UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of
The
Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): February 9,
2010
|
COLLECTORS UNIVERSE,
INC.
|
|
(Exact
name of registrant as specified in its
charter)
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Delaware
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1-34240
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33-0846191
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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1921 E. Alton Avenue, Santa Ana,
California
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92705
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (949)
567-1234
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N/A
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(Former
name or former address, if changed since last
report)
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[ ] Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
[ ] Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02 Results
of Operations and Financial Condition
On
February 9, 2010, Collectors Universe, Inc. (the “Company”) issued a press
release announcing its financial results for its second fiscal quarter ended
December 31, 2009. A copy of that press release is attached as Exhibit 99.1, and
by this reference is incorporated into, this Current Report on Form
8-K.
In
accordance with General Instruction B.2 of Form 8-K, the information in this
Current Report, including Exhibit 99.1 hereto, is being furnished and shall not
be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of
1934, as amended, or otherwise subject to the liabilities of that Section, nor
shall such information be deemed incorporated by reference in any filing under
the Securities Act of 1933, as amended.
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Item 9.01
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Financial
Statements and Exhibits.
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(d)
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Exhibits
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Exhibit
No.
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Description
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99.1
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Press
release issued by Collectors Universe, Inc. on February 9, 2010,
announcing its financial results for its second fiscal quarter ended
December 31, 2009.
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2
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this Current Report to be signed on its behalf by the undersigned,
hereunto duly authorized.
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COLLECTORS
UNIVERSE, INC.
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||
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Dated:
February 9, 2010
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By:
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/s/
JOSEPH J. WALLACE
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Joseph
J. Wallace, Chief Financial Officer
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||
S-1
EXHIBIT
INDEX
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Exhibit
No.
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Description
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99.1
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Press
release issued by Collectors Universe, Inc. on February 9, 2010,
announcing its financial results for its second fiscal quarter ended
December 31, 2009.
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E-1
Exhibit
99.1
Collectors
Universe Reports Results for Second Quarter Ended December 31, 2009
Operating
income of $1.5million and EPS of $0.22 for the quarter
NEWPORT
BEACH, CA – February 9, 2010 - Collectors Universe, Inc. (NASDAQ: CLCT), a
leading provider of value-added authentication and grading services to dealers
and collectors of high-value collectibles, today announced financial results for
its second fiscal quarter and six months ended December 31, 2009.
Overview
Continuing Operations Second Quarter
and First half of 2010
For the
current second quarter, the Company reported net service revenues of
$8.9 million, operating income of $1.5 million and after tax income from
continuing operations of $1.7 million, or $0.22 per diluted share. This
compares to net service revenues of $7.8 million, an operating loss of
$(419,000) and an after tax loss from continuing operations of $(1.6) million,
or $(0.17) per diluted share for the second quarter of fiscal
2009.
For the
first half of fiscal 2010, the Company’s net service revenues were $18.2
million, operating income was $3.3 million and after tax income from continuing
operations was $3.4million, or $0.45 per diluted share. This compares to
net service revenues of $16.8 million, an operating loss of $(86,000) and an
after tax loss from continuing operations of $(1.1) million, or $(0.12) per
diluted share, for the six months ended December 31, 2009.
Net
Income Second Quarter and First half of 2010
Net
income for the second quarter and first half of fiscal 2010 was $1.2 million or
$0.15 per diluted share and $2.8 million or $0.37 per diluted share,
respectively and included losses from discontinued operations of $(508,000) for
the quarter and $(561,000) for the six months, related to the Company’s New York
leases. The comparable net losses for the second quarter and first half of
fiscal 2009 of $(10.9) million and $(12.2) million, respectively included
operating losses and impairment charges related to our discontinued operations
of $(9.4) million for the second quarter and $(11.1) million for the first half
of fiscal 2009.
Operational and Financial
Highlights:
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§
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The
net service revenue increase of 14% in the current second quarter was
driven primarily by a 34% increase in coin service revenues. In
particular, our bulk grading business performed well above our
expectations.
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§
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Although
revenues increased by 14% and 8% in the current quarter and
six-month periods compared to the same periods of the prior
year, total operating expenses were down 10% and 14% in the
current quarter and six month periods, as a result of cost reduction
programs that we began implementing in fiscal
2009.
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§
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The
Company’s operating income for the current second quarter of $1.5 million
represented 16% of revenues, compared with a loss of $(419,000) or (5)% of
revenues in the second quarter of last
year.
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Collectors
Universe
Page 2 of 6
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§
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The
Company’s cash position at December 31, 2009 was $18.7 million, net of the
payment of dividends to stockholders of $1.9 million or $0.25 per share in
the second quarter.
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|
§
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On
January 25, 2010, the Company announced its quarterly cash dividend of
$0.25 per share per quarter payable on February 22, 2010 to stockholders
of record on February 8, 2010.
|
Michael
McConnell, Chief Executive Officer, stated, “We are pleased with the growth
achieved in both net service revenues and operating income in what is typically
our slowest period of the year. PCGS continues to develop innovative
service offerings for our growing client base. While PSA faces
industry headwinds on the top-line, the team has done an excellent job of
right-sizing operations to the current environment.”
Results
of Operations of our Continuing Businesses
The
growth in revenues of $1.1 million in the current second quarter and $1.3
million in the first half of the year was driven by revenue increases of $1.5
million for the quarter and $2.0 million for the six months, in our coin grading
and authentication business. Our other businesses continued to be impacted by
current economic conditions with our trading cards and autographs business
experiencing revenue declines of $0.2 million and $0.5 million for both the
current second quarter and six months, respectively, and other reductions mainly
in our stamp business. Our coin business represented 63% of our
revenues for the first half of the year.
The gross
profit margin of 59% in both the current year’s second quarter and six month
periods, compared with 48% and 52% for the second quarter and six month periods
of the prior year, reflects the benefits of operating leverage in our coin
grading and authentication business as well as continued efforts to improve
operational efficiency.
The
reductions in operating expenses to $3.8 million and $7.5 million, respectively,
in the current second quarter and six month periods reflect lower G&A
expenses for personnel and outside professional services. Stock-based
compensation costs increased in the current second quarter to $330,000 compared
to $261,000 in the same quarter of last year, reflecting the recognition of
performance based stock compensation determined to be probable in the second
quarter.
The
resulting operating income of $1.5 million and $3.3 million in the current
second quarter and six months represented 16% and 18% of revenues. By
comparison, the Company experienced operating losses of $(0.4) million and
$(0.1) million for the three and six month periods of the prior
year.
The
income tax benefits of $0.2 million and $75,000 for the current year second
quarter and six months reflect an annual effective tax rate of 5%, due to tax
net operating loss carry forwards from prior years offset by a benefit that
arose in the second quarter related to a change in the rules for alternative
minimum taxes.
Income
from continuing operations of $1.7 million or $0.22 per diluted share in the
current second quarter, and $3.4 million and or $0.45 per diluted share for the
current six months, reflects improved operating results and in the case of the
per share amounts also reflects a reduction in the number of shares outstanding
as a result of the repurchase of 1.75 million shares in the July 2009 Dutch
Auction Tender Offer.
Discontinued
Operations
The loss
from discontinued operations of $(0.5) million and $(0.6) million for the three
and six months ended December 31, 2009 relate to additional fair value accruals
for the leased facilities in New York City, associated with our former jewelry
businesses.
Financial
Condition
At
December 31, 2009, cash and cash equivalents totaled $18.7 million, compared
with $23.9 million at June 30, 2009. Net cash used of
$5.2 million in the first half of the year comprised of cash generated from
continuing operations of $3.9 million, the collection of a note receivable
of $2.3 million, the repurchase of shares in the Dutch Auction Tender Offer for
cash of $8.9 million, the payment of dividends to stockholders of $1.9 million
and cash of $0.6 million used in discontinued operations.
1
Collectors
Universe
Page 3 of 6
Outlook
McConnell
continued, “Despite the continued uncertain economic conditions that prevailed
in the first half of the year, our business has performed
admirably. We will continue to monitor short-term revenue trends and
activity and maintain a bottom line focus in 2010. ”
Conference
Call and Webcast
Collectors
Universe will host a conference call to discuss results on Tuesday, February 9,
2010 at 4:30 p.m. Eastern Time/1:30 p.m. Pacific
Time. Interested parties may participate in the conference call by
dialing 877-941-8610 or 480-629-9820, five to ten minutes prior to the
initiation of the call. A replay of the conference call will be
available through February 23, 2010, by dialing 800-406-7325 or 303-590-3030 and
entering access code 4206099#. A live webcast of the conference call
will also be available on the Collectors Universe website, www.collectors.com
under Investor Relations: Earnings Conference Calls. The webcast will
be archived for 12 months.
About
Collectors Universe
Collectors
Universe, Inc. is a leading provider of value added services to the high-value
collectibles markets. The Company authenticates and grades collectible coins,
trading cards, event tickets, autographs, memorabilia and stamps
(“collectibles”). The Company also compiles and publishes
authoritative information about United States and world coins, collectible
trading cards and sports memorabilia, collectible stamps, and operates its CCE
dealer-to-dealer Internet bid-ask market for certified coins and its Expos trade
show and conventions business. This information is accessible to
collectors and dealers at the Company's web site, http://www.collectors.com and is also
published in print.
Cautionary
Statements Regarding Forward Looking Information
This news
release contains statements regarding our expectations, beliefs or views about
our future financial performance and trends in our business and in our markets,
which constitute "forward-looking statements" as defined in the Private
Securities Litigation Reform Act of 1995. Forward looking statements can often
be identified by the use of words such as "believe," "expect," "anticipate,"
"intend," "plan," "estimate," "project," or future or conditional verbs such as
"will," "would," "should," "could," or "may."
Due to a
number of risks and uncertainties to which our business is subject, our future
financial performance may differ, possibly significantly, from our expected
financial performance as set forth in the forward looking statements contained
in this news release. Information regarding those risks and
uncertainties, and their possible impact on our future financial performance,
include, but are not limited to, our continued and increased dependence on our
coin business which generated 63% of our consolidated revenues and substantially
all of our operating income in the first half of the year, the risk that
economic conditions in the United States will not improve for some time and may
even deteriorate further, which could result in reductions in the demand for our
collectible grading services and, consequently, in our revenues; the risk that
the current economic recession and credit crisis will lead to longer term
changes in the spending habits of consumers and in the availability and use of
credit by smaller businesses, such as collectibles dealers, to fund purchases of
collectibles, which could lead to longer term declines in collectibles commerce
and, therefore, in the demand for our services; the risk that our strategy to
offer new services in our continuing collectibles markets will not be successful
in enabling us to improve our profitability or may even cause us to incur
significant losses; and the risk that the commercial real estate market in New
York City will deteriorate further, in which case we may not be able to sublease
the offices and laboratory facilities in New York City formerly occupied by our
jewelry businesses within the time periods and for the rents currently expected,
which would cause our net rental payment obligations to be significantly higher
than currently expected leading to reductions in cash flows and additional
losses from discontinued operations in future periods.
Collectors
Universe
Page 4 of 6
Additional
information regarding these risks and information regarding other risks and
uncertainties to which our business is subject is contained in our Annual Report
on Form 10-K for our fiscal year ended June 30, 2009 and our Quarterly Report on
Form 10-Q for the second quarter ended December 31, 2009 filed with the
Securities and Exchange Commission today. Due to these risks
and uncertainties, readers are cautioned not to place undue reliance on the
forward-looking statements contained in this news release or in our Annual or
Quarterly Reports, which speak only as of their respective dates. We
also disclaim any obligation to update or revise any of the forward-looking
statements as a result of new information, future events or otherwise, except as
may be required by law or NASDAQ rules.
|
Contact:
Joseph
Wallace
Chief
Financial Officer
Collectors
Universe, Inc.
949-567-1245
Email: jwallace@collectors.com
|
- tables
to follow -
Collectors
Universe
Page 5 of 6
COLLECTORS
UNIVERSE, INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In
Thousands, except per share data)
(unaudited)
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Three
Months Ended
December
31,
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Six
Months Ended
December
31,
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|||||||||||||||
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2009
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2008
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2009
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2008
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|||||||||||||
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Net
revenues
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$ | 8,883 | $ | 7,802 | $ | 18,181 | $ | 16,845 | ||||||||
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Cost
of revenues
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3,633 | 4,027 | 7,372 | 8,153 | ||||||||||||
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Gross profit
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5,250 | 3,775 | 10,809 | 8,692 | ||||||||||||
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Selling
and marketing expenses
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1,141 | 994 | 2,336 | 2,242 | ||||||||||||
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General
and administrative expenses
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2,644 | 3,200 | 5,212 | 6,536 | ||||||||||||
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Total
operating expenses
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3,785 | 4,194 | 7,548 | 8,778 | ||||||||||||
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Operating
income (loss)
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1,465 | (419 | ) | 3,261 | (86 | ) | ||||||||||
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Interest
and other income, net
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12 | 77 | 52 | 213 | ||||||||||||
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Income
before provision for income taxes
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1,477 | (342 | ) | 3,313 | 127 | |||||||||||
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Provision
(benefit) for income taxes
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(202 | ) | 1,210 | (75 | ) | 1,210 | ||||||||||
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Income
(loss) from continuing operations
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1,679 | (1,552 | ) | 3,388 | (1,083 | ) | ||||||||||
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Loss
from discontinued operations, net of loss on sales of discontinued
businesses,
net of income taxes
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(508 | ) | (9,373 | ) | (561 | ) | (11,139 | ) | ||||||||
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Net
income (loss)
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$ | 1,171 | $ | (10,925 | ) | $ | 2,827 | $ | (12,222 | ) | ||||||
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Net
income (loss) per basic share:
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||||||||||||||||
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Income
(loss) from continuing operations
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$ | 0.23 | $ | (0.17 | ) | $ | 0.45 | $ | (0.12 | ) | ||||||
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Loss
from discontinued operations
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(0.07 | ) | (1.03 | ) | (0.07 | ) | (1.22 | ) | ||||||||
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Net income
(loss)
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$ | 0.16 | $ | (1.20 | ) | $ | 0.38 | $ | (1.34 | ) | ||||||
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Net
income (loss) per diluted share:
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||||||||||||||||
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Income (loss) from continuing
operations
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$ | 0.22 | $ | (0.17 | ) | $ | 0.45 | $ | (0.12 | ) | ||||||
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Loss from discontinued
operations
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(0.07 | ) | (1.03 | ) | (0.08 | ) | (1.22 | ) | ||||||||
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Net income
(loss)
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$ | 0.15 | $ | (1.20 | ) | $ | 0.37 | $ | (1.34 | ) | ||||||
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Weighted
average shares outstanding:
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||||||||||||||||
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Basic
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7,404 | 9,079 | 7,478 | 9,113 | ||||||||||||
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Diluted
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7,555 | 9,079 | 7,592 | 9,113 | ||||||||||||
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Dividends declared per common
share
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$ | 0.25 | $ | - | $ | 0.25 | $ | 0.23 | ||||||||
Collectors
Universe
Page
6 of
6
COLLECTORS
UNIVERSE, INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In
Thousands, except per share data)
(unaudited)
|
December
31,
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June
30,
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|||||||
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ASSETS
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2009
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2009
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||||||
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Current
assets:
|
||||||||
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Cash and cash
equivalents
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$ | 18,696 | $ | 23,870 | ||||
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Accounts receivable, net of
allowance of $85 at December 31, 2009 and $63
at June 30, 2009
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1,237 | 1,252 | ||||||
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Inventories, net
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540 | 497 | ||||||
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Prepaid expenses and other current
assets
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1,155 | 868 | ||||||
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Customer notes
receivable
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- | 2,340 | ||||||
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Notes receivable from sale of
net assets of discontinued operations
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142 | 212 | ||||||
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Current assets of discontinued
operations
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37 | 102 | ||||||
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Total current
assets
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21,807 | 29,141 | ||||||
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Property and equipment,
net
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1,094 | 1,174 | ||||||
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Goodwill
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2,826 | 2,626 | ||||||
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Intangible assets,
net
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2,413 | 2,776 | ||||||
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Notes receivable from sale of net
of assets of discontinued operations
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212 | 300 | ||||||
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Other assets
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267 | 74 | ||||||
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Non-current assets of discontinued
operations
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182 | 182 | ||||||
| $ | 28,801 | $ | 36,273 | |||||
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LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
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Current
liabilities:
|
||||||||
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Accounts payable
|
$ | 998 | $ | 1,051 | ||||
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Accrued
liabilities
|
1,355 | 1,344 | ||||||
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Accrued compensation and
benefits
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1,201 | 1,341 | ||||||
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Income taxes
payable
|
172 | 252 | ||||||
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Net deferred income tax
liability
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71 | 60 | ||||||
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Deferred revenue
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2,196 | 1,883 | ||||||
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Current liabilities of
discontinued operations
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1,541 | 1,827 | ||||||
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Total current
liabilities
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7,534 | 7,758 | ||||||
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Deferred
rent
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275 | 220 | ||||||
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Net
deferred income tax liability
|
197 | 208 | ||||||
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Non-current
liabilities of discontinued operations
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3,460 | 3,308 | ||||||
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Commitments
and contingencies
|
||||||||
|
Stockholders’
equity:
|
||||||||
|
Preferred stock, $.001 par value;
3,000 shares authorized, none issued or outstanding
|
- | - | ||||||
|
Common stock, $.001 par value;
20,000 shares authorized; 7,683 and 9,158 issued and
outstanding
at December 31, 2009 June 30, 2009, respectively
|
8 | 9 | ||||||
|
Additional paid-in
capital
|
67,542 | 75,957 | ||||||
|
Accumulated
deficit
|
(50,215 | ) | (51,187 | ) | ||||
|
Total stockholders’
equity
|
17,335 | 24,779 | ||||||
| $ | 28,801 | $ | 36,273 | |||||