Collectors Universe, parent company of PSA, has announced it’s fourth quarter earnings for fiscal 2006.
Direct from the company’s PR Dept:
Collectors Universe, Inc. (NASDAQ: CLCT) , a leading provider of value-added authentication and grading services to dealers and collectors of high-value collectibles and to sellers and purchasers of diamonds, colored gemstones and other high value assets, today announced financial results for the fourth quarter and fiscal year ended June 30, 2006.
Fourth Quarters Ended June 30, 2006 and 2005. Net revenues increased 25% to a record $10.6 million for the three months ended June 30, 2006, compared to $8.5 million for the year ago quarter. Operating income for the fourth quarter of fiscal 2006 was $939,000 compared with $1.2 million for the fourth quarter of fiscal 2005 and income before taxes in the fourth quarter of 2006 was $1.5 million compared with $1.7 million in the fourth quarter of 2005. Income from continuing operations for the fourth quarter of 2006 was $777,000, or $0.09 per diluted share, compared to $1.0 million, or $0.12 per diluted share, for the fourth quarter of last year, while income from discontinued operations was $127,000, or $0.01 per diluted share, for the fourth quarter this year compared to $139,000, or $0.01 per diluted share, for the fourth quarter of last year. Net income was $904,000, or $0.10 per diluted share, for the fourth quarter of 2006 compared to $1.2 million or $0.13 per diluted share for the same period of the prior year.
Fiscal Years Ended June 30, 2006 and 2005. Fiscal year 2006 net revenues increased 10% to $36.9 million, from $33.6 million for fiscal 2005. Operating income for fiscal 2006 was $3.8 million compared with $7.0 million in fiscal 2005 and income before taxes was $6.1 million in fiscal 2006 compared to $7.9 million in fiscal 2005. Income from continuing operations for fiscal 2006 totaled $3.4 million, or $0.39 per diluted share, compared to $4.8 million, or $0.64 per diluted share, for fiscal 2005. Income from discontinued operations for fiscal 2006 totaled $296,000, or $0.03 per diluted share, compared to $60,000, or $0.01 per diluted share, for fiscal 2005. Fiscal 2006 net income was $3.7 million, or $0.42 per diluted share, compared with fiscal 2005 net income of $4.8 million, or $0.65 per diluted share.
Revenues. Revenue growth, in both the fourth quarter and fiscal year ended June 30, 2006, was primarily attributable to increases in the number of collectibles units authenticated and graded in both those periods, as compared to the corresponding periods of 2005, including our new diamond and currency grading businesses and (ii) service related revenues generated by other businesses that we acquired in the first half of 2006, including Certified Coin Exchange (CCE).
Operating Income. Operating income for the fourth quarter and fiscal year 2006 was reduced primarily by expenses incurred in the integration, infrastructure build and marketing re-launch of Company’s GCAL diamond division and by stock based compensation (which was not required to be recognized as an expense in 2005). GCAL incurred an operating loss of approximately $870,000 in the fourth quarter and approximately $1.5 million for fiscal 2006 which, for the year, consisted of approximately $600,000 in sales and marketing expenses and approximately $900,000 of general and administrative costs, including approximately $185,000 in non-cash expenses (principally depreciation and amortization of intangibles). Stock based compensation was $272,000 in the fourth quarter and $670,000 for the year ended June 30, 2006. In fiscal 2006, the Company also incurred additional infrastructure costs (which included investment in information technology systems, personnel and additional space) of approximately $170,000 in the fourth quarter and approximately $630,000 for the year, when compared to similar expenditures during the same corresponding periods of 2005, to support the growth of its business. Sarbanes-Oxley and accounting compliance costs increased in fiscal 2006, compared to the prior year, by approximately $130,000 in the fourth quarter and by approximately $400,000 for the year.
Financial Condition and Liquidity
At June 30, 2006, cash and cash equivalents totaled $52.1 million compared with $65.4 million at June 30, 2005.
This $13.3 million reduction was primarily attributable to the use of approximately $14.6 million of cash to fund four acquisitions during fiscal 2006, partially offset by cash generated from operations in fiscal 2006. In addition, the Company used cash of approximately $2.6 million to make repurchases of its common stock and $674,000 to pay its first dividend to stockholders pursuant to the cash dividend policy adopted by the Board of Directors, which calls for cash dividends of $0.08 per share per quarter. The Company has no long-term debt and continues to be able to fund operations with internally generated cash flow. Total stockholders’ equity was $71.9 million at June 30, 2006, compared with $70.6 million at June 30, 2005.
Commentary and Outlook
"Strong, consistent demand continued throughout fiscal 2006 in each of our collectibles markets, driving record unit performance metrics and record revenues, even though we experienced the partial loss of volume from one of our larger customers early in the fiscal year due to a serious illness encountered by its owner," said Michael Haynes, Chief Executive Officer. "Our higher general and administrative expenses reflect, in part, the non-capitalized portion of the re-investment of our profits into technology, infrastructure and the integration of new acquisitions to position ourselves for future growth. The increased selling and marketing expenses were the result of our emphasis on marketing and promotional programs, along with the re-launch and re-positioning in the fourth fiscal quarter of GCAL, our newly acquired diamond grading business. We also initiated the recognition of stock-based compensation expense in fiscal 2006 which, as a percentage of net revenues, increased our cost of sales by approximately 1% and our general and administrative expenses also by approximately 1%.
"Our outlook for fiscal 2007 includes increased revenues and operating cash flows generated from the new businesses that we acquired in fiscal 2006 and in the first quarter of fiscal 2007. We intend, during fiscal 2007, to continue to accelerate our penetration within our recently entered diamond and colored gemstone markets, and we plan to continue our efforts to identify additional high-value collectibles or high-value asset markets to build our market presence among dealers, buyers and sellers."
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