Exhibit 99.1
NEWS BULLETIN RE: COLLECTORS UNIVERSE, INC.
FROM: P.O. Box 6280
Newport Beach, CA 92658
[LOGO] FRB WEBER SHANDWICK NasdaqNM: CLCT
FINANCIAL COMMUNICATIONS
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FOR FURTHER INFORMATION:
At the Company: At FRB | Weber Shandwick:
Michael Lewis Kristen McNally Brandi Piacente
Chief Financial Officer General Information Investor/Analyst Information
(949) 567-1375 (310) 407-6548 (415) 296-2245
lewism@collectors.com kmcnally@webershandwick.com bpiacente@webershandwick.com
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FOR IMMEDIATE RELEASE
September 29, 2003
COLLECTORS UNIVERSE REPORTS FOURTH QUARTER
AND YEAR END FISCAL 2003 FINANCIAL RESULTS
COMMENTS ON PRELIMINARY FIRST QUARTER 2004 FINANCIAL PERFORMANCE
NEWPORT BEACH, Calif., September 29, 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
reported financial results for the fourth quarter and fiscal year 2003 ended
June 30, 2003.
For the fourth quarter ended June 30, 2003, the Company reported a pre tax loss
of $2,646,000 or $0.43 per basic and diluted share and a net loss of $1,288,000
or $0.21 per basic and diluted share, as compared to pre tax income of $83,000,
or $0.01 per basic and diluted share and net income of $148,000 or $0.02 per
basic and diluted in the fourth quarter of fiscal 2002. Contributing to the net
loss in the quarter ended June 30, 2003 were (a) accounts receivable and
inventory reserves and write-downs totaling $538,000, (b) an increase in
selling, general and administrative expense associated with relocation expenses
of $315,000 relating to the move of the Bowers & Merena Division from Wolfeboro,
NH to Mandeville, LA and (c) a $1,477,000 non-cash goodwill impairment charge
recorded as an operating expense in that quarter, that had the effect of
writing-off the Company's remaining goodwill.
For the fiscal year ended June 30, 2003, the Company reported a pre-tax loss of
$3,627,000 or $0.58 per basic and diluted share, a net loss before a previously
reported $8,973,000, or $1.45 per share, non-cash goodwill impairment charge
(recorded as the cumulative effect of an accounting change in the first quarter
of fiscal 2003), of $1,466,000, or $0.23 per basic and diluted share, and a net
loss (which includes that non-cash goodwill impairment charge) of $10,439,000,
or $1.68 per basic and diluted share. By comparison, in fiscal 2002 we reported
a pre-tax loss of $3,945,000, or $0.62 per basic and diluted share, and a net
loss of $2,510,000 or $0.40 per basic and diluted share.
Fourth Fiscal Quarter Operating Performance
Net revenues for the fourth quarter of fiscal 2003 were $12,756,000, an increase
of 6% over net revenues of $11,981,000 for the fourth quarter of fiscal 2002.
Gross margin declined to $4,426,000 in the three months ended June 30, 2003 from
$5,671,000 in the three months ended June 30, 2002. Selling, general and
administrative expenses increased 7% to $5,622,000, or 44% of net revenues, in
the fiscal year ended June 30, 2003 from $5,273,000, or 44% of net revenues in
the three months ended June 30 2002.
Collectors Universe
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Fiscal Year 2003 Operating Performance
Net revenues increased 17% to $52,265,000 for the 12 months ended June 30, 2003
from $44,781,000 for the 12 months ended June 30, 2002. Collectible sales
revenue increased 21% to $31,999,000 in fiscal 2003 from $26,454,000 in the
prior fiscal year, while grading and authentication revenues increased by 11% to
$20,266,000 in the current fiscal year from $18,327,000 in fiscal 2002.
Collectible sales revenue represented 61% and 59% of total revenues, while
grading and authentication revenues represented 39% and 41% of total revenues
for fiscal 2003 and 2002, respectively. We believe that this increase was
fueled, at least in part, by an increase in purchases of precious metals and
collectibles by investors in response to continued uncertainties and volatility
in the securities markets and an increase in consumer confidence, particularly
in the first half of fiscal 2003. The 11% increase in grading and authentication
revenues in fiscal 2003 occurred primarily as a result of increases in coin and
sportscard grading submissions of 24% and 10%, respectively. However, the
increase in sportscard submissions was offset somewhat by a 24% decline in the
average price for sportscard grading, that was primarily attributable to an
increase in "bulk" grading submissions by sportscard manufacturers of newly
manufactured sportscards and a reduction in the number of "vintage" sportscard
submissions, which tend to use a higher priced grading service rate because of
the value of the sportscards.
The gross margin of the Company (gross profits as a percentage of revenues)
declined to 37% in fiscal 2003 from 41% in the prior fiscal year. The decline
was due primarily to (i) a decision, in the second half of the year to liquidate
older inventories of collectibles at bargain sales prices, (ii) an increase in
gold bullion sales, which were made as an accommodation to collectibles sales
customers at prices close to our cost of those sales, and (iii) charges to cost
of sales, increasing our inventory reserves for those items in inventory with
carrying cost in excess of current market value. The gross profit for grading
and authentication in fiscal 2003 did not change from the prior fiscal year.
As a percentage of revenues, selling, general and administrative expense
decreased to 41% in fiscal 2003 from 47% in fiscal 2002, primarily as a result
of reductions in overhead personnel and related expenses, offset by $315,000 of
expenses incurred in relocating our Bowers and Merena division from New
Hampshire to Louisiana. In fiscal year 2003, general and administrative expenses
also included a $235,000 charge for professional services in connection with
obtaining $671,000 in State Enterprise Zone tax credits.
Financial Condition
Net cash used by operations was $167,000 for fiscal 2003. At June 30, 2003, cash
and cash equivalents totaled $4,482,000 compared with $4,947,000 at June 30,
2002. Assets totaled $32,291,000 at June 30, 2003, compared with $45,509,000 at
June 30, 2002. Total stockholders' equity was $26,319,000 at June 30, 2003,
compared with $37,128,000 at June 30, 2002.
The declines in total assets and in stockholders equity were primarily
attributable to the non-cash goodwill impairment charge recognized in the first
quarter of the fiscal 2003 as a result of the Company's adoption of SFAS 142,
"Goodwill and Other Intangible Assets." and the non-cash goodwill impairment
charge recorded as an operating expense in the fourth quarter of fiscal 2003.
Total working capital was $18,369,000 at June 30, 2003 as compared to total
working capital of $18,877,000 at June 30, 2002. The Company currently has no
debt to a commercial bank or other lender.
Commentary and First Quarter Fiscal 2004 Outlook
Commenting on fourth quarter and fiscal 2003 results and fiscal 2004 outlook,
Chief Executive Officer Michael Haynes commented, "We are disappointed with the
our fourth quarter and fiscal 2003 operating results; however, we believe that
the actions we took that resulted in the balance sheet adjustments in the fourth
quarter of the year were prudent and necessary and we believe positions us to
increase the efficiency of our operations and achieve sustained profitability in
the future. We ended fiscal 2003 with prudent inventory levels."
Collectors Universe expects to report net profits for the first quarter of
fiscal 2004, which will end September 30, 2003, with both the collectibles
services and the collectible commerce segments of our business contributing to
the expected improvement in operating results. Contributing to the improved
operating results were two major
Collectors Universe
Page 3 of 5
auctions that we conducted during the first quarter of fiscal 2004. At the first
of the two auctions, which was held in conjunction with the August 2003 National
Sports Collectors Convention in Atlantic City, NJ, our Superior Sports Auctions
unit auctioned $1.22 million of sportscards and sports memorabilia, making that
auction one of the four largest conducted by Superior Sports Auctions since its
inception in 1999 and the largest since December 2001. At the second of the two
auctions, which was held in conjunction with the August 2003 American Numismatic
Association annual convention in Baltimore, MD, our Bowers & Merena unit
auctioned $12.77 million of rare coins and currency, making that auction the
largest conducted by Bowers and Merena since it became part of Collectors
Universe in 2000.
Conference Call and Webcast
Management of Collectors Universe will host a conference call with a
simultaneous webcast Wednesday, October 1, 2003, at 1:30 p.m. Pacific/4:30 p.m.
Eastern to discuss fourth quarter and 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, click on `Investor Home' under the Investor Information
menu, and find the webcast link under `Conference Calls.' An online replay will
be available for 12 months on www.collectors.com, or a phone replay will be
available through October 8, 2003, by dialing 303-590-3000 or 800-405-2236 and
entering the passcode 554868#.
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 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, 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 web site,
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; 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 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, 2003, as
filed with the Securities and Exchange Commission. 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.
- tables to follow -
Collectors Universe
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Collectors Universe, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended Twelve Months Ended
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June 30, June 30, June 30, June 30,
2003 2002 2003 2002
------- ------- ------- -------
Net Revenues $12,756 $11,981 $52,265 $44,781
Cost of revenues 8,330 6,310 33,112 26,517
------- ------- ------- -------
Gross profit 4,426 5,671 19,153 18,264
Selling, general and
administrative expenses 5,622 5,273 21,620 20,911
Amortization of goodwill 0 414 0 1,649
Impairment of goodwill 1,477 51 1,477 51
------- ------- ------- -------
Total operating expenses 7,099 5,738 23,097 22,611
Operating loss (2,673) (67) (3,944) (4,347)
Interest income, net 47 146 295 379
Other expense (income), net 20 (4) (22) (23)
------- ------- ------- -------
Income (loss) before
benefit for income taxes (2,646) 83 (3,627) (3,945)
Benefit for income taxes (1,358) (65) (2,161) (1,435)
------- ------- ------- -------
Income (loss) before
cumulative effect of
accounting change (1,288) 148 (1,466) (2,510)
Cumulative effect of
accounting change, net of tax 0 0 (8,973) 0
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Net loss ($1,288) $ 148 ($10,439) ($2,510)
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Income (loss) per share - basic
Before cumulative effect of
accounting change $ (0.21) $ 0.02 $ (0.23) $ (0.40)
======= ======= ======= =======
Cumulative effect of
accounting change $ -- $ -- $ (1.45) $ --
------- ------- ------- -------
Net income (loss) - basic $ (0.21) $ 0.02 $ (1.68) $ (0.40)
======= ======= ======= =======
Net Income (loss) per share - diluted
Before cumulative effect of
accounting change $ (0.21) $ 0.02 $ (0.23) $ (0.40)
======= ======= ======= =======
Cumulative effect of
accounting change $ -- $ -- $ (1.45) $ --
------- ------- ------- -------
Net income (loss) - diluted $ (0.21) $ 0.02 $ (1.68) $ (0.40)
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Weighted average shares outstanding
Basic 6,131 6,380 6,205 6,347
Diluted 6,131 6,380 6,205 6,347
Collectors Universe
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COLLECTORS UNIVERSE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
Assets
June 30,
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ASSETS 2003 2002
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Current assets:
Cash and cash equivalents $ 4,482 $ 4,947
Accounts receivable, net 4,652 7,291
Auction consignment advances 1,511 3,359
Inventories, net 8,541 8,166
Prepaid expenses and other 1,041 513
Notes receivable 1,474 481
Note receivable from related party - 381
Refundable income taxes 1,183 1,191
Deferred income taxes 1,066 648
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Total current assets 23,950 26,977
Property and equipment, net 1,332 1,736
Notes receivable, net of current portion 224 476
Goodwill, net - 14,961
Deferred income taxes 6,467 1,074
Other assets 318 285
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$ 32,291 $ 45,509
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 917 $ 878
Consignor payable 895 4,598
Accrued liabilities 1,583 736
Accrued compensation and benefits 773 967
Deferred revenue 1,413 921
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Total current liabilities 5,581 8,100
Deferred rent 391 281
Commitments and contingencies (note 13)
Stockholders' equity:
Preferred stock, $.001 par value; 3,000 shares authorized;
no shares issued or outstanding -- --
Common stock, $.001 par value; 30,000 shares authorized;
(issued and outstanding shares: 6,131 in 2003 and 6,382 in 2002) 25 26
Additional paid-in capital 40,879 41,248
Accumulated deficit (13,564) (3,125)
Treasury stock, at cost (125 shares) (1,021) (1,021)
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Total stockholders' equity 26,319 37,128
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$ 32,291 $ 45,509
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