Exhibit 99.1
COLLECTORS UNIVERSE ANNOUNCES FOURTH QUARTER AND FISCAL YEAR 2006 RESULTS
NET REVENUES UP 10% YEAR-OVER-YEAR AND 25% QUARTER-OVER-QUARTER
NEWPORT BEACH, CA - September 13, 2006 -- Collectors Universe, Inc.
(NASDAQ: CLCT), a leading provider of value-added authentication and grading
services to dealers and collectors of high-value collectibles and to sellers and
purchasers of diamonds, colored gemstones and other high value assets, today
announced financial results for the fourth quarter and fiscal year ended June
30, 2006.
OPERATING RESULTS
Fourth Quarters Ended June 30, 2006 and 2005. Net revenues increased
25% to a record $10.6 million for the three months ended June 30, 2006, compared
to $8.5 million for the year ago quarter. Operating income for the fourth
quarter of fiscal 2006 was $939,000 compared with $1.2 million for the fourth
quarter of fiscal 2005 and income before taxes in the fourth quarter of 2006 was
$1.5 million compared with $1.7 million in the fourth quarter of 2005. Income
from continuing operations for the fourth quarter of 2006 was $777,000, or $0.09
per diluted share, compared to $1.0 million, or $0.12 per diluted share, for the
fourth quarter of last year, while income from discontinued operations was
$127,000, or $0.01 per diluted share, for the fourth quarter this year compared
to $139,000, or $0.01 per diluted share, for the fourth quarter of last year.
Net income was $904,000, or $0.10 per diluted share, for the fourth quarter of
2006 compared to $1.2 million or $0.13 per diluted share for the same period of
the prior year.
Fiscal Years Ended June 30, 2006 and 2005. Fiscal year 2006 net
revenues increased 10% to $36.9 million, from $33.6 million for fiscal 2005.
Operating income for fiscal 2006 was $3.8 million compared with $7.0 million in
fiscal 2005 and income before taxes was $6.1 million in fiscal 2006 compared to
$7.9 million in fiscal 2005. Income from continuing operations for fiscal 2006
totaled $3.4 million, or $0.39 per diluted share, compared to $4.8 million, or
$0.64 per diluted share, for fiscal 2005. Income from discontinued operations
for fiscal 2006 totaled $296,000, or $0.03 per diluted share, compared to
$60,000, or $0.01 per diluted share, for fiscal 2005. Fiscal 2006 net income was
$3.7 million, or $0.42 per diluted share, compared with fiscal 2005 net income
of $4.8 million, or $0.65 per diluted share.
Revenues. Revenue growth, in both the fourth quarter and fiscal year
ended June 30, 2006, was primarily attributable to increases in the number of
collectibles units authenticated and graded in both those periods, as compared
to the corresponding periods of 2005, including our new diamond and currency
grading businesses and (ii) service related revenues generated by other
businesses that we acquired in the first half of 2006, including Certified Coin
Exchange (CCE).
Operating Income. Operating income for the fourth quarter and fiscal
year 2006 was reduced primarily by expenses incurred in the integration,
infrastructure build and marketing re-launch of Company's GCAL diamond division
and by stock based compensation (which was not required to be recognized as an
expense in 2005). GCAL incurred an operating loss of approximately $870,000 in
the fourth quarter and approximately $1.5 million for fiscal 2006 which, for the
year, consisted of approximately $600,000 in sales and marketing expenses and
approximately $900,000 of general and administrative costs, including
approximately $185,000 in non-cash expenses (principally depreciation and
amortization of intangibles). Stock based compensation was $272,000 in the
fourth quarter and $670,000 for the year ended June 30, 2006. In fiscal 2006,
the Company also incurred additional infrastructure costs (which included
investment in information technology systems, personnel and additional space) of
approximately $170,000 in the fourth quarter and approximately $630,000 for the
year, when compared to similar expenditures during the same corresponding
periods of 2005, to support the growth of its business. Sarbanes-Oxley and
accounting compliance costs increased in fiscal 2006, compared to the prior
year, by approximately $130,000 in the fourth quarter and by approximately
$400,000 for the year.
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Collectors Universe, Inc.
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FINANCIAL CONDITION AND LIQUIDITY
At June 30, 2006, cash and cash equivalents totaled $52.1 million
compared with $65.4 million at June 30, 2005.
This $13.3 million reduction was primarily attributable to the use of
approximately $14.6 million of cash to fund four acquisitions during fiscal
2006, partially offset by cash generated from operations in fiscal 2006. In
addition, the Company used cash of approximately $2.6 million to make
repurchases of its common stock and $674,000 to pay its first dividend to
stockholders pursuant to the cash dividend policy adopted by the Board of
Directors, which calls for cash dividends of $0.08 per share per quarter. The
Company has no long-term debt and continues to be able to fund operations with
internally generated cash flow. Total stockholders' equity was $71.9 million at
June 30, 2006, compared with $70.6 million at June 30, 2005.
COMMENTARY AND OUTLOOK
"Strong, consistent demand continued throughout fiscal 2006 in each of
our collectibles markets, driving record unit performance metrics and record
revenues, even though we experienced the partial loss of volume from one of our
larger customers early in the fiscal year due to a serious illness encountered
by its owner," said Michael Haynes, Chief Executive Officer. "Our higher general
and administrative expenses reflect, in part, the non-capitalized portion of the
re-investment of our profits into technology, infrastructure and the integration
of new acquisitions to position ourselves for future growth. The increased
selling and marketing expenses were the result of our emphasis on marketing and
promotional programs, along with the re-launch and re-positioning in the fourth
fiscal quarter of GCAL, our newly acquired diamond grading business. We also
initiated the recognition of stock-based compensation expense in fiscal 2006
which, as a percentage of net revenues, increased our cost of sales by
approximately 1% and our general and administrative expenses also by
approximately 1%.
"With the acquisitions of CoinFacts.com in July 2005, and with very
little additional technology investment, we increased the depth to our coin
related websites and increased our advertising revenue with the corresponding
increase in web page space for banner advertising. The acquisition of Certified
Coin Exchange, an online bid/ask market in certified coins, in September 2005,
provided a mature business with good cash flow, and using the business model, we
plan to extend the online trading to many of our other collectibles markets. We
have begun technology upgrades on the CCE model and expect that we will extend
CCE's business into at least one new market in fiscal 2007. The key acquisition
of GCAL, the diamond grading business, in November 2005, along with the purchase
of the Gemprint diamond identification `fingerprinting' technology, in December
2005, provided a high-quality foothold in the very large diamond jewelry market.
We are nearing completion of the technology and system upgrade and expansion of
capacity of GCAL, to position the diamond grading business for future growth,
driven by the marketing re-launch and continued stimulation of the marketplace
with our `push' and `pull' marketing strategies. With our recent acquisition of
AGL, we have now entered the colored gemstone market for third party
authentication and grading. Because the colored gemstone market and the diamond
market have similar retail distribution, we expect that we will gain some
synergy in marketing expenses as we launch AGL and continue to market GCAL. We
expect to re-invest in technology and systems upgrades for AGL and to incur some
integration cost; however, our expectation is that AGL will benefit from the
increased capacity of GCAL as both companies have similar operations. In
general, we expect that the addition of these businesses in our new jewelry
segment will further diversify the Company from collectibles markets into other
high value asset markets.
Collectors Universe, Inc.
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"Our outlook for fiscal 2007 includes increased revenues and operating
cash flows generated from the new businesses that we acquired in fiscal 2006 and
in the first quarter of fiscal 2007. We intend, during fiscal 2007, to continue
to accelerate our penetration within our recently entered diamond and colored
gemstone markets, and we plan to continue our efforts to identify additional
high-value collectibles or high-value asset markets to build our market presence
among dealers, buyers and sellers."
CONFERENCE CALL AND WEBCAST
Collectors Universe will host a conference call to discuss results
tomorrow, Thursday, September 14, 2006, at 1:00 p.m. Eastern/10:00 a.m. Pacific.
Interested parties may participate in the conference call by dialing
800-257-6566 or 303-262-2130, five to ten minutes prior to the initiation of the
call. A replay of the conference call will be available through Thursday
September 28, 2006, by dialing 800-405-2236 or 303-590-3000 and entering access
code 11071244#. A live webcast of the conference call will also be available on
the Collectors Universe website www.collectors.com under Investor Relations:
Earnings Conference Calls. The webcast will be archived for 12 months.
ABOUT COLLECTORS UNIVERSE
Collectors Universe, Inc. is a leading provider of value added services
to the high-value collectibles and diamond and colored gemstone markets. The
Company authenticates and grades collectible coins, sports cards, autographs,
stamps, currency, diamonds and colored gemstones. The Company also compiles and
publishes authoritative information about United States and world coins,
collectible sports cards and sports memorabilia, collectible stamps, diamonds
and colored gemstones. This information is accessible to collectors and dealers
at the Company's web site, www.collectors.com, and is also published in print.
CAUTIONARY STATEMENTS REGARDING FORWARD LOOKING INFORMATION
This news release contains statements regarding our expectations,
beliefs and views about our future financial performance which 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 future or conditional verbs such as "will," "would," "should,"
"could," or "may" or by the fact that such statements relate to future, and not
just historical, events or circumstances.
Due to a number of risks and uncertainties to which our business is
subject, our actual financial performance in the future may differ, possibly
significantly, from our expected financial performance as set forth in the
forward looking statements contained in this news release. Information regarding
those risks and uncertainties, and their possible impact on our future financial
performance, including, but not limited to the risks that our strategy to expand
into new collectibles and other high value asset markets, such as the diamond
and colored gemstone markets, and to offer new services in our existing markets,
will not be successful in enabling us to improve our profitability or may even
cause us to incur losses, is contained in our Annual Report on Form 10-K for our
fiscal year ended June 30, 2006 which we filed with the Securities and Exchange
Commission on September 13, 2006. Due to such risks and uncertainties, readers
are cautioned not to place undue reliance on the forward-looking statements
contained in this news release, which speak only as of its date, or to make
predictions about future performance based solely on historical financial
performance. We also disclaim any obligation to update forward-looking
statements contained in this news release or in our Annual or Quarterly Reports
filed with the Securities and Exchange Commission.
CONTACTS:
Joe Wallace
Chief Financial Officer
Collectors Universe
919-567-1245
jwallace@collectors.com
Brandi Piacente
Investor Relations
The Piacente Group
212-481-2050
brandi@thepiacentegroup.com
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Collectors Universe, Inc.
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COLLECTORS UNIVERSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
THREE MONTHS ENDED YEAR ENDED
------------------------ -----------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2006 2005 2006 2005
---------- ---------- ---------- ----------
Net revenues:
Grading, authentication and related services $ 10,620 $ 8,475 $ 36,914 $ 33,607
Cost of revenues:
Cost of grading, authentication and related services 4,312 3,152 14,890 12,239
---------- ---------- ---------- ----------
Gross profit 6,308 5,323 22,024 21,368
Operating expenses:
Selling and marketing expenses 1,532 953 4,918 3,534
General and administrative expenses 3,837 3,200 13,337 10,367
Settlement of lawsuit - - - 500
---------- ---------- ---------- ----------
Total operating expenses 5,369 4,153 18,255 14,401
---------- ---------- ---------- ----------
Operating income 939 1,170 3,769 6,967
Interest income, net 608 487 2,346 906
Other income (expenses), net (2) 44 22 26
---------- ---------- ---------- ----------
Income before provision for income taxes 1,545 1,701 6,137 7,899
Provision for income taxes 768 654 2,733 3,141
---------- ---------- ---------- ----------
Income from continuing operations 777 1,047 3,404 4,758
Income from operations of discontinued operations,
net of gains on sales of discontinued businesses
(net of income taxes) 127 139 296 60
---------- ---------- ---------- ----------
Net income $ 904 $ 1,186 $ 3,700 $ 4,818
========== ========== ========== ==========
Net income per basic share:
Income from continuing operations $ 0.09 $ 0.12 $ 0.40 $ 0.68
Income from operations of discontinued operations,
net of gains on sales of discontinued businesses
(net of income taxes) 0.02 0.02 0.04 0.01
---------- ---------- ---------- ----------
Net income $ 0.11 $ 0.14 $ 0.44 $ 0.69
========== ========== ========== ==========
Net income per diluted share:
Income from continuing operations $ 0.09 $ 0.12 $ 0.39 $ 0.64
Income from operations of discontinued operations,
net of gains on sales of discontinued businesses
(net of income taxes) 0.01 0.01 0.03 0.01
---------- ---------- ---------- ----------
Net income $ 0.10 $ 0.13 $ 0.42 $ 0.65
========== ========== ========== ==========
Weighted average shares outstanding:
Basic 8,433 8,479 8,473 7,013
Diluted 8,750 8,902 8,782 7,452
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Collectors Universe, Inc.
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COLLECTORS UNIVERSE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
JUNE 30,
------------------------
2006 2005
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 52,110 $ 65,439
Accounts receivable, net of allowance of $37 in 2006 and $38 in 2005 1,753 1,508
Inventories, net 437 436
Prepaid expenses and other current assets 1,010 1,102
Customer notes receivable, net of allowance of $16 in 2006 and $0 in 2005 3,797 1,560
Deferred income taxes 1,414 2,854
Receivables from sale of net assets of discontinued operations 196 63
Current assets of discontinued operations held for sale 83 365
---------- ----------
Total current assets 60,800 73,327
Property and equipment, net 1,897 857
Goodwill 9,799 -
Intangible assets, net 4,674 79
Note receivable from sale of discontinued operation 321 -
Deferred income taxes 342 1,051
Other assets 388 174
Non-current assets of discontinued operations held for sale - 46
---------- ----------
$ 78,221 $ 75,534
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 907 $ 753
Accrued liabilities 2,043 1,563
Accrued compensation and benefits 1,075 1,069
Income taxes payable 496 -
Deferred revenue 1,384 1,001
Current liabilities of discontinued operations held for sale 8 27
---------- ----------
Total current liabilities 5,913 4,413
Deferred rent 402 386
Other long-term liabilities - 169
Commitments and contingencies - -
Stockholders' equity:
Preferred stock, $.001 par value; 5,000 shares authorized;
no shares issued or outstanding - -
Common stock, $.001 par value; 45,000 shares authorized;
Shares issued: 8,475 in 2006 and 8,610 in 2005; - -
Shares outstanding (net of treasury stock): 8,350 in 2006 and 8,485
in 2005 8 9
Additional paid-in capital 76,909 78,594
Accumulated deficit (3,990) (7,016)
Treasury stock, at cost (125 shares) (1,021) (1,021)
---------- ----------
Total stockholders' equity 71,906 70,566
---------- ----------
$ 78,221 $ 75,534
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