CLCT - Earnings call transcript Q4 2020

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Operator

Good afternoon, everyone, and thank you for joining us to discuss Collectors Universe’s Financial Results for the Fourth Quarter and Year Ended June 30, 2020. 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. 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 reminder, a that as also today's being program recorded. is over that, Joseph with I'd And now turn the call to Orlando. Joe?

Joseph Orlando

Thank call to and review to XXXX. you, today's welcome our conference fiscal

all and we hope safe are of First healthy. and foremost, you

a the quarter is Collectors for the the services summarize new year, Universe's collectibles and business I to for I provider on leading results and Universe overview to Collectors brief content today's call. the any of full Before value-added give of listeners a the would like market.

collectible cards, are coins, We banknotes, various great autographs types memorabilia. trading authenticating of and

quarter We Grading tokens. despite of collectibles. world's Professional Service a solid performance memorabilia banknotes, examined examined certified millions pandemic. service. and and services, coins, certified has Since PSA. millions or and in Professional PCGS and XXXX world Coin have the Authenticator or trading Since and PSA of is grading had the Sports metals card, PCGS, and the fourth largest authentication and U.S. autograph business PCGS XXXX two major PSA has

set about since quarter has by and our an XX% revenue fourth the grown fastest-growing all-time As segment, record PSA in XXXX. annually

million than past with XXXX, certified in fiscal of collectibles had of the X year. those total million the certified more As of just over XX Universe end Collectors

and to on XXXX Let's the quarter move results. fourth fiscal

few fiscal and adjusted crisis COVID-XX finish QX operating the a current record XXXX. guidelines gradually up quickly complete skeleton shutdown and terrific QX to challenges, While to to rate. a Beginning ramped new a of team at revenues at transitioning a company we and weeks of the capacity for the later, achieved fiscal under with presented environment with year our a host crew able the start safety we're run the we and our

be move last earnings the due As was call, lost details year QX will the of case through our as the performance. the Collectors finished the we during our quarter last despite context up with revenues, in beginning of pandemic. million key from X% QX the time at Universe service to $XX.X

QX. performance all-time record As just represents noted not earlier, an revenue this any quarter for

$XX.X million was Collectors service finished back-to-back $XX.X For years XXXX XXXX. represent revenue and which the year, up revenues, fiscal in The with company. in record the Universe from million performances for in XXXX

the QX, quarterly ongoing at of all-time million the end represented also company. Collectors our million In of the quarter from to QX in for operations $XX.X the $X.X in mark setting record, end an for figure from the year addition QX record met collectible and a our revenue position fiscal to Universe million during X Furthermore, history. certified new the time first $XX.X the cash exceeded million single generations at annual increased of

our prospects business results to moving challenging continued forward. excited and the of ability times, about we Given in strength remain our execute these our

each division. Now, deeper performance look let's at take the a within

million, last Our and by up memorabilia that is to with the million, though by overall business autograph PCGS Even business. or million more our card, to our trading related QX, division for year-over-year. deal $X from finished continues year-over-year. coin in note down solid X% performance pandemic important at finishing $XX.X year's which was XX% slightly challenges performance $X.X and PCGS it QX than $XX.X at the surpass quarter, million was PSA was

impacted has said, of events, grading are pandemic PSA. cancellation meant. these tradeshows Traditionally, numerous and of than in of restricted resulted environment. That the on-site example, it on things more and the been types we PCGS has production to dependent the some adjusting international U.S. has new For travel the

Let's responding. QX, $X.X up finishing in was how million vintage are start versus $X.X In look PCGS XX% year-over-year, at we PCGS XXXX. domestic with and million fiscal at a

Some available corporate of due nature of be that the accommodate in our the was portion And of the a have lack of certified gain shows. them. need tradeshows presence to submissions office without offices. of were to to or at Coins quarter, potential our tradeshow we with to services this as re-routed still

all conventions Long Beach in scheduled were in our tradeshow three coin expected, major As own California. QX canceled, including

show this of show industry quarter, from $XXX,XXX as the over events shipping left a that coins void. the trading primarily PCGS, occurred about during schedule to technically In late already So, QX. response a of recorded to tradeshows, fill while nature to least of PCGS by begun took events at lack has that in in of place help, no was smaller part, revenue result

safe lead smaller been can service a houses dealers, submissions for more environment submissions and are This PCGS events show create more ultimately creating collectors QX. to hosted Four our help vintage into rerouted While auction scheduled by be in PCGS. trading being activity. line, can meeting can for and some have coin potential such

incremental catalyst generate safely customers We our that in be are the and process. events important bring optimistic smaller can revenue the to an together

part area up million of PCGS in than $X.X was meaningful we a another with of impacted are Bulk, way COVID-XX finished parts PCGS revenues more other hand service year-over-year. the the to XX% coin on that in other International QX and business to some this by business. Turning report pleased was our

the submissions to respectable with in Hong $X.X same XXXX, fiscal from travel on year, in prevented for compared and China quarter restrictions $X.X PCGS the While more service processed. million finished million last combining revenues performances being versus Kong

top a higher earnings Shanghai is experts that our will of give highest on-site have This good As to we our has along the to call, loan process did operational to But send cancellation been. already continue China coins the The more news ever Shanghai China last with us in office to to greater to of handle over material that process towards on detailed along is our more coins become independent that the backlog office our inability the with begun. some move independence fact impact. ability we the grading enabling time. value has event our

Although market. COVID-XX challenges created some has short-term we for with we team, pleased making that our that progress the very in are are

in finished quarter million versus Finally, but the the Paris last revenues $X.X the $X.X for year service quarter, in office was slightly entire virtually shutdown with million over it QX.

PSA. to turn Let's

the earlier, for This prior collectibles mentioned the items in record set We As over for PSA quarter PSA/DNA includes XXX,XXX division. about total fiscal the year. revenue record services of shipped set QX an output QX surpassing and all-time the and XXX,XXX XXXX. record

the part was associated quarter. days ramping to As year achieve this our a the of challenge profit quarter, up reminder, Returning XX% up overall a for safe in in from margins in ago. COVID-XX losing the XX% and despite a business, were the manner shutdown gross we early and operations working which with measured the

which previous operating XXXX prior income for from for $X.X $X.X the Long down non-cash the compensation and impairment the year. to Net million $X.X after or and per $X.X Our in million business in of fourth QX stock-based million the Beach $X.XX share, was was the fiscal income compared Expo quarter per year. million, diluted was $X.XX charge for share

in ongoing shareholders also to $X.X during the XXXX returned form of our dividend. fiscal We million

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

Joseph Wallace

the that COVID give Yes. fiscal challenges announced for quarter you, company a the XXXX. Thank of that I'll the in discussed, of and now fourth quarter results results Despite and overview quarter third the the financial impacted year. Joe. brief fourth for just strong the Joe fourth our

million of $XX.X of share. year million of X% net the of this quarter, expect per continued income the for that results were million, will to were generated $X.X achieved sheet. capacity. the coin fourth continued were million quarterly for or discuss for quarter $X.XX $XX.X revenue authentication the COVID. $XX.X fourth revenue year's financial $XX.X autographs of X% year million, per two income revenues income fourth or income overall and fiscal $X.XX to we strong or annual in higher XX% revenues the and $X.XX continue the impacted $XX.X in and quarters. operating representing driven fourth business. In of the an XXXX. of for prior $X.X the operating company increased grading by below. $X.X the increase of million and in was million Combined but and autographs about has $X.X to generated of million finished compared as quarter, therefore generated first the fourth of year and million unchanged In XX or a and of XX, revenues that Card the This million or and a the X% the revenues, fiscal quarter $X.X and quarter XXXX. million, with record of as income coin and increase and the to $XX.X growth June quarter net quarter, record periods reflects $XX.X million substantially revenues share revenues have and revenue of the and In in operating of we in cards XX XX% by in record expenses of and net autographs and our in operating year to million addition, million, to or that of those year $X.X backlog revenues income share. and fourth growth of income that $XX.X over in of performance. This charge record share the The million the or million, continue by In last XX% per for quarterly income XXXX, businesses growth The in year. $X.X China, detail or and net per we autographs total represented importance $X.X G&A operating in fiscal $X.X year. cards fiscal we business in company both half of impairment And revenues and coins of $X.XX of XXXX, very Cards growth year of quarter year million were compared revenues increases balance QX million down more Total $X.X

the in COVID business the As is coin challenges. U.S. discussed facing related earlier, some

we advantage did like continuing However, to respect backlog. the in identify quarter. that with business to coin fourth China of With our ended are our the relatively take in high revenue which and opportunities much operation, we year efforts

our and COVID, XX% making capacity margins margins March backlog year's and autographs same up the offset and XX% XX% China. buildup year. continuing in this compared gross the that operations profit for quarter the The except for slightly last each business to employees. abruptly XX% focus due QX, quarter were of business. impact margin less Overall, U.S. the profit reliant the between the of year, the of reflects record travel gross all profit and also were while year, as are in to the to We restriction to personnel The of pay in cards on when the U.S. in periods to gross we address in year closed continuing the and of fourth

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

fourth and including in shows, will expenses year's shows. future this XX% quarter and quarter of number marketing of fiscal The revenues fourth expenses expenses settlement year revenues limit and XXXX. XX% compared and the operating for XX% and marketing stock-based operations, to XXXX. versus last year compared pre-trial concerns in year. reflective G&A this at and the year's and cards and were current the higher XX% year, lower G&A in charge expenses arose for of quarter of operating quarter and our XX% XX% XX% for dollar revenues were year, G&A periods, dollar million. fourth represented expenses of represented quarter marketing cancellation $X.X COVID. the and More expenses the and as XX% above, as offset last quarter that our year's for XX% in and and of due fourth tradeshow the and X% and about compared generally result this coin $X.X legal of business million in incurred partially in in year's primarily Expos Resulting the which XX% compensation of the quarter $X.X impairment Our and COVID, the X% in $X.X fiscal in the to and XXXX. for of of $X.X expense to year, in The and unexpected costs million, year. the lower million selling the due expense of lower margins fourth Selling to by period fourth fourth in uncertainty increases our reflects higher quarter impairment year's included attendees social in terms business revenues XX% for non-cash to and and quarter fourth of year's million charge to $X.X and dealers the has higher that XX% at fourth business, development higher of Collectively, we revenues distancing XX% business. this The of and the and year, charge costs overseas revenues of of and year's in of same as impairment related and XX% represented fiscal quarter X% XX% selling travel combined million revenues in the last autographs and to and in last expenses viability non-cash and as $X.X the the discussed of million growing

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

of be fourth quarter XX Our per finished and we the of quarter August turned this first of the out upcoming primarily on than our better in In to in share paid our with as cash stockholders and August XXXX XX. And May $X.XXX business. QX momentum record will autographs we up ramped for dividend expected Friday, fiscal summary, operation June. cards strong

enter I'd the we we on thank that momentum continued in as backlog fiscal build intent that, your XXXX. Joe? to business, to With you like year attention. that for With

Joseph Orlando

Thanks Joe.

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

job While we very a quarter team so challenging remarkable like the our I all a revenue with publicly crisis. did acknowledge the this was forth record they uncertainty, and for under tremendous current That difficult ended performance, the it effort Universe QX as them many put thank and Collectors take would circumstances. very to the for was amidst companies to moment coping said, with

strong, has our the for it has but May, during our displayed discussed our earnings and the PSA reiterating remain climate need call decades. we economic has collectibles only PCGS in services. in some for country the resiliency As incredible markets, during last market increased collectibles faced not demand challenging most The in has

businesses shift increase. in direct some items for a result the e-commerce more this more pandemic, provide demand the toward certifications and the more as are As liquid. hence of should Certified traded easily we marketplace, strategies

result trading of We a QX By interest remain the confident card Collectors and mentioned, resource backlog of customers a and level. a to end I are direct also the rose that asset serve. just the will we as critical classes increased record to our Universe submission

short pressure been our reconfigured operation. no and the the ever. for our out relevant of have help capacity spread need shifts demand these than risen each efficiencies some is services. the greater has on has day. employees But for our new to introduce As social put team In that our question distancing There response, result, the on-boarding handle term, need In to I'm have reduced. our challenges. team how a has accelerated departments the proud to substantially better is important efforts more we for the

to the and in can accuracy our focus people with technology in revamp on help process and long-term. team our In our the short within believes efficiency addition term, operational

on and for into fact, In plan coming capture. in we our the months recognition image process introducing robotics

more testing into our using our for have move the first major We represents and automation. capability received prototype widely. to forward first This look

believe opportunities current focused growing to our businesses remain solutions continue continues our We operations. in has are leverage the to and on technology priority there that our the environment. We stabilizing improve more to possible best Overall, customers. be operating core and to finding for top been

pandemic While remain. challenges related

We are fiscal collectibles excited in shareholders. business about robust our for of a us. opportunity with and better to new driving enter front eager to expanding ways the market our We returns find XXXX and we're of

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

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

Joseph Orlando

like joining fall. look results this to everyone us our for QX thank to today later would We and reporting forward

Operator

that Once again gentlemen, today's joining again Thanks ladies for and us. conference. concludes

disconnect. now may You

Collectors Universe (CLCT) 26 Aug 202020 Q4 Earnings call transcript