Gregory Gibas

Gregory Gibas asked about the trend of backwardation and cost of carry from Q3 to Q4 2025, and requested an update on the integration progress for SGI and AMS, including completed work and remaining tasks.

Answer

CEO Greg Roberts stated that backwardation and cost of carry challenges have not eased, citing disruptions from government announcements, such as silver being deemed a strategic metal, which affects financing and hedging. He detailed integration progress: the finance team completed 90% of purchase price accounting, Pinehurst's logistics are fully moved to Las Vegas, and synergies are being sought for AMS marketing and Stack's trading desk development.

Gregory Gibas from Northland Securities, Inc. sought clarification on the impact of backwardation and cost of carry in fiscal Q4 2025 compared to Q3 2025, and requested an update on the completed and upcoming integration work for Spectrum Group International and AMS Holdings LLC acquisitions.

Answer

CEO Gregory N. Roberts stated that the backwardation and cost of carry challenges have not eased, citing recent disruptions in the silver market due to announcements about silver as a strategic metal, which affected financing and hedging. He described how such disruptions cause the contango curve to flip, leading to near-term spikes in premiums. Regarding acquisition integration, Roberts highlighted the finance team's 90% completion of purchase price accounting. He detailed the successful relocation of Pinehurst's logistics to Las Vegas, led by Thor Gjerdrum, and ongoing efforts to find synergies with JM Bullion. For AMS, the focus is on marketing department synergies, and for Stack's, resources have been moved to Orange County to build an integrated trading desk.

Gregory Gibas followed up on the impact of backwardation and cost of carry in fiscal Q4 2025 versus Q3 2025, and asked for an update on the progress of integrating Spectrum Group International and AMS Holdings LLC.

Answer

CEO Gregory N. Roberts stated that backwardation challenges have not eased, citing recent disruptions like the White House designating silver as a strategic metal, which affected silver financing and hedge positions. He detailed integration progress, including the finance team completing 90% of purchase price accounting, Pinehurst's logistics fully moved to Las Vegas, and ongoing efforts to find synergies in AMS's marketing and to build an integrated trading desk for Stack's.

Gregory Gibas asked about A-Mark's current stance on M&A and whether its focus has shifted following the three recent acquisitions. He also requested commentary on how customer activity and market conditions have trended since early April, after the tariff uncertainty subsided.

Answer

Executive Gregory Roberts affirmed that A-Mark will continue to be active in acquisitions, particularly during slower markets when valuations are more attractive, viewing it as a key way to grow its customer base. He noted that since early April, the company has seen elevated interest and activity across all business lines, well above Q3 levels. Roberts also observed a direct correlation where stock market downturns have recently led to positive results for A-Mark, indicating a flight to safety among investors.

Gregory Gibas of Northland Securities inquired about the timing of the Spectrum Group International (SGI) acquisition, given the long-standing relationship, and asked for more detail on expected synergies. He also asked about A-Mark's next steps for geographic expansion in Asia following its establishment in Singapore.

Answer

Executive Gregory Roberts explained the timing was opportune as Stack's was hitting a growth ceiling due to its balance sheet limitations, which A-Mark can alleviate. He cited synergies like lower borrowing costs and access to A-Mark's inventory and balance sheet. For Asia, Roberts clarified the current focus is on developing its new presence in Singapore and Hong Kong, with M&A efforts currently concentrated on domestic opportunities.

Gregory Gibas of Northland Securities asked about the macroeconomic catalysts that could lead to improving spreads, whether the VIX index is a good general indicator for performance, and what historical business trends the company has observed during past election cycles.

Answer

Executive Gregory Roberts confirmed that macroeconomic events, especially equity market downside and precious metals price volatility, are key positive drivers. He noted the market's outsized positive reaction to the VIX spike in early August was very encouraging. Regarding election cycles, Roberts observed that the 2024 cycle has been different from 2016 and 2020, with recent political shifts creating more uncertainty, which may be contributing to increased customer activity. He affirmed the company is well-positioned for any outcome.

Gregory Gibas from Northland Securities requested details on the financial cadence for the remainder of 2025, considering the ramp-up of both the Workforce Hub construction and the reactivated Dilley government facility. He also asked for clarification on opportunities to support government immigration policy beyond Target's existing asset portfolio.

Answer

CFO and CAO Jason Vlacich explained that Workforce Hub construction revenue will peak in Q2 and Q3. For the Dilley facility, he noted margins will be lowest in Q2 during the ramp-up, with full run-rate revenue and margin contribution expected by Q4 2025. President and CEO Brad Archer clarified that to meet potential government demand exceeding their current inventory, Target would first utilize all existing assets and then look to the open market to purchase or build new facilities, structuring contracts to protect capital investment.

Gregory Gibas of Northland Securities, Inc. followed up on post-redemption liquidity, asking about the expected revolver balance, 2025 CapEx and free cash flow, potential modifications needed for the West Texas (PCC) assets, and full-year expectations for the core HFS business.

Answer

CFO Jason Vlacich projected a short-term revolver balance of $40-$50 million, lower CapEx than 2024, and positive free cash flow. He also stated the core HFS business should perform similarly to the prior year. CEO James Archer added that the West Texas assets are in excellent shape and would require 'very little to none' in capital to be reactivated for government use.

Gregory Gibas followed up on SuperNation's performance, asking about marketing spend efficiency and other growth drivers. He also inquired about the decision to cancel the new match-3 game launch and the company's future pipeline for in-house game development.

Answer

CFO Joseph A. Sigrist attributed SuperNation's strength not only to marketing but also to product development and the successful leveraging of all three of its brands, including two legacy ones alongside Duelz. Executive In Keuk Kim addressed the canceled game, stating it did not meet internal thresholds for player engagement or monetization. Kim emphasized a disciplined, data-driven approach to greenlighting new titles, noting the company is using AI-assisted tools to iterate faster on new concepts while remaining focused on launching games that can scale profitably.

Gregory Gibas followed up on SuperNation, asking about specific investments for market share growth in the U.K. and Sweden, and whether there are plans to expand into new iGaming markets. He also inquired about promising categories for future game development and the potential timing for new titles.

Answer

CFO Joseph A. Sigrist explained that the primary investment in SuperNation is increased marketing for user acquisition, which yields a very fast payback period. He noted the strategy targets 'entertainment style' players, supported by product and brand development. For new games, Sigrist confirmed the most near-term title is the internally developed match-three game currently in beta. While organic development focuses on the casual category, M&A opportunities are being evaluated across a wider range of gaming categories.

Gregory Gibas of Northland Securities questioned the company's strategy for revenue diversification between M&A and organic growth. He also sought details on the drivers behind the strong KPI improvements and the better-than-expected performance of SuprNation.

Answer

CFO Joseph A. Sigrist explained that growth will come from both internal development in new game categories and continued M&A activity, leveraging their strong balance sheet. He attributed KPI improvements to a heightened focus on player and payer retention via new meta features. For SuprNation, he noted its outperformance is related to successful new player acquisition, and the company plans to increase marketing investment in its key markets.

Gregory Gibas of Northland Securities asked for details on the positive inflection of monthly recurring revenue (MRR) in March, the drivers of the quarterly outperformance, and the projected path for Average Revenue per Member (ARPM).

Answer

CEO Chuck Cohn reported that the Consumer Learning Membership business saw MRR turn positive year-over-year in March, transforming it into a growth tailwind. CFO Jason Pello provided a clear ARPM forecast, expecting it to rise from $335 in Q1 to over $370 by year-end, driven by price increases and a mix shift to higher-frequency plans.

Gregory Gibas inquired about the drivers of the Institutional revenue decline, progress on monetizing free school district access, Q4 consumer expectations for active members versus ARPM, and the reasons for lower customer acquisition costs.

Answer

Charles Cohn, Founder, Chairman and CEO, attributed the lower-than-expected Institutional bookings to a newly ramped sales team and an over-focus on the ESSER deadline, which resulted in smaller deal sizes. He noted the platform access strategy is working to build trust and convert districts to paid offerings. Jason Pello, CFO, added that 32% of paid contracts in Q3 came from these free-access conversions. Regarding the consumer business, Cohn projected ending the year with around 36,000 active members and ARPM rising to approximately $310 in Q4, attributing a 14% drop in consumer CAC to more efficient marketing and improved sales conversion.

Gregory Gibas from Northland Securities asked for a breakdown of the drivers behind the increased EBITDA guidance, the expected timing for finalizing letter contracts, and an update on the potential rebidding of the ISAP contract.

Answer

CFO David Garfinkle attributed the guidance increase to the Q1 beat, the Dilley facility reactivation, and sustained higher ICE populations. CEO Damon Hininger stated that contract templates for the letter agreements were received recently and expects finalization in "days and weeks, not months." Regarding ISAP, Hininger confirmed CoreCivic is prepared to bid on the contract, noting a potential one-year extension for the incumbent was rumored.

Gregory Gibas sought clarification on the 28,000-bed proposal to ICE, asking how it reconciles with previously mentioned available beds and how the potential $200M-$275M EBITDA uplift relates to these numbers. He also asked about Q1 population trends and the financial impact and timeline of activating an idle facility.

Answer

CEO Damon Hininger explained the 28,000-bed figure includes capacity in currently operating facilities, vacant facilities, surge capacity above rated levels, and third-party leased capacity. CFO David Garfinkle clarified the $200M-$275M EBITDA figure relates to activating about 15,000 beds of idle and third-party capacity. Garfinkle noted that Q1 populations are up slightly but the guidance assumes a steady increase throughout the year. He also detailed that an activation takes 4-6 months with significant upfront costs before generating positive EBITDA.

Gregory Gibas asked about the drivers for a potential move to dual-sourcing the ATD program (scale, cost, or technology) and requested a breakdown of the 18,000 available beds between idle facilities and topping off existing ones, along with a potential blended margin.

Answer

CEO Damon T. Hininger agreed that the move toward dual-sourcing the ATD contract is likely driven by all factors mentioned: scale, cost, technology, and quality. CFO David Garfinkle broke down the available capacity as approximately 1,500-2,000 beds in existing contracts, another 800 in other operational facilities, and about 13,000 in idle facilities. He explained that margins for filling existing facilities would be high due to fixed costs already being covered, while activated idle facilities would stabilize at margins slightly higher than the portfolio average after initial start-up costs.

Gregory Gibas of Northland Security asked for the rationale behind ICE's decision to revert the Karnes facility back to housing single adults, the updated timeline for contracting the remaining idle facilities, and developments with U.S. Marshals Service RFPs.

Answer

CEO Dave Donahue explained that the Karnes facility decision reflects GEO's flexibility and partnership with ICE to meet the agency's evolving, mission-specific needs. He confirmed the company remains on plan for additional idle facility contract awards during the second quarter, with activations expected in the second half of the year. Regarding the U.S. Marshals Service, Donahue noted that their needs are also tied to congressional funding and that GEO is in frequent communication and having 'good pace discussions' about its available facilities.

Gregory Gibas inquired about the expected utilization of the Adelanto facility following the lifting of a court order, the anticipated start-up costs for reactivating Delaney Hall and other idle facilities, and the projected timeline for realizing the $250 million to $300 million in incremental EBITDA.

Answer

Executive Chairman George Zoley stated that the Adelanto facility has initial authorization for approximately 470 beds, with a hearing next month expected to permit full utilization of its nearly 2,000 beds. He noted that while Delaney Hall will receive partial payment during its 60-day start-up, other reactivations will incur several million dollars in unbudgeted training costs. CFO Mark Suchinski confirmed that the full financial benefits of these opportunities are expected in 2026, with an initial positive impact beginning in the second half of 2025.

Gregory Gibas of Northland Securities inquired about the potential challenges, such as staffing, and the costs, including CapEx and one-time expenses, associated with reactivating idle facilities to meet increased ICE demand. He also asked about the outlook for opportunities with the Bureau of Prisons (BOP) under a new administration.

Answer

Executive Chairman George Zoley acknowledged there would be start-up costs for physical plant renovations and labor recruitment but stated that hiring for federal facilities is generally not difficult due to attractive wages. He explained that under a new administration, the ban on private sector BOP contracts would likely end. While ICE would be the short-term priority, he foresees a long-term opportunity to consolidate aging BOP facilities into newer, private sector ones.

Gregory Gibas from Northland Capital Markets asked for an update on the timing and next regulatory steps for Phase 2 of the Fairmount project. He also inquired about the drivers of Louisiana's strong Q1 performance and its sustainability, and requested a recap of the 2025 CapEx guidance versus normalized levels.

Answer

Executive Mark Phelan explained that the company is using Phase 1 at Fairmount to assess demand and will have more clarity on Phase 2 plans after the racing season ends in October. Executive Andrew Rubenstein stated that Louisiana's performance run rate is expected to improve throughout the year as the company implements best practices, remodels, and introduces proprietary technology. CFO Mathew Ellis reiterated the 2025 CapEx forecast of $75-$80 million and the normalized annual expectation of $40-$45 million once major projects are complete.

Gregory Gibas inquired about Accel's growth strategy in Louisiana, asking whether the focus would be on acquisitions or organic growth. He also requested further details on the Fairmount project, including the timeline for Phase 2 and the financial contribution from the FanDuel partnership.

Answer

CEO Andy Rubenstein characterized Louisiana as a fragmented market with opportunities for both organic growth and tuck-in acquisitions, particularly in the truck stop segment. President of U.S. Gaming Mark Phelan confirmed the target for Fairmount's Phase 2 completion is the end of 2027. CFO Matt Ellis noted that while the FanDuel component's revenue cannot be broken out, the entire Fairmount track, including the sportsbook, was operating near breakeven prior to the casino development.

Gregory Gibas of Northland Capital Markets questioned the estimated profitability impact of the recent location closures and asked for reasons behind Accel's outperformance relative to Illinois casinos, as well as the expected business impact of implementing Ticket-In, Ticket-Out (TITO) technology.

Answer

CFO Mat Ellis stated that the financial impact of closing 22 locations is minimal on a consolidated basis but is a key part of achieving overall growth targets. CEO Andrew Rubenstein attributed market outperformance to a superior and more convenient local product offering. He also noted that the TITO rollout, expected in H1 2025, should provide a lift to the industry by enhancing the player experience.

Gregory Gibas asked about the primary drivers for the expected revenue acceleration in the second half of 2025 and the timing of increased costs related to supporting enterprise deals.

Answer

CEO Patrick Goepel listed several drivers for H2 growth, including lapping ERTC comparisons, a growing contracted backlog, ramping partnerships, and cross-selling momentum. CFO John Pence explained that costs peaked in Q1 after hiring ahead of revenue, and the cost structure is expected to be relatively flat going forward, which should provide operating leverage as revenue grows.

Gregory Gibas asked if the 2025 guidance assumes the large, delayed tax deals will be recognized starting in Q1. He also inquired about the organic growth expectations implicit in the Q4 and 2025 guidance, and the strategy behind the HireClick acquisition.

Answer

CFO John Pence and CEO Patrick Goepel clarified that revenue from the large deals will be recognized throughout 2025 as they are implemented, not all at once in Q1. Pence estimated high-single-digit organic growth for Q4, while Goepel projected 12-13% organic growth for 2025, excluding new M&A and float headwinds. Regarding HireClick, President Eyal Goldstein and Goepel explained it addresses a key client need—hiring—and integrates with Asure's core HR compliance offerings to create a stronger value proposition.

Gregory Gibas of Northland Capital Markets inquired about the expected business impact from tariffs and the company's mitigation strategies. He also asked for the key assumptions underlying the 2025 guidance and FGI's confidence in its BPC strategy to outperform a flat market.

Answer

President and CEO, David Bruce, explained that FGI is navigating the fluid tariff environment by collaborating with suppliers and customers and actively diversifying its sourcing, drawing on past experience. Regarding the 2025 outlook, Bruce stated that while the overall market is expected to be flat, FGI's growth guidance is driven by incremental gains from new programs and market expansion through its BPC strategy, giving them confidence in outpacing the industry.

Gregory Gibas of Northland Securities asked for the rationale behind reiterating guidance, the current trend and outlook for freight rates, and an update on the company's market penetration strategy in India.

Answer

President and CEO David Bruce explained that guidance was maintained because performance is tracking to expectations, with a stronger second half anticipated for sales and lower operating expenses. He acknowledged that rising freight rates are being monitored but are not a major concern, as many customers handle their own shipping. Regarding India, Bruce confirmed the opening of an office and showroom, the securing of one distributor with two more pending, and a planned official market launch in the fall to accelerate growth.

Gregory Gibas asked for more details on the wholesale expansion plans for the successful Mini Beans product line, clarification on Q4 retail metrics like conversion and transaction size, and the expected cadence for the 50 new store openings in 2025.

Answer

CEO Sharon John stated that Mini Beans have sold over 1.25 million units and are driving attachment sales and conversion. She confirmed the company is actively exploring wholesale opportunities, citing existing success with international partners like Giochi Preziosi in Italy. CFO Vojin Todorovic clarified the Q4 metrics, noting store traffic was up 3% and dollars per transaction improved, though there was some softness in conversion. He also explained that the 50 net new locations planned for 2025 would be back-half weighted, contributing to the expected 20% growth in the Commercial segment.

Gregory Gibas from Northland Securities asked for more detail on the positive trends in the four key store metrics, the drivers behind the increased new store guidance, and for clarification on the updated full-year SG&A outlook.

Answer

CFO Vojin Todorovic confirmed that all four store metrics (traffic, conversion, AUR, UPT) were positive, highlighting a 3% traffic increase against a national decline, driven by the successful Halloween collection. CEO Sharon John attributed the higher store count guidance to accelerated openings by successful international partners, particularly in Italy. Vojin Todorovic clarified that the full-year SG&A forecast was raised to be slightly above 2023 levels due to increased medical insurance costs and wage pressures.

Gregory Gibas inquired about the cadence of new store openings for the remainder of the year and the geographic breakdown of the new stores added in Q2. He also requested color on the brick-and-mortar same-store sales performance, acknowledging the complexities from new openings and declining web demand.

Answer

CFO Vojin Todorovic stated that the goal is to open the remaining new locations as early as possible to capitalize on the holiday season, with growth focused on partner-operated stores both domestically and internationally. While not providing a specific same-store sales metric, he offered color by explaining that existing stores saw improvement due to a favorable calendar shift and that store sales would have been even stronger if not for the decline in web demand, as stores fulfill a significant portion of online orders.

Gregory Gibas asked about the status of the $25-$30 million cost savings plan, when the savings would be fully realized, how to account for the upcoming $14-$16 million Q4 charge, and for a more specific launch timeline for the new Tetris title.

Answer

CEO Andrew Pascal confirmed the workforce reduction was underway and that all cost-saving measures should be implemented by year-end. CFO Scott Peterson explained the Q4 charge will be an add-back for adjusted EBITDA, with half being non-cash impairment and half cash severance. Regarding the new Tetris title, Pascal was reluctant to give a specific date, stating that while an early 2025 launch is possible, it depends on the product's optimization cycle.