Exhibit 99.1
Collectors Universe Reports Fourth Quarter and Fiscal 2004 Financial Results
Fourth Quarter 2004 Net Revenues up 31%, Fiscal 2004 Net Revenues up 30%;
Continuing Operations EPS for Fourth Quarter 2004 at $0.20,
Fiscal 2004 at $0.44
NEWPORT BEACH, Calif., Sept 10 /PRNewswire-FirstCall/ -- Collectors
Universe, Inc. (Nasdaq: 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 fiscal year ended
June 30, 2004 with annual earnings of $1,730,000, or $0.27 per diluted share,
which included income from continuing operations of $2,798,000, or $0.44 per
diluted share, and a loss from discontinued operations of $1,068,000, or a
loss of $0.17 per diluted share. Net revenues were $26.4 million for the
fiscal year 2004, up $6.1 million, or 30%, from $20.3 million for the fiscal
year 2003.
Financial Highlights:
Fourth Quarter 2004
-- Net revenues, which consist of grading and authentication services,
increased 31%, as the number of collectible coins graded increased by
30% and the total number of collectible units graded increased by
17% overall, in each case as compared to the fourth quarter last year.
-- Gross profit margin from increased to 67% from 64% over the
corresponding period last year.
-- Income from continuing operations increased to $1.3 million, or
$0.20 per diluted share from $0.5 million or $0.08 per diluted share in
the fourth quarter of 2003.
-- Net income, inclusive of a loss from discontinued (collectibles sales)
operations of $534,000, increased to $785,000 from a net loss of
$1.3 million or $0.21 per diluted share in the fourth quarter of 2003.
Year Ended June 30, 2004
-- Net revenues increased 30% to $26.4 million from $20.3 million for
fiscal 2003, as the number of collectible coins graded increased by
35%, and the total number of collectible units graded increased by
16% overall, in each case as compared to fiscal 2003.
-- Income from continuing operations increased to $2.8 million, or
$0.44 per diluted share from $736,000, or $0.12 per diluted share, in
fiscal 2003.
-- Net income, inclusive of a loss from discontinued operations of nearly
$1.1 million, increased to $1.7 million, or $0.27 per diluted share
from a net loss of $10.4 million (inclusive of a goodwill impairment
charge of $1.4 million and a cumulative effect of accounting change of
$8.9 million).
-- The Company ended fiscal 2004 with a strong cash position of
$21.5 million.
Fiscal Fourth Quarter Results
Continuing operations consist primarily of grading and authentication
services for coins, sportscards, stamps and autographs.
Income from Continuing Operations and Net Income. Income from continuing
operations increased to $1.3 million, or $0.20 per diluted share, in the
fourth quarter of 2004 from $791,000, or $0.13 per diluted share for the
immediately preceding quarter of 2004 and $508,000 or $0.08 per diluted share
in the fourth quarter of 2003. However, discontinued operations, comprised of
our collectibles sales businesses, recorded a loss of $534,000 or $0.08 per
diluted share in the fourth quarter of fiscal 2004, as compared to a gain of
$201,000 or $0.03 per diluted share in the immediately preceding quarter of
fiscal 2004 and a loss of $1.8 million or $0.29 per diluted share in the
fourth quarter of 2003.
As a result, Collectors Universe recorded a net profit of $785,000, or
$0.12 per diluted share, for the fourth quarter of 2004, as compared to net
profit of $992,000 or $0.16 per diluted share, in the third quarter of fiscal
2004 and a net loss of $1.3 million, or $0.21 per diluted share, in the fourth
quarter of 2003.
Net Revenues. Net revenues increased 31% to $7.8 million in the fourth
quarter of 2004 from $5.9 million in the corresponding period last year.
Driving the year-over-year top-line growth was a 17% increase in total
collectible units graded to 649,000 units compared with 553,000 units for the
fourth quarter of 2003. The balance of the revenue increase was primarily due
to a shift in the mix of collectibles being graded to a greater proportion of
collectible coins, which carry a higher average grading fee than sportscards.
Gross Profit and SG&A. Gross profit increased 37% to $5.2 million in the
fourth quarter of fiscal 2004 from $3.8 million in the year-ago quarter, while
gross profit margin improved to 67% from 64% in the fourth quarter last year.
The Company continued to demonstrate progress in improving operating
efficiency. Selling, general and administrative expenses (SG&A) increased only
slightly to $3.5 million in the 2004 fourth fiscal quarter from $3.4 million
in the corresponding prior-year period, notwithstanding 31% increase in net
revenues. As a result, as a percentage of net revenues, SG&A declined to
45% in the fourth quarter of 2004 from 57%, in the same quarter last year.
Fiscal Year 2004 Results
Income from Continuing Operations and Net Income. Income from continuing
operations increased to $2.8 million, or $0.44 per diluted share, in the
twelve months ended June 30, 2004, from $736,000, or $0.12 per diluted share,
in the prior year. Discontinued operations incurred a loss of nearly
$1.1 million, or $0.18 per diluted share, in the twelve months ended June 30,
2004. As a result, we recorded net profits for fiscal 2004 of $1.7 million, or
$0.27 per diluted share.
By comparison, for fiscal 2003, the Company incurred a net loss of
$10.4 million, or $1.66 per diluted share. These results included a non-cash
goodwill impairment charge of $56,000 or $0.01 per diluted share, in
continuing operations recorded as the cumulative effect of a change in
accounting principle and a loss from discontinued operations of $11.1 million,
or $1.77 per diluted share, which included an impairment charge of
$1.4 million and cumulative effect of accounting change of $8.9 million.
Net Revenues. Net revenues increased 30% to $26.4 million in fiscal year
2004 from $20.3 million for fiscal 2003. The increase in fiscal 2004 resulted
from a 16% growth in total collectibles units graded and authenticated to
2,323,000 units in 2004 from 2,002,000 last year and a shift in the mix of
total items graded to a greater proportion of collectible coins.
Gross Profit and SG&A. Gross profit increased 37% to $17.3 million in
fiscal year 2004, from $12.6 million last year, reflecting the increase in
higher margin coin grading submissions relative to sportscard and stamp
grading submissions. Year over year, the gross profit margin rose to 65% in
fiscal 2004 from 62% in fiscal 2003, as the growth in revenues drove down the
fixed elements in cost of sales as a percent of total revenues. SG&A increased
by only 4% to $13.0 million in the 2004 fiscal period from $12.5 million in
the prior year, despite the 30% increase in net revenues in 2004. As a result,
as a percentage of net revenues SG&A improved to 49% in fiscal 2004 from 62%
in fiscal 2003.
Fiscal 2004 was a Turning Point
"Our 2004 fiscal year marked a turning point in our history as we made
strategic decisions to reposition the Company in order to take advantage of
our leading brands in the service business of grading and authenticating
collectibles and to exit the commerce business in the buying, selling and
auctioning collectibles," explained Chief Executive Officer Michael Haynes.
"Additionally, we achieved our objectives to quickly and efficiently sell our
discontinued operations during the second half of the fiscal year and in an
orderly fashion, liquidate substantially all of our inventories and collect
our receivables from those operations. As a result of all of these efforts, we
are reporting excellent annual earnings, and our continuing grading and
authentication operations, although currently smaller in annual revenue, have
recast the Company as one with lower volatility of revenues, lower balance
sheet risk, higher gross margin, excellent brand recognition and focused
management, all for the purpose of growing our continuing businesses."
Improved Financial Condition
At June 30, 2004, Collectors Universe had cash and cash equivalents of
$21.5 million compared with cash and cash equivalents of $4.5 million at
fiscal year end June 30, 2003. Continuing operations provided net cash of
$6.1 million in fiscal 2004, compared with $838,000 in the prior year. The two
main sources of the cash inflow in 2004 were $2.8 million net income from
continuing operations and $1.2 million of refundable income taxes. Investing
activities provided $1,852,000 in fiscal 2004 compared to cash used of
$294,000 in the prior year. Financing activities generated cash flows of
$924,000 compared to $16,000 in fiscal 2003.
In addition, discontinued operations provided $8.1 million cash in fiscal
2004 in contrast to a cash outflow of $1.0 million in 2003.
Inventories at June 30, 2004 totaled $452,000, as compared with
$180,000 at the end of fiscal 2003.
Assets totaled $33.7 million at June 30, 2004, compared with $32.3 million
at fiscal year end 2003, and assets of discontinued operations held for sale
accounted for $1.4 million and $16 million, respectively, of the total.
Total stockholders' equity was $29 million at June 30, 2004, compared with
$26.3 million at June 30, 2003. The Company currently has no debt.
Fiscal 2005 Outlook
Mr. Haynes stated, "As we stand at the threshold of the initial year of
our new strategy, we are enthusiastic about a return to our founding premise
of ending 'buyer beware' in the markets we serve and extending our excellent
value proposition inherent in our services into other markets for collectibles
and high value assets. Our cash position provides us with a significant
resource for enhancing our current market share and continuing our momentum
along with the prospect for careful and selective acquisitions that will
enable us to enter new markets where third party validation can add
significant value and facilitate transactions."
Conference Call and Webcast
Management will host a conference call and simultaneous webcast today at
8:00 a.m. Pacific/11:00 a.m. Eastern to discuss fourth-quarter and fiscal 2004
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 September 24, 2004, by dialing
800-642-1687 and entering the passcode 9987030.
About Collectors Universe
Collectors Universe, Inc. is the leading provider of 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 also compiles and publishes authoritative information about
collectible sportscards 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 and business 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, 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; a
lack of diversity in our sources of revenues and, more particularly, our
dependence on collectible coin grading for a significant percentage of our
total revenues, which makes us vulnerable to declines in revenues and income
should there be declines in collectibles grading submissions generally or,
more particularly, in collectible coin submissions which can be caused by a
decline in the value of precious metals over which we do not have control; and
our dependence on a limited number of key management personnel the loss of any
of which could adversely affect future financial performance. 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. In addition,
although we believe that our strategy to exit the commerce segment of our
business and focus substantially all of our resources on our grading and
services segment will better enable us to achieve improvements in the
profitability, there is no assurance that our strategy will prove to be
successful. Among other things, one consequence of our strategy is that there
will be a significant decline in our revenues. As a result, our profitability
will suffer if we are unable to reduce our general and administrative expenses
to bring them in line with our lower revenue base. Also, there is a practical
limit on the amount by which expenses can be reduced as a means of improving
profitability. As a result, our success in the future will depend as well on
our ability to achieve internal growth in our grading businesses and to find
and take advantage of opportunities to acquire other businesses that provide
value added services to the collectibles markets. There is no assurance that
we will be able to achieve such growth and growth by acquisition presents a
number of risks including an inability to integrate newly acquired businesses
into existing operations successfully and the potential that such acquisitions
will result in increased operating costs that will adversely affect operating
income and profits.
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.
COLLECTORS UNIVERSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
as of June 30, 2004, and June 30, 2003
(in thousands, except per share data)
(Unaudited)
June 30, June 30,
2004 2003
ASSETS
Current assets:
Cash and cash equivalents $ 21,454 $ 4,482
Accounts receivable, net of allowance for
doubtful accounts of $30 at June 30, 2004 and
$29 at June 30, 2003 790 454
Inventories, net 452 180
Prepaid expenses and other 781 638
Refundable income taxes 13 1,183
Deferred income taxes 1,174 1,066
Receivables from sales of discontinued businesses 1,611 --
Current assets of discontinued operations
held for sale 1,267 15,947
Total current assets 27,542 23,950
Property and equipment, net 1,045 1,262
Deferred income taxes 4,863 6,467
Other assets 165 194
Non-current assets of discontinued operations
held for sale 117 418
$ 33,732 $32,291
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 455 $ 917
Accrued liabilities 1,351 1,253
Accrued compensation and benefits 936 490
Deferred revenue 1,225 777
Current liabilities of discontinued operations
held for sale 276 2,144
Total current liabilities 4,243 5,581
Deferred rent 401 391
Other long-term liabilities 64 --
Commitment and contingencies
Stockholders' equity:
Preferred stock, $.001 par value;
5,000 shares authorized;
no shares issued or outstanding -- --
Common stock, $.001 par value; 40,000 shares
authorized; issued and outstanding 6,338
at June 30, 2004 and 6,255 at June 30, 2003 41,878 40,904
Accumulated deficit (11,833) (13,564)
Treasury stock, at cost (125 shares) (1,021) (1,021)
Total stockholders' equity 29,024 26,319
$ 33,732 $32,291
COLLECTORS UNIVERSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended Years Ended
June 30, June 30, June 30, June 30,
2004 2003 2004 2003
Net revenues $ 7,759 $ 5,933 $ 26,420$ 20,337
Cost of revenues 2,551 2,144 9,142 7,720
Gross profit 5,208 3,789 17,278 12,617
Selling, general and
administrative expenses 3,491 3,357 13,009 12,526
Operating income 1,717 432 4,269 91
Interest income, net 110 9 135 94
Other expenses (2) -- (25) (6)
Income before income taxes 1,825 441 4,379 179
Provision (benefit) for
income taxes 506 (67) 1,581 (557)
Income from continuing operations
before cumulative effect of change
in accounting principle $ 1,319 $ 508 $ 2,798 $ 736
Cumulative effect of change
in accounting principle,
net of income taxes of $27 -- -- -- (56)
Loss from discontinued operations,
net of gain on sales of
discontinued businesses in 2004,
net of income taxes (534) (1,796) (1,068)(11,119)
Net income (loss) $ 785 $(1,288) $ 1,730$(10,439)
Net income (loss) per basic share:
Income from continuing operations
before cumulative effect of change
in accounting principle $ 0.21 $ 0.08 $ 0.45 $ 0.12
Cumulative effect of change
in accounting principle,
net of income taxes -- -- -- (0.01)
Loss from discontinued operations,
net of gain on sales of
discontinued businesses
in 2004, net of income taxes (0.08) (0.29) (0.17) (1.79)
Net income (loss) $ 0.13 $ (0.21) $ 0.28 $(1.68)
Net income (loss) per diluted share:
Income from continuing operations
before cumulative effect of change
in accounting principle $ 0.20 $ 0.08 $ 0.44 $ 0.12
Cumulative effect of
accounting change,
net of income taxes -- -- -- (0.01)
Loss from discontinued operations,
net of gain on sales of
discontinued businesses in 2004,
net of income taxes (0.08) (0.29) (0.17) (1.77)
Net income (loss) $ 0.12 $(0.21) $ 0.27 $(1.66)
Weighted average shares outstanding:
Basic 6,201 6,131 6,170 6,205
Diluted 6,557 6,226 6,463 6,294
COLLECTORS UNIVERSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except share data)
(unaudited)
Years Ended
June 30,
2004 2003
OPERATING ACTIVITIES:
Income from continuing operations $ 2,798 $ 680
Adjustments to reconcile income from
continuing operations to net cash provided
by operating activities:
Depreciation and amortization 647 650
Impairment of goodwill 5
Loss on disposal of fixed assets 25 5
Cumulative effect of accounting change -- 56
Interest on note receivable from an officer -- (8)
Stock-based compensation 50 --
Provision for doubtful accounts 31 --
Provision for inventory write down 59 --
Deferred income taxes 1,496 (1,300)
Changes in operating assets and liabilities:
Accounts receivable (367) 264
Inventories (331) 4
Prepaid expenses and other assets (143) (216)
Notes receivable -- 22
Refundable income taxes 1,170 8
Other assets 29 13
Accounts payable and accrued liabilities (364) 639
Accrued compensation and benefits 446 (192)
Deferred revenue 448 98
Deferred rent 10 110
Deferred compensation 64 --
Net cash provided by operating activities 6,068 838
INVESTING ACTIVITIES:
Capital expenditures (538) (297)
Collections on notes receivables -- 3
Proceeds from sale of fixed assets 83 --
Cash received from sales of discontinued businesses 2,307 --
Net cash provided by (used in)
investing activities 1,852 (294)
FINANCING ACTIVITIES:
Proceeds from employee stock purchase plan 60 14
Proceeds from exercise of stock options 864 2
Net cash provided by financing activities 924 16
Discontinued Operations:
Net cash provided by (used in) operations
of discontinued operations 8,128 (1,025)
Net increase (decrease) in cash and cash equivalents 16,972 (465)
Cash and cash equivalents at beginning of period 4,482 4,947
Cash and cash equivalents at end of period $21,454 $4,482
CONTACT:
Mike Lewis
Chief Financial Officer
Collectors Universe
+1-949-567-1375
mlewis@collectors.com
SOURCE Collectors Universe, Inc.
-0- 09/10/2004
/CONTACT: Mike Lewis, Chief Financial Officer, of Collectors Universe,
+1-949-567-1375, or mlewis@collectors.com/
/Web site: http://www.collectors.com/
(CLCT)
CO: Collectors Universe, Inc.
ST: California
IN: CPR MLM ECM
SU: ERN CCA