May 9, 2011

Collectors Universe Reports Record Third Quarter Revenues and Operating Income

NEWPORT BEACH, Calif., May 9, 2011 /PRNewswire via COMTEX/ --Collectors Universe, Inc. (NASDAQ: CLCT), a leading provider of value-added authentication and grading services to dealers and collectors of high-value collectibles, today announced financial results for its third quarter ended March 31,

NEWPORT BEACH, Calif., May 9, 2011 /PRNewswire via COMTEX/ --Collectors Universe, Inc. (NASDAQ: CLCT), a leading provider of value-added authentication and grading services to dealers and collectors of high-value collectibles, today announced financial results for its third quarter ended March 31, 2011.

Operational and Financial Highlights:

  • Net service revenues increased 17% in this year's third quarter to a record $12.6 million (excluding product sales of $263,000), driven primarily by a 21% increase in coin service revenues to $8.8 million from $7.3 million in the prior year third quarter. The increase in coin service revenues was primarily the result of a $1.2 million or 40% increase in modern coin grading revenues and a $0.5 million or 206% increase in world coin grading revenues in the quarter.
  • The gross profit margin for this year's third quarter, excluding product sales, was 63% of revenues, compared to 61% for the third quarter of last year, reflecting the increased percentage of higher margin coin revenues in this year's third quarter and operating leverage in our business.
  • Operating income increased by 31% in this year's third quarter to a record $3.3 million from $2.5 million in the third quarter of last year. Our operating margin was 26% of revenues in the current third quarter, compared with 23% of revenues in the prior third quarter.
  • Income from continuing operations was $2.0 million, or $0.25 per diluted share, and $4.1 million, or $0.52 per diluted share, for the third quarter and nine months of fiscal 2011, compared to $2.4 million, or $0.32 per diluted share, and $5.8 million, or $0.76 per diluted share, for the third quarter and nine months of fiscal year 2010. The current period results reflect income tax provisions of $1.4 million for the quarter and $2.7 million for the nine months, compared to immaterial income tax provisions for the same prior year periods. The increase in the tax provision for 2011 resulted from the release of valuation allowances against deferred tax assets at June 30, 2010. Cash payments for taxes continue to be minimal.
  • The Company's cash position at March 31, 2011 was $21.2 million, compared with $20.3 million at June 30, 2010. The net cash generated of $0.9 million in the nine months ended March 31, 2011, comprised of cash generated from continuing operations of $8.2 million and proceeds received from the exercise of stock options of $0.9 million, net of payments of $7.4 million for cash dividends paid to stockholders, $0.5 million for discontinued operations and $0.3 million for capital expenditures.
  • On April 25, 2011, we announced our quarterly cash dividend of $0.325 per share, to be paid on May 27, 2011 to stockholders of record on May 13, 2011.

Commentary and Outlook

Michael McConnell, Chief Executive Officer, stated, "We are pleased to report to our stockholders, record operating results for the third quarter. Both industry fundamentals and internal efficiencies contributed to the strong performance. Further, the fourth quarter has started strongly with a continued high level of submissions from customers."

Conference Call and Webcast

Collectors Universe will host a conference call to discuss results on Monday, May 9, 2011 at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time. Interested parties may participate in the conference call by dialing 877-941-8610 or 480-629-9820, five to ten minutes prior to the initiation of the call. A replay of the conference call will be available through May 23, 2011, by dialing 800-406-7325 or 303-590-3030 and entering access code 4438578#. A live webcast of the conference call will also be available on the Collectors Universe website, www.collectors.com under Investor Relations: Earnings Conference Calls. The webcast will be archived for 12 months.

About Collectors Universe

Collectors Universe, Inc. is a leading provider of value-added services to the high-value collectibles markets. The Company authenticates and grades collectible coins, trading cards, event tickets, autographs, memorabilia and stamps ("collectibles"). The Company also compiles and publishes authoritative information about United States and world coins, collectible trading cards and sports memorabilia, collectible stamps, and operates its CCE dealer-to-dealer Internet bid-ask market for certified coins and its Expos trade show and conventions business. This information is accessible to collectors and dealers at the Company's website, http://www.collectors.com and is also published in print.

Cautionary Statements Regarding Forward-Looking Information

This news release contains statements regarding our expectations, beliefs or views about our future financial performance and trends in our business and in our markets, which constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can often be identified by the use of words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," or future or conditional verbs such as "will," "would," "should," "could," or "may."

Due to a number of risks and uncertainties to which our business and our markets are subject, our future financial performance may differ, possibly significantly, from our expected financial performance as set forth in the forward-looking statements contained in this news release. Information regarding those risks and uncertainties, and their possible impact on our future financial performance, include, but are not limited to, the following: our continued dependence on our coin business which generated more than 60% of our consolidated revenues and a substantial portion of our operating income in the nine months ended March 31, 2011, making our operating results more vulnerable to conditions that could adversely affect the precious metals and coin markets; the risk that general improvement in economic conditions in the United States and the high price of gold and silver, will not be sustainable such that economic conditions may even deteriorate and prices may decline, which could result in reductions in the demand for our collectible grading services and, consequently, in our revenues; the risk that the slow economic recovery will lead to longer-term changes in the spending habits of consumers and in the availability and use of credit by smaller businesses, such as collectibles dealers, to fund purchases of collectibles, which could lead to longer-term declines in collectibles commerce and, therefore, in the demand for our services; the risk that our strategy to offer new services in our continuing collectibles markets will not be successful in enabling us to improve our profitability or may even cause us to incur significant losses; the risk that it may become necessary for us to reduce the amount of, or suspend or discontinue the payment of cash dividends in the future, due to conditions or circumstances outside of our control, such as adverse economic or market conditions, as well as our future financial performance and the cash needs of our business in the future; and the risk that our continuing financial obligations with respect to two facilities in New York City, which we had leased for our subsequently discontinued jewelry businesses, will lead to reductions in cash flows and additional losses from discontinued operations in future periods.

Additional information regarding these risks and information regarding other risks and uncertainties to which our business is subject is contained in our Annual Report on Form 10-K for our fiscal year ended June 30, 2010 filed with the Securities and Exchange Commission. Due to these risks and uncertainties, readers are cautioned not to place undue reliance on the forward-looking statements contained in this news release or in our Annual or Quarterly Reports, which speak only as of their respective dates. We also disclaim any obligation to update or revise any of the forward-looking statements as a result of new information, future events or otherwise, except as may be required by law or NASDAQ rules.

Contact:Joseph Wallace Chief Financial Officer Collectors Universe, Inc. 949-567-1245 Email: jwallace@collectors.com

- tables to follow -

 

 

COLLECTORS UNIVERSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, except per share data)

(unaudited)


 

Three Months Ended

March 31,


Nine Months Ended

March 31,

 
 

2011

 

2010

 

2011

 

2010

 

Net revenues

$ 12,818

 

$ 10,790

 

$ 32,174

 

$ 28,971

 

Cost of revenues

4,907

 

4,204

 

12,577

 

11,576

 

Gross profit

7,911

 

6,586

 

19,597

 

17,395

 

Selling and marketing expenses

1,585

 

1,449

 

4,426

 

3,785

 

General and administrative expenses

3,013

 

2,602

 

8,469

 

7,814

 

Operating income

3,313

 

2,535

 

6,702

 

5,796

 

Interest and other income, net

36

 

35

 

88

 

87

 

Income before provision for income taxes

3,349

 

2,570

 

6,790

 

5,883

 

Provision for income taxes

1,381

 

129

 

2,735

 

54

 

Income from continuing operations

1,968

 

2,441

 

4,055

 

5,829

 

Net loss from discontinued operations, net of loss on sales of discontinued businesses, net of income taxes

-

 

(68)

 

(35)

 

(629)

 

Net income

$ 1,968

 

$ 2,373

 

$ 4,020

 

5,200

 








 

Net income per basic share:

               

Income from continuing operations

$ 0.25

 

$ 0.33

 

$ 0.53

 

$ 0.78

 

Loss from discontinued operations

-

 

(0.01)

 

(0.01)

 

(0.08)

 

Net income per basic shares

$ 0.25

 

$ 0.32

 

$ 0.52

 

$ 0.70

 
                 

Net income per diluted share:

               

Income from continuing operations

$ 0.25

 

$ 0.32

 

$ 0.52

 

$ 0.76

 

Loss from discontinued operations

-

 

(0.01)

 

-

 

(0.08)

 

Net income per diluted shares

$ 0.25

 

$ 0.31

 

$ 0.52

 

$ 0.68

 
                 

Weighted average shares outstanding:

               

Basic

7,727

 

7,420

 

7,672

 

7,459

 

Diluted

7,841

 

7,676

 

7,795

 

7,620

 

Dividends declared per common share

$ 0.325

 

$ 0.25

 

$ 0.95

 

$ 0.50

 

 
               

COLLECTORS UNIVERSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands, except per share data)

(unaudited)

 

March 31,


June 30,

 

ASSETS

2011

 

2010

 

Current assets:

       

Cash and cash equivalents

$ 21,259

 

$ 20,321

 

Accounts receivable, net of allowance of $69 at March 31, 2011 and

$75 at June 30, 2010

1,852

 

1,246

 

Inventories, net

1,159

 

708

 

Prepaid expenses and other current assets

893

 

919

 

Refundable income taxes

65

 

335

 

Deferred income tax assets

1,654

 

4,365

 

Notes receivable from sale of net assets of discontinued operations

50

 

96

 

Current assets of discontinued operations

28

 

52

 

Total current assets

26,960

 

28,042

 
         

Property and equipment, net

1,176

 

1,145

 

Goodwill

2,826

 

2,826

 

Intangible assets, net

1,860

 

2,184

 

Deferred income tax assets

3,807

 

3,807

 

Notes receivable from sale of net assets of discontinued operations

132

 

170

 

Other assets

225

 

330

 

Non-current assets of discontinued operations

182

 

182

 
 

$ 37,168

 

$ 38,686

 

LIABILITIES AND STOCKHOLDERS' EQUITY

       

Current liabilities:

       

Accounts payable

$ 1,194

 

$ 1,434

 

Accrued liabilities

1,451

 

1,495

 

Accrued compensation and benefits

1,961

 

1,804

 

Income taxes payable

184

 

197

 

Deferred revenue

2,538

 

1,926

 

Current liabilities of discontinued operations

785

 

923

 

Total current liabilities

8,113

 

7,779

 
         

Deferred rent

381

 

321

 

Non-current liabilities of discontinued operations

2,670

 

2,974

 

Commitments and contingencies

       
         

Stockholders' equity:

       

Preferred stock, $.001 par value; 3,000 shares authorized, none issued or outstanding

-

 

-

 

Common stock, $.001 par value; 20,000 shares authorized; 7,896

and 7,693 issued and outstanding at March 31, 2011 and at June 30, 2010,

respectively

8

 

8

 

Additional paid-in capital

69,861

 

68,134

 

Accumulated deficit

(43,865)

 

(40,530)

 

Total stockholders' equity

26,004

 

27,612

 
 

$ 37,168

 

$ 38,686

 
   
       

SOURCE Collectors Universe, Inc.

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