Exhibit 99.1
SUPERIOR GALLERIES REPORTS RECORD REVENUES, RETURNS TO PROFITABILITY
o MANAGEMENT ATTRIBUTES RESULTS TO INTERNAL IMPROVEMENTS, PLUS
MARKET DEMAND DRIVEN BY ONGOING GEOPOLITICAL AND MACROECONOMIC
FORCES
o CONFERENCE CALL SCHEDULED FOR TODAY AT 1:30 P.M. PACIFIC TIME
Beverly Hills, California - (Business Wire) - May 16, 2006 - Superior
Galleries, Inc. ("Superior") (OTC Bulletin Board: SPGR) today reported financial
results for its fiscal year 2006 third quarter and the nine-month period ended
March 31, 2006.
For the 2006 third quarter, Superior Galleries recorded record
quarterly revenues of $15.1 million, an increase of $3.4 million, or 29%, from
$11.7 million for the prior-year third quarter, ended March 31, 2005.
For the nine months ended March 31, 2006, the Company reported revenues
of $36.3 million, an increase of $7.0 million, or 24%, over $29.3 million in the
corresponding period of the prior year.
Management attributed the year-over-year quarterly and nine-month
revenue growth to continued strong market demand for rare coins. Management
believes that this results in part from the continued rise in gold and silver
prices, driven by high oil prices, declining dollar exchange rates and other
global economic and political forces.
Management also credited the Company's website enhancements, which have
resulted in higher traffic and conversion rates, additional numismatic staff,
improved employee training and education, and continued development of its
Preferred Supplier and Exclusive Auctioneer relationship with Stanford Financial
member company Stanford Coins & Bullion. Stanford Financial, the Company's
largest shareholder, recommends that its investor clients diversify their
portfolios to include rare coins.
Superior Galleries recorded net income of $451,000, or $0.08 per basic
share, $0.05 diluted, for the quarter ended March 31, 2006, which included $0.01
in extraordinary income net of applicable taxes. The net income result compared
with a net loss of $203,000, or $0.04 per basic and diluted share, for the prior
year's third quarter. The third quarter 2006 extraordinary item was related to
the Company's March 31, 2006 repayment of the balance of a $1.9 million line of
credit involving a $50,000 discount for early repayment, which was classified as
an extraordinary gain.
For the nine months ended March 31, 2006, the Company reported a net
loss of $772,000, or $0.16 per basic and diluted share, which was net of the
extraordinary gain noted in connection with the quarter. This compared to a net
loss of $208,000, or $0.05 per basic and diluted share, in the corresponding
prior-year period.
"We believe there are both internal factors and external forces that
are driving our performance, and we believe they will continue to position us
for good financial results in coming quarters," commented Silvano DiGenova,
Chairman and CEO of Superior Galleries. "Our investments in the e-commerce
functionality of our web site, enhanced staff and executive resources and
higher-quality inventory, which we believe have lasting positive operational
effects, have returned us to profitability."
"Our internal improvements have positioned us to take advantage of
ongoing external factors including continued high oil prices, high precious
metals prices and overall geopolitical trends that strongly reinforce the wisdom
of including shrewdly selected rare coins in a well-balanced, well-hedged
investment portfolio. We believe that our market will continue to be robust and
that we are in an excellent position to continue reporting improved results
throughout calendar 2006 and beyond," Mr. DiGenova concluded.
CONFERENCE CALL TODAY AT 1:30 P.M. PACIFIC TIME
Superior Galleries will hold a conference call, today, Tuesday, May
16, 2006 at 1:30 p.m. Pacific Time to discuss results for the third quarter and
first nine months of fiscal 2006.
To participate in the conference call, please dial the following
number five to ten minutes prior to the scheduled conference call time: (866)
363-6071. International callers should dial (706) 679-0614. There is no pass
code required for this call.
If you are unable to participate in the call at this time, a replay
will be available on Tuesday, May 16 at approximately 3:00 p.m. PT, through
Tuesday, May 23 at 9:00 p.m. PT. To access the replay, dial (800) 642-1687 and
enter the conference ID number 9371027. International callers please dial (706)
645-9291 and enter the same conference ID.
Additionally, a transcript and audio webcast replay of the conference
call will be made available on the Superior Galleries web site at (www.sgbh.com)
following the conclusion of the live call.
Superior Galleries, Inc. is a publicly traded company, acting as a
dealer and auctioneer in rare coins and other fine collectibles. The firm
markets its products through its prestigious location in Beverly Hills,
California and the Company's web site at sgbh.com.
Included in this release are statements that are "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
including express and implied statements concerning future results of
operations, expansion plans and expectations. Although the company believes that
the expectations reflected in such forward-looking statements are reasonable, it
can give no assurance that the expectations reflected in such forward looking
statements will prove to be correct. These forward-looking statements are
subject to certain risks and uncertainties, including market and other
conditions that may affect the Company's ability to expand its auction and
dealer activities and control our operating costs, changes in investment
recommendations by financial advisors and risks identified in its SEC filings.
The company's actual results could differ materially from those anticipated in
the forward looking statements as a result of certain factors including sales
levels, operating costs, distribution and competition trends, consumer
preferences and other market factors. Past sales performance may not be
indicative of future results. No assurances are given that sales trends or sales
performance on behalf of consignors or customers will continue.
(FINANCIAL TABLES AND CONTACTS FOLLOW)
Superior Galleries, Inc.
Statements of Operations
(Unaudited)
(In thousands, except per share data
Nine Months Ended Three Months Ended
---------------------------- ----------------------------
March 31, March 31, March 31, March 31,
2006 2005 2006 2005
------------ ------------ ------------ ------------
Net sales $ 34,302 $ 27,700 $ 13,870 $ 10,933
Commission income 2,043 1,630 1,197 725
------------ ------------ ------------ ------------
TOTAL REVENUE 36,345 29,330 15,067 11,658
COST OF REVENUE 29,866 23,663 12,085 9,661
------------ ------------ ------------ ------------
GROSS PROFIT 6,479 5,667 2,982 1,997
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 6,872 5,594 2,404 2,098
------------ ------------ ------------ ------------
Income (loss) from operations (393) 73 578 (101)
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE)
Interest income 313 298 99 95
Interest expense (741) (575) (276) (196)
Other expense, net -- (3) -- (1)
------------ ------------ ------------ ------------
Total other income (expense) (428) (280) (177) (102)
------------ ------------ ------------ ------------
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES AND
EXTRAORDINARY ITEM (821) (207) 401 (203)
PROVISIONS FOR INCOME TAXES 1 1 -- --
------------ ------------ ------------ ------------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM (822) (208) 451 (203)
EXTRAORDINARY GAIN FROM EXTINGUISHMENT OF DEBT,NET
OF APPLICABLE TAXES 50 -- 50 --
============ ============ ============ ============
NET INCOME (LOSS) $ (772) $ (208) $ 451 $ (203)
============ ============ ============ ============
NET INCOME (LOSS) PER SHARE
Basic:
Income (loss) before extraordinary item (0.17) (0.05) 0.08 (0.04)
Extraordinary income net of applicable taxes 0.01 -- 0.01 --
------------ ------------ ------------ ------------
Net Income (loss) $ (0.16) $ (0.05) $ 0.09 $ (0.04)
============ ============ ============ ============
Fully diluted
Income (loss) before extraordinary item (0.17) (0.05) 0.04 (0.04)
Extraordinary income net of applicable taxes 0.01 -- 0.01 --
------------ ------------ ------------ ------------
Net Income (loss) $ (0.16) $ (0.05) $ 0.05 $ (0.04)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
Basic 4,820 4,563 4,820 4,685
============ ============ ============ ============
Fully diluted 4,820 4,563 8,977 4,685
============ ============ ============ ============
Superior Galleries, Inc.
Balance Sheets
(In thousands)
March 31, June 30,
2006 2005
(Unaudited)
----------- -----------
ASSETS
CURRENT ASSETS
Cash $ 471 $ 417
Accounts receivable, net of allowance for uncollectible
accounts of $148 (March 2006) and $122 (Jun. 2005) 5,208 4,969
Auction and customer advances 1,842 4,950
Inventories 9,425 8,713
Prepaid expense and other 328 346
----------- -----------
Total current assets 17,274 19,395
----------- -----------
LONG-TERM ASSETS
Property and equipment, net 409 220
----------- -----------
Total long-term assets 409 220
----------- -----------
TOTAL ASSETS $ 17,683 $ 19,615
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Line of credit - related party $ 10,850 $ 9,250
Line of credit -- 2,200
Accounts payable and accrued expenses 4,394 5,154
Notes payable to a related party 200 350
Notes payable 1,150 650
Series A stock redemption payable -- 275
----------- -----------
Total current liabilities 16,594 17,879
----------- -----------
LONG-TERM LIABILITIES
Notes payable to a related party, net of current portion 300 400
----------- -----------
Total long-term liabilities 300 400
----------- -----------
TOTAL LIABILITIES 16,894 18,279
=========== ===========
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, 693 shares undesignated, none outstanding Series B
convertible preferred stock, $1.00 par value, 3,400 shares
designated, 3,400 shares issued and outstanding with a
liquidation preference of $3,400 2,967 2,967
Series D convertible preferred stock, $1.00 par value,
2,000 shares designated, 2,000 shares issued and
outstanding with a liquidation preference of $2,000 1,931 1,931
Series E convertible preferred stock, $1.00 par value,
2,500 shares designated, 2,500 shares issued and
outstanding with a liquidation preference of $2,500 2,488 2,488
Common stock, $0.001 par value, 20,000 shares authorized; 4,808 and
4,820 shares issued and outstanding as of March 31, 2006 and June
30, 2005, respectively 5 5
Additional paid in capital 8,685 8,459
Accumulated deficit (15,287) (14,514)
----------- -----------
Total stockholders' equity 789 1,336
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 17,683 $ 19,615
=========== ===========
See the Company's filing with the SEC on Form 10Q for notes to financial
statements.
Contact:
Superior Galleries, Inc., Beverly Hills, California
Larry Abbott, Exec. V.P. and COO, at 310-203-9855 or larrya@sgbh.com
www.sgbh.com
Investor Relations Contacts:
CCG Investor Relations
Sean Collins, Partner, at 310-477-9800
www.ccgir.com
American Capital Ventures, Inc.
Howard Gostfrand, President, at 305-918-7000
or hg@amcapventures.com
www.amcapventures.com