CLCT - Earnings call transcript Q1 2020

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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, 2019. Today's conference is being recorded.

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 the call up to your questions.

that call future statements and Securities financial business and today's expectations, the statements Litigation during as trends its statements XXXX. about performance, profitability Reform made Act may the regarding contain company's concerning defined of Comments in forward-looking Private are including forecasts

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

would Orlando. call now the like turn With that, Joe? I to Joseph to over

Joseph Orlando

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

Revenues finished established June, the PSA a up within perspective. were quarterly record results both in and new the QX Universe as million, for $XX.X the our QX divisions figure also a improved PCGS finish company. Similar product overall year-over-year from The QX million results. with performances $XX.X a outstanding major all-time of to a from positive found quarter increase strong Collectors were million XX% first in year-over-year, a $XX.X from year ago.

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

were by down the division, million services compared to and year. our U.S. $X.X last combined slightly PCGS Show Within Vintage

PCGS continuing $X.X PCGS million which fiscal momentum for up note the bulk is in generated the quarter shortfall in XXXX. year, and it said, last to this X% of comparison. year, U.S. or on-site versus compared QX by QX XX% important other PCGS QX. up was Overall, or the hand, positive explains in was event fewer last $X.X million QX had approximately year that to on one the That grading QX

the International $X.X to up strong $X.X year's compared of X additional international million, QX. results and QX. positive PCGS a produced coin QX combined our in PCGS The up were in to Paris Hong offices. with our office last $X.X finished each Once quarter while Shanghai million backlog approximately entering was offices Kong an million again,

We continue to on make the efforts feel the greatest return lies. base in business especially we where potential in building overseas, China, investment

our The million, performance. PSA PSA the exceeded $X.X any our PSA of This year. of million year's increase the that exceeded figure last $X PSA/DNA QX that revenue reached this finished marks top million. $X the quarter. a the surpassed and quarter record previous year-over-year This part was business time another or and in of million first time with bottom record to division, line figures consecutive XXth QX Turning of the from $X.X

satisfaction by the our second quarter history. included the is performance quarter, and increasing the demand of our largest backlog, QX PSA's the management the the over submission on division's we Customer throughput. been high for head is our record which was PSA priority. further record, year. The exceeded into in unprecedented output has an services, for for focused a the capacity with submissions fiscal never strong new as ended quarter operational team fiscal customer our collectibles. higher set XXX,XXX shipped units This quarterly of at prior XXXX incoming Despite XX,XXX outpaced all-time in units. roughly

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

year. operating after was $X.X million new QX from and the stock-based share Our $X.X record which diluted was per $X.X previous a was compensation million or XXXX $X.XX million which of represents in compared to prior for income income the quarter up share, in Net first $X.XX $X.X fiscal QX year. noncash per million, for the

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

Joseph Wallace

quarterly brief now million financial fiscal diluted first per Joe. the for $XX.X million In income earned record $X.X million, QX you, generated share. the operating revenues overview 'XX. of first $X.X the I Thank and income or will of quarter company give the results of a $X.XX record quarter, of of net

of This of income quarterly quarter fiscal in of $X.XX of $X.X per or million net operating $X.X share income million, the first 'XX. $XX.X revenues to compares million and diluted

has of first XX cards million cards growth of achieved XX% autographs XX X% record quarters. that quarterly XX% $X.X $X.X the increases or revenue business revenues, increase autographs represented in coins. The revenue and the The million and or includes million of $X.X quarter-over-quarter and quarter in and last increase in or

coin year's in and China to U.S. performance. coins, by this quarter. The Kong one $X.X about million and $X.X revenues those overall businesses coin of continued the businesses for of improved the U.S. about show France the by less quarter X% and in revenues were our revenues Combined, increase in X reflect Hong financial modern having cards the represented million offset $X.X from revenues million. the first included autograph to increased quarter, partially of and up importance coins, XX% QX

quarter, as trend occur for cards will have our fiscal backlog record ending our impact year second This quarter in that we the our seasonally to a business the mostly disclosed, activity our in authentication to of business quarter previously coin typically December slowest the holidays U.S. due the of U.S. trading expect grading. submissions to slower is and XX As continues winter this that and year. continue

period businesses. to year's same The margin gross compared compared the quarter. China, margins to China first QX margin year. higher see coin quarter we last second this in our continue gross was revenues second to improved quarter of expectation this to to in improved profit XX% respect is With profit current due year's in that our in will last year's year's in The XX% this as in as was

disclosed, in business. the margin previously gross As the our to and can our seasonality due of of mix profit there be variability revenues

during a years On basis, profit 'XX, the ended June XX% quarterly XX%. X between and our varied gross margins

XX% both this operating revenue about in quarter. compared combined expenses Our revenues quarter represented year's first XX% were of as year's flat $X.X in million of at quarters first to last in and first

million, of having one QX of in selling down in terms, Selling show, marketing represented due XX% in G&A revenues and this last year. were and primarily In this to versus last dollar expenses of trade were $X.X year's revenues expenses XX% first year above, year's quarter. as quarter. to this revenues in of discussed less revenues first compared quarter expenses as about XX% year's XX% first marketing

million recruitment expenses increase and and relocation in dollar infrastructure-related $X.X fiscal costs small of 'XX costs. for included The

compared of XX% in resulting 'XX. for margins operating of as to in as XX% 'XX this the million stock-based the of The QX million and expense, compared in over QX XX% an compensation Adjusting $X.X this represented non-cash, in year's income XX% operating $X.X about last earned XX% first the were quarter represented quarter year. increase revenues to year

cash down 'XX was cash generated cash million in from September million million used sheet. of and balance 'XX. in million Net of of as included paid company's by The in $X.X to and $X.X to capitalized activities offset to term generated in million, the operating $XX.X used 'XX September $XX.X $XX.X million dividends compared QX expenditures capital position million $X.X company's our cash $X.X to and June Turning partially pay $X.X loan. stockholders costs for million software

XX-Q discussed lease recognize as which July assets required As adopted us to on X, with right-of-use September our liabilities sheet and was in new balance we of leasing XX. a on that filed the related today our SEC guidance, 'XX,

estate, and operating company's are on guidance. leases material from was results there impact to operating leases, the related new no mostly this Our arising real

'XX, October of share, On our on will XX, cash on dividend November be which paid quarterly to announced XX. XX $X.XXX of November stockholders record we per

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

Joseph Orlando

Joe. Thanks,

few about of make like to the the would second of I our fiscal into forward close conclude, quarter we moving and QX a Before the year. outlook comments

now in as in to for key we has the is for now areas year of the record progress make That behind quarter. the respective of led set to X record-setting performances the Collectors continue the revenue helped remainder it tone performance Universe progress us, While consecutive QX company. each

to the over the focus past here in that Our has XXXX. year case fiscal on fundamentals, and early been continues be

as all. is to year. in enjoying team management maximizing is building PSA that at our corner important into adding our that's specifically, on process we demand pace our fiscal second half turn services. of addition grow in and of existing an rapid light fact This resources such of includes capacity is unprecedented especially the But hyper-focused ones. not This continues for a new to More level the the

At approaching U.S. of PCGS, products XXXX. we year by our in are busiest bulk the rapidly as Mint the released are new early season

was world Mint highly the in One with museum's unveiled the at of Springfield Coin the design XXXX over Hall in The U.S. a of of marry the out Fame the XXth Due Induction coins the the to Ceremony Fame Massachusetts. coin's at of Basketball numismatics of new Hall Symphony will world the more anticipated anniversary. celebrate releasing commemorative summer sports. Hall will spring, be

the their The expand educational U.S. silver for agreement coins of with and this Memorial up XXX,XXX Basketball events and certification coin The nationwide. XX,XXX project. Mint of portfolio has program hall PCGS coins, by The programs XXX,XXX gold of PCGS the clad exclusive generated More the help to Mint special new the importantly, will calls from Hall and bolster funds their Fame signed U.S. Naismith coins. production of sales for an coins

PCGS partnership, grading Hall As part of Fame's as exclusive service. this act the will of

work only including of domestically, coins. sport and worldwide we Naismith is Fame that to certified international the an do designing this Not the Universe door will of communities project. believe will work collector appeal the Hall designed the for with popularity It coin special Basketball the alike the Hall company Our will numismatic labels, Fame the opportunities. autographed to Collectors on Memorial on of sports the accompany opens honor to with especially inserts

of to creating and PCGS customized the addition of brands presentation help appeal collector In on the the broaden items. we using enhance leading intend of power our these PSA designs to these to coins,

as And be services. to Turning domestic reminder, new market the a XXXX. early our in PCGS grading reentering currency sights will

QX. Our to be banknote scheduled service relaunched PCGS is in

team launch, to our During upcoming the last has few all facets of on staffing been management the including from design. everything working months, product

are this which collecting to, should natural to once act community, services. excited our grading service domestic the as complement to coin a again, We offer

That process. of and the number and bear But These the units of backlog remains hands now kinds highs from assist our improvement new process been help establishing employ reached division maintaining is possess year performance, of improved a quality. who now shipped has At required the change size. background to PSA, brought quarterly of expertise of of to the time to have improvements which implement each customers to in the throughput revenue in make includes team, officially areas the year-over-year no focus take it collectibles help consultants full while operations the kind to doubt in these a we millions can consultants, of we into faster. backlog that our There decade of our fruit. every outside enhance back

mentioned some move of management service to act certification, includes Universe From customers our not on and but team content for the user as experience. That deeper foundation collections. all includes improvements the we great QX, into is the the it Collectors also to operational wants new offerings. only concentrated earlier, As

enjoyable our to more to hobby is This innovation. already and grow. structure increased improve experience and by company better collector the opportunities participation, goal it making gives commerce, leads Our to ultimately, through an

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

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

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

Joseph Orlando

and speaking to forward next We joining thank you us you all today quarter. look of for with

Operator

you. Thank today's and conference. Ladies concludes gentlemen, this

now may disconnect. You

Collectors Universe (CLCT) 2 Nov 192020 Q1 Earnings call transcript