GROW Fiscal Year 2017 Results Webcast

Transcription

1 GROW Fiscal Year 2017 Results Webcast Frank Holmes, CEO and Chief Investment Officer Susan McGee, President, General Counsel and Chief Compliance Officer Lisa Callicotte, Chief Financial Officer US.FUNDS September 12,

2 Today s Presenters Frank Holmes Susan McGee Lisa Callicotte Lisa Aston 2

3 Forward-Looking Statements 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 the corresponding Form 10-K filing for more detail on factors that could cause 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. 3

4 About U.S. Global Investors (GROW) U.S. Global Investors, Inc. is an innovative investment manager with vast experience in global markets and specialized sectors. Founded as an investment club, the company became a registered investment adviser in 1968 and has a longstanding history of global investing and launching first-of-their kind investment products, including the first no-load gold fund. U.S. Global Investors is well known for expertise in gold and precious metals, natural resources and emerging markets. 4

5 GROW Strengths Strive to be the Go-to stock for exposure to emerging markets and resources Debt-free, strong balance sheet with a reflexive cost structure Monthly dividend and return on equity discipline 5

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7 Top Institutional Holders of GROW 1. Financial and Investment 18% Management Group 2. Royce and Associates 12% 3. The Vanguard Group 4% 4. Newberg Family Trust 3% 5. Koshinski Asset Management, Inc. 3% Percentage of shares outstanding Source: NASDAQ, Data as of 9/1/2017 7

8 GROW Dividends Paid Monthly Consistently paid for more than 10 years Current yield at share price of $1.52 as of 6/30/ % Monthly dividend payment of $.0025 Approved through September

9 Share Repurchase Program in Motion The board approved a repurchase of up to $2.75 million of its outstanding common stock on the open market through calendar year 2017 During the fourth fiscal quarter 2017, the company repurchased 12,205 class A shares using cash of $17,000 May be suspended or discontinued at any time As evidenced by regulatory filings, Frank Holmes is purchasing shares of GROW pursuant to a Rule 10b-18 plan 9

10 Balance Sheet Strength No Debt Started investing in higher earning securities * 10

11 Earnings Per Share Quarterly Corporate events impacting earnings Transition to Atlantic Fund Services Closed Money Market Funds 14 11

12 Quarterly Average Assets Under Management Remain Stable 12

13 Asset Breakdown U.S. Global Investors Funds Data for SEC-registered mutual funds as of June 30,

14 For financial professional use only. Do not distribute to the public. 14

15 Pending update 15

16 Disruption in Junior Gold Mining Stocks April 13,

17 Fund Regulatory Costs Small retail investors potentially being harmed by industry interpretation of Fiduciary Rule. Wirehouse platforms focus on cheaper is better to avoid risk. Small Fund Family Small Shareholder Accounts 17

18 Managing Expectations See Our Managing Expectations Whitepaper at Understanding Volatility of Asset Classes Standard deviation based on 10-year daily data as of 6/30/2017 U.S. Global Investors (GROW) NYSE Arca Exchange Gold BUGS Index Daily Rolling 1 Year ±4% ±51% ±3% ±40% Gold Bullion ±1% ±19% S&P 500 Index (SPX) ±1% ±18% Oil ±3% ±39% Dollar Index ±1% ±9% Source: Bloomberg, U.S. Global Investors 18

19 Strategic Partnership with HIVE Blockchain Technologies Ltd., the World s Leading Cryptocurrency Miner In the first quarter of fiscal year 2018, U.S. Global Investors, Inc., through its wholly-owned subsidiary, U.S. Global Investors (Canada) Limited (USCAN), purchased 10 million shares of HIVE (approximately $2.4 million USD). In addition, USCAN purchased shares of a fund managed by our 65 percent owned subsidiary, Galileo Global Equity Advisors, Inc. The Galileo Partners Fund purchased 7 million shares of HIVE. 19

20 U.S. Global Investors, Inc. (GROW) Income Statement Financial Analysis Lisa Callicotte CFO 20

21 Consolidated Statements of Operations (dollars in thousands) Operating Revenues Fiscal Year Ended June 30, Advisory fees $ 6,479 $ 5,185 Administrative service fees $ 6,763 $ 5,505 Operating Expenses Employee compensation and benefits $ 3,754 $ 4,918 General and administrative 3,494 4,235 Advertising Depreciation and amortization $ 7,636 $ 9,681 Operating Loss (873) (4,176) 21

22 Consolidated Statements of Operations (dollars in thousands, except per share amounts) Fiscal Year Ended June 30, Operating Loss $ (873) $ (4,176) Total Other Income Loss from Continuing Operations Before Income Taxes (527) (3,691) Provision for Federal Income Taxes Tax expense (benefit) 17 (6) Loss from Continuing Operations (544) (3,685) Loss from Discontinued Operations, Net of $0 Tax Benefit of Distributor - (18) Net Loss (544) (3,703) Less: Net Loss Attributable to Non-Controlling Interest (31) (28) Net Loss Attributable to U.S. Global Investors, Inc. $ (513) $ (3,675) Net Loss Per Share Attributable to U.S. Global Investors, Inc. Basic Net Loss Per Share $ (0.03) $ (0.24) Diluted Net Loss Per Share $ (0.03) $ (0.24) Basic weighted average number of common shares outstanding 15,212,008 15,294,893 Diluted weighted average number of common shares outstanding 15,212,008 15,294,893 22

23 Consolidated Balance Sheets (dollars in thousands) Assets June 30, 2017 June 30, 2016 Current Assets Cash and cash equivalents $ 3,958 $ 3,993 Restricted cash 1,000 1,000 Investment securities trading, at fair value 9,720 10,104 Accounts and other receivables Note receivable 1,952 2,000 Prepaid expenses Total Current Assets 17,465 18,174 Net Property and Equipment 2,212 2,466 Other Assets Investment securities available-for-sale, at fair value 3,401 3,481 Other investments 2,130 1,924 Note receivable, long term Other assets, long term Total Other Assets 5,843 5,706 Total Assets $ 25,520 $ 26,346 23

24 Consolidated Balance Sheets (dollars in thousands) Liabilities and Shareholders Equity June 30, 2017 June 30, 2016 Current Liabilities Accounts payable $ 118 $ 148 Accrued compensation and related costs Dividends payable Other accrued expenses Total Current Liabilities 1,166 1,300 Commitments and Contingencies (Note 18) Shareholders Equity Common stock (class A) - $0.025 par value; nonvoting; authorized, 28,000,000 shares; issued, 13,866,601 and 13,866,421 at June 30, 2017 and June 30, 2016, respectively Common stock (class B) - $0.025 par value; nonvoting; authorized, 4,500,000 shares; no shares issued Convertible common stock (class C) - $0.025 par value; voting; authorized, 3,500,000 shares; issued, 2,068,947 and 2,069,127 shares at June 30, 2017 and June 30, 2016, respectively Additional paid-in-capital 15,646 15,651 Treasury stock, class A shares at cost; 751,303 and 688,700 shares at June 30, 2017 and June 30, 2016, respectively (1,760) (1,663) Accumulated other comprehensive gain (loss), net of tax 264 (149) Retained Earnings 9,321 10,290 Total U.S. Global Investors Inc. Shareholders Equity 23,870 24,528 Non-Controlling Interest in Subsidiary Total Shareholders Equity 24,354 25,046 Total Liabilities and Shareholders Equity $ 25,520 $ 26,346 24

25 Significant Events Susan McGee President, General Counsel and Chief Compliance Officer 25

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27 Newsletter Recommendations for U.S. Global Investors Funds No-Load Mutual Fund Selections & Timing Newsletter 27

28 Branding and Marketing of GROW 24 TV/Radio/Podcasts 31 Total Interviews 498 Web Mentions 27 Frank Talk Blog Entries 43 Newsletter Recommendations Data from April 2017 June

29 Thought Leadership Speaking Engagements and Research Around the World 29

30 Gold Game Film Show a Success on Kitco 134 episodes Kitco audience 10 million monthly visitors TheStreet audience 7.8 million monthly visitors 30

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32 Recognition As an Industry Leader in Investor Education MFEA 80 Mutual Fund Education Alliance STAR Awards The Mutual Fund Education Alliance (MFEA) is a national industry association committed to investor education, and its STAR Awards program recognizes marketing communications efforts in the mutual fund industry. The awards competition is judged by industry professionals, and based on criteria including educational value, content, design and functionality. 32

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34 Q&A 34

35 Disclosures All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. The NYSE Arca Gold BUGS (Basket of Unhedged Gold Stocks) Index (HUI) is a modified equal dollar weighted index of companies involved in gold mining. The HUI Index was designed to provide significant exposure to near term movements in gold prices by including companies that do not hedge their gold production beyond 1.5 years. The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. The U.S. Trade Weighted Dollar Index provides a general indication of the international value of the U.S. dollar. Standard deviation is a measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation. Standard deviation is also known as historical volatility. There is no guarantee that the issuers of any securities will declare dividends in the future or that, if declared, will remain at current levels or increase over time. Note that stocks and Treasury bonds differ in investment objectives, costs and expenses, liquidity, safety, guarantees or insurance, fluctuation of principal or return, and tax features. Holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the presentation were held by one or more accounts managed by U.S. Global Investors as of 6/30/2017: VanEck Vectors Junior Gold Miners ETF (GDXJ) 35