CLCT - Earnings call transcript Q3 2017

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Operator

Good afternoon, everyone, and thank you for joining us to discuss Collectors Universe's financial results for the first quarter ended September 30, 2017. With us today from Management are; Joseph J. Orlando, Chief Executive Officer; and Joseph Wallace, Chief Financial Officer. Management will provide a brief overview of the quarter and then open the call up for your questions. Comments made during today's call may contain statements regarding the company's expectations and its future financial performance, including forecasts and statements concerning business trends and profitability that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. in may results possibly actual company's the differ future materially. The due forecast number in those to this From uncertainties. call a and of risks of in uncertainties, are Certain Commission. the and to Exchange risks risks, other Securities in and more company's the addition described filings with fully these or conference to as statements forward-looking events update information, the statements, whether today's or result only the of company future the date as revise The and of undertakes a new made of are call, otherwise. no obligation forward-looking Please this recorded. note, may call be With to would now call that, like I to Joseph the turn over Orlando. Joe?

Joseph J. Orlando

First Thank setting our Conference the you, and Year. second the the year. fiscal commentary revenues, on the welcome to to New some highlights you for today's want XXXX. quarter quarter during of summarize the give the with closed record Quarter I tone We outlook into fiscal forward first the then and for quarter Call going

for service record established in year-over-year memorabilia a coins, ago. to were grading and core up our from a the performance which Our revenues, revenues fourth China operations. quarter $XX.X increase a businesses from authentication XX% in cards year million, Service in included record highs all-time a

of The even of the growth consider service of quarters is all QX, in a $X.X This few Our collectors. The Kong Asia, a you from into thousands total months the and the record QX in for in autograph it service traditionally slower hundreds In equates XX% past us of our nearly means division Collectors quarter. chance revenue success and high revenue in in for operations preferred Year-over-year, for generated revenues, Shanghai becoming XXX%. when more Hong the way offices. which more impressive figure coins market It is cycle. into XX% made have million $XX.X the showed local to that alone and primary company from was first was the Universe. business now goal a between new during up Asian that time international and only our one record, business revenue QX majority hands their our of grading coin for of PCGS-graded has combined product. the million been overseas. and the clearer to fact was our of our of gives gets revenues card and also feel the year. choice trading XX% the business previous closer was more consumers This not touch a This the any

of numbers As dealers from increasing have collectors we forward. as more demand our PCGS will and move brand the distributors, leverage

and PSA/DNA and PSA quarter. its QX line growth year the of bottom with Our seventh consecutive division finished top in

Dodgers that record Just Jackie the and Brooklyn recently, sports to to XXXX player selected piece broke Robinson one quarter historic society. the barrier contract, piece color memorabilia. set was for historic the document is expected this being forever and auctioned in changed game is any later This baseball, an the all-time of certify PSA/DNA that

consistent up gross finishing for which at the quarter, the and X% profit healthy see margins was to year. continue We previous overall, from XX%

share operations for share, million year, XX%. XXXX $X.X per up million year. million the previous to an or prior quarter Our operating was the fiscal from the increase was in $X.XX of income from QX in Income diluted $X.XX compared of for continuing $X.X first $X.X per

in QX, million company of units our unit in history. processed a Our any first up over X.X businesses. the for quarter primary record was prior year Collectors for an from XX% also Universe and strong all-time period growth quarter

in comes total Universe visits our every views. our information submission the of through venues is to page is average leader in grading, the collectors part unit as months growth is easier company plant traffic or and key than the website, continued initial devices. accessible position experienced came Collectors half not Asia program articles, the in mobile visitors, in be web prospective content, our of seed information. of like and as and for A cement offices, data using industry that from competitive PCGS in single and part area more collectibles unique effort current To to Registry XX our highs of virtually The population at And well. our trailing to strategy authentication impact business in segment only this information. While PSA part worldwide images, of the our the of online pricing Set use. make traffic growth but generated a driving which our large and leader collectibles form system established greatest our as long-term More collectibles from our also and to all-time

we All to content of leads company. in serve, markets the which our helps submissions for made effort ultimately in commerce create more the arena more the

As collectibles we of submitted for and us continues the authentication grading seen, increase. to have volume to

we the submitted this respond a of and our us annually efficient to our in manner. millions capacity good problem by to collectibles ability increasing to While need is a have, more to process

one. a space current to replace capability a increasing gives only Southern to to primary We new are our that from improve be team the of operation. our by not happy been customized standpoint, sheer into moving flow California office announce layout will of This new capacity the the facility our us the shortly facility has

goal achieve consolidating in a our overseas. the the In location will during be central to addition, China weeks in Shanghai also current we same offices coming to

it over let turn review Joe? Now performance. detailed financial to of more our a for Joe Wallace me

Joseph Wallace

Joe. Fiscal I'll results Quarter financial XXXX. the brief now a of the for you, First give of thank overview Yes,

first income $X.X $X.X million autographs For per the the XXXX. first or revenue or from for million operating coin million, first or from continuing $X.X per in compares and $X.XX an of fiscal revenues $X.X of This Directed diluted generated of XX% quarter, of million, income of increase XX%. after-tax the on million, the included diluted quarter quarter of of and share $X.X cards $XX.X record revenues or revenue million the and and million, of operations represented after-tax quarter record revenue of company increase operating of income to $XX.X share. earned income XX% $X.XX continuing increase operations $X.X million

by XX% XX record Our last out business, QX international XXX% the XX has in XXX% quarters. which operations to up the million QX to about growth $X.X China X% revenues XX% as consolidated of revenues in autograph the revenues coin $X.X in to including in quarter-over-quarter cards China, compared revenue or of revenues in million were of revenues or for increased $X.X XXXX. XXXX. in quarterly represented that The and quarter increase million quarter achieved

the and first coin reflects Our represents the business of our financial overall our business revenues importance XX% continued coin in performance. to quarter of

fact contrast, than costs. trade margin business in and to development XXXX. to in quarter were expenses slowest revenues our first quarter of this the represented Selling of in grading We overseas full in offices G&A as same the The Overall, China, year quarter. quarter of As the the X.X trend dollar was in occur and second the operating incurred in $X.X and the authenticating first varies in the terms China, XXXX the year's XX% travel costs, when for compensation of the our lower that This incentives China of our increased growth holidays was performance-based to in first performance related of costs in XXXX, million increased marketing year. the to first to between in this quarter. due XX% improved first XX% in fiscal to and quarter bonuses the to revenues business. to dollars of higher change in increase our typically to profit the quarter expect second the reflected compared an including quarter. income in compared to revenues the And to due represented of in nature quarter for that will previously quarter of respect revenues due the to this XXXX. increased XX% this quarter incentives operating were an particular, to be disclosed, the in as higher as activities. in attribute XX% that the year's stock-based for fiscal a show The quarter China. and authentication The the that quarter. second first in continue of QX as the XX%. in compared gross Recruitment QX XX% grading is that fiscal compared expenses was our quarters sorry, coins U.S. second period costs our show support – and seasonal business. mix the prior On the in first increase XX% quarter. second seasonally channel payroll XXXX, reflecting for XX% quarter typically margins of compared banking as XX% of revenues about quarterly the gross revenues that And of quarter last operating quarter. in increased With reflected expectations profit in and fiscal year's margin in quarter of winter XX% we quarter about our second year's year's million basis, this current trade quarter and And to and $X.X China increase

facility. XX, record on be your as connection November at cash balance in this September November $X.X With our included on Joe? $X.X million our XXXX in company's of thank operations cash our to shares I'd XXXX. The be stockholders XXXX, stockholders quarter million under that the to in XXXX. obtained million under which XX, we dividends costs $X.X XX you elevated operations XX, for business and October generated $X as September share, and quarterly announced million headquarter unsecured million borrowings costs per software position million, of used compared cash for of $X.X that, from new borrowings to the five-year, September fund the dividend attention. operations. loan construction discontinued facility XX. $X.X used continuing of million June by like of was primarily offset paid On in to of of will $XX.X million There million were Net loan to Turning generated of with capital $X $X.X for sheet. our company loan term will XXXX In capitalized a $X.X outstanding of expenditures $X.XX and partially with used paid term company's million, cash

Joseph J. Orlando

Joe. Thanks,

that I conclude, we is done like much this have foundation comments but fiscal make more year. for performance on we of a build rest Universe Before there upon Collectors lay XXXX. to record-setting would to continue the the for It a be that we overseas. and started few is to QX outlook was of QX remainder work to our imperative the

Our on our shows those believes markets, in can of the Management China. our especially, team the there impact company. in clearly, potential performance have And QX it

increased resulting results value. those high. revenue fiscal a into our financial in have the record shareholder gains show think I translated all-time XXXX staff how After with carried momentum that into performance, an ending QX,

our QX the has a due business, this company larger While operation, in we of space excited future. to move been seasonality our give the will the month. Despite to the to of requisite our grow facility the our to traditionally the slowest temporary quarter disruption about California X, are this later

we coming we to build sound the our deliver intensifying and increased long-term years, do value. level, we decisions so can global is making focus on to our shareholder By believe priority just that. in a Our can continue brands

the all possibility next as collectibles, economic I today, by state you precious governed the with of the Of look you to metals, the speaking our policies climate price for and the not us course, joining worldwide. such the of and in control U.S. expectations for of factors forward and changing trade in international overall several market primarily our quarter. are Thank

like would the you open questions to to call may any have. I Now

Operator

[Operator Instructions] no are Looks there at like this time. questions

Joseph J. Orlando

and We thanks, well, you everyone, forward to for us. Okay, next look listening joining quarter. talking with

Joseph Wallace

Thank you.

Operator

you program. for today's participation. does This Thank your conclude

any time. disconnect may at You

Collectors Universe (CLCT) 4 Nov 172017 Q3 Earnings call transcript