Collectors Universe, Inc.
May 7, 2014
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Collectors Universe Reports Record Revenues in Third Quarter

Service Revenues Up 12% for the Quarter and 26% for the Nine Months

NEWPORT BEACH, Calif., May 7, 2014 (GLOBE NEWSWIRE) -- 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 of fiscal 2014.

Operational and Financial Highlights:

Commentary and Outlook

Robert Deuster, Chief Executive Officer, stated, "We are very pleased with the performance of our businesses this year and our third quarter results are evidence again of the strength of our core markets, especially in the U.S. With this as a backdrop, we continue to strive to demonstrate operating performance at a high level, leveraging our teams and capabilities to enhance our bottom line while investing in new long term growth opportunities, like China. We believe our coin brand is gaining increased recognition around the world for consistent quality of grade and that enhances the value of our customer's collectibles in the marketplace."

Conference Call and Webcast

Collectors Universe will host a conference call to discuss results on Wednesday, May 7, 2014 at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time. Interested parties may participate in the conference call by dialing 888-549-7880 or 480-629-9643, five to ten minutes prior to the initiation of the call. A replay of the conference call will be available through May 21, by dialing 800-406-7325 or 303-590-3030 and entering access code 4682492#. A live webcast of the conference call will also be available on the Collectors Universe website, www.collectors.com under Investor Relations: Events and Presentations. 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 and memorabilia ("collectibles"). The Company also compiles and publishes authoritative information about United States and world coins, collectible trading cards and sports memorabilia ("collectibles"), 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 year ended June 30, 2013 and the nine months of fiscal 2014, making our operating results more vulnerable to conditions that could adversely affect or cause stagnation in the prices of precious metals and collectible coins; the risks that the economic recovery may remain weak or stall, or that economic conditions may deteriorate as a result of events outside of our control, including international tensions that could cause volatility in the prices of gold and silver, which could result in reductions in the demand for our collectibles authentication and grading services and, consequently, in our revenues and operating results; the risk that the economic recession from 2008 to 2010 and the weakness of the economic recovery in the United States 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 risks that claims under our coin and trading card authentication and grading warranties will increase substantially and that the warranty reserves we maintain for such claims, will, as a result prove to be inadequate, which could cause our gross margin and operating results to decline or cause us to incur operating losses, the risk that our strategies of offering new services and expanding our collectibles authentication and grading business into new geographic areas, such as Europe and Asia will not be successful in enabling us to improve our profitability or may even cause us to incur significant losses; the risks and added complexity of conducting business overseas, 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, 2013 which we filed with the Securities and Exchange Commission on August 28, 2013. 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 filed with the Securities and Exchange Commission, 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.

 

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,
  2014 2013 2014 2013
Net revenues:        
Authentication, grading and related services $ 16,298 $ 14,488 $ 43,956 $ 34,763
Product Sales  10  --  68  550
   16,308  14,488  44,024  35,313
Cost of revenues:        
Authentication, grading and related services  6,061   5,178  16,548  13,480
Product sales  23   2  72  554
   6,084  5,180  16,620  14,034
         
Gross profit   10,224 9,308  27,404  21,279
Operating expenses:        
Selling and marketing expenses 2,465 2,174 6,779 5,542
General and administrative expenses 4,046 3,214 11,958 9,556
Total operating expenses 6,511 5,388 18,737 15,098
Operating income 3,713 3,920 8,667 6,181
Interest income and other expense, net  3 8 27 79
Income before provision for income taxes 3,716 3,928 8,694 6,260
Provision for income taxes 1,581 1,541 3,663 2,475
Income from continuing operations 2,135  2,387 5,031  3,785
Loss from discontinued operations, net of income taxes (16)  (7)  (61)  (38)
Net income $ 2,119 $ 2,380 $ 4,970 $  3,747
         
Net income per basic share:        
Income from continuing operations $ 0.26 $ 0.30 $  0.62 $  0.47
Loss from discontinued operations -- -- (0.01) --
Net income per basic share $ 0.26 $ 0.30 $ 0.61 $ 0.47
         
Net income per diluted share:        
Income from continuing operations $ 0.26 $ 0.29 $ 0.61 $ 0.47
Loss from discontinued operations -- -- (0.01) (0.01)
Net income per diluted share $ 0.26 $ 0.29 $ 0.60 $ 0.46
         
Weighted average shares outstanding:        
Basic 8,186 8,066 8,149 8,047
Diluted 8,274 8,101 8,219 8,099
Dividends declared per common share $ 0.325 $ 0.325  $0.975  $0.975

 

COLLECTORS UNIVERSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, except per share data)
(Unaudited)
 
ASSETS March 31,
2014
June 30,
2013
Current assets:    
Cash and cash equivalents $ 17,683 $ 18,711
Accounts receivable, net of allowance of $25 at March 31, 2014 and $27 at June 30, 2013 2,526 2,067
Inventories, net 1,821 1,656
Prepaid expenses and other current assets 1,184 964
Deferred income tax assets 1,328 1,328
Total current assets 24,542 24,726
     
Property and equipment, net 2,673 2,153
Goodwill 2,083 2,083
Intangible assets, net 1,296 1,477
Deferred income tax assets 2,003 2,003
Other assets 399 394
Non-current assets of discontinued operations 182 182
  $ 33,178 $ 33,018
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Accounts payable $ 1,985 $ 1,608
Accrued liabilities 2,568 2,121
Accrued compensation and benefits 3,327 2,680
Income taxes payable 908 760
Deferred revenue 2,736 2,345
Current liabilities of discontinued operations 832 802
Total current liabilities 12,356 10,316
     
Deferred rent 469 474
Non-current liabilities of discontinued operations 1,268 1,666
     
Commitments and contingencies    
     
Stockholders' equity:    
Preferred stock, $.001 par value; 3,000 shares authorized; no shares issued or outstanding  
--
--
Common stock, $.001 par value; 20,000 shares authorized; 8,792 and 8,509 issued and outstanding at March 31, 2014 and June 30, 2013, respectively. 9 9
Additional paid-in capital 76,111 74,578
Accumulated deficit (57,035) (54,025)
Total stockholders' equity 19,085 20,562
  $ 33,178 $ 33,018
 
 
COLLECTORS UNIVERSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
   
  Nine Months Ended
March 31,
  2014 2013
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income $4,970 $3,747
Discontinued operations 61 38
Income from continuing operations 5,031 3,785
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:    
Depreciation and amortization expense  907  769
Stock-based compensation expense  1,398  625
Provision for bad debts  19  10
Provision for inventory write-down  53  37
Provision for warranty  587  479
Gain on sale of property and equipment  (2)  (14)
Interest on note receivable  --   (6)
Change in operating assets and liabilities:    
Accounts receivable  (493)  (718)
Inventories  (218)  501
Prepaid expenses and other  (220)  (210)
Other assets  (4)  (167)
Accounts payable and accrued liabilities  300  (154)
Accrued compensation and benefits  647  (381)
Income taxes payable  148  1,547
Deferred revenue  390  356
Deferred rent  (5)  18
Net cash provided by operating activities of continuing operations  8,538  6,477
Net cash used in operating activities of discontinued businesses  (429)  (380)
Net cash provided by operating activities  8,109  6,097
     
CASH FLOWS FROM INVESTING ACTIVITIES:    
Proceeds from sale of property and equipment  7  37
Proceeds from sale of business  15  -- 
Capital expenditures  (1,125)  (529)
Capitalized software  (110)  (28)
Patents and other intangibles  (14)  (62)
Collection of notes receivable from discontinued operations  --   154
Net cash used in investing activities  (1,227)  (428)
     
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from exercise of stock options  292  28
Dividends paid to common stockholders  (8,046)  (8,171)
Payments for retirement of common stock  (156)  (8)
Net cash used in financing activities  (7,910)  (8,151)
     
Net decrease in cash and cash equivalents  (1,028)  (2,482)
Cash and cash equivalents at beginning of period  18,711  21,214
Cash and cash equivalents at end of period $17,683 $18,732
     
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:    
Income taxes paid during the period $3,479 $904
CONTACT: Joseph Wallace

         Chief Financial Officer

         Collectors Universe

         949-567-1245

         jwallace@collectors.com

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Source: Collectors Universe, Inc.

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