Exhibit 99.1
NEWS BULLETIN RE: COLLECTORS UNIVERSE, INC.
FROM: P.O. Box 6280
Newport Beach, CA 92658
{LOGO] Weber Shandwick NasdaqNM:CLCT
Financial Communications
FOR FURTHER INFORMATION:
At the Company:
Michael Lewis
Chief Financial Officer
(949) 567-1375
lewism@collectors.com
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At FRB | Weber Shandwick:
Kristen McNally
General Information
(310) 407-6548
kmcnally@webershandwick.com
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Brandi Piacente
Investor/Analyst Information
(415) 296-2245
bpiacente@webershandwick.com
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FOR IMMEDIATE RELEASE
April 28, 2003
COLLECTORS UNIVERSE REPORTS
THIRD QUARTER FISCAL 2003 FINANCIAL RESULTS
|X| Fiscal third quarter net revenue increase
|X| Fiscal third quarter EPS of $0.00
NEWPORT BEACH, Calif., April 28, 2003 -- Collectors Universe, Inc. (NasdaqNM:
CLCT), the leading provider of value-added grading and authentication services
and products to dealers and collectors of high-end collectibles, today announced
financial results for the third quarter of fiscal 2003 ended March 31, 2003.
Third Fiscal Quarter and Nine Month Operating Performance
Net revenues for the third fiscal quarter of 2003 increased 21% to $15,600,000,
from $12,900,000 in the year-ago quarter. For the nine months ended March 31,
2003, net revenues increased 20% to $39,500,000 from $32,800,000 in the nine
months ended March 31, 2002. Net revenues increased 38% from $11,300,000
reported for the second fiscal quarter of 2003. The net revenue growth was
primarily the result of (i) continued strength in the coin market, which
positively impacted each of Collectors' three business units: grading and
authentication services ("services"), auctions and direct sales, and (ii) sales
during the third quarter of the current year of gold bullion coins, which are
made periodically as an accommodation to direct sale customers and on which the
Company generates relatively low margins.
During the quarter ended March 31, 2003, gross margin was 33% as compared to 37%
for the corresponding quarter of the prior year. Gross margin for the nine
months ended March 31, 2003 was 37%, as compared to 38% for the same nine months
of fiscal 2002. The decline in gross margin in the three months ended March 31,
2003 was due to a combination of factors, the most important of which consisted
of (i) more rapid growth in the Company's auction and direct collectibles sales
business than in its higher margin grading and authentication service business,
which led to a change in the mix of revenues to an increased proportion of
revenues from collectibles sales, (ii) the gold bullion sales that occurred in
the third quarter of the current year, and (iii) the Company's revenue
recognition policies which require it to recognize the costs and other expenses
of auction sales in the accounting period when those auction take place, but
require the recognition of the revenues from those auction sales when the sale
proceeds are received, usually 45 days after an auction is conducted.
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The mix of revenues for the three months ended March 31, 2003 was 30% for
grading and authentication services, 10% for auctions and 60% for collectibles
sales, as compared to 36% for grading and authentication services 11% for
auctions and 53 % for collectibles sales in the same three months of fiscal
2002. By contrast, the mix of revenue for the nine months ended March 31, 2003
was 36% for grading and authentication services, 12% for auctions and 52% for
collectibles sales, as compared to 39% for grading and authentication services
and services, 12% for auctions and 49% for collectibles sales in the same nine
months of fiscal 2002. "The coins and currency market remained strong during our
fiscal third quarter, contributing to the growth of both our grading and
authentication services and collectibles sales segments," said Michael Haynes,
Chief Executive Officer of Collectors Universe. "Additionally, we have seen
growth, albeit more modest, in sales of other collectibles including currency,
sportscards, and sports and entertainment autographs and memorabilia.
"To build momentum in our higher margin grading business, we are executing on
several key initiatives that include broadening the scope of grading and
authentication services we offer our customers. We intend to offer advances to
coin dealers, secured by the coins they submit to us for grading and
authentication, that will provide an added incentive for them to have their
coins graded by us. On the commerce side of our business, we intend to provide
auction advances that are designed to increase consignments to our auctions,
increasing the number of auctions we conduct and producing live auctions at
major collectibles dealer conventions," stated Haynes.
Selling, general and administrative (SG&A) expense decreased as a percentage of
net revenues to 34% for the third fiscal quarter of 2003, compared with 41% in
the year-ago quarter. For the nine months ended March 31, 2003, SG&A expense
declined to 40% of net revenues from 48% in the first nine months of fiscal
2002. Those improvements reflect the increases in revenues and cost cutting
programs initiated during the second quarter of the current fiscal year.
Collectors Universe reported a net loss of $0.00 per basic and diluted share,
for the third quarter of fiscal 2003, compared with a net loss of $470,000, or
$0.08 per basic and diluted share, for the third quarter of fiscal 2002, and a
net loss of $449,000, or $0.07 per basic and diluted share, for the second
quarter of fiscal 2003. For the nine months ended March 31, 2003, the Company
reported a net loss (before the previously reported accounting charge of
$8,970,000 for goodwill impairment recorded in the first quarter of the current
fiscal year) of $180,000, or $0.03 per basic and diluted share. By comparison,
for the nine months ended March 31, 2001, the Company reported a net loss of
$2,656,000, or $0.42 per basic and diluted share. These improvements were
primarily the result of increases in net revenues and a slowing of the increase
in selling, general and administrative expenses, partially offset by declines in
gross margin, in the quarter and nine months ended March 31, 2003, as compared
to the corresponding prior year periods.
Financial Strength
Net cash provided by operations was $4,100,000 for the first nine months of
fiscal 2003. At March 31, 2003, cash and cash equivalents totaled $8,900,000
compared with $4,900,000 at June 30, 2002. Assets totaled $37,500,000 at March
31, 2003, compared with $45,500,000 at June 30, 2002. Total stockholders' equity
was $27,600,000 at March 31, 2003, compared with $37,100,000 at June 30, 2002.
The declines in total assets and in stockholders equity were primarily
attributable to the goodwill impairment charge recognized in the first quarter
of the current fiscal year as a result of the Company's adoption of SFAS 142.
Total working capital was $18,900,000 at March 31, 2003, and the Company
currently has no debt.
Through the services of an investment banking firm retained in March, the
Company is seeking to obtain a new bank credit facility or other institutional
debt financing in an amount up to $20 million to be used primarily for auction
advance lending. The Company presently has access to an undrawn $1.5 million
short-term credit facility with a commercial bank.
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Commitment to Growth and Profitability
"In addition to our specific strategies aimed at top line growth, we are taking
steps to enhance profitability through accelerated marketing efforts and
improved operating efficiencies," Haynes commented. "Over time, we intend to
expand our existing brands both vertically and horizontally through the addition
of services and products tailored to our four core markets. We intend to
leverage our world-class collectibles expertise and prominent brands to broaden
our reach in our targeted growth markets such as entertainment and sports
memorabilia, with an emphasis on fostering growth in fee-related businesses
within both the services and auctions sectors.
"In the meantime, we are continuing a steadfast focus on reducing our costs by
improving our administrative efficiencies. We expect to continue our trend
toward profitable operations and to complete our fiscal year with a modest
fourth quarter profit," Haynes concluded.
Conference Call and Webcast
Management of Collectors Universe will host a conference call with a
simultaneous webcast today at 1:30 p.m. Pacific/4:30 p.m. Eastern to discuss
third quarter fiscal 2003 operating performance. The conference call, featuring
Chief Executive Officer Michael Haynes and Chief Financial Officer Mike Lewis,
will be available live via the Internet. To listen to the live Internet webcast,
log on to the Company's web site at www.collectors.com and click on the link
under the Investor Information menu.
An online replay will be available for 12 months on www.collectors.com, or a
phone replay will be available through May 5, 2003, by dialing (800) 405-2236 or
(303) 590-3000 and entering the passcode 536692#.
About Collectors Universe
Collectors Universe, Inc. is the leading provider of products and essential
services to the high-end collectibles market. The Collectors Universe brands,
including Professional Sports Authenticator (PSA) are among the strongest and
best known in their respective markets. The Company grades and authenticates
collectible coins, sportscards, stamps, and autographs. The Company engages in
collectibles commerce, selling coins, currency, sportscards and sports
memorabilia, and entertainment memorabilia through direct sales, auctions,
catalogs, and the Internet. The Company also compiles and publishes
authoritative information about collectible sports cards and sports memorabilia,
United States and world coins, and entertainment memorabilia. This information
is accessible to collectors and dealers at the Company's website,
www.collectors.com, and is also published in print.
Forward-Looking Statements
This news release contains statements regarding our expectations about our
future financial performance that are "forward-looking statements" as defined in
the Private Securities Litigation Reform Act of 1995. Forward-looking statements
can be identified by the use of words such as "believe," "expect," "anticipate,"
"intend," "plan," "estimate," "project," or words of similar meaning, or future
or conditional verbs such as "will," "would," "should," "could," or "may." Our
actual results in the future may differ, possibly materially, from our current
expectations as set forth in the forward looking statements contained in this
release due to a number of risks and uncertainties. Those risks and
uncertainties include, but are not limited to: changes in general economic
conditions, including a potential further slowing of the economy and changes in
conditions in the collectibles markets in which we operate, such as a possible
decline in the popularity of some high-end collectibles, either of which could
reduce the volume of grading submissions and therefore the grading fees we
generate and the volume of collectible sales that we are able to make; increases
in competition for and difficulties in obtaining consignments of collectibles
that could reduce the size and profitability of our auctions, even if we succeed
in obtaining a larger credit facility to fund advances to consignors; potential
losses on owned collectible merchandise or the need to adjust these inventories
to fair market value through inventory write downs; our dependence on a limited
number of key management
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personnel the loss of any of which could adversely affect future financial
performance; and seasonality and potential fluctuations in quarterly operating
results and quarterly cash flows. Certain of these risks and uncertainties, in
addition to other risks, are more fully described in the Company's Annual Report
on Form 10-K for the fiscal year ended June 30, 2002. These forward-looking
statements are made only as of the date of this news release, and the Company
undertakes no obligation to update or revise the forward-looking statements,
whether as a result of new information, future events or otherwise.
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Collectors Universe, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
Unaudited
(in thousands except per share data)
Three Months Ended Nine Months Ended
------------------------ ------------------------
March 31, March 31, March 31, March 31,
2003 2002 2003 2002
--------- --------- --------- ---------
Net revenues $ 15,604 $ 12,856 $ 39,509 $ 32,799
Cost of revenues 10,519 8,036 24,782 20,206
-------- -------- -------- --------
Gross profit 5,085 4,820 14,727 12,593
Selling, general and administrative expenses 5,246 5,282 15,942 15,635
Amortization of goodwill and intangibles 19 411 56 1,234
-------- -------- -------- --------
Total operating expenses 5,265 5,693 15,998 16,869
Operating loss (180) (873) (1,271) (4,276)
Interest income, net 69 107 248 233
Other income 34 4 42 17
-------- -------- -------- --------
Loss before income taxes (77) (762) (981) (4,026)
Benefit from income taxes (52) (292) (803) (1,370)
-------- -------- -------- --------
Net loss before cumulative effect of change
in accounting principle (25) (470) (178) (2,656)
Cumulative effect of change in accounting principle,
net of tax -- -- (8,973) --
-------- -------- -------- --------
Net loss $ (25) $ (470) $ (9,151) $ (2,656)
======== ======== ======== ========
Loss per common share - basic
Before cumulative effect of accounting change $ 0.00 $ (0.08) $ (0.03) $ (0.42)
Cumulative effect of accounting change -- -- (1.46) --
-------- -------- -------- --------
Net loss - basic $ 0.00 $ (0.08) $ (1.49) $ (0.42)
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Loss per common share - diluted
Before cumulative effect of accounting change $ 0.00 $ (0.08) $ (0.03) $ (0.42)
Cumulative effect of accounting change -- -- (1.46) --
-------- -------- -------- --------
Net loss - diluted $ 0.00 $ (0.08) $ (1.49) $ (0.42)
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Weighted average shares outstanding:
Basic 6,131 6,253 6,162 6,250
Diluted 6,131 6,253 6,162 6,250
Collectors Universe
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Collectors Universe, Inc. and Subsidiaries
Consolidated Balance Sheets
As of March 31, 2003 and June 30, 2002
Unaudited
(in thousands)
March 31, June 30,
2003 2002
--------- --------
ASSETS
Current Assets:
Cash and cash equivalents $ 8,853 $ 4,947
Accounts receivable, net 8,015 7,291
Auction consignment advances 1,339 3,359
Inventories, net 7,170 8,166
Prepaid expenses and other 852 513
Notes receivable 550 481
Note receivable from an officer -- 381
Refundable income taxes 957 1,191
Deferred taxes 648 648
-------- --------
Total current assets 28,384 26,977
Property and equipment, net 1,438 1,736
Notes receivable, net of current portion 123 476
Goodwill, net 1,477 14,961
Intangible assets, net 37 93
Deferred income taxes 5,759 1,074
Other assets 240 192
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$ 37,458 $ 45,509
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 413 $ 878
Consignor payable 6,229 4,598
Accrued liabilities 753 736
Accrued compensation and benefits 799 967
Deferred revenue 1,271 921
-------- --------
Total current liabilities 9,465 8,100
Deferred rent 385 281
Stockholders' equity:
Preferred stock, $.001 par value; 3,000 shares authorized; no shares issued
or outstanding -- --
Common stock, $.001 par value; 30,000 shares authorized; issued 6,131 at
March 31, 2003 and 6,381 at June 30, 2002 25 26
Additional paid-in capital 40,880 41,248
Accumulated deficit (12,276) (3,125)
Treasury stock, at cost (125 shares) (1,021) (1,021)
-------- --------
Total stockholders' equity 27,608 37,128
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$ 37,458 $ 45,509
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