CLCT - Earnings call transcript Q1 2021

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Operator

Good afternoon, everyone, and thank you for joining us to discuss Collectors Universe’s Fiscal 2021 First Quarter Earnings Conference Call. 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, these 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 With like Sievers I'd Relations. to that, over turn to of the Leanne Investor conference Shelton Group Please ahead. go

Leanne Sievers

Thank and you, XXXX to financial everyone Joe, ahead. CEO. to turn joined fiscal review like I’d us over to now please go and today welcome to results. the quarter President our Orlando, first call who Joe

Joseph Orlando

everyone QX outlook report on that Leanne, begin Collectors in in results. record financial company. revenues to same conference fiscal call first I quarter. summarizing then I’ll for commentary our and you, provide our am and the million the Total were today’s to quarter from going year review Thank to into first a setting an results million quarterly QX ago time record finished second quarter for quarter $XX.X XXXX results. XX% fiscal the operating by up the today’s with call welcome $XX.X all year-over-year Universe to pleased some the

was the and Trading were business, flow. which $X.X Card pandemic. PCGS, $X.X fees of to in revenue, to to headwinds record million profit and that recruitment expenses Operating million. Our the stock-based year. income strong operating also compensation XX% this coin important expenses related included model. performance Autograph or operating compared leverage growth Also of the $X.X professional is profit year-over-year. despite XX% non-cash in quarter further was amount related note this with million cash X% in first to our in and up quarter quarter year was the operating of PSA $X.X previous over of expenses highlighting was quarter our It achievement significant last the these the was the million our pleased the operating up by the business of by our which Together, underscoring led higher and XXX% We margin business, in

our doubling square is will we an fiscal In growth our gratifying addition, that utilize been thereby This can reflection allow see XXXX. for facility team over surpassing sequentially few onboarding recently it’s to office, fiscal additional over the even new feet, XX,XXX years proximity includes the our has adjacent enable which and the business directly to current footage social To quickly typically expanding still while the material for by last square million growth, experience Southern ahead. employees. to California, is facility, This that rooms space million record And to way acquired record $X.X to cash our able announced the space, diligent a disruptions first workforce to expansion new marketing training not by with XXX,XXX. offsite are more an upgraded of in also position expansion to will of we to it’s associated of distancing increased quarter of to $XX.X past IT, downtime continue our existing service, a and to results could the facility by any $X.X location. million the deliver quarter’s that in guidelines. in these or moving direct customer of transform newly return Due QX personnel we being XXXX. adhere to this opportunities of we the work the achieved that a of These support kind recently to results, we exciting while our in

Our expansion such the be business, as while and backlog overtime support our robotic staged company. vision to automation the also of future, our providing long-term solutions growing support to integrate new will for the technology space in into ample room

items Now, into services, let’s of memorabilia XXXX. of strong new record Universe our of record as and million, the take the Improved PSA revenue. pricing prior our which increased quarterly catapulted Beginning quarterly of drive includes in the look approximately PSA better our total division represented XX% for conditions a turnaround the fiscal trading about market QX improved Collectors customer base in combination the rose in collectibles, XXX,XXX This set a of faster ASP from strength the year-over-year. and division. and performance and ASP quarter, to and deeper autograph surpassing each record authentication need with PSA/DNA grading a of The which division output we times helped $XX.X throughput margins. shipped total for card, $X.XX resulted million XX%

of a our in trading average however, could overall due is why which believe up, have growth. to substantial letting As mix. that signs market in division services these of throughput ASP the shown PSA the PSA material card and to our increases strength the changes for division contributor The submission fluctuate our will future to we demand be continue not

facing absence included PCGS’ year-over-year reported PCGS, has challenges the by compass million the domestic despite to X% those ongoing turning the the response to headwinds major Now tradeshows. posting recent previously grew smaller our to global events to coin to due of been division division $XX.X pandemic.

Domestic, $X.X the Looking PCGS quarter. to year up was at QX versus in X% year-over-year in prior Vintage PCGS $X.X million million

in expected, our versus by our replace Beach, way, to revenue both grading Vintage QX Service were trading of was important can PCGS through even earnings Long calls, when on line evaluating talked rerouted hosting fiscal By XXXX last and including coins with events, combined prior own performance, scheduled California. As some be PCGS approximately year’s first canceled versa able combine is in or as figures QX smaller it we about Vintage revenue, in were virtually inventions When show the customer. of And vice to coin last in quarter. show major year. have trade XX% all this show coins revenue since simply the

response changing shows. the quick of traditional this trade environment lack stream to stabilize the help PCGS’ revenue despite So

this to the Turning Bulk, and XXXX. up $X.X in part business service to million compared was approximately PCGS million of with $X XX% QX in fiscal year-over-year revenues, finished

restricted where But progress saw from to able XX% In to rose International, onsite $X.X were were revenues a we year to Shanghai overall. greatest events million terms host impact to still COVID send year-over-year million travel, or continued grading China PCGS from same is in of PCGS any additional not we Even with we pleased our though to the $X.X approximately perspective. a compared this ago. quarter the personnel China due in

Joe We on have $XXX,XXX Joe? a We of a the reliant been challenges the from our from to U.S. prior year due Hong to our contribute our turn see for were detailed are and basis let which increasing did Paris quarter. about over our less staff in call With down in locations, which Kong operational performance in financial some help combined capacity the so that based review the that, mainly China, QX. we on now pandemic. in performance Wallace me weakness more to processing

Joseph Wallace

continued compare of income fiscal $X.XX overview $X.X first the that Thank impact operating quarterly quarter income $X.X income the revenues and financial give results or a in quarter, announced were and $XX.X quarter our Despite or of income expenses primarily record increase in for the first total driven the earning of quarterly to higher XXXX. brief million in in the you, Joe. results operating us $XX.X to quarter $X.X of XXXX. service company of fiscal quarter, of of the QX, which million million customers or units results and asset with that share. quarterly in COVID-XX $XX.X in of I'll business in net revenue now driven primarily higher the by from million of share This challenges increase to of the million, quarter. the million record for revenues, per the a was a the In company operating The growth operating and personnel, per autograph million revenues earning XXX% The $X.X generated fees discussed by income coin net and XX% quarter more turnaround of million operating first faster $X.XX G&A the revenue ship of the cards was enabled increase record $XX.X by paying representing capacity, an business. in below. in and impacted rate quarter Despite record increase times.

overall of and quarters. million us achieved travel. in $X.X have the that two despite coin to U.S. revenues, $X.X quarter-over-quarter XX% – quarter businesses another autographs coin uncertainty authentication production represented China U.S. of accelerated card will on quarter with and reflects million this to XX or excuse revenues recently charges to Cards financial to the personnel autographs after Although XX% record for revenues Combined those revenues last of on of XX for business adding revenue trade importance X% our cancelled growth the we that the utilizing increased backlog and and our increase COVID-related the autographs growth and cards businesses international continued space we business. restrictions the finished through me. revenue the has shows of schedule to about which revenues plan continued quarter X% net XX% of increased capacity performance. support coin grading the in and allow U.S. and total growth quarter therefore continuing additional and secured, increased and the or

the also. offset expect quarters. and ASP to the capacity will last XX% gross the China, The in restrictions higher ended and the first impact revenue continue respect continue seasonally travel slowest and increasing business, higher XX% in trend a between progressive second coins is in we backlog, quarter we we the to future which The compared local as this China cards the due will in quarter, quarter. to result year profit slighter for U.S. quarter gross was earned expect to was margin the of business. The with autographs in year’s year margin profit growth that of our which quarter With the fiscal to

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

million; the for of of last largest compensation primarily customer million, Those costs this XX% The or higher million to in first offset to when revenues lower as of and dollars the shows account $X.X Our represented The expense cost connection of payroll G&A million last improved first members; combined in selling the XX% incentive year’s about reflected in XX% and Selling were the compensation coins, margins cards development dollaring revenues resulting in G&A of demonstrates due for of autographs is first business. XX% $X.X the cancellation new expense quarter. and The operating year’s service two, XX% to and quarter, issue Together, a quarter. The both quarter, performance which of and by stock-based last as G&A to due operating a of year, three, the versus with $X the higher compared of of million the expenses the year’s to this were represented higher X% operating which about lower the XX% professional are of $X.X the in higher revenues cost first $X.X quarter higher non-cash costs, year to in activist growth were expense improving discussed costs due compared above freeze A&A business. of and trade non-cash fees leverage into one, partially the of revenue. current included taken Nationals of in inclusive marketing revenues the represented this of in settled stock-based incurred reductions first and due in last expenses cost both first COVID-XX. of and board and marketing expenses quarter, professional of the quarter. year’s million higher XX% cards recruitment G&A fees show autographs was the now and business. $X.X quarter cost year’s of in business two

million XXXX, from XX, million our $XX.X sheet. $X.X generated million position for to down cash cash balance costs; of of to $X.X and by $X.X to The taxes dividends as September capitalized $XX.X $XX.X XXXX loan used million cash $X.X pay June company’s company’s cash the million million of partially September operating and activities million, of for capital $X.X paid Turning withholding at and at XXXX. used term pay $XX.X offset of shares. to million to compared software Net included stockholders; the the million expenditures at vested used quarter generated

a headquarter As be we operations additional will doubled lease facility. we The entered disclosed occupied lease landlord at XXXX, on amendment the to with into in corporate October X, accounted space our a modification as space our lease the lease higher announce sheet results. updated assets will on QX we balance prior for the rules our under on our obligation be the used when accounting to lease right reflected latest view in which that

QX further XX. November will strong attention. primarily results record revenue summary, your cards in to per that, continued we finished autographs paid up that to the dividend XXXX. momentum our on through thank on fiscal like cash be we I'd to ramp Joe? in to you and November for first the share business of build $X.XXX momentum our increased Our with capacity of fiscal of with quarter With We demonstrated as quarter quickly progress that to on generation. XXXX XXth stockholders ability intent the business, for In backlog record contributed and second that

Joseph Orlando

Joe. Thanks

and questions, close few make final to into your fiscal outlook we open I second quarter. like Before call our would a comments to the of the about and QX going conclude the

and division grading in to has any will in our the seasonally As slowest year. volatility revenues fiscal been authentication typically the the quarter, the anticipated what look in record we quarter of moderate help coming PSA backlog

We the into efforts over which our our our of staging expansion coming have business, side visibility this begin helps support efforts to quarters. capacity

remains shows absence PCGS travel. trade for the ongoing the international business are and outlook major but the to coin somewhat present the that tampered near-term Additionally, in solid due with of restricted obstacles

grow to operations, in we fully front of of that To in opportunity, start new capitalize to on focused us capacity investing fiscal the the great our the on and continue the year, to With have we in remain opportunity plan we terms technology. business. personnel,

the while these of as immediately contributors fruit company. the we actions first Some of will to long-term be will key in others potentially showcased bear evolution quarter, our

QX. the our primarily possibility pandemic, reminder, for are such going worldwide. of and subject energized policies several for Board the Overall, our control on of U.S. encouraged Universe course providing our a The very and the market the overall trade we of progress changing the by by our collectibles, returns as and As the the as international metals, the fallout Collectors remain set outside team are increasing forward to focus of shareholders. both record results price we factors to achieved the from Directors in expectations the management precious climate, in COVID-XX future state and economic aligned

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

Joseph Orlando

on the January November Needham Growth for Gems Conference Furey the us of the all Hidden you and XXth. to Thank XXth week we final Conference One plan attend joining Research today. comment, then

to with to like out you to an you’d the could or the please next Operator, meeting, We look providing respective arrange Group the management. request forward business quarter. a Shelton our update disconnect. If you contact now on may firm also to call reach

Operator

This for you call. today's your Thank concludes participation.

disconnect. may now You

Collectors Universe (CLCT) 2 Nov 202021 Q1 Earnings call transcript