US Global Investors Inc. (NASDAQ: GROW) experienced a significant increase in its net income in the third quarter of fiscal 2023, despite the uncertainties surrounding the COVID-19 pandemic and its impact on global economies and financial markets. The company posted a net income of $1.6 million ($0.11 per share) for the three months ending March 31, 2023, as compared to a net loss of $846,000 ($(0.06) per share) for the same period in 2022.
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Decrease in Operating Expenses
This remarkable turnaround can be attributed to the $764,000 decrease in total consolidated operating expenses, leading to a 20.9% decrease. This was mainly due to a $663,000 decrease in general and administrative expenses as a result of lower fund expenses and consulting and professional fees, a $55,000 decrease in employee compensation, and a $47,000 decrease in advertising expenses.
Investments and Assets
During this time, the company held investments with a fair value of $20.8 million and a cost basis of $27.6 million, making up approximately 37.4% of its total assets. The investments consist of equity and fixed income assets, with the equity portion of the assets generating an average investment management fee of 79 basis points for Q3 2023 and 81 basis points for the nine months ending March 31, 2023. Despite fee waivers, the average investment management fee for the fixed income funds remained minimal.
Significant Increase in Other Income
Moreover, the company’s other income recorded a significant increase, with a total consolidated income of $1.2 million for Q3 2023 as compared to a loss of $3.6 million for Q3 2022. This change was primarily a result of the unrealized gains on equity securities and embedded derivatives, which shifted from losses in the prior year to gains in the current year.
Impact of Market Volatility
It’s important to note that the impact of market volatility on digital asset prices may lead to fluctuations in investment values. Despite this, US Global Investors has managed to maintain a strong financial position during these uncertain times. The company remains committed to providing investment management services and investing for its account, continually striving to add growth and value to its cash position.
In conclusion, US Global Investors Inc. has rebounded in Q3 2023, demonstrating resilience amid the challenges of the current economic landscape. The decrease in operating expenses and increase in other income significantly contributed to the company’s improved financial results. As the global economy continues to recover from the setbacks caused by the COVID-19 pandemic, the company is well-positioned to capitalize on new growth opportunities and expand its assets under management.
Financials in millions USD. Fiscal year is July – June. source
|Year||2022||2021||2020||2019||2018||2017||2016||2015||2014||2013||2012 – 1995|
|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|
|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|
|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|
|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|
|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|
|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|
|28||Depreciation & Amortization||-0.42||0.37||0.2||0.21||0.24||0.25||0.32||0.33||0.26||0.28||Upgrade|
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