Exhibit 99.1
Collectors Universe Reports Record Net Income in the First Quarter 2005
Q1'05 EPS of $0.19 up 171% Over Q1'04; Revenues From Continuing Operations
Increase 37%
NEWPORT BEACH, Calif., Nov. 4 /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 first fiscal quarter
ended September 30, 2004 with record quarterly earnings of $1,242,000, or
$0.19 per diluted share, which included income from continuing operations of
$1,311,000, or $0.20 per diluted share, and a loss from discontinued
operations of $69,000 ($0.01 per diluted share).
Contributing to the earnings growth were an increase in net revenues to a
record $8.2 million for the first quarter of fiscal year 2005, an increase of
$2.2 million, or 37%, from $6.0 million for the first quarter of fiscal year
2004 and an increase in the Company's gross profit margin from continuing
operations to 66% in the first quarter this year from 58% in the corresponding
quarter last year.
Financial Highlights
* First quarter revenues from continuing operations set a quarterly record
at $8.2 million and increased 37% over the corresponding period
last year.
* First quarter earnings set a quarterly record equal to $1,242,000,
up 25% over the previous record, which was set in the third quarter of
fiscal 2004 which ended March 31, 2004.
* First quarter earnings per share were up 171% over the corresponding
period last year.
* First quarter gross profit margins from continuing operations increased
to 66% from 58% over the corresponding period last year.
* First quarter 2005 collectible units graded increased 21% as compared to
the corresponding period last year.
Fiscal First-Quarter Results
Income from continuing operations increased to $1.3 million or $0.20 per
diluted share in the first quarter of 2005 from $384,000 or $0.06 per diluted
share in the same quarter of 2004. Discontinued operations recorded a loss of
$69,000 or $0.01 per diluted share in the first quarter of fiscal 2005
compared to a gain of $47,000 or $0.01 per diluted share, in the same quarter
of fiscal 2004. As a result, first-quarter 2005 net income increased to $1.2
million, or $0.19 per diluted share, compared with $431,000 or $0.07 per
diluted share in the first quarter of fiscal 2004.
Fiscal First-Quarter Results from Continuing Operations
Net revenues from continuing operations increased 37% to $8.2 million in
the first quarter of the current fiscal year from $6.0 million in the
corresponding period last year. Driving the year-over-year top-line growth
was our previously reported 21% increase in total collectible units graded to
663,000 units compared to 549,000 units for the fiscal 2004 period. The
balance of the revenue increase was primarily due to a shift in the mix of
customer grading submissions toward our faster turnaround services, which
carry higher average fees.
Gross profits from continuing operations increased 54% to $5.4 million in
the first quarter this year from $3.5 million in the year-ago quarter, while
gross profit margin grew to 66% from 58%. The previously mentioned revenue
mix shift boosted gross margin, as did the increase in net revenues, which
drove down the fixed element of cost of sales as a percent of total net
revenues and accelerated margin leverage.
The Company continued to demonstrate progress in improving operating
efficiency, as the 37% increase in net revenues substantially exceeded a 14%
increase in operating expenses during the first quarter of 2005. As a result,
operating expenses declined as a percentage of net revenues to 40% in the
first quarter this year from 46%, in the same quarter last year.
Focus on Growth of Grading Segment to Increase Profitability
"We continue to execute on our plans to increase revenue and units in our
existing markets and we have begun to see results from our plans to derive
revenues from additional services in these existing markets," commented Chief
Executive Officer Michael Haynes. "Our efforts have been rewarded with record
quarterly earnings and increased consumer acceptance and use of our services
in our growing markets of autographs and stamps. Continuing increases in coin
sales among dealers and collectors, which results in increases in coin grading
and authentication submissions, also contributed to the increase in our net
revenues during the first quarter this year."
Financial Condition
At September 30, 2004, Collectors Universe had cash and cash equivalents
of $25.0 million compared with cash and cash equivalents of $21.5 million at
June 30, 2004. Continuing operations provided net cash of $2.4 million during
the quarter ended September 30, 2004, compared with $254,000 in the same
quarter last year. This organically generated cash flow was derived primarily
from operating profits. The Company has no debt and continues to be able to
fund operations with internally generated cash flow.
Fiscal 2005 Outlook
"We have enjoyed superb execution of our plans thus far in fiscal 2005,
and we are encouraged by the responses in all of our markets to our efforts,"
reported Mr. Haynes. "We expect to see increased net revenues and
profitability in the December quarter this year, as compared to the same
quarter of fiscal 2004, even though we anticipate that our December quarter
this year will reflect the historical seasonality of the period, with units
and revenues lower than in the previous two quarters. With respect to our
expansion plans for new markets, we are diligently analyzing several
alternatives and we believe that we will be able to meet our objective of
entering a new collectible services market by the end of fiscal 2005."
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 first-quarter fiscal 2005
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 November 18, 2004, by dialing
706-645-9291 or 800-642-1687 and entering the passcode 1868606.
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, sports cards, stamps, and autographs.
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 financial performance 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, 2004, 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.
For further information, please contact: Mike Lewis, Chief Financial
Officer of Collectors Universe, +1-949-567-1375, mlewis@collectors.com; or
Brandi Piacente, Investor Relations of The Anne McBride Co., +1-212-983-1702,
ext. 208, bpiacente@annemcbride.com, for Collectors Universe.
- Financial Tables Follow -
COLLECTORS UNIVERSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
as of September 30 and June 30, 2004
(in thousands, except per share data)
(Unaudited)
September 30, June 30,
2004 2004
ASSETS
Current assets:
Cash and cash equivalents $25,047 $21,454
Accounts receivable, net of
allowance for doubtful accounts
of $33 at September 30, 2004 and
$30 at June 30, 2004 891 790
Inventories, net 370 452
Prepaid expenses and other 667 781
Refundable income taxes 23 13
Deferred income taxes 1,174 1,174
Receivable from sales of
discontinued businesses 810 1,611
Current assets of discontinued
operations held for sale 631 1,267
Total current assets 29,613 27,542
Property and equipment, net 967 1,045
Deferred income taxes 4,373 5,205
Other assets 183 165
Non-current assets of discontinued
operations held for sale 103 117
$35,239 $34,074
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $651 $455
Accrued liabilities 1,124 1,351
Accrued compensation and benefits 1,001 936
Deferred revenue 1,219 1,225
Current liabilities of discontinued
operations held for sale 143 276
Total current liabilities 4,138 4,243
Deferred rent 401 401
Other long-term liabilities 89 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 6,214
at September 30, 2004 and 6,338
at June 30, 2004 42,224 42,221
Accumulated deficit (10,592) (11,834)
Treasury stock (1,021) (1,021)
Total stockholders' equity 30,611 29,336
$35,239 $34,074
COLLECTORS UNIVERSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended
September 30, September 30,
2004 2003
Net revenues $8,195 $6,012
Cost of net revenues 2,826 2,549
Gross profit 5,369 3,463
Selling & Marketing expenses 957 838
General & Administrative expenses 2,287 1,928
Operating income 2,125 697
Interest income, net 64 7
Other expenses -- (7)
Income before income taxes 2,189 697
Provision for income taxes 878 313
Income from continuing operations $1,311 $384
Income (loss) from discontinued
operations net of gain on sales
of discontinued businesses, net
of income taxes (69) 47
Net income $1,242 $431
Net income per basic share:
Income from continuing operations $0.21 $0.06
Income (loss) from discontinued
operations net of gain on sales
of discontinued businesses,
net of income taxes (0.01) 0.01
Net income $0.20 $0.07
Net income per diluted share:
Income from continuing operations $0.20 $0.06
Income (loss) from discontinued
operations net of gain on sales
of discontinued businesses, net
of income taxes (0.01) 0.01
Net income $0.19 $0.07
Weighted average shares outstanding:
Basic 6,214 6,172
Diluted 6,569 6,288
Certain prior year amounts have been reclassified from administrative
expense to cost of net revenues to conform to the current year
presentation.
COLLECTORS UNIVERSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except share data)
(unaudited)
Three Months Ended
September 30,
2004 2003
OPERATING ACTIVITIES:
Net income from continuing operations $1,311 $384
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 142 174
Stock-based compensation expense -- 12
Provision for bad debts 2 2
Loss on disposal of fixed assets -- 7
Changes in operating assets and liabilities:
Accounts receivable (103) (88)
Inventories 82 (61)
Prepaid expenses and other assets 114 (16)
Refundable income taxes (10) 599
Other assets (18) 78
Deferred income taxes 832 --
Accounts payable 196 (663)
Accrued liabilities (227) (401)
Accrued compensation and benefits 65 37
Deferred revenue (6) 185
Deferred compensation 25 --
Deferred rent -- 5
Net cash provided by operating
activities 2,405 254
INVESTING ACTIVITIES:
Capital expenditures 64 (262)
Cash received from sale of net
assets of discontinued operations 801 --
Net cash provided by (used in) investing
activities 737 (262)
FINANCING ACTIVITIES:
Proceeds from employee stock purchase plan -- 16
Stock option exercise and related tax benefit 3 155
Net cash provided by financing activities 3 171
Discontinued Operations:
Net cash provided by operations of
discontinued operations 448 4,036
Net increase in cash and cash equivalents 3,593 4,199
Cash and cash equivalents at beginning
of period 21,454 4,482
Cash and cash equivalents at end
of period $25,047 $8,681
SOURCE Collectors Universe, Inc.
-0- 11/04/2004
/CONTACT: Mike Lewis, Chief Financial Officer of Collectors Universe,
+1-949-567-1375, mlewis@collectors.com; or Brandi Piacente, Investor Relations
of The Anne McBride Co., +1-212-983-1702, ext. 208, bpiacente@annemcbride.com,
for Collectors Universe/
/Web site: http://www.collectors.com/
(CLCT)
CO: Collectors Universe, Inc.
ST: California
IN: REA MLM
SU: ERN