Form 8-K COLLECTORS UNIVERSE INC For: Feb 04

 

---

---

 

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 4, 2016

 

COLLECTORS UNIVERSE, INC.

 (Exact name of registrant as specified in its charter)

 

Delaware	1-34240	33-0846191
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

 

1921 E. Alton Avenue, Santa Ana, California		92705
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code: (949) 567-1234

 

N/A

(Former name or former address, if changed since last report)

 

 

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 4, 2016, Collectors Universe, Inc. (the “Company”) issued a press release announcing its consolidated financial results for its second quarter of fiscal year 2016, which ended on December 31, 2015. 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, information in Item 2.02 and Item 7.01 of this Report, and Exhibit 99.1 hereto, are being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall such information or such Exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”).

 

Item 9.01

Financial Statements and Exhibits.

	(d)     Exhibits.
	Exhibit No.		Description
	99.1		Press release issued February 4, 2016 by Collectors Universe, Inc. announcing its consolidated financial results for its second quarter of fiscal year 2016, ended December 31, 2015.

  

 

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.

 

		COLLECTORS UNIVERSE, INC.
Dated: February 5, 2016	By:	/s/ JOSEPH J. WALLACE
		Joseph J. Wallace, Chief Financial Officer

  

 

EXHIBIT INDEX

 

 

Exhibit No.		Description
99.1		Press release issued on February 4, 2016 by Collectors Universe, Inc. announcing its consolidated financial results for the second quarter of fiscal 2016, ended December 31, 2015.

 

 

 

E-1

 

Exhibit 99.1

 

 

Collectors Universe Reports Financial Results for 2^nd Quarter of Fiscal 2016

 

 

NEWPORT BEACH, CA – February 4, 2016 — 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 quarter of fiscal year 2016, ended December 31, 2015.

 

Operational and Financial Highlights:

 

■

Services revenues in the second quarter declined by $1.5 million or 11% to $12.6 million from $14.1 million in last year’s second quarter. In this year’s six months, service revenues declined by $3.1 million or 10% to $27.2 million from $30.3 million in last year’s six months. Revenues in last year’s second quarter and six months represented record revenues for each of those periods.

 

■

The service revenue declines related to our coin business and consistent with the first quarter primarily related to lower revenues from the U.S. Mint’s very popular Baseball Hall of Fame and 50th Anniversary Kennedy modern coin programs that favorably impacted last year’s second quarter and six months. There were no comparable U.S. Mint programs in the first half of this year.

 

■

The services gross profit margin was 60% and 63% in this year’s second quarter and six months as compared to 64% for both last year’s second quarter and six months. Our gross profit margin, on a quarterly basis, has typically varied between 59% and 64% in recent years.

 

■

Operating income was $1.7 million and $4.9 million in this year’s second quarter and six months, respectively, as compared to $2.6 million and $5.7 million in the same periods of the prior year. Included in these results are the expenses incurred to bring the Collectors.com search tool to market, which occurred in September 2015. To do so, we incurred losses of $0.5 million and $0.8 million for Collectors.com in this year’s second quarter and six months, respectively, as compared to $0.1million in the three and six months ended December 31, 2014. We will continue to develop this important part of our strategy throughout fiscal year 2016.

 

■

Income from continuing operations in this year’s second quarter and six months was $1.0 million or $0.12 per diluted share and $2.9 million or $0.34 per diluted share, respectively, as compared to $1.7 million or $0.20 per diluted share and $3.4 million or $0.41 per diluted shares in the corresponding periods of the prior year.

 

■

The Company’s cash position as of December 31, 2015 was $12.8 million as compared to $17.3 million as of June 30, 2015. Net cash used of $4.5 million in the six months, included $2.4 million of cash generated from continuing operations offset by $6.0 million used to pay cash dividends to stockholders and $0.7 million used for capital expenditures.

 

■

On January 25, 2016, we announced our quarterly cash dividend of $0.35 per share, which will be paid on February 26, 2016 to stockholders of record on February 17, 2016.

 

Commentary and Outlook

 

Robert Deuster, Chief Executive Officer, stated, “Clearly, our results so far this year, have shown the effect of the variability in the modern coin market. There were no significant commemorative coin issues by the US Mint in calendar year 2015. We also saw fewer special high value collector grading events in the last few quarters. However, we are optimistic about the start of the new coin year that just got underway and we continue to see growth opportunities in our China coin business. Our Sports and other businesses continue to perform nicely and we are investing in growth platforms like Collectors.com to further cement and leverage our premier brands in the collectibles market. ”

 

 

Collectors Universe, Inc.

Page 2 of 6

 

 

Conference Call and Webcast

 

Collectors Universe will host a conference call to discuss results on Thursday, February 4, 2016 at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time. Interested parties may participate in the conference call by dialing 888-455-2260 or 719-325-2244, five to ten minutes prior to the initiation of the call. A replay of the conference call will be available through February 18, 2016 by dialing 888-203-1112 or 719-457-0820 and entering access code 4947240#. A live webcast of the conference call will also be available on the Collectors Universe website, www.collectorsuniverse.com under Investor Relations: Events and Presentations. 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 and memorabilia (“collectibles”). The Company also compiles and publishes authoritative information about United States and world coins, collectible trading cards and sports memorabilia (“collectibles”), 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 website, http://www.collectorsuniverse.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 and our markets are subject, our future financial performance may differ, possibly significantly, from expectations regarding our future financial performance that are expressed in, or that may be implied or inferred from the discussion of our operating results in this news release. Those risks and uncertainties, and their possible impact on our future financial performance, include, but are not limited to, the following: our continued dependence on our coin business which historically has generated more than 60% of our consolidated revenues and a substantial portion of our operating income, making our operating results more vulnerable to conditions that could adversely affect or cause stagnation in the prices of precious metals and collectible coins; the variability of the modern coin market, which can lead to period-over-period fluctuations in our service revenues; the risks that the economic recovery may stall, or that domestic or international economic conditions may deteriorate as a result of events outside of our control, that could lead to reductions in the demand for our collectibles authentication and grading services and, consequently, in our revenues and operating results; the risk that the weakness or volatility of economic conditions in the United States and worldwide 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 risks that claims under our coin and trading card authentication and grading warranties will increase substantially and that the warranty reserves we maintain for such claims, will, prove to be inadequate, which could cause our gross margin and operating results to decline or cause us to incur operating losses; the risk that our strategies of offering new services and expanding our collectibles authentication and grading business into new geographic areas, such as Europe and Asia will not be successful in enabling us to improve our profitability or may even cause us to incur significant losses; the risks and added complexity of conducting business overseas; the risk that it may become necessary for us to reduce the amount of, or suspend or discontinue the payment of cash dividends in the future, due to conditions or circumstances outside of our control, such as adverse economic or general market conditions, as well as our future financial performance and the cash needs of our business in the future.

 

Additional information regarding these risks and other risks and uncertainties to which our business is subject is contained in Item 1A, entitled “Risk Factors”, in our Annual Report on Form 10-K for our fiscal year ended June 30, 2015 which we filed with the Securities and Exchange Commission on August 27, 2015 and readers of this news release are urged to review the discussion of those risks and uncertainties in that Report. Also, our actual financial results in the future may differ from those currently expected due to additional risks and uncertainties of which we are not currently aware or which we do not currently view as, but in the future may become, material to our business or operating results. 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 filed with the Securities and Exchange Commission, which speak only as of their respective dates. We also disclaim any obligation to update or revise any of the forward-looking statements contained in this news release or in our Annual Report on Form 10-K, as a result of new information, future events or otherwise, except as may be required by law or NASDAQ rules.

 

 

Collectors Universe, Inc.

Page 3 of 6 

 

 

Contact: Joseph Wallace Chief Financial Officer Collectors Universe 949-567-1245 Email: [email protected]

- tables to follow - 

 

 

Collectors Universe, Inc.

Page 4 of 6 

 

 

COLLECTORS UNIVERSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, except per share data)

(Unaudited)

 

 

		Three Months Ended December 31,								Six Months Ended December 31,
		2015				2014				2015				2014
Net revenues:
Grading, and authentication and related services		$	12,636			$	14,148			$	27,249			$	30,317
Product Sales			-				-				5				9
			12,636				14,148				27,254				30,326
Cost of revenues:
Grading, authentication and related services			5,006				5,048				10,145				10,827
Product sales			4				19				11				36
			5,010				5,067				10,156				10,863
Gross profit			7,626				9,081				17,098				19,463
Operating expenses:
Selling and marketing expenses			2,040				2,147				4,209				4,514
General and administrative expenses			3,897				4,288				8,004				9,277
Total operating expenses			5,937				6,435				12,213				13,791
Operating income			1,689				2,646				4,885				5,672
Interest income and other expense, net			(15	)			(7	)			(42	)			(2	)
Income before provision for income taxes			1,674				2,639				4,843				5,670
Provision for income taxes			679				971				1,906				2,220
Income from continuing operations			995				1,668				2,937				3,450
Income (loss) from discontinued operations, net of income taxes			(6	)			(13	)			(17	)			9
Net income		$	989			$	1,655			$	2,920			$	3,459
Net income per basic share:
Income from continuing operations		$	0.12			$	0.20			$	0.35			$	0.41
Income from discontinued operations			-				-				-				0.01
Net income per basic share		$	0.12			$	0.20			$	0.35			$	0.42
Net income per diluted share:
Income from continuing operations		$	0.12			$	0.20			$	0.34			$	0.41
Loss from discontinued operations			-				(0.01	)			-				-
Net income per diluted share		$	0.12			$	0.19			$	0.34			$	0.41
Weighted average shares outstanding:
Basic			8,441				8,339				8,438				8,333
Diluted			8,549				8,519				8,541				8,511
Dividends declared per common share		$	0.35			$	0.325			$	0.70			$	0.65
Note:
Non-cash stock-based compensation included above		$	140			$	433			$	291			$	1,365

 

 

Collectors Universe, Inc.

Page 5 of 6  

 

  

COLLECTORS UNIVERSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands, except per share data)

(Unaudited) 

 

		December 31, 2015				June 30, 2015
ASSETS
Current assets:
Cash and cash equivalents		$	12,794			$	17,254
Accounts receivable, net of allowance of $30 and $33 at December 31, 2015 and June 30, 2015, respectively			2,090				2,460
Inventories, net			1,765				1,619
Prepaid expenses and other current assets			991				940
Deferred income tax assets			1,599				1,599
Total current assets			19,239				23,872
Property and equipment, net			2,656				2,326
Goodwill			2,083				2,083
Intangible assets, net			1,707				1,558
Deferred income tax assets			1,945				1,945
Other assets			377				236
Non-current assets of discontinued operations			79				182
Total assets		$	28,086			$	32,202
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	1,816			$	1,961
Accrued liabilities			2,979				2,898
Accrued compensation and benefits			2,166				3,890
Income taxes payable			905				521
Deferred revenue			2,914				2,621
Current liabilities of discontinued operations			695				778
Total current liabilities			11,475				12,669
Deferred rent			394				422
Non-current liabilities of discontinued operations			441				642
Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock, $.001 par value; 3,000 shares authorized; no shares issued or outstanding			-				-
Common stock, $.001 par value; 20,000 shares authorized; 8,898 and 8,882 issued and outstanding at December 31, 2015 and June 30, 2015, respectively.			9				9
Additional paid-in capital			80,136				79,848
Accumulated deficit			(64,369	)			(61,388	)
Total stockholders’ equity			15,776				18,469
Total liabilities and stockholders’ equity		$	28,086			$	32,202

  

 

Collectors Universe, Inc.

Page 6 of 6   

 

 

COLLECTORS UNIVERSE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

 

		Six Months Ended December 31,
		2015				2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	2,920			$	3,459
Discontinued operations			17				(9	)
Income from continuing operations			2,937				3,450
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
Depreciation and amortization expense			699				671
Stock-based compensation expense			291				1,365
Provision for bad debts			1				-
Provision for inventory write-down			42				151
Provision for warranty			224				241
Gain on sale of property and equipment			(2	)			(1	)
Loss on sale of business			-				1
Change in operating assets and liabilities:
Accounts receivable			362				(448	)
Inventories			(188	)			(381	)
Prepaid expenses and other			(51	)			464
Other assets			(141	)			21
Accounts payable and accrued liabilities			(657	)			(480	)
Accrued compensation and benefits			(1,724	)			(1,434	)
Income taxes payable			382				(88	)
Deferred revenue			293				444
Deferred rent			(28	)			(13	)
Net cash provided by operating activities of continuing operations			2,440				3,963
Net cash used in operating activities of discontinued businesses			(199	)			(313	)
Net cash provided by operating activities			2,241				3,650
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and equipment			-				2
Proceeds from sale of business			9				80
Purchase of business			-				(200	)
Capital expenditures			(292	)			(275	)
Capitalized software			(371	)			(34	)
Patents and other intangibles			(26	)			(10	)
Net cash used in investing activities			(680	)			(437	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid to common stockholders			(6,021	)			(5,468	)
Payments for retirement of common stock			-				(504	)
Net cash used in financing activities			(6,021	)			(5,972	)
Net decrease in cash and cash equivalents			(4,460	)			(2,759	)
Cash and cash equivalents at beginning of period			17,254				19,909
Cash and cash equivalents at end of period		$	12,794			$	17,150
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Income taxes paid during the period		$	1,513			$	2,305

 

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Charting New Paths: Mannatech Expanding with Thailand Office, Grand Opening, September 2024
• StakingFarm Introduces Best Crypto Staking Offers to Attract Investors
• ChampionX Reports First Quarter 2024 Results