Collectors Universe (CLCT) Reports Preliminary Operating Results for the Second Quarter

Collectors Universe, Inc. (NASDAQ: CLCT) (“Collectors Universe” or the “Company”), a leading provider of value-added authentication and grading services to dealers and collectors of collectibles, today announced preliminary financial results for the second quarter ended December 31, 2020.

The Company expects second quarter revenues to be approximately $35.4 million. For the same period, gross margin is expected to be approximately 64% and operating income is expected to be approximately $10.0 million, after transaction costs of approximately $3.0 million and non-cash stock-based compensation costs of approximately $1.8 million. These preliminary results are subject to change, and are expected to be finalized in early February 2021, as the Company progresses through its normal quarter-end processes.

Joseph J. Orlando, President and Chief Executive Officer, said, “Collectors Universe achieved strong second quarter operating results. Our second quarter performance was largely attributable to an increase in top-tier services performed by our PSA division. These smaller batch, rapid turnaround services have resulted in an average selling price, or ASP, that is 35% higher than the prior quarter and approximately 65% higher than the average ASP currently reflected in our backlog. As noted during our Q1 2021 earnings call, the average ASP in PSA can fluctuate due to changes in submission mix and overall market conditions. Our forecast for fiscal year 2022 and beyond remains unchanged in light of expected downward pressure on ASP as we work through our sizable backlog.”

Tender Offer

In a separate press release issued today, Collectors Universe announced that it has entered into an amended and restated merger agreement under which Cards Acquisition Inc., an affiliate of the investor group led by Nat Turner, D1 Capital Partners L.P., and Cohen Private Ventures, LLC, has increased its offer to acquire all of the outstanding shares of Collectors Universe to $92.00 per share in cash. The “best and final” offer represents an approximately 32% premium to Collectors Universe’s unaffected share price on November 25, 2020, the last full trading day before the transaction was announced, and a premium of 18% to the Company’s closing share price on January 19, 2021. The tender offer commenced on December 17, 2020 and has been extended to February 3, 2021.

The Collectors Universe Board of Directors today unanimously reaffirmed its support of, and recommendation that all shareholders tender their shares in the tender offer, as more completely described in the Schedule 14D-9 previously filed by Collectors Universe with the Securities and Exchange Commission on December 17, 2020, subsequent amendments thereto and in the separate press release issued today.

A.J. “Bert” Moyer, Chairman of the Collectors Universe Board of Directors, said, “This enhanced, ‘best and final’ offer recognizes the strong momentum in our business and provides certainty of value in an uncertain economic environment. While the Board has a high degree of confidence in management’s plan, it also believes that there is a significant risk that the Company’s recent growth rate will decline over time. For these reasons, the Board continues to believe that this transaction and the certainty it provides is in the best interest of shareholders.”

Cards Acquisition Inc.’s tender offer statement on Schedule TO, as well as Collectors Universe’s solicitation/recommendation statement on Schedule 14D-9, will be amended to reflect the revised terms of the transaction.

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