September 10, 2010

U.S. Global Investors Reports 2010 Earnings

2010 revenues, earnings and cash flow improve over 2009 levels

U.S. Global Investors (GROW) reported improved revenues, earnings and cash flow in fiscal year 2010 over 2009 levels, according to the San Antonio, Texas-based firm's webcast on Friday, September 10. One of a handful of publicly-traded asset managers in the U.S., the company reported diluted earnings per share (EPS) of $0.35 for the fiscal year ended June 30, versus a loss of $0.15 for the year earlier period. Net income for 2010 was $5.35 million on revenues of $35.03 million, versus a $2.237 million loss for fiscal 2009 on revenues of $23.14 million.

U.S. Global is "debt free," the company said during the webcast.

Expenses are slightly down year-over-year for FY 2010, at $26.52 million versus $26.75 million for FY 2009.

Assets under management (AUM) have grown to $2.60 billion (including retail and institutional assets) as of June 30, 2010, from $2.15 billion on June 30, 2009. U.S. Global Investors CEO and CIO, Frank Holmes, said during the webcast that "the industry is seeing net redemptions" of assets; "investors as a whole across all asset classes are redeeming."

"While markets have bounced back from the depths seen in March 2009, there is still uncertainty that has affected consumer and investor confidence," Holmes stated in a September 9 earnings announcement. "With unemployment stuck around 10 percent and continued weakness in the housing sector, we're seeing growing worries of a coming economic downturn or even a 'double-dip' recession. This has many U.S. investors waiting on the sideline for better days that will eventually arrive."

"At the same time, the long-term global growth story remains intact as tens of millions of Chinese, Indians and others move into the middle class every year," Holmes added. "We believe their desire for a lifestyle we take for granted will continue to have huge implications for gold, energy and other commodities."

The company announced on September 8 that it would continue its monthly dividend of $0.2 cents per share for the fourth quarter of 2010, to holders of record on October 11, November 10 and December 13, and the payment dates will be October 25, November 24 and December 27.

Comments? Please send them to kmcbride@wealthmanagerweb.com. Kate McBride, AIF(R), is editor in chief of WealthManagerWeb and a member of The Committee for the Fiduciary Standard.

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