CLCT - Earnings call transcript Q4 2019

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Operator

Good afternoon, everyone, and I would thank you for joining us to discuss Collectors Universe's financial results for the Fourth Quarter and Fiscal year ended June 30, 2019.

As a reminder, this call is being recorded and with us today from management are Joseph J. Orlando, President and Chief Executive Officer; and Joseph Wallace, Senior Vice President and Chief Financial Officer. Management will provide a brief overview of the quarter and then open up the call up for your questions.

Comments made during today's call may contain statements regarding the company's expectations about 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 in may a this risks uncertainties. results from possibly number actual and forecast those call company's the differ future materially of The due to risks and filings company's the Securities addition Certain in Commission. with uncertainties Exchange these fully described risks to of other are and more the in information, the as result statements company to obligation undertakes only date events forward-looking whether today's a of future revise as statements forward-looking new The made conference otherwise. of of no update the are call, the or or and

And I'd Joseph that, like with call to over Orlando. turn to the Joe?

Joseph Orlando

fourth Thank our conference the you, and first XXXX. fiscal commentary on welcome to to some results you for today's want XXXX. quarter for of summarize the give the quarter I outlook into fiscal forward then and quarter call going

excellent ago. new established a finished $XX.X million $XX.X approximately overall Revenues year-over-year new in were and shipped company increase for $XX.X from year highwater X.XX also record The Universe million quarter million the QX QX. set a from results. units the up all-time fourth Collectors quarterly a for to the XX% mark million, a with figure

divisions positive our QX results of March, record in within improved performances a and PCGS the found setting both product a Like PSA were QX major from as perspective. finish year-over-year

X% division from the business autograph our Our XX% an overall trading of primary and card in in previous increase showed coin our business and year.

quarter show QX. last slightly or positive services PCGS XX% hand, in Bulk, down for up around other and QX the year, momentum or U.S. million combined. were was vintage $X.X to the $X.X PCGS the Within generated the on division, our continuing X% at million compared approximately

from raise a year's similar produced of was year QX year-over-year processing last Bulk X% fiscal helped results last PCGS XXXX to year, mixed $X.X customized in by ASP team International the QX. same U.S. to QX and the addition more versus quarter. created packaging PCGS In our up QX in Overall, million overall ASP the over PCGS this or versus units perspective. and

operation million, while our the XX%, million compared was increase finishing down Our Paris of set slightly up QX. an to the last Shanghai below nearly $X.X combined pace Hong a and were offices previous Kong about year $X.X

finish did approach backlog in standpoint. as our QX. the strategic quarter the international robust PCGS from with we entering a international coin remains with to a services tinker Interest continue solid

another and figure surpassed quarterly Turning to collectibles, brought new and our division, line year fiscal This $X.X with last business of million record top quarter million million. this all-time the XXXX PSA record and year-over-year performance over at another to of record PSA's new of quarter slightly out fiscal $X.X finished bottom-line ninth year's performance QX outstanding high and a approximately revenue PSA's part The record. June. included PSA/DNA setting of helped close our $X.X XXX,XXX bottom annual unit of shipped top growth. a the year for total its in $X.X increase collectibles. per consecutive million,

despite history This QX with submission so clear four in the highest Furthermore, backlog our customers. The and operational facing services. times ultimately demand expanding of our turnaround continued we to extended work PSA company continues the on the the for improve capacity, brand division's can its of the of increasing quarters. last the PSA indication closed power the a output in each is

Returning from up which for ago. the to margins year XX% was were quarter, overall XX% business, a profit our gross

which and per previous prior in to operations $X $X.X QX up for was from or the share income diluted is million year. $X.XX XXXX million of fiscal from the million was continuing operating Income $X.X the compensation million for $X.X stock-based Our year. fourth non-cash, $X.XX after share, compared per quarter

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

Joseph Wallace

operations diluted the share. company $XX.X of revenues Joe. you, $X.XX $X.X quarter income income diluted the will after-tax quarterly after-tax and record million per This and $X.X QX million $X.X million, overview quarter and now I XXXX. million, of $X.X income continuing of fiscal or the quarter operating fiscal income share continuing compares the earned from of $X.XX quarterly from of for of financial record operations In million, a fourth fourth give of thank operating the to Yes, generated XXXX. of results per revenues million, in brief or $XX.X fourth

For year revenues continuing million, of $XX.X This million share. after-tax record from from $XX.X generated million, diluted operating million $X.XX operations $XX.X of and share diluted income of continuing earned fiscal per operations $XX XXXX, annual the and XXXX. income or $X the million, company per $X.XX of $X.X million, compares of income fiscal of income to or operating for revenues record after-tax

assets compared provision of against tax valuation realization. in uncertainty of to higher due year's reflects The the non-cash quarters earlier to this tax allowance established quarter fourth China as a the deferred year

Our XX%. payment tax to continues about rate be

fourth autographs million represented cards revenue increases which and $X.X The XX% autographs included revenues record revenues The quarterly or revenue for tradeshows. $X.X coin million increase X% in modern U.S. and and million in increased in an or X%, quarter included or and from increase coins improved increase $X.X included XX% that to Cards business. of coins.

our about China decrease or XXXX, build to brands increase $X.X and any shows absence X% for business. $X.X $X.X In annual record quarter. nonbanking that channel up million increase X% revenue channel million were in or we of and XXXX fiscal XX% million cards partially $XX.X revenues discussed as by trade fiscal increased China, included in $X.X a the revenues. for to XX% the to revenues, revenues or significant The and fiscal a represented $X.X previously XX% revenues revenues autographs million in the or in U.S. the increase increase by U.S. modern coin revenues in in due million a of QX coin autograph The coin million the increase and banking in region. million cards year that of higher revenue for $X.X included China offset XXXX continue

represented in reflects that revenues the to in XXXX, performance. XX% decrease net business of business and financial coin fiscal our coin our importance continued overall revenues a our of Despite

coin our XXXX China, U.S. we in rebounded with to will X% continue maximize revenue fiscal focus we efforts In growing continue fiscal will XXXX in and business. Difficulty]. over a business on [Technical increase Our opportunities to our nonbanking… that

Operator

Please gentlemen, we the has moment the disconnected. as I try hold Just to speaker will redial try and. back a presenters. to ladies and unfortunately

Joseph Wallace

like some where $X.X we an The were further looks X% $X.X in included million revenues or increase in off, million million will we or coins. X% off from got increase will for represents continue think and just by trade quarterly U.S. for increase revenues counting coin I autographs $X.X XX% autograph revenue. cards it quarter which I Okay, XX% improved revenue The start increase so cut and of so The and disconnected, fourth on could includes that be increases duplication. I of include record coins modern or in revenue business. shows. there

of or in QX by a The coin the and China autographs, XXXX. in in quarter. coin for in to increase any U.S. banking $X.X million in Due revenue million offset cards and partially or fiscal X% revenues $X.X XXXX discussed revenues a by XX% million million includes million significant to about $X.X increase fiscal revenues, the China. or XX% or $X.X decrease increased million absence channels increased X% $X.X $X.X previously

to modern The continued autograph In trade XXXX cards continue build were our revenues importance reflects of financial that China, region. higher overall represented million of $XX.X increased representing annual includes coin XX% our in the revenues our record fiscal revenues. net business and of year revenues XX% The of and shows Despite fiscal increase coin that revenues business XXXX, the the nonbanking U.S. performance. revenues we brands as revenues the channel decrease in our and productiveness. in to for up coin

revenues Our fiscal our rebounded with the graded. which backlog cards to we do to expect With XXXX banking we business. we China, and focus autographs with opportunities in authenticated increase in growing in XXXX X% be will not and XX in over cards continue our a will that channels efforts on At maximize In business nonbanking fiscal this and U.S. channel of to revenues. our XXXX. fiscal generate business time, ended revenue to fiscal to continue respect coin from

We grading as increase expect to capacity. we in continue XXXX continued growth physical

higher profit margins XX% quarter to and year's gross and graded. fourth and mix XX% due operating margins this clients reflect higher periods greater authenticated autograph's and collectables both certain profit fees leverage of The XX% at the Asia, and higher for same gross as were of Due XXXX cards And divisions. cards charged to year. and XX% of percentages number and authenticated Those compared the cards the to for prior we our in achieved higher the fiscal services. for in

margin mix three June gross disclosed, As between there XX%. during XX% previously profit a of XX, seasonality due the the can and to variability be gross and basis, our the business. margins ended varied quarterly our On profit the and

were of this expenses same in XX% fiscal the Selling dollar XX% fourth In were marketing the and coins of and fiscal periods to as XXXX. quarter XXXX growing expenses autographs substantially the included part savings and of marketing and selling offset parts and for terms our by costs unchanged in business the XX% and at year's in revenues most and business. compared higher XX%

half expense year's of XXXX this about occurred due quarter management of coin about the year in payroll and and moving the in The exit company's the dollar improved fourth combined costs changes G&A offset of fiscal and litigation and savings of and that million. $X.X business performances million to fiscal in the million lower in three, of quarter XXXX. lease fourth XXXX. compared fiscal year of and $X.X $X.X XXXX Two, and reflected related staff increased incentives our in And of one in quarter fiscal this of the non-stock and lower primarily in revenues rising by savings compensation from a division million. partially nonrecurring reductions XX% expenses for to first fourth XX% XXXX the XX% of [indiscernible] as cost based management $X.X last year's of fiscal represented XX%

Adjusting expense, about of year's million for XX% The fiscal the represents represents compensation $XX.X operating quarter XX%. the XXXX. and noncash operating of and of the margin stock income margins resulting this based $X.X operating XX% the in million margin fourth XX% were an operating in in an for year quarter

balance XXXX cash down was dividends $XX.X as paid million compared included $XX.X $XX.X [ph] the million, June software was to Turing used generated million generated XXXX. term position sheet, and July at operations costs XX $XX.X stockholders will $XX.XX cash stockholders XXXX of million $X.X million XXXX partially $X.X quarterly and a dividend to used be March in fiscal loan. cash million paid pay at On $X.X company's June announced capitalized record XX. to we by from continuing on cash Net $X.X cash on of which capital at October expenditures company's our to the XXXX of August and offset share million million XX, of to per for

brief comment will Just that a new accounting impact us. on the rule

As statement. as XXXX accounting our amount filed rules the a in capitalize income million These sheet quarters. and don't The the at will SEC real on will the leases appear and same are X, with on July XX, new was that and for the and be XX-K our future balance right-of-use which liability any leases disclosed about liabilities effect $XX material effective to of liability. classified today, published we assets mostly $X.X assets will expect the September of million sheet our us related XXXX, balance our estate corresponding require about on current

for like attention. you With to your that, I'd thank

Joseph Orlando

Thanks Joe.

for In conclude, the quarter we make the fiscal few by line set QX QX, was top but like annual history. transitions, successful revenue company new Before revenue the The and outlook would for year. new a not Collectors as moving record. Universe high, in any of a QX In into achievement quarter I operating record income Universe XXXX primarily of of Collectors back strong the a our proved fiscal only set a year. a comments year and driven about March, forward a to close half first of

with In quarterly another new June, income high all-time operating and QX record. that a for the performance strong a setting company one, revenue followed

the reached inception. also a $XX milestone entire since certified month milestone new eclipsing to million same brands. in and to of the Collectors employees total million $XX both During certified addition current items Reaching former collectible is the Universe the power unparalleled staff, testament our a

as base. them the helping Of of company. is enough build it as much course, our be This is support would their customer of possible can't achievement thank none ours, this this us for without we unwavering and

committed future our services seek and but only Collectors the look this our Universe team us to expanding the wonderful ultimate mark, to vision enhancing to has can $XXX foundation million far, not ways we is the what taken head towards that the As be. also of new further to of

Over the set and continue made the registry our This service. program the core decision team XXXX. customer past year to our reinvest will management into refocus in business, from our of fiscal to

recently months provide In are includes meantime, the currency name technology. effort enhancing grading next with of company name we and when be that announced XXXX. in services Bank our new we PCGS our calendar grading to early system, In fiscal the to the get we and At will a but coming new services, QX into reacquiring domestically after intend operational name a to PCGS, in making fiscal concerted relaunched also PCGS the efficiency under our the which back that used continue business increase domestic Notes, second products international service is XXXX, of the year. half will grading the improve the

this grading is will momentum PCGS's for logical any only serve very The will coin the PSA international This business. the help marketplace continues. brand. in including confusion grading PSA the to service around At a for Gehrig's items million. again Not certified existing clear record numerous $XXX,XXX as banknote record baseball high-quality market once complement XXXX cards, photo Ruth, includes collectibles. Babe a recent a been Jack strong everything a from months which inscribed $X.X sold have of which complete Lou as to set for This in paid for sold Cracker prices signed up

and is as The Collectors Earlier PSA. Convention well. for Sports out largest this Chicago, as company PSA helped month, the in remains PSA to backlog it for the the blockbuster which turned showcase record attended a at a levels produce National be for industry. single the expected It record week

continues to international is the beginning. just PSA While business domestic grow, PSA

With investments to continues recorded very in region. brand past best enjoy visibility Japan, increased its PSA June our modest month single the as in this

We will business brand build manner we continue our of in very the approach international our disciplined as to overseas. a part

both and our X say have PSA past doubled, nearly X Phase for response the launching needless program annual Set members of users have and Since excellent. achievement over and Set’s several Registry to from growth the our rates been PCGS months, new ones for and existing new

experience, role Set creates. submission it in and brand commerce plays more generation Registry more development activity we The a of key The the such loyalty. the improve the and user

Looking years search streams ahead fiscal grow operations team the core that our businesses from our revenue committed to to customer company is enhance new technology, management continuing improving for to service to our in potential in reinvesting while to ability to to come. the could XXXX, by

economic state trade all the price international factors the as U.S., of policies course, collectibles of and the our Of governed for expectations metals, the the market several possibility and worldwide. the our overall changing control, primarily climate, such by of are not in in precious

joining you I forward for you with next look today, and quarter. speaking Thank to us

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

Operator

We’ll first Hugh Instructions] Hinton[ph] , private take go from a our investor, [Operator ahead. please question

Unidentified Analyst

into and ago? do you pricing level strength to will the Thank you. that years Do be hello, this, the think congratulations and targeting last to Yes, it had to get I able you XXs. able of think of to the couple you return I to XXs will have great that be was a noticed that? gross improved low you you that brand quarter. you the sort Do on the do back kind that’s the be since to high margin noticed in time think power

Joseph Orlando

of think Yes, point. we’re to you’ve question, answer good definitely and margin raised that think the absolutely do I shooting range for I gross -- mean, I we have really a

I add something that? offer would next areas and that power in brand in we think anything relation certain bit that's going can we have explore Joe, the our goal. to a do fiscal but the better our services to to leverage be you of we're year, over little certain to that that company

Joseph Wallace

Joe's is a but business business. getting correct. mean, profit think I and lower gross that operating PSA gross are profit No, leverage over time improving in margin, traditionally cards autograph had margin we’re and has our comments actually I that

or but to plus we XX% to plus committed time, upon profit XX% longer are lower than the we’re issue based yes, experiencing, margin. So the currently over would the but XX% we’re reflect XX% gross or term, although, a committed record revenues mix XX% higher that

Unidentified Analyst

the Do optimize think for how management kind you or about brings growth have of Okay. you the to do revenue that a value brand or that? plan

Joseph Orlando

mind re-asking plan are our is moving specifically talking forward don’t you you If what mean, you price…? question, the or about

Unidentified Analyst

strong getting you've deserve about do just the out you that Yes, that? you think super think pricing of to the optimize you do a make brand, how I got sure -- it's how are value you

Joseph Orlando

It’s a great question.

there's course trajectory a has of for answer growth no sort seen pretty what and we’ve now. but over example to there's, through decade almost PSA significant So with gone PSA past, this, magic the of

nine consecutive our years prices the and had the history Over year of top for yet raised line nine growth and the we’ve the years, division, backlog we company. every consecutive years, of we have biggest in ASP the have past raised nine bottom in

but balance any pushing between not one of obviously, a So, that there's price it's in not exact year. find , given never us too course, and it’s increases to up it an science, to hard perfect

for learned I marketing think quality going up, are all ask excellent, PSA little the bit well, else guess of long more. well, business, I the it of as as a your you way and side great, is the everything you're is the the a product well, on we've things going would doing I the Now, is if sum I of service think the division PCGS lot other can your is from

been think it's something looking I think our XX. in past, divisions leverage; time little that a brand look the leveraging for of because so power, in that for that bit forward, to to been utilize from XX that's has other and years, I the PSA one terms of learn we've reluctant PCGS maybe around

in for and premium products such our so a our sell We’re entrenched markets price.

we asking I wrong there's as where more it anything appropriate. thoughtfully, long with do bit don't for little a think As

the as especially real So, price there that cards. we is services and are to where offer certain dollar issue, relates it coins a lower

be but there that's out price forward we’re have areas something little other looking where careful markets, I move are yourself our next higher-end, bit so could of more, You year. about very items really not items, we as those talking where brand to think we’re at a to leverage our of that company vintage high-value we

Unidentified Analyst

you. Thank

Operator

I’ll -- Paul next York. Please And take ahead. our New [ph] from Saperstein at First question go first

Unidentified Analyst

Hi, for guys. the the Thank you very and the of question. call much

might but question increase questions, you headcount, that the one. think give on relative gross what you a this you Just to capacity to to type just technology of technology question, increase evolve all, expecting and/or other and goes the I around couple just can metrics sort the you improving or margins number grading more you the enhancing to both the capacity heads year on and a percentage of grading first it kind of midterm like and authentication follow-up just of in Can of of little some process how capacity, margin are of mentioned. and a also as increase about guys implementing talk that’s color be your and back

that all the kind concentration Other are with going just of investigations PWCC. two in around are questions the on revenue

to the Thank associated of the around just sheet? warranty and to are commentary investigation implications of there on balance potential the of have other you type any that, reserves you. and kind risks If point you with

Joseph Orlando

you. Got

So I'll question stab one. take a at

think frankly well. let I’ll here I chime in quite and Joe Wallace as

This grading I can we sort certain some on will think of what stages little operational technology in beginning the figure is too probably projects the of long-term process. impact stages it's upcoming if to of kinds a have out early trying incorporate to our margins. predict certain of at

guess I is to figuring be guess how are out successful determined. And I we

for we we’re how and believe it's Certainly think early So us that, we little as exactly of at there. look millions to I our improvements. for a moving We -- the speculate will completely units so be room there many through successful is

of we’re efficiency gain the though can at units we’re even look facility a any our small will especially size units a year. through millions are terms relatively we little every company so And – of make processing moving we of year one in many company you really millions of help overall our

I mind there are there how guess but Joe it gains or doubt anybody at past our much to where. to that I or our no done me this improper is think we be silos rid year here the So made, or is would or the inside silo for be what of this that we in would company. organization impact stage so the our have that of will had gotten exactly say over

receivers their this had a PCGS everything PCGS includes so sealers to operation operation example separate from For own forth. and had and so

past And the operation is exception grading course expertizing. done the the over of together like blended what of we've with actual the year

be At is if certain business now lot move we’re those now. to cards right So can times is one side very can happened the very, the mentioned to there flexible one or whether of other sometimes hot move seasonality Joe as and based year gets the busy. hot modern coins demand. part the bulk on very of more we people that's a We

of believe it's forward benefit in percentage sort we terms premature a looking are there, So little think predict benefit. getting to some of we but I a

company answer can other for nature there that with. question sweet as our very you auctioneer concerned a believe far As the we our had of investigation don't industry. is to anything that in be regards and it of short to in the I this material

four that from of negative see, deal of that I course at on that new our time remain I'm at of look the demand with or like which The to PSA certified publicity is to actually time. mean time there so a think industry to have items receive I or sort we our every and terrific But it's negative to you Of is but news there. industries part gone not is be a if going that the last sure prices up. company. is has the any this sort this months something about receiving story for broke

don't we a this. anticipate meaning don't result So we of any anything of as

Unidentified Analyst

Got it, XX-K grading is through and reading and of warranty just associated looking practices type at? the historical provisioning there the that process. understanding any with risk questionable FBI and of Is and kind of legacy kind the

Joseph Orlando

as practices Questionable outside relates it to submitters?

Unidentified Analyst

through involved. when blogs the kind kind into the reading whose better mean or then collectors kind cards I the any the by kind There breaking of news I’m a – upgrading – not basically of changing I’m whether question are not is of for or boxes card a of Well and speculating grade you resubmitting. of read the of of just means kind what's some all collected and

grade and to you’re certain higher getting potentially higher think cards it's extent. a with I a valued And associated

I’m wondering kind associated requiring warranty provisioning? just be where could – potentially are auditors the of higher So your with something that whether or not

Joseph Orlando

we with deal what There I auctioneer. day. of nothing the million every this The I battle XX mentioned that PCGS with as years this been years that earlier of answer this to XX of they now describe graded for is of we've I have would around same combined items. is unique of PSA over XX would This exact what investigation course with say course the question, is

way this I guess really new the would this is is, of I there is characterize So news. none

these It’s not things us. It's types on. to news news to the of industry go not that

the So there from history. year our versus other is nothing really in that ordinary about out perspective any the of investigation

chime he special to Universe. So to other something but as day again view we is issue Joe has a of welcome the this Collectors add, warranty in any don't versus if of here lives Wallace in sort

Unidentified Analyst

great Great, sounds to that hear.

number? just is in of talk of customers when of this its about wrap And concentration five So the top is it you PWCC the investigation? revenue one business because just kind sales turning XX% so I that of think down up

Joseph Wallace

customer Well that they’re base certainly to willing in customers correct. five not larger top that's

Unidentified Analyst

Okay, thank much. you okay very

Joseph Orlando

Okay.

Operator

from a investor. go I’ll next private question Please take Johnson our as Tyler ahead.

Unidentified Analyst

My had to Hi, for question the in thank is my regards should they regarding taking been cards you [indiscernible] PSA in regards this aware be? graded that two you call. higher employees than trimmed former our

Joseph Orlando

couldn't I the question the question? please repeat understand could you

Joseph Wallace

a the question. you couldn’t up there Yeah understand broke for we moment

Unidentified Analyst

that Yes two cards the is PSA in be employees of my investigation about aware they implicated were were are trimmed higher the that? former question the you graded than for should

Joseph Orlando

aware anything of not I'm here. about you're talking

Unidentified Analyst

the So card mentioned a you’re implicated that of not not of card in the you are employees that have that get investigation information? in before you aware guys been you PSA aware any

Joseph Orlando

We moderator from on please this move you. to would ask the thank caller,

Operator

Please take from ahead. private investor. Ken I'll a Teske our question next as go

Unidentified Analyst

is because could Maybe Hey taking your thanks for percentage like the just related you it wondering if the it business question. fraud was lot card concentrated I’ll card of sports just a disclose try what of another way. I seems there. was

that the card handicap people around investors? So, grading would for sports you think area to risk are trying what know is in the helpful be I

Joseph Orlando

exact you of coins year percentage in the last fiscal all between detail call in our if to our listen we of cards and divisions. every disclosed Well our

that. we of I So all think covered

you if we’re another So have it. to question happy answer

Unidentified Analyst

thinking I then on you obviously Well is cards is guys related like was stuff and have be because so non-sports well card. there going to a collector cards and you Pokémon it's if do sports other presumably as focusing

specifically? sports related, that’s So much just within trading is cards I of card XX% cards autograph and the wondering how was

Joseph Orlando

if getting out of We don't where genre percentage at. by you’re break it that’s

Unidentified Analyst

Yes.

Joseph Orlando

well. non-sports And your I'm I cards amount misunderstood as question sorry tremendous or grade but do a of we

And those this XX photos Over in tickets, Gathering months, we original and it autograph, graded the most several for. – other of Pokémon and Magic things of that past we've total some the is year card; is services thousand PSA is some of in last provide hundred it sorts things. and of

here. in out We genre break the but the process million don't that non-sports detail items. neighborhood in variety, of X.X thousand we hundred was by I several our of say literally of it would

Unidentified Analyst

And whole what that just advantage helpful. the do I are you missing prevented of and cards, guess identifying you these certain in taking the scandal, you another today? trimmed from anything guess loopholes graders this authentication is when to then that's that think I follow-up do collectors and think Okay trimming mean your about actually process grading can what address if I

Joseph Orlando

Well are that that that grading blown any the being so some our of of on proportion. as we we very staff the we But and is very loophole confident think don't and in provide has the and of end we our business scheme confident this out view we been services have that overall public. the way this in in

the over increased. past has our months mentioned I business several if As anything

it the So marketplace product. of thinks you what quality the grading our tells services overall our of and kind of

Unidentified Analyst

okay if here. one can one sneak and last I Right just

the You the of of last pretty at guys two can a And so X flow last planning in say three million, next are cash to going five your what strong, if know been milestones so generate about you invest over internationally, what capital allocation that the of to of increasing lot years? talk forward, trying for and company to head using some on over you're X each quarters cash the million quarters. the obviously it’s the about are continue plans some look to you're in for you cash you if two that

Joseph Orlando

allocation it over years. think defined and don't milestones has wouldn't that I pretty capital have, we we our cash as been to few have the say relates Well, I last any consistent

internally, at of year. we positive looking we in the our have of looking our are cash next expanding of verticals, are position now, and some that at have did are year services terms some a very a at we’re we since hard we cash right very core some businesses strong generation very over looking and new looking We fiscal

And this that have depending we anything. with number if we the But that determined we determining some over it's say, it's defined of can access, don't do under cash, well, it’s we the or a cannot indeed if that do to or on we will it this, we to but decide current process what the and in how where level our spend dividend view money of fits at. also we the dictate we're

we’re thinking very what five, so to think -- good Universe, looks So where it's XX on about a it's look the we’re hard something time start down our it eight, that. taking years Collectors fresh like at that We minds. road,

Unidentified Analyst

Great.

one one. just Okay. last then if I could And sneak

had Within you I the guys the quarter, actually mean, up versus was you the unit in X% for some growth segment nice negative six quarters. coin prior had

you I next five was guys see over you if to or because wondering, last growth where time, about if have that that's the three over look just years, you had can so unit talk decent long-term? call so you the just growth So going over the it XX the over unit that years just that wondering medium, sustainable

Joseph Orlando

improvement where that in XXXX literally the certainly to I quarters so what predict period. five growth have versus is U.S. verses the the of some It fiscal is is coins, couple very this year over the volume opportunity past in hard area. fiscal is over that and of that's you seen in say XXXX on what modern three But to unit can is because

So control modern at comes the improvement ball coins. QX success lot over PCGS when their an that of we coin the those packaging some performance when of was have ball QX, you presentation in and coins, a that it modern and area, in and to look so

consumer, creative we product to So better can can the more the do. more the we our appeals get, the ultimate

the would've Collectors, at believe if From an to XXXX opportunity also a have coin in they banking revenue couple level We QX mercy so had of the we I it produce past that. international on perspective, surges business, surges quarters in on the in of growth, of channel mid-produces some of projects big that been resonates you those they two of a guess that fiscal coin we've sustainable because XXXX quarters. were the had discussed than QX international if are we of where these and of better a are remove into and we with those very capitalize I big sort revenue like a fiscal more isolated what

versus gaining base banking that's the traction collecting the But community and seems traditional business channel more revenue. be to more of

So domestically modern. real is for coins opportunity in the

come on types to point an to out have side coin you this side competitive brand business, we have modern Babe sort item, people us is business go will it's on high-end and those somebody It’s ask can. like like don't modern is to They naturally that at submissions. whether domestic or do best as modern Ruth something if have for the so and concerted effort receive has very them. our we of autograph of If to coins of but volume to PSA on a build be the because where vintage that, making the that we’re a card we grade, our of much strength

international And as up soon, the banking business revenue can. don't base earlier, side, commented on while Joe the Wallace we anticipate we to much are we as any then build trying on as channel anytime

Unidentified Analyst

great. for quarter. and the All a questions taking thanks congrats right, on Okay, the lot

higher Yes should is you trimmed the investigation PSA question were two the former employees of in than my the that? were are about implicated cards they be that graded for aware

Joseph Orlando

about of aware here. talking anything not I'm you're

Unidentified Analyst

you So not you’re implicated card are have in before aware card in been of investigation that you that employees information? aware that of mentioned the get you any not PSA a guys the

Joseph Orlando

We would move ask on you. to the moderator caller, this from thank please

Operator

take Teske go Ken from a ahead. question as next Please investor. I'll private our

Unidentified Analyst

was it Maybe is another Hey your sports if just just taking you wondering way. I related it lot card of a percentage the of question. thanks like I’ll business card because disclose the try concentrated there. seems for what fraud could was

helpful what be to trying people I the know investors? for sports around think you grading area handicap the that in are card is risk So would

Joseph Orlando

divisions. you listen and between of last our our coins if in of exact we our in cards year Well detail fiscal all to the call disclosed every percentage

So of I we think covered that. all

you it. question happy answer So if another have we’re to

Unidentified Analyst

as do guys you so there you on if be is card. going because thinking sports collector cards non-sports stuff presumably to was then have other I and like related a Well focusing and it's cards well is Pokémon obviously

that’s specifically? I within trading wondering card of much and XX% how just So autograph related, cards sports cards the is was

Joseph Orlando

where of break percentage getting genre by if you’re it don't that’s at. We out

Unidentified Analyst

Yes.

Joseph Orlando

I sorry I'm And a well. misunderstood as your non-sports cards grade tremendous question of or do but amount we

in XX this of that tickets, photos Over is of Magic we've things. months, thousand some some total the in of for. and sorts of Pokémon Gathering original hundred autograph, year services most it and those card is last things provide the And it several we and past PSA is other – graded

say out we in variety, neighborhood the it items. process thousand would of genre here. million hundred several We our but by of literally the in detail don't X.X I of non-sports that was break

Unidentified Analyst

do if is this Okay that scandal taking trimming advantage grading you certain in mean when another think then what missing are that guess address loopholes I think these to And of cards and process your whole the actually about what can I anything identifying just you graders trimmed I that's prevented follow-up you the guess helpful. do authentication and from collectors today?

Joseph Orlando

that the don't have in is and of we we being blown in of of our out view the confident very overall public. and our that we staff services business been and the in this this loophole on scheme Well we any very think as so But some end we that confident the grading proportion. are has provide way that

months our As business I if over the has mentioned past anything increased. several

the services product. of kind thinks and of our grading the overall marketplace So tells of what it quality you our

Unidentified Analyst

here. I can Right last okay if one sneak just and one

if obviously the the the can two You look in And, so last two of been guys you X if about that a say to and capital talk lot the head next using planning each to some million you quarters million, quarters. know, continue in X for cash internationally, what going on of over allocation cash five milestones the what of three invest company to to the last are your years? are trying forward, plans over you're some at you you're that for so it’s flow about cash strong, generate pretty increasing of

Joseph Orlando

it say been any and we last over Well, have wouldn't have, think I defined the as cash relates pretty capital milestones allocation consistent I we to years. few our don't has that

now, the internally, did since at position verticals, looking positive our we strong of and that year in and we are are year. of have some We services very new looking terms businesses at at some we’re over looking fiscal cash very we expanding next right have some very hard of a looking are cash our a generation core we

this have And can it's cash, this, process dictate a over we also indeed some don't determined where that decide depending to how we we money or cannot we But we if with on in say, of it the we're to we will defined do anything. do dividend that that what our number of fits but it’s under we it's or access, current at. the the determining level and view spend well, if the

think hard five, road, it like it's time taking years our We a we’re Universe, something where the thinking so good what start down about minds. fresh XX So that. -- at on looks to that it's look we’re Collectors very eight,

Unidentified Analyst

Great.

then And if one. could I Okay. sneak just one last

I segment quarters. coin the unit actually for the negative some up prior you was had had versus growth in nice you Within mean, guys the six X% quarter,

three wondering over So can next that years long-term? you had just that's the call see so guys growth the over you so was going have it talk to over unit the look sustainable if growth about if just just XX unit time, last the you that I where medium, five you over that years, or decent because wondering,

Joseph Orlando

three volume because modern XXXX say very five unit opportunity can XXXX in what to over where hard I couple is of the that's this have that is But that improvement certainly so is literally in over growth coins, It the period. you predict in U.S. past the of on quarters fiscal what is the some and to seen year verses versus area. fiscal is

that QX the at coin those coins. modern improvement in coins, and a lot have and some the presentation modern of So control it when look QX, ball and to an success area, we in performance so of that their ball comes packaging you when was PCGS over

ultimate to the can do. creative better consumer, we more we our appeals more the the So product can get, the

growth, and to they and surges international XXXX We of that projects we these are we the were would've surges like coin Collectors, banking those where in of the a the XXXX big sustainable discussed of on we fiscal I couple big what remove also guess more so produce business, had perspective, an if a of that. had From on are fiscal isolated very of been of if into believe of it because that QX revenue QX than two mercy some international mid-produces resonates better quarters sort you I a we've capitalize the in level in have with revenue channel opportunity they coin a those past quarters. at

traditional But community the revenue. versus collecting more to seems that's the of banking more be traction gaining business channel base and

So the coins is modern. in for real opportunity domestically

receive we that is our we and domestic you coin ask whether card grade, us for modern the something business, have They come the of so high-end an the modern have at It’s point has brand we’re vintage to Ruth strength our this those it's we coins types PSA build of do go can. to people of autograph if don't on out a making because modern or to side that, volume have like is very a somebody where item, business and submissions. will but of them. as sort be concerted on that best on competitive to If Babe effort side much like to naturally

anticipate Wallace earlier, up we soon, anytime base don't banking build we trying as to the the are on commented revenue channel while much then any on international Joe business And we as side, as can.

Unidentified Analyst

congrats and right questions on quarter. the Okay, great. thanks taking a All lot for the

Joseph Orlando

Thank you.

Operator

Management. [Operator the last Please go Bobby Nouredin ahead. take now Instructions] BBN from from question We’ll

Unidentified Analyst

to you for Hey from PWCC that auction questions. particular? answers the business off to based about noticed Have it clear scandal me and wasn't drop this trimming quick question, the real guys in a taking house in guys, thanks on earlier

Joseph Orlando

do drop-off is how but a auction house there I we following am from that that know not better? is

Unidentified Analyst

June? has end off drop since in No, no, from of of business beginning PWCC there me I heard been think don't properly no you a May

Joseph Orlando

would look certainly it virtually and over no say I'll business at there that We certainly I the leave say I but would at records, of couple months has last been could that. the

Unidentified Analyst

I so go it, ahead. Got there think were

Joseph Wallace

just we backlog it continue I sorry parts said fact in in very our to submissions in back the try and go actually that continues me ahead see as is business is Joe of than the was this level be issue, earlier to let June. am PSA close now good higher

conservative very where the terms terms and our sheet. in we in terms our warranty expectation In warranty of of take our of balance is view a

is you issue we additional on I of that that probably like this really it something this about subject. our any We’d material don't spent lot talking terms to to today whole of time leave questions So we consider just trimming in think at a business. that

Unidentified Analyst

that then Okay well one around grading let business continues me add and just formally kind if of card dance is of revenue to bit the to little basically zero grow a large these gone customers collectors large or customers? this Is one by picking growth is individual coming other up. you created dealers the from when mean it of have who I where kind vacuum your of is

Joseph Orlando

quite idea I referring company whether at way the make are Well some you’re percentage that bit. the that question in it's a least coming concerned. your they PSA we other One very is and out be that are up is company in business business should PCGS such think any that there different from maybe of an PWCC the a that’s is large guess that little the interesting spread is to this submissions that it's than that that way submissions I the really thing issue that about bit a

call. the in PWCC have it mean They commented as think define consider that there Collectors We in customer I on fit at anyway, I don't large do is. larger Universe some customers what would being I but has already a to would we Joe earlier don't

as we whether no So part matter impact investigation. them what from to any happens anticipate of this don't whatsoever PWCC

record like levels and about backlog concerned be record continues and business. Joe PWCC levels is regardless our at personal it to current at said not We’re of

answer the are Are three or to So concerned what business submissions is about is out way to. for spread the a future no. minus that are think another on dependent or one a two you ability the or submitter our not to and I customer such are in grow we PSA in our we grow getting which

Unidentified Analyst

this to cards – some ensuring kind you don't want of much pardon it, don't get with bother too seems authenticated. needs regards change I guys trim to Got so to me in happen and like the but it

flawed technologies. how each a according humans on card that XX I employing card message pick me been on are get like in you a grade hard up we to little the earlier that's to some this how other the of think my maybe about it's bit and grading Can to new about some seconds right. Especially in on you bit touched of one computerized calculations, inherently discussed sense talk minutiae. graders or little of terms things kind

kind be out at computerized to are of terms might card take I wrong that eventually in just forward of, What was and you the you and a human hands try specifically? and this going rough going are of grading So to technologies looking calculation.

Joseph Orlando

human of no have on We plans grading hands. out taking

Bobby Nouredin

all it, your guys, thanks time I Got appreciate right okay for it.

Joseph Orlando

you. Thank

Operator

no appears the this time. back to I turn at further would to It conference the questions presenters. like go ahead. Please

Joseph Orlando

you thank for today to speaking us like look next would quarter. We for everyone joining in the to call and forward with

Joseph Wallace

Thank you.

Collectors Universe (CLCT) 28 Aug 192019 Q4 Earnings call transcript