months ended March 31, 2023. The report cited several factors influencing these decreases, including lower average assets under management in the Exchange Traded Funds (ETFs) and a decrease in base management fees received. The company’s financial position, performance fees, and market risks were also discussed in the report.
U.S. Global Investors Inc. is an investment management firm that offers its services to individual, institutional and corporate clients. The company primarily focuses on managing equity and fixed income mutual funds for its clients, along with managing assets in ETFs.
Table of Contents
Decrease in Advisory Fees
According to the SEC report, the company’s advisory fees decreased by $6.9 million, or 39.0 percent, primarily as a result of lower average assets under management in the ETFs and a decrease in base management fees received. The majority of this decrease originated from the ETF unitary management fees, which decreased $5.8 million due to a decrease in ETF average assets under management, primarily for the Jets ETF.
Performance Fees Drop
The performance fees for the U.S. Global Investors Funds (USGIF) also experienced a drop of approximately $599,000, with the current period performance fees standing at $(390,000) compared to $209,000 in the corresponding period in the prior year. The performance fee applies to the USGIF equity funds only and is adjusted based on differences between a fund’s performance and that of its designated benchmark index over the prior rolling 12 months.
Reduction in Operating Expenses
Additionally, the report highlighted a decrease of $2.4 million or 22.0 percent in total consolidated operating expenses for the nine months ended March 31, 2023, compared with the previous year. Notable components of the decrease include a reduction in employee compensation of $1.4 million or 28.2 percent, primarily resulting from a decrease in bonuses in the current period and amortization expense of employee stock options in the same period of the prior year. General and administrative expenses also decreased by $1.0 million or 18.4 percent, primarily due to lower fund expenses, lower ETF expenses, and lower directors’ fees and expenses.
Other Income (Loss) Figures
The report also touched on the company’s other income (loss) figures for the nine months ended March 31, 2023, amounting to a loss of $5,000, compared to a loss of $2.0 million for the nine months ended March 31, 2022. This change was predominantly due to a decrease in investment losses from $2.0 million in the previous year to $189,000 in the current fiscal year.
Liquidity and Capital Resources
Regarding liquidity and capital resources, U.S. Global Investors Inc. reported a net working capital of approximately $36.9 million, an increase of $3.0 million or 8.7 percent since June 30, 2022, and a current ratio of 14.3 to 1. With $24.9 million in cash and cash equivalents, an increase of $2.6 million or 11.8 percent since June 30, 2022, and $13.0 million in securities carried at fair value on a recurring basis, the company stated that it has adequate liquidity to meet its current obligations.
Optimism on Financial Position and Market Risks
Despite the decrease in advisory fees and reduction in operating expenses, the company remains optimistic about its financial position and market risks. With continued plans for growth through investment advisory contracts and a proactive approach to managing market risks, U.S. Global Investors Inc. aims to maintain a position of stability and profitability in the investment management industry.
Income Statement
Financials in millions USD. Fiscal year is July – June. source
| Year | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 – 1995 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 0 | Revenue | 24.71 | 21.65 | 4.48 | 3.46 | 6.26 | 6.76 | 5.51 | 7.33 | 8.53 | 17.32 | Upgrade |
| 1 | Revenue Growth (YoY) | 14.13% | 383.78% | 29.40% | -44.75% | -7.42% | 22.85% | -24.93% | -14.07% | -50.72% | -22.60% | Upgrade |
| 2 | Gross Profit | 24.71 | 21.65 | 4.48 | 3.46 | 6.26 | 6.76 | 5.51 | 7.33 | 8.53 | 17.32 | Upgrade |
| 3 | Selling, General & Admin | 13.38 | 13.29 | 6.68 | 6 | 8.31 | 7.38 | 9.37 | 10.51 | 11.34 | 14.58 | Upgrade |
| 4 | Other Operating Expenses | 0.23 | 0.2 | 0.2 | 0.21 | 0.24 | 0.25 | 0.32 | 0.33 | 0.47 | 2.93 | Upgrade |
| 5 | Operating Expenses | 13.6 | 13.49 | 6.88 | 6.22 | 8.55 | 7.64 | 9.68 | 10.84 | 11.81 | 17.51 | Upgrade |
| 6 | Operating Income | 11.11 | 8.17 | -2.4 | -2.76 | -2.29 | -0.87 | -4.18 | -3.51 | -3.28 | -0.19 | Upgrade |
| 7 | Other Expense / Income | 6.15 | -29.27 | 2.46 | 1.61 | -3.13 | -0.38 | -0.5 | -0.3 | -1.83 | -0.1 | Upgrade |
| 8 | Pretax Income | 4.97 | 37.44 | -4.86 | -4.37 | 0.84 | -0.5 | -3.68 | -3.21 | -1.45 | -0.09 | Upgrade |
| 9 | Income Tax | 1.15 | 5.48 | -0.18 | -0.98 | 0.2 | 0.02 | -0.01 | 0.82 | -0.48 | 0.1 | Upgrade |
| 10 | Net Income | 3.82 | 31.96 | -4.68 | -3.39 | 0.65 | -0.51 | -3.68 | -4.03 | -0.97 | -0.19 | Upgrade |
| 11 | Net Income Growth | -88.05% | – | – | – | – | – | – | – | – | – | Upgrade |
| 12 | Shares Outstanding (Basic) | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | Upgrade |
| 13 | Shares Outstanding (Diluted) | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | Upgrade |
| 14 | Shares Change | -0.38% | -0.27% | -0.20% | -0.13% | -0.35% | -0.54% | -0.68% | -0.38% | -0.15% | 0.27% | Upgrade |
| 15 | EPS (Basic) | 0.25 | 2.12 | -0.31 | -0.22 | 0.04 | -0.03 | -0.24 | -0.26 | -0.06 | -0.01 | Upgrade |
| 16 | EPS (Diluted) | 0.25 | 2.12 | -0.31 | -0.22 | 0.04 | -0.03 | -0.24 | -0.26 | -0.06 | -0.01 | Upgrade |
| 17 | EPS Growth | -88.21% | – | – | – | – | – | – | – | – | – | Upgrade |
| 18 | Free Cash Flow Per Share | 0.69 | 0.31 | -0.13 | -0.07 | -0.00 | 0.04 | 0.20 | -0.05 | -0.98 | 0.03 | Upgrade |
| 19 | Dividend Per Share | 0.083 | 0.043 | 0.030 | 0.029 | 0.030 | 0.030 | 0.037 | 0.060 | 0.060 | 0.170 | Upgrade |
| 20 | Dividend Growth | 93.02% | 43.33% | 3.45% | -3.33% | 0% | -18.92% | -38.33% | 0% | -64.71% | -29.17% | Upgrade |
| 21 | Gross Margin | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | Upgrade |
| 22 | Operating Margin | 44.97% | 37.71% | -53.69% | -79.71% | -36.54% | -12.91% | -75.86% | -47.82% | -38.40% | -1.10% | Upgrade |
| 23 | Profit Margin | 15.45% | 147.60% | -104.65% | -97.95% | 10.33% | -7.59% | -66.76% | -54.96% | -11.37% | -1.12% | Upgrade |
| 24 | Free Cash Flow Margin | 41.74% | 21.67% | -43.61% | -31.08% | -0.54% | 10.20% | 54.86% | -9.71% | -178.33% | 2.44% | Upgrade |
| 25 | Effective Tax Rate | 23.13% | 14.63% | – | – | 23.34% | – | – | – | – | – | Upgrade |
| 26 | EBITDA | 4.55 | 37.81 | -4.66 | -4.15 | 1.09 | -0.24 | -3.37 | -2.88 | -1.19 | 0.18 | Upgrade |
| 27 | EBITDA Margin | 18.41% | 174.62% | -104.04% | -120.01% | 17.33% | -3.59% | -61.13% | -39.29% | -13.90% | 1.05% | Upgrade |
| 28 | Depreciation & Amortization | -0.42 | 0.37 | 0.2 | 0.21 | 0.24 | 0.25 | 0.32 | 0.33 | 0.26 | 0.28 | Upgrade |
| 29 | EBIT | 4.97 | 37.44 | -4.86 | -4.37 | 0.84 | -0.5 | -3.68 | -3.21 | -1.45 | -0.09 | Upgrade |
| 30 | EBIT Margin | 20.10% | 172.89% | -108.56% | -126.19% | 13.48% | -7.33% | -66.87% | -43.75% | -16.93% | -0.54% | Upgrade |
Note that we may hold securities mentioned in this article. All data is based on recent SEC filings. Even though we have implemented various manual and automatic fact-checking and data acquisition processes, some incorrect information may have slipped through (false positive). Let us know if you find any inconsistencies!