Company Launches First ETF Product
U.S. Global Investors, Inc. (NASDAQ: GROW), a boutique
registered investment advisory firm with longstanding experience in
global markets and specialized sectors, recorded a net loss of
$1.01 million or ($0.07) per share, on operating revenues of $1.83
million for the quarter ended March 31, 2015.
Net loss for the same quarter of the previous year was $28,000,
or ($0.00) per share, on operating revenues of $2.74 million.
Average assets under management, including SEC-registered funds,
Galileo funds and offshore clients, were $818 million for the
quarter ended March 31, 2015, compared to an average of $978
million for the same quarter a year ago. Total assets under
management were $785 million as of March 31, 2015, versus $959
million at March 31, 2014.
Challenges of a Strong Dollar
Emerging markets have suffered bigger net capital outflows over
the latest three quarters than during the 2008-2009 financial
crisis. “The strongest dollar in forty years is hurting foreign
countries and emerging markets have been hit the hardest, stifling
worldwide economic growth and demand for commodities. This slump
continues to hurt our resource-based and emerging market funds,
which impacted our revenues. We are not alone in experiencing the
squeeze of the strong dollar. The dollar’s surge has also reduced
reported earnings at many blue-chip American companies from
Caterpillar to Tiffany,” says Frank Holmes, U. S. Global Investors
CEO.
An Antidote to Volatile Markets
“While the equity markets have been volatile, our Near-Term Tax
Free Fund (NEARX) has demonstrated positive returns every year for
the past two decades, providing investors and financial advisors
steady past performance with tax-free income. Out of 25,000 equity
and bond mutual funds, only 30 of them have had positive returns
for 20 years in a row. We are proud that NEARX is one of the few,”
says Holmes. The fund has experienced modest growth in assets this
quarter.
Launch of Company’s First Smart Beta ETF—The Only Airline
ETF
U.S. Global Investors rang in a new era for the company with the
launch of its first exchange-traded fund, U.S. Global Jets ETF, on
April 30, 2015. The smart-beta index fund focuses on the airline
industry and trades on the New York Stock Exchange under the ticker
JETS. U.S. Global Investors recognized the airline industry’s
significant restructuring in recent years had contributed to the
industry’s financial success and had stoked demand from investors.
The airline industry has experienced a rise of 287% over the past
three years ended April 1, 2015, making it the best performing
industry within the industrials sector. As the only airline-focused
ETF presently available to investors, the product positions the
company to grow assets under management.
“ETFs are vital to U.S. Global’s future growth. Ten years ago
ETF assets in the U.S. were at $228 million. Today they top $2
trillion and show no signs of slowing. Investors are increasingly
demonstrating a preference for ETFs over mutual funds. That’s why
we have invested considerable time, effort and resources to launch
this new product line. The landscape for ETF marketing,
distribution and operations is quite different than mutual funds,”
says Holmes. The company plans to expand its ETF product offerings
in 2015.
Share Repurchase Program, Strong Balance Sheet, and Monthly
Dividends
The company continued repurchasing outstanding stock in the
third fiscal quarter totaling 19,245 class A shares using cash of
$60,000. The company is using an algorithm to purchase shares on
down days, following the rules and regulations that restrict the
amounts and times when shares can be purchased on any given day,
such as at the opening of the day and in the last half-hour of
trading. The share repurchase plan is set to expire at the end of
calendar year 2015 but may be suspended or discontinued at any
time.
As of March 31, 2015, the company had net working capital of
approximately $21.1 million. Cash and cash equivalents totaled $3.7
million and marketable securities totaled $20.7 million as of the
end of the quarter.
In addition, the company has had no long-term debt since 2004
and owns its headquarters building. The company has also continued
to pay monthly dividends for more than seven years. A monthly
dividend of $0.005 per share is authorized through June 2015 and
will be reviewed by the board quarterly.
Earnings Webcast Information
The company has scheduled a webcast for 7:30 a.m. Central time
on Friday, May 15, 2015, to discuss the company’s key financial
results for the quarter. Frank Holmes will be accompanied on the
webcast by Susan McGee, president and general counsel, and Lisa
Callicotte, chief financial officer. Click here to register for the
earnings webcast or visit www.usfunds.com for more information.
Selected financial data (unaudited) (dollars in thousands,
except per share data):
Three months ended 3/31/2015
3/31/2014 Operating Revenues $ 1,831 $ 2,742
Operating Expenses 3,049 3,157
Operating Loss (1,218 ) (415 ) Total Other Income 249
403 Loss from Continuing
Operations Before Income Taxes (969 ) (12 ) Tax Expense 25
14 Loss from Continuing
Operations (994 ) (26 ) Loss from Discontinued Operations (net of
tax) -- (2 ) Net Loss $ (994 ) $
(28 ) Less: Net Income Attributable to Non-Controlling Interest
13 -- Net Loss
Attributable to U.S. Global Investors $ (1,007 ) $
(28 ) Loss per share (basic and diluted) $ (0.07 ) $
0.00 Avg. common shares outstanding (basic)
15,379,365 15,454,932 Avg. common shares outstanding (diluted)
15,379,365 15,454,932 Avg. assets under management
(billions) $ 0.818 $ 0.978
About U.S. Global Investors, Inc.
The story of U.S. Global Investors goes back more than 40 years
when it began as an investment club. Today, U.S. Global Investors,
Inc. (www.usfunds.com) is a registered investment advisor that
focuses on niche markets around the world. Headquartered in San
Antonio, Texas, the company provides money management and other
services to U.S. Global Investors Funds and other international
clients.
Please consider carefully a fund’s investment objectives, risks,
charges and expenses. For this and other information, obtain a fund
prospectus by visiting www.usfunds.com or by calling 1-800-US-FUNDS
(1-800-873-8637). Read it carefully before investing. U.S. Global
Investors Funds are distributed by U.S. Global Brokerage, Inc.
Forward-Looking Statements and Disclosure
This news release and other statements by U.S. Global Investors
may include certain “forward-looking statements” including
statements relating to revenues, expenses and expectations
regarding market conditions. You can identify these forward-looking
statements by the use of words such as “outlook,” “believes,”
“expects,” “potential,” “opportunity,” “seeks,” “anticipates” or
other comparable words. Such statements involve certain risks and
uncertainties and should be read with corporate filings and other
important information on the company’s website, www.usfunds.com, or
the Securities and Exchange Commission’s website at
www.sec.gov.
These filings, such as the company’s annual report and Form
10-Q, should be read in conjunction with the other cautionary
statements that are included in this release. Future events could
differ materially from those anticipated in such statements and
there can be no assurance that such statements will prove accurate
and actual results may vary. The company undertakes no obligation
to publicly update or review any forward-looking statements,
whether as a result of new information, future developments or
otherwise.
Total Annualized Returns as of 3/31/15
One-Year Five-Year Ten-Year
GrossExpenseRatio
Expense Cap Near-Term Tax Free Fund 2.38 % 2.59 %
3.10 % 1.08 % 0.45 %
Expense ratio as stated in the most recent prospectus. The
expense cap is a contractual limit through April 30, 2016, for the
Near-Term Tax Free Fund, on total fund operating expenses
(exclusive of acquired fund fees and expenses, extraordinary
expenses, taxes, brokerage commissions and interest). Performance
data quoted above is historical. Past performance is no guarantee
of future results. Results reflect the reinvestment of dividends
and other earnings. For a portion of periods, the fund had expense
limitations, without which returns would have been lower. Current
performance may be higher or lower than the performance data
quoted. The principal value and investment return of an investment
will fluctuate so that your shares, when redeemed, may be worth
more or less than their original cost. Performance does not include
the effect of any direct fees described in the fund’s prospectus
which, if applicable, would lower your total returns. Performance
quoted for periods of one year or less is cumulative and not
annualized. Obtain performance data current to the most recent
month-end at www.usfunds.com or 1-800-US-FUNDS.
Bond funds are subject to interest-rate risk; their value
declines as interest rates rise. Though the Near-Term Tax Free Fund
seeks minimal fluctuations in share price, it is subject to the
risk that the credit quality of a portfolio holding could decline,
as well as risk related to changes in the economic conditions of a
state, region or issuer. These risks could cause the fund’s share
price to decline. Tax-exempt income is federal income tax free. A
portion of this income may be subject to state and local taxes and
at times the alternative minimum tax. The Near-Term Tax Free Fund
may invest up to 20% of its assets in securities that pay taxable
interest. Income or fund distributions attributable to capital
gains are usually subject to both state and federal income
taxes.
The Galileo Mutual Funds are not offered for sale in the United
States. They are represented across Canada by independent financial
advisors.
U.S. Global Investors, Inc.Susan Filyk, 210-308-1286Public
Relationssfilyk@usfunds.com
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