Exhibit 99.1
Exhibit 99.1
|
|
|
Contact:
Ryan George
Public Relations
210.308.1268
rgeorge@usfunds.com
|
|
![(LOGO)](c16655p1665501.jpg) |
For Immediate Release
U.S. Global Investors reports 70 percent year-over-year increase
in earnings per share for 3Q2011
The Wall Street Journal Ranks Four Funds in Top 25 for 10-year Period
SAN ANTONIOMay 5, 2011U.S. Global Investors, Inc. (NASDAQ: GROW), a boutique registered
investment advisory firm specializing in natural resources and emerging markets, today reported
that revenue increased 22 percent and earnings per share increased 70 percent on a year-over-year
basis for the quarter ended March 31, 2011.
In the third quarter of fiscal 2011, U.S. Global recorded net income of $2.7 million, or 17 cents
per share, on revenue of $11.4 million. This compares to net income of $1.5 million, or 10 cents
per share, on revenue of $9.4 million for the third quarter of fiscal 2010. The company earned $2.3
million, or 15 cents per share, on revenue of $11.9 million in the second quarter of fiscal year
2011.
Assets under management at period end stood at $3.18 billion as of March 31, 2011, a 20 percent
increase from $2.65 billion at March 31, 2010, and an increase of 4 percent from $3.04 billion at
December 31, 2010.
Average assets under management were $3.10 billion for the quarter ended March 31, 2011, an
increase of 18 percent from $2.63 billion at March 31, 2010, and an increase of 9 percent from
$2.85 billion for the quarter ended December 31, 2010.
The company continued its strong performance for the fiscal 2011 year during the quarter, says
Frank Holmes, U.S. Global Investors CEO. U.S. Global continues to pay a monthly dividend, remains
debt-free and is poised to deploy the capital necessary to capture new opportunities should they
arise.
U.S. Globals marketing strategy is expanding to be a leader in providing specialized investment
expertise to financial advisors and institutions both domestically and internationally and we have
fortified our efforts to seize the opportunity to serve a growing global marketplace, says Holmes.
The mutual fund industry has gone through a major shift over the past decade and the total amount
managed by registered-investment advisers (RIAs) has grown to over $2
trillion. Weve focused our strategy to tap into this market and have attracted veteran Keith
Carlson out of early retirement to lead this charge. Keith is the former president of Van Eck
Global and has both the explicit and tacit knowledge needed to advance our efforts to build our
institutional asset base, says Holmes.
3Q11 earnings, Page 2
May 5, 2011
Keiths impressive credentials include more than 25 years of operational and strategic management
experience. Keith is a CPA with expertise in natural resources and emerging markets investments,
and he has a proven track record in building investment management businesses.
One year ago we introduced institutional class shares for three of our natural resources and
emerging markets funds. These funds carry a $5 million minimum and are designed for institutional
investors with large pools of assets who want to diversify into natural resources and emerging
markets, says Holmes.
U.S. Globals SEC-registered funds experienced an increase of $138.4 million in assets under
management during the quarter ended March 31, 2011. The increase was driven by $78.8 million of net
shareholder inflows, including $243 million in gross purchases for a higher margin product, and
$60.0 million of market appreciation in the companys funds, primarily the natural resources
sector. Fixed-income funds and money market funds, which represent a small portion of the overall
asset base, experienced a net decrease as shareholders sought alternatives to low yields.
The biggest challenge for active money managers such as U.S. Global has been the proliferation of
exchange-traded funds (ETFs). These products make it easier for short-term traders to buy and sell
the markets near-term trends. Many of the sector- and country-specific ETFs have attracted inflows
despite underperforming actively managed peers. This is an opportunity for actively managed funds
that can outperform many of these ETFS with their stock selection disciplines. Many of the
individual securities within these sector- and country-specific ETFs do not meet our stock
selection models, says Holmes.
Our focus remains on active management because we believe those managers who outperform ETFs over
an extended period will receive the greatest long-term investment inflows, says Holmes.
Recognized Long-term Performance of Funds
Four U.S. Global Investors emerging markets and natural resources-oriented funds ranked among the
top 25 funds in the entire mutual fund and ETF universe for the 10-year period according to The
Wall Street Journals latest Mutual Funds Quarterly report as of March 31, 2011. Two funds ranked
in the top 10: The World Precious Minerals Fund (UNWPX) and the Gold & Precious Metals Fund
(USERX), ranking fourth and seventh, respectively. The Eastern European Fund (EUROX) ranked
24th and the Global Resources Fund (PSPFX) ranked 25th. The Wall Street
Journal used Lipper data to compile these rankings.*
With gold prices hovering around $1,500 an ounce and crude oil climbing above $110 per barrel,
investors are clamoring for the commodities, emerging markets and natural resources space, says
Holmes. Our funds are well positioned to gain investors assets since several of our funds have
achieved spectacular long-term performance.
3Q11 earnings, Page 3
May 5, 2011
Market Commentary
We think the global recovery will continue; however, many markets may remain volatile throughout
the year as the U.S. economy inches forward and emerging markets battle inflationary pressures. We
also continue to keep a watchful eye on the political turmoil in the Middle East and North Africa
(MENA) region, says Holmes.
Market and media sentiment is stubbornly negative and many are trigger happy to call any asset
class rise a new bubble. These naysayers are often oblivious to positive developments, such as
growth in emerging economies. The old adage a bull market climbs a wall of worry remains a
powerful reminder of how the S&P 500 and other asset classes rose to the levels they are at today
from two years ago, says Holmes.
We believe were only halfway through a 20-year bull cycle for commodities and emerging markets,
says Holmes. Those investors with longer-term investment horizons and a higher risk tolerance, who
understand the importance of diversification and dont confuse volatility with losing money, are
positioned to benefit the most from this secular bull market, says Holmes.
Earnings Webcast Information
The company has scheduled a webcast for 8:00 a.m. Central time on Friday, May 6, 2011, to discuss
the companys key financial results for the quarter. Frank Holmes, CEO and chief investment
officer, will be accompanied on the webcast by Susan McGee, president and general counsel, and
Catherine Rademacher, chief financial officer. Click here to register or visit www.usfunds.com.
3Q11 earnings, Page 4
May 5, 2011
Selected financial data (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
3/31/2011 |
|
|
12/31/2010 |
|
|
3/31/2010 |
|
Revenues |
|
$ |
11,410,231 |
|
|
$ |
11,910,738 |
|
|
$ |
9,361,091 |
|
Expenses |
|
|
7,360,736 |
|
|
|
8,270,445 |
|
|
|
7,078,417 |
|
|
|
|
|
|
|
|
|
|
|
Income before taxes |
|
|
4,049,495 |
|
|
|
3,640,293 |
|
|
|
2,282,674 |
|
Tax expense |
|
|
1,355,410 |
|
|
|
1,310,007 |
|
|
|
808,704 |
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
2,694,085 |
|
|
$ |
2,330,286 |
|
|
$ |
1,473,970 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per share (basic and diluted) |
|
$ |
0.17 |
|
|
$ |
0.15 |
|
|
$ |
0.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Avg. common shares outstanding (basic) |
|
|
15,396,240 |
|
|
|
15,372,554 |
|
|
|
15,350,888 |
|
Avg. common shares outstanding (diluted) |
|
|
15,396,240 |
|
|
|
15,372,554 |
|
|
|
15,353,504 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Avg. assets under management (billions) |
|
$ |
3.101 |
|
|
$ |
2.847 |
|
|
$ |
2.629 |
|
####
About U.S. Global Investors, Inc.
U.S. Global Investors, Inc. (www.usfunds.com) is a registered investment adviser that focuses on
profitable niche markets around the world. Headquartered in San Antonio, Texas, the company
provides advisory, transfer agency and other services to U.S. Global Investors Funds and other
clients.
With an average of $3.1 billion in assets under management in the quarter ended March 31, 2011,
U.S. Global Investors manages domestic and offshore funds offering a variety of investment options,
from emerging markets to money markets.
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 companys website, www.usfunds.com,
or the Securities and Exchange Commissions website at www.sec.gov.
These filings, such as the companys annual report and Form 10-K, 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.
3Q11 earnings, Page 5
May 5, 2011
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.
Please consider carefully a funds investment objectives, risks, charges and expenses. For this and
other important 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. Distributed by U.S. Global
Brokerage, Inc.
*Rankings were provided to the Wall Street Journal by Lipper and include all mutual funds and ETFs
tracked by Lipper. Lipper ranked the funds based on 10-year performance data including share prices
and reinvested dividends. For funds with multiple share classes, only the largest share class was
included. Rankings are based on total annualized return.
Foreign and emerging market investing involves special risks such as currency fluctuation and less
public disclosure, as well as economic and political risk. By investing in a specific geographic
region, a regional funds returns and share price may be more volatile than those of a less
concentrated portfolio. Because the Global Resources Fund concentrates its investments in a
specific industry, the fund may be subject to greater risks and fluctuations than a portfolio
representing a broader range of industries. The Eastern European Fund invests more than 25% of its
investments in companies principally engaged in the oil & gas or banking industries. The risk of
concentrating investments in this group of industries will make the fund more susceptible to risk
in these industries than funds which do not concentrate their investments in an industry and may
make the funds performance more volatile.
Gold, precious metals and precious minerals funds may be susceptible to adverse economic, political
or regulatory developments due to concentrating in a single theme. The prices of gold, precious
metals and precious minerals are subject to substantial price fluctuations over short periods of
time and may be affected by unpredicted international monetary and political policies. We suggest
investing no more than 5% to 10% of your portfolio in these sectors.
Diversification does not protect an investor from market risks and does not assure a profit. The
S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices
in U.S. companies.