Collectors Universe Announces Record Financial Results for Year; Auction Revenues Increase 269%, Drive Annual Revenues To Record $42 Million.Business Editors NEWPORT BEACH Newport Beach, residential and resort city (1990 pop. 66,643), Orange co., S Calif., on Newport Bay and the Pacific Ocean; inc. 1906. It is a popular seaside resort and yachting center. Manufactures include electrical and medical equipment, computers, boats, and adhesives. , Calif.--(BUSINESS WIRE)--Sept. 6, 2000 Collectors Universe, Inc. (Nasdaq:CLCT CLCT Calcite (lithological term) ) today announced record revenues and earnings for the fiscal year ended July July: see month. 1, 2000. Net revenues for the current fiscal year increased 88% to $42.4 million from $22.6 million in the prior year. Grading and authentication (1) Verifying the integrity of a transmitted message. See message integrity, e-mail authentication and MAC. (2) Verifying the identity of a user logging into a network. revenues rose 38% to $24.4 million from $17.7 million, and auction revenues grew 269% to $18.0 million from $4.9 million in fiscal year 1999. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the current fiscal year was $2.5 million compared to an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $796,000 for the prior fiscal year. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net income, which excludes amortization of intangibles and stock based compensation, and assumes a 42% tax rate due to the company's conversion to a "C" corporation from an "S" corporation in February 1999, was $2.4 million, or $0.10 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with pro forma net income of $456,000, or $0.02 per diluted share, for the prior fiscal year. Net income increased to $1.5 million, or $0.06 per diluted share, compared to a net loss of $170,000, or $0.01 per diluted share, for the prior fiscal year. Net revenues for the current fiscal fourth quarter rose to $11.3 million from $8.2 million in the same quarter last year, a 38% increase. Grading and authentication revenues increased 13% to $6.3 million from $5.5 million, and auction revenues increased 88% to $5.1 million from $2.7 million in the fourth quarter of last year. Operating income for the current fiscal fourth quarter increased to $970,000 from an operating loss of $1.7 million in the comparable prior year quarter. Pro forma net income was $846,000, or $0.03 per diluted share, compared to a pro forma net loss of $127,000, or $0.01 per diluted share, for the prior year's fourth quarter. Net income was $467,000, or $0.02 per diluted share, compared with a net loss of $943,000, or $0.05 per diluted share, for the fiscal 1999 fourth quarter. "I am pleased with our overall performance this past year. Gross profit this year was $22 million, which is approximately equal to our total revenue for the prior year," said David G. Hall, chairman and chief executive officer. "We believe that our co-branding sites with eBay and now Yahoo!, will provide increased visibility to a growing collectors audience. Also, we are very pleased with the strong operating performance of Bowers Bowers is a surname, and may refer to
2. He is the agent of both parties, the seller and the buyer. 2 Taunt. 38, 209 4 Greenl. R. 1; Chit. Contr. 208. 3. and dealer we acquired in March 2000, which contributed approximately 25% of total revenues and was accretive to earnings for the fiscal fourth quarter. "During the fiscal fourth quarter, it became clear that our weekly Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the auctions would continue to produce unacceptable operating losses unless substantial additional resources were committed to this business," added Hall. "Consequently, we made the decision to discontinue dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: these auctions and reduce and re-allocate overhead costs overhead costs see fixed costs. associated with them. In doing so, we expect the attractive margins which we enjoy in our grading services and premium auctions will be more fully reflected in subsequent periods without the operating losses associated with the weekly Internet auctions." This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties, including, but not limited to: the company's limited operating history, unpredictability of future revenues, potential fluctuations in quarterly operating results, seasonality, grading submission rates submission rate percentage of cows in a herd which come on heat and which are mated during a specified period, usually a month; the difference, i.e. those which come on heat and are not mated, are the deferred mating group. for rare coins and sportcards, realized average grading fees, competition, a possible decline in the popularity of some high-end collectibles, current losses in our auction business segment and, the limited availability When customers of the PSTN make telephone calls, they commonly make use of a telecommunications network called a switched-circuit network. In a switched-circuit network, devices known as switches are used to connect the caller to the callee. of high-end collectibles. Certain of these risks and uncertainties, in addition to other risks, are more fully described in our Prospectus dated November 4, 1999, which was part of our Registration Statement on Form S-1 filed with the Securities and Exchange Commission (SEC) and the Company's Form 10-Q Form 10-Q See 10-Q. filings for the first, second, third fiscal quarters of the current fiscal year and Form 8-K/A filed with the SEC on May 8, 2000. About Collectors Universe: Collectors Universe is the world's leading provider of grading and authentication services to the collectibles markets and one of the world's leading multi-market, multi-venue (Internet, telephone, and live) collectibles commerce providers. Collectors Universe grading and authentication services are an essential component of collectibles commerce and make sight-unseen collectibles e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. possible. Collectors Universe markets its online services through its own Web site (www.collectors.com) and co-branded sites with Yahoo! and other online collectors communities. To date, Collectors Universe has graded and authenticated au·then·ti·cate tr.v. au·then·ti·cat·ed, au·then·ti·cat·ing, au·then·ti·cates To establish the authenticity of; prove genuine: a specialist who authenticated the antique samovar. 8.5 million coins, sportscards, stamps, and autographs with a total declared value of over $9 billion. Collectors Universe's market leading, dominant grading brands include PCGS PCGS Professional Coin Grading Service PCGS Placer County Genealogical Society (California) (Professional Coin Grading Service The Professional Coin Grading Service (PCGS) is a third-party appraisal service for grading rare coins. It determines the condition and authenticity of each coin it grades to provide consumers with an independent knowledgeable rating on which to judge the coin. ) and PSA (Professional Services Automation) An information system designed to organize, track and manage all opportunities, work, resources, costs, revenues and invoices to improve the productivity and efficiency of the workforce. (Professional Sports The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. Authenticator The device in an authentication system that physically allows or blocks access to the network. It is typically an access point in a wireless system or a network access server (NAS) in a dial-up system. See 802.1X and authentication. ). Collectors Universe's market leading, dominant collectibles commerce brands include Bowers and Merena (Coins), Lyn Knight Currency Auctions, and Good Rockin' Tonight (rare records). TABLE FOLLOWS COLLECTORS UNIVERSE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (Unaudited)
Three Months Ended Twelve Months Ended
July 1, June 30, July 1, June 30,
2000 1999 2000 1999
Net revenues $ 11,326 $ 8,219 $ 42,374 $ 22,563
Cost of
revenues 5,023 3,933 20,185 8,654
Gross profit 6,303 4,286 22,189 13,909
Operating expenses:
Selling,
general and
administrative
expenses 4,887 4,536 18,553 13,124
Amortization
of goodwill 433 198 1,070 337
Stock-based
compensation 13 1,244 61 1,244
Total
operating
expenses 5,333 5,978 19,684 14,705
Operating
income (loss) 970 (1,692) 2,505 (796)
Interest
income, net 206 30 748 30
Other
expense, net (161) -- (161) (28)
Income (loss)
before
income taxes 1,015 (1,662) 3,092 (794)
Provision
(benefit)
for income
taxes 548 (719) 1,550 (624)
Net income
(loss) $ 467 $ (943) $1,542 $ (170)
Net income
(loss) per share:
Basic $ 0.02 $ (0.05) $ 0.07 $ (0.01)
Diluted $ 0.02 $ (0.05) $ 0.06 $ (0.01)
Weighted
average shares
outstanding:
Basic 25,429 20,282 23,330 17,644
Diluted 26,343 20,282 24,575 17,644
Pro Forma Results (a)
Pro forma
income (loss)
from operations $ 1,416 $ (250) $ 3,636 $ 785
Pro forma
net income
(loss) $ 846 $ (127) $ 2,445 $ 456
Pro forma
net income
(loss) per share:
Basic $ 0.03 $ (0.01) $ 0.10 $ 0.03
Diluted $ 0.03 $ (0.01) $ 0.10 $ 0.02
Weighted
average
shares
outstanding
used in
computation
of pro forma
net income
(loss), per share:
Basic 25,429 20,282 23,330 17,644
Diluted 26,343 20,282 24,575 18,765
(a): Pro forma results for the three and twelve month periods
ended July 1, 2000 and June 30, 1999 are presented for
informational purposes only and are not prepared in accordance
with general accepted accounting principles. These results
present the operating results of Collectors Universe, Inc.,
excluding charges of $446 thousand and $1,442 thousand for the
three month periods and $1,131 thousand and $1,581 thousand
for the twelve month periods ended July 1, 2000 and June 30,
1999, respectively, relating to the amortization of goodwill and
stock-based compensation and a 42.1% tax rate provision for all
periods presented.
COLLECTORS UNIVERSE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(Unaudited)
July 1, June 30,
ASSETS 2000 1999
Current assets:
Cash and cash equivalents $ 14,580 $ 1,852
Accounts receivable, net 10,157 2,026
Inventories, net 7,415 3,148
Prepaid expenses and other 2,566 514
Deferred and refundable taxes 738 218
Total current assets 35,456 7,758
Fixed assets, net 1,616 1,201
Notes receivable from
related party 152 178
Other assets 427 167
Intangibles, net 17,920 5,599
Deferred taxes 661 637
$ 56,232 $ 15,540
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 11,729 $ 2,430
Accrued liabilities 1,124 856
Accrued compensation and benefits 540 524
Deferred revenue 1,724 1,616
Income taxes payable -- 16
Total current liabilities 15,117 5,442
Shareholders' equity:
Common stock 25 20
Additional paid-in capital 41,055 11,586
Retained earnings (deficit) 35 (1,508)
Total shareholders' equity 41,115 10,098
$ 56,232 $ 15,540
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