"This trend is also positively affecting our net loss," Holmes continues. "The steps that the company has taken to reduce costs has resulted in an improvement in net loss, starting in the third quarter and continuing in the fourth quarter."Growth Strategy to Build Innovative and Dynamic ETF Product Line The company intends to expand its ETF product line in 2016. The U.S. Global Jets ETF (NYSE: JETS), the company's first ETF, reached its one-year anniversary in April 2016, and continues to attract attention within the ETF industry. "U.S. Global is an innovative investment manager with a longstanding history. We will build upon our expertise as active managers in the resource and emerging markets sectors to create robust, rules-based smart-beta ETFs that leverage our knowledge and understanding of the factors that can identify stocks with long-term growth potential," says Holmes. "ETFs have a lower fee structure than mutual funds, since they do not have the same 12b-1 distribution fees or transfer agency expenses. This lower fee structure makes them attractive to investors," continues Holmes. Streamlining for Greater Efficiencies In the second fiscal quarter, the shareholders of the U.S. Global Investors Funds (the Funds) held a special meeting and approved the election of new trustees for the funds. This action, which the company endorsed, resulted in the Funds becoming part of the family of funds that receive administrative, fund accounting and/or transfer agency services from Atlantic Fund Services. The primary reason behind this initiative was to streamline costs to positively impact both the Fund shareholders and GROW shareholders. When this transition is completed in December 2017, the Fund shareholders and GROW shareholders should fully realize the economies of scale expected as a result of this transition. "This partnership with Atlantic is a win-win for Fund shareholders and GROW shareholders, as it eliminates many expensive administrative and operational duties for the company and allows our streamlined team of highly skilled professionals to focus on improving mutual fund performance and building our growth strategy," says Frank Holmes, CEO of U.S. Global Investors, Inc.
Gold and Municipal Bond Funds Performing for ShareholdersUBS noted recently that gold has "entered a new bull run." The precious metal had a spectacular first half of the year, with total global demand reaching the second-highest on record, according to the World Gold Council. The company's gold equity mutual funds have benefited from this rally. As of August 31, 2016, the Gold and Precious Metals Fund (USERX) is up 84 percent year to date, and the World Precious Minerals Fund is up 129 percent. Past performance does not guarantee future results. 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. The company's Gold and Precious Metals Fund (USERX) has earned the 4-star Morningstar Overall rating through June 30, 2016, based on risk-adjusted returns out of 71 funds in the Equity Precious Metals funds category. In addition, the World Precious Minerals Fund (UNWPX) earned Morningstar's 5-star rating for the three-year period as of June 30, 2016, based on risk-adjusted returns out of 71 Equity Precious Metals funds.* In addition to these positive results, the company's municipal bond fund has performed well for shareholders. "Out of 31,306 equity and bond mutual funds, only 39 of them have had positive returns for 21 years in a row, and our Near-Term Tax Free Fund (NEARX) is one of the few. This fund has provided investors and financial advisors with steady performance, through bull and bear markets and rising and falling interest rate environments," says Holmes. The fund has earned the 4-star Morningstar Overall rating, through June 30, 2016, based on risk-adjusted returns out of 190 Municipal National Short-Term funds. Share Repurchase Program U.S. Global Investors has continued purchasing its outstanding stock. Since the program began in January 2013, the company has purchased a total of 421,652 class A shares through June 30, 2016, using cash of approximately $1,067,000. The company uses 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. The share repurchase plan expires at the end of the calendar year 2016, but may be suspended or discontinued at any time.
Continued Strong Balance SheetThe company had net working capital of approximately $16.9 million at the end of fiscal year 2016. With approximately $4.0 million cash and cash equivalents and $13.6 million in securities recorded at fair value, which together comprise approximately 67 percent of total assets, U.S. Global Investors has adequate liquidity to meet its current obligations. The company has had no long-term debt since 2004 and owns its headquarters building. U.S. Global Continues GROW Dividends The company has paid monthly dividends for more than nine years and will continue monthly dividend payments through the fourth calendar quarter of 2016. A monthly dividend of $0.0025 per share is authorized through December 2016. The record dates are October 10, November 14 and December 12, and the payment dates will be October 24, November 28 and December 27. The continuation of future cash dividends will be reviewed by the board of directors quarterly. Earnings Webcast Information The company has scheduled a webcast for 7:30 a.m. Central time on Thursday, September 15, 2016, to discuss the company's key financial results for the quarter. Frank Holmes will be accompanied on the webcast by Susan McGee, president and general counsel, and Lisa Callicotte, chief financial officer. Click here to register for the earnings webcast or visit www.usfunds.com for more information. Selected financial data (unaudited): (dollars in thousands, except per share data)
|Three months ended|
|Total Other Income (Loss)||73||148||(89)|
|Tax Expense (Benefit)||(1)||(16)||800|
|Net Loss from Continuing Operations||(250)||(376)||(2,059)|
|Net Income (Loss) from Discontinued Operations||--||--||7|
|Less: Net Income (Loss) Attributable to Non-Controlling Interest||(5)||(26)||1|
|Net Loss Attributable to U.S. Global Investors||$(245)||$(350)||$(2,053)|
|Loss per share (basic and diluted)||$(0.02)||$(0.02)||$(0.13)|
|Avg. common shares outstanding (basic)||15,259,287||15,277,098||15,380,689|
|Avg. common shares outstanding (diluted)||15,259,287||15,277,098||15,380,689|
|Avg. assets under management (millions)||$836||$709||$819|
|Total Other Income||485||434|
|Income Tax Expense (Benefit)||(6)||822|
|Loss from Continuing Operations||(3,685)(18)||(3,895)(81)|
|Loss from Discontinued Operations|
|Net Loss||(3,703) (28)||(3,976) 54|
|Less: Net Income (Loss) Attributable to Non-Controlling Interest|
|Net Loss Attributable to U.S. Global Investors||$(3,675)||$(4,030)|
|Loss per share (basic and diluted)||$(0.24)||$(0.26)|
|Avg. common shares outstanding (basic)||15,294,893||15,399,831|
|Avg. common shares outstanding (diluted)||15,294,893||15,399,831|
|Avg. assets under management (millions)||$744||$931|
Please consider carefully a fund's investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by clicking here or by calling 1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Foreside Fund Services, LLC, Distributor. U.S. Global Investors, Inc. is the investment adviser.
|Total Annualized Returns as of 6/30/2016|
|One-Year||Five-Year||Ten-Year||Gross Expense Ratio||Expense Cap|
|Near-Term Tax Free Fund||2.22%||2.13%||3.13%||1.09%||0.45%|
|Gold and Precious Metals Fund||67.82%||-8.04%||-0.36%||2.20%||1.90%|
|World Precious Minerals Fund||87.51%||-11.85%||-2.90%||2.01%||1.90%|
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.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.
CONTACT: Contact: Lisa Aston Investor Relations 210.308.1222 firstname.lastname@example.org