(Mark
One)
|
|
ý
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the quarter ended September 30, 2008
|
|
OR
|
|
q
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED]
|
For
the transition period from _______ to _____
|
|
Commission
file number 0-27887
|
|
![]() COLLECTORS
UNIVERSE, INC.
(Exact
name of Registrant as specified in its
charter)
|
Delaware
|
33-0846191
|
(State
or other jurisdiction of
|
(I.R.S.
Employer Identification No.)
|
Incorporation
or organization)
|
|
1921
E. Alton Avenue, Santa Ana, California 92705
|
|
(address of principal executive
offices and zip code)
|
|
Registrant's
telephone number, including area code: (949)
567-1234
|
Large
accelerated filer o
|
Accelerated
filer ý
|
Non-accelerated
filer o
|
Class
|
Outstanding at October 31,
2008
|
||
Common
Stock $.001 Par Value
|
9,109,467
|
||
PART
I
|
Financial
Information
|
Page
|
|
1
|
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2
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3
|
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4
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14
|
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14
|
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14
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15
|
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15
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17
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17
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21
|
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22
|
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24
|
|||
24
|
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PART
II
|
Other
Information
|
||
25
|
|||
25
|
|||
25
|
|||
25
|
|||
S-1
|
|||
E-1
|
|||
EXHIBITS
|
|||
Exhibit 3.3
|
Amended
and Restated Bylaws of Collectors Universe, Inc. as Adopted and Effective
September 26, 2008
|
||
Exhibit 31.1
|
Certifications
of Chief Executive Officer Under Section 302 of the Sarbanes-Oxley Act of
2002
|
||
Exhibit 31.2
|
Certifications
of Chief Financial Officer Under Section 302 of the Sarbanes-Oxley Act of
2002
|
||
Exhibit 32.1
|
Chief
Executive Officer Certification Under Section 906 of the Sarbanes-Oxley
Act of 2002
|
||
Exhibit 32.2
|
Chief
Financial Officer Certification Under Section 906 of the Sarbanes-Oxley
Act of 2002
|
September
30,
|
June
30,
|
|||||||
ASSETS
|
2008
|
2008
|
||||||
Current
assets:
|
||||||||
Cash and cash
equivalents
|
$ | 22,952 | $ | 23,345 | ||||
Accounts receivable, net of
allowance of $88 at September 30, 2008 and $79 at
June 30, 2008
|
1,309 | 1,414 | ||||||
Refundable income
taxes
|
575 | 575 | ||||||
Inventories, net
|
1,074 | 983 | ||||||
Prepaid expenses and other current
assets
|
1,041 | 1,029 | ||||||
Customer notes receivable, net of
allowance of $31 at September 30, 2008 and June
30, 2008
|
1,749 | 2,062 | ||||||
Net deferred income tax
asset
|
486 | 486 | ||||||
Customer notes receivables held
for sale
|
599 | 3,579 | ||||||
Receivables from sale of net
assets of discontinued operations
|
92 | 92 | ||||||
Total current
assets
|
29,877 | 33,565 | ||||||
Property and equipment,
net
|
4,551 | 4,482 | ||||||
Goodwill
|
3,974 | 3,974 | ||||||
Intangible assets,
net
|
8,417 | 8,494 | ||||||
Net deferred income tax
asset
|
909 | 909 | ||||||
Note receivable from sale of
discontinued operations
|
115 | 138 | ||||||
Other assets
|
463 | 456 | ||||||
$ | 48,306 | $ | 52,018 | |||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts payable
|
$ | 2,032 | $ | 1,870 | ||||
Accrued
liabilities
|
1,508 | 1,766 | ||||||
Accrued compensation and
benefits
|
1,254 | 1,471 | ||||||
Income taxes
payable
|
360 | 368 | ||||||
Deferred revenue
|
1,750 | 2,084 | ||||||
Current liabilities of
discontinued operations
|
9 | 9 | ||||||
Total current
liabilities
|
6,913 | 7,568 | ||||||
Deferred
rent and other long-term liabilities
|
673 | 620 | ||||||
Commitments
and contingencies
|
- | - | ||||||
Stockholders’
equity:
|
||||||||
Preferred stock, $.001 par value;
5,000 shares authorized;
|
||||||||
No shares issued or
outstanding
|
- | - | ||||||
Common stock, $.001 par value;
45,000 shares authorized;
|
||||||||
shares outstanding: 9,189 at
September 30, 2008 (including 828 shares issued on November
3, 2008 as a stock dividend)
and
8,361 at June 30, 2008
|
9 | 8 | ||||||
Additional paid-in
capital
|
76,273 | 75,996 | ||||||
Accumulated
deficit
|
(35,562 | ) | (32,174 | ) | ||||
Total stockholders’
equity
|
40,720 | 43,830 | ||||||
$ | 48,306 | $ | 52,018 |
Three
Months Ended
|
||||||||
September
30,
|
||||||||
2008
|
2007
|
|||||||
Net
revenues
|
$ | 9,692 | $ | 10,825 | ||||
Cost
of revenues
|
5,182 | 5,200 | ||||||
Gross profit
|
4,510 | 5,625 | ||||||
Selling
and marketing expenses
|
1,730 | 2,018 | ||||||
General
and administrative expenses
|
3,901 | 3,948 | ||||||
Amortization
of intangible assets
|
310 | 270 | ||||||
Total operating
expenses
|
5,941 | 6,236 | ||||||
Operating
loss
|
(1,431 | ) | (611 | ) | ||||
Interest
income, net
|
125 | 444 | ||||||
Other
income
|
10 | 1 | ||||||
Loss
before benefit for income taxes
|
(1,296 | ) | (166 | ) | ||||
Income
tax benefit
|
- | (66 | ) | |||||
Loss
from continuing operations
|
(1,296 | ) | (100 | ) | ||||
Loss
from discontinued operations (net of income taxes)
|
(1 | ) | (10 | ) | ||||
Net
loss
|
$ | (1,297 | ) | $ | (110 | ) | ||
Net
loss per basic share:
|
||||||||
Loss
from continuing operations
|
$ | (0.14 | ) | $ | (0.01 | ) | ||
loss from discontinued operations (net of income taxes)
|
- | - | ||||||
Net loss
|
$ | (0.14 | ) | $ | (0.01 | ) | ||
Net
loss per diluted share:
|
||||||||
loss from continuing operations
|
$ | (0.14 | ) | $ | (0.01 | ) | ||
loss from discontinued operations (net of income taxes)
|
- | - | ||||||
Net loss
|
$ | (0.14 | ) | $ | (0.01 | ) | ||
Weighted
average shares outstanding:
|
||||||||
Basic
|
9,150 | 9,310 | ||||||
Diluted
|
9,150 | 9,310 | ||||||
Dividends declared per common
share
|
$ | 0.25 | $ | 0.25 |
Three
Months Ended
September
30,
|
||||||||
2008
|
2007
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
loss
|
$ | (1,297 | ) | $ | (110 | ) | ||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||
Depreciation and
amortization
|
650 | 574 | ||||||
Impairment of fixed
assets
|
- | 1 | ||||||
Stock-based compensation
expense
|
278 | 246 | ||||||
Interest on note
receivable
|
- | (3 | ) | |||||
Provision for inventory write
down
|
12 | 10 | ||||||
Discontinued
operations
|
1 | 10 | ||||||
Deferred income
taxes
|
- | 19 | ||||||
Gain on sale of notes
receivable
|
(10 | ) | - | |||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
receivable
|
(96 | ) | (395 | ) | ||||
Inventories
|
(103 | ) | 5 | |||||
Prepaid expenses and other
current assets
|
189 | (11 | ) | |||||
Other assets
|
(11 | ) | (8 | ) | ||||
Income taxes
payable
|
(8 | ) | 10 | |||||
Accounts
payable
|
163 | (329 | ) | |||||
Accrued
liabilities
|
(258 | ) | (30 | ) | ||||
Deferred rent and other
long-term liabilities
|
52 | (13 | ) | |||||
Accrued compensation and
benefits
|
(217 | ) | (540 | ) | ||||
Deferred
revenue
|
(335 | ) | (344 | ) | ||||
Net cash used in operating
activities
|
$ | (990 | ) | $ | (908 | ) | ||
Net
cash (used in) provided by operating activities of discontinued
businesses
|
(1 | ) | 13 | |||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Capital
expenditures
|
(406 | ) | (361 | ) | ||||
Collection
of receivables from sales of discontinued businesses
|
23 | 22 | ||||||
Advances
on customer notes receivables
|
(333 | ) | (1,926 | ) | ||||
Proceeds
from customer notes receivables
|
3,636 | 769 | ||||||
Capitalized
software
|
(232 | ) | (361 | ) | ||||
Net cash provided by (used in)
investing activities
|
2,688 | (1,857 | ) | |||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds
from exercise of stock options
|
- | 72 | ||||||
Dividends
paid to common stockholders
|
(2,090 | ) | (2,129 | ) | ||||
Net cash used in financing
activities
|
(2,090 | ) | (2,057 | ) | ||||
Net
decrease in cash and cash equivalents
|
(393 | ) | (4,809 | ) | ||||
Cash
and cash equivalents at beginning of period
|
23,345 | 42,386 | ||||||
Cash
and cash equivalents at end of period
|
$ | 22,952 | $ | 37,577 | ||||
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||
Interest
paid
|
$ | 2 | $ | - | ||||
Income
taxes paid
|
$ | 8 | $ | - |
Three
Months Ended
September
30,
(in
thousands)
|
||||||||
2008
|
2007
|
|||||||
Included
in:
|
||||||||
Cost
of revenues
|
$ | 82 | $ | 61 | ||||
Selling
and marketing expenses
|
- | (7 | ) | |||||
General
and administrative expenses(1)
|
196 | 192 | ||||||
Pre-tax
stock-based compensation expense
|
$ | 278 | $ | 246 |
|
(1)
|
Includes
$91,000 and $82,000 in the three months ended September 30, 2008 and 2007,
respectively, for amortization of compensation expense related to issuance
of restricted stock.
|
Shares
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Term
|
Aggregate
Intrinsic
Value
|
|||||||||
Options:
|
||||||||||||
Outstanding
at June 30, 2008
|
927,200 | $ | 12.54 |
5.5
yrs.
|
$ | 314,000 | ||||||
Granted
|
- | - | ||||||||||
Exercised
|
(100 | ) | 2.80 | |||||||||
Forfeited
or cancelled
|
(35,800 | ) | 11.58 | |||||||||
Outstanding
at September 30, 2008
|
891,300 | $ | 12.57 |
5.3
yrs.
|
$ | 483,000 | ||||||
Exercisable
at September 30, 2008
|
710,600 | $ | 12.43 |
4.8
yrs.
|
$ | 483,000 | ||||||
Unvested
at September 30, 2008
|
180,700 | $ | 13.13 |
7.0
yrs.
|
$ | - | ||||||
Expect
to vest at September 30, 2008
|
170,900 | $ | 13.15 |
6.9
yrs.
|
$ | - |
Non-Vested
Shares:
|
Shares
|
Weighted
Average
Grant-Date
Fair
Value
|
|||||
Non-vested
at June 30, 2008
|
50,359 | $ | 12.60 | ||||
Granted
|
- | - | |||||
Vested
|
(11,333 | ) | 12.58 | ||||
Forfeited or
Cancelled
|
- | - | |||||
Non-vested
at September 30, 2008
|
39,026 | $ | 12.60 |
Fiscal
Year Ending June 30,
|
Amount
|
||
2009
|
394,000 | ||
2010
|
271,000 | ||
2011
|
125,000 | ||
2012
|
16,000 | ||
$ | 806,000 |
|
Concentrations
|
3.
|
FAIR
VALUE MEASUREMENTS
|
In September 2006, the Financial Accounting Standards Board (“FASB”)
issued Statement of Financial Accounting Standards (“SFAS”) No. 157, Fair Value
Measurements. SFAS 157 defines fair value, establishes a
framework for measuring fair value in accordance with U.S. GAAP, and
expands disclosures about fair value measurements, SFAS 157 is effective
for financial statements issued for fiscal years beginning after November
15, 2007, and interim periods within those fiscal years. In
February 2008, the FASB issued SFAS No. 157-2, Effective Date of FASB
Statement No. 157, which delays the effective date of SFAS 157 to
fiscal years beginning after November 15, 2008 for all nonfinancial assets
and nonfinancial liabilities, except for those that are recognized or
disclosed at fair value in the financial statements on a recurring
basis. The Company has adopted the provisions of SFAS 157 as of
July 1, 2008 for financial assets, including cash and cash equivalents,
and SFAS 157-2 will be adopted as of July 1, 2009 for nonfinancial assets
and nonfinancial liabilities.
|
(in
thousands)
|
||||||||||||||||
Total
As
of
September
30, 2008
|
Quoted
Prices
in
Active
Markets
or
Identical
Assets
(Level
1)
|
Significant
Other
Observable
Inputs
(Level
2)
|
Significant
Unobservable
Inputs
(Level
3)
|
|||||||||||||
Cash
and cash equivalents
|
$ | 22,952 | $ | 22,952 | $ | - | $ | - | ||||||||
Total
|
$ | 22,952 | $ | 22,952 | $ | - | $ | - |
4.
|
INVENTORIES
|
Inventories
consist of the following:
|
||||||||
(in
thousands)
|
||||||||
September
30,
|
June
30,
|
|||||||
2008
|
2008
|
|||||||
Coins
|
$ | 813 | $ | 751 | ||||
Other
collectibles
|
28 | 28 | ||||||
Grading
raw materials consumable inventory
|
336 | 295 | ||||||
1,177 | 1,074 | |||||||
Less
inventory
reserve
|
(103 | ) | (91 | ) | ||||
Inventories,
net
|
$ | 1,074 | $ | 983 |
Property
and equipment consist of the following:
|
||||||||
(in
thousands)
|
||||||||
September
30,
|
June
30,
|
|||||||
2008
|
2008
|
|||||||
Coins
and stamp grading reference sets
|
$ | 614 | $ | 610 | ||||
Computer
hardware and equipment
|
1,554 | 1,876 | ||||||
Computer
software
|
1,035 | 1,035 | ||||||
Equipment
|
4,216 | 4,206 | ||||||
Furniture
and office
equipment
|
1,124 | 1,117 | ||||||
Leasehold
improvements
|
1,964 | 1,598 | ||||||
Trading
card reference
library
|
52 | 52 | ||||||
10,559 | 10,494 | |||||||
Less
accumulated depreciation and amortization
|
(6,008 | ) | (6,012 | ) | ||||
Property
and equipment, net
|
$ | 4,551 | $ | 4,482 |
Accrued
liabilities consist of the following:
|
(in
thousands)
|
|||||||
September
30,
|
June
30,
|
|||||||
2008
|
2008
|
|||||||
Warranty
costs
|
$ | 658 | $ | 687 | ||||
Professional
fees
|
258 | 125 | ||||||
Other
|
592 | 954 | ||||||
$ | 1,508 | $ | 1,766 |
(in
thousands)
|
||||||||
Three
Months
Ended
September
30,
|
Three
Months
Ended
September
30,
|
|||||||
2007
|
2008
|
|||||||
Warranty
reserve, beginning of
period
|
$ | 687 | $ | 735 | ||||
Charged
to cost of
revenue
|
133 | 107 | ||||||
Payments
|
(162 | ) | (79 | ) | ||||
Warranty
reserve, end of
period
|
$ | 658 | $ | 763 |
7.
|
DISCONTINUED
OPERATIONS
|
8.
|
INCOME
TAXES
|
9.
|
NET
LOSS PER SHARE
|
(In
thousands,
except
per share data)
|
||||||||
Three
Months Ended
September
30,
|
||||||||
2008
|
2007
|
|||||||
Loss
from continuing operations
|
$ | (1,296 | ) | $ | (100 | ) | ||
Loss
from discontinued operations (net of income taxes)
|
(1 | ) | (10 | ) | ||||
Net
loss
|
$ | (1,297 | ) | $ | (110 | ) | ||
NET
LOSS PER SHARE – BASIC:
|
||||||||
Loss from continuing
operations
|
$ | (0.14 | ) | $ | (0.01 | ) | ||
Loss from discontinued
operations (net of income taxes)
|
- | - | ||||||
Total
|
$ | (0.14 | ) | $ | (0.01 | ) | ||
NET
LOSS PER SHARE – DILUTED:
|
||||||||
Loss from continuing
operations
|
$ | (0.14 | ) | $ | (0.01 | ) | ||
Loss from discontinued
operations (net of income taxes)
|
- | - | ||||||
Total
|
$ | (0.14 | ) | $ | (0.01 | ) | ||
WEIGHTED
AVERAGE SHARES OUTSTANDING:
|
||||||||
Basic
|
9,150 | 9,310 | ||||||
Effect of dilutive
shares
|
- | - | ||||||
Diluted
|
9,150 | 9,310 |
10.
|
BUSINESS
SEGMENTS
|
(in
thousands)
|
||||||||
Three
Months Ended September 30,
|
||||||||
2008
|
2007
|
|||||||
Net
revenues from external customers
|
||||||||
Coins
|
$ | 4,995 | $ | 6,038 | ||||
Sportscards
|
2,189 | 2,292 | ||||||
Jewelry
|
435 | 380 | ||||||
Other
|
2,073 | 2,115 | ||||||
Total revenue
|
$ | 9,692 | $ | 10,825 | ||||
Amortization
and depreciation
|
||||||||
Coins
|
$ | 75 | $ | 56 | ||||
Sportscards
|
49 | 23 | ||||||
Jewelry
|
318 | 314 | ||||||
Other
|
120 | 98 | ||||||
Total
|
562 | 491 | ||||||
Unallocated amortization and
depreciation
|
88 | 83 | ||||||
Consolidated amortization and
depreciation
|
$ | 650 | $ | 574 | ||||
Stock-based
compensation
|
||||||||
Coins
|
$ | 33 | $ | 34 | ||||
Sportscards
|
- | 5 | ||||||
Jewelry
|
3 | 3 | ||||||
Other
|
53 | 28 | ||||||
Total
|
89 | 70 | ||||||
Unallocated stock-based
compensation
|
189 | 176 | ||||||
Consolidated stock-based
compensation
|
$ | 278 | $ | 246 | ||||
Operating
loss before unallocated expenses
|
||||||||
Coins
|
$ | 1,801 | $ | 2,484 | ||||
Sportscards
|
345 | 518 | ||||||
Jewelry
|
(1,630 | ) | (1,810 | ) | ||||
Other
|
19 | 310 | ||||||
Total
|
535 | 1,502 | ||||||
Unallocated operating
expenses
|
(1,966 | ) | (2,113 | ) | ||||
Consolidated operating
loss
|
$ | (1,431 | ) | $ | (611 | ) |
(in
thousands)
|
||||||||
At
September 30,
|
At
June 30,
|
|||||||
Identifiable
Assets
|
2008
|
2008
|
||||||
Coins
|
$ | 3,212 | $ | 3,346 | ||||
Sportscards
|
996 | 1,035 | ||||||
Jewelry
|
9,240 | 9,061 | ||||||
Other
|
7,654 | 11,055 | ||||||
Total
|
21,102 | 24,497 | ||||||
Unallocated
assets
|
27,204 | 27,521 | ||||||
Consolidated
assets
|
$ | 48,306 | $ | 52,018 |
(in
thousands)
|
||||||||
September
30,
|
June
30,
|
|||||||
Goodwill:
|
2008
|
2008
|
||||||
Coins
|
$ | 515 | $ | 515 | ||||
Jewelry
|
1,348 | 1,348 | ||||||
Other
|
2,111 | 2,111 | ||||||
Consolidated
assets
|
$ | 3,974 | $ | 3,974 |
11.
|
LEGAL
MATTERS
|
12.
|
SUBSEQUENT
EVENTS
|
Three
Months Ended September 30,
|
||||||||
2008
|
2007
|
|||||||
Net
revenues
|
100.0 | % | 100.0 | % | ||||
Cost
of revenues
|
53.5 | % | 48.0 | % | ||||
Gross
profit
|
46.5 | % | 52.0 | % | ||||
Operating
expenses:
|
||||||||
Selling and marketing
expenses
|
17.9 | % | 18.7 | % | ||||
General and administrative
expenses
|
40.2 | % | 36.4 | % | ||||
Amortization of
intangibles
|
3.2 | % | 2.5 | % | ||||
Total operating
expenses
|
61.3 | % | 57.6 | % | ||||
Operating
loss
|
(14.8 | )% | (5.6 | )% | ||||
Interest
income, net
|
1.3 | % | 4.1 | % | ||||
Other
income
|
0.1 | % | - | |||||
Loss
before income tax benefit
|
(13.4 | )% | (1.5 | )% | ||||
Income
tax benefit
|
- | (0.6 | )% | |||||
Loss
from continuing operations
|
(13.4 | )% | (0.9 | )% | ||||
Loss
from discontinued operations (net of income taxes)
|
- | (0.1 | )% | |||||
Net
loss
|
(13.4 | )% | (1.0 | )% |
Units
Processed
Three
Months Ended September 30,
|
Declared
Value (000)
Three
Months Ended September 30,
|
|||||||||||||||||||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||||||||||||||||||
Coins
|
328,100 | 46.4 | % | 367,100 | 47.0 | % | $ | 302,722 | 73.6 | % | $ | 333,351 | 80.0 | % | ||||||||||||||||||
Sportscards
|
301,600 | 42.7 | % | 338,500 | 43.0 | % | 26,562 | 6.5 | % | 20,534 | 5.0 | % | ||||||||||||||||||||
Autographs
|
41,600 | 5.9 | % | 44,800 | 6.0 | % | 4,854 | 1.2 | % | 5,811 | 1.0 | % | ||||||||||||||||||||
Stamps
|
7,300 | 1.0 | % | 19,700 | 2.0 | % | 5,071 | 1.2 | % | 4,351 | 1.0 | % | ||||||||||||||||||||
Currency
|
16,800 | 2.4 | % | 11,000 | 1.0 | % | 8,092 | 2.0 | % | 9,349 | 2.0 | % | ||||||||||||||||||||
Diamonds
|
9,800 | 1.4 | % | 7,700 | 1.0 | % | 35,065 | 8.5 | % | 31,963 | 8.0 | % | ||||||||||||||||||||
Colored
Gemstones
|
1,400 | 0.2 | % | 900 | - | 28,804 | 7.0 | % | 10,986 | 3.0 | % | |||||||||||||||||||||
Total
|
706,600 | 100.0 | % | 789,700 | 100.0 | % | $ | 411,170 | 100.0 | % | $ | 416,345 | 100.0 | % |
Three
Months Ended September 30,
|
||||||||||||||||||||||||
2008
|
2007
|
Increase
(Decrease)
|
||||||||||||||||||||||
Amount
|
%
of Net
Revenues
|
Amount
|
%
of Net
Revenues
|
Amount
|
%
of Net
Revenues
|
|||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||
Grading
and authentication fees
|
$ | 7,960 | 82.1 | % | $ | 8,971 | 82.9 | % | $ | (1,011 | ) | (11.3) | % | |||||||||||
Other
related services
|
1,732 | 17.9 | % | 1,854 | 17.1 | % | (122 | ) | (6.6) | % | ||||||||||||||
Total
net revenues
|
$ | 9,692 | 100.0 | % | $ | 10,825 | 100.0 | % | $ | (1,133 | ) | (10.5 | )% |
Three
Months Ended September 30,
|
||||||||||||||||||||||||||||||||
2008
|
2007
|
2008
vs. 2007
|
||||||||||||||||||||||||||||||
Increase
(Decrease)
|
||||||||||||||||||||||||||||||||
%
of Net
|
%
of Net
|
Revenues
|
Units
Processed
|
|||||||||||||||||||||||||||||
Amount
|
Revenues
|
Amount
|
Revenues
|
Amounts
|
Percent
|
Number
|
Percent
|
|||||||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||
Coins
|
$ | 4,995 | 51.5 | % | $ | 6,038 | 55.8 | % | $ | (1,043 | ) | (17.3) | % | (39,000 | ) | (10.6 | )% | |||||||||||||||
Sportscards
|
2,189 | 22.6 | % | 2,292 | 21.2 | % | (103 | ) | (4.5) | % | (36,900 | ) | (10.9 | )% | ||||||||||||||||||
Other
(1)
|
2,508 | 25.9 | % | 2,495 | 23.0 | % | 13 | 0.5 | % | (7,200 | ) | (8.6 | )% | |||||||||||||||||||
$ | 9,692 | 100.0 | % | $ | 10,825 | 100.0 | % | $ | (1,133 | ) | (10.5 | )% | (83,100 | ) | (10.5 | )% |
(1)
|
Consists
of autographs, stamps, currency, diamonds and colored gemstones, CCE
subscription business, our CFC dealer financing business, and our
collectibles convention business.
|
Three
Months Ended September 30,
|
||||||||||||||||
2008
|
2007
|
|||||||||||||||
Amount
|
%
of Revenues
|
Amount
|
%
of Revenues
|
|||||||||||||
Gross profit
|
$ | 4,510,000 | 46.5 | % | $ | 5,625,000 | 52.0 | % |
Three
Months Ended September 30,
|
||||||||||||||||
2008
|
2007
|
|||||||||||||||
Amount
|
%
of Revenues
|
Amount
|
%
of Revenues
|
|||||||||||||
Selling and
Marketing
|
$ | 1,730,000 | 17.9 | % | $ | 2,018,000 | 18.7 | % |
Three
Months Ended September 30,
|
||||||||||||||||
2008
|
2007
|
|||||||||||||||
Amount
|
%
of Revenues
|
Amount
|
%
of Revenues
|
|||||||||||||
General and
Administrative
|
$ | 3,901,000 | 40.2 | % | $ | 3,948,000 | 36.4 | % |
Three
Months Ended September 30,
|
||||||||||||||||
2008
|
2007
|
|||||||||||||||
Amount
|
%
of Revenues
|
Amount
|
%
of Revenues
|
|||||||||||||
Amortization of
Intangibles
|
$ | 310,000 | 3.2 | % | $ | 270,000 | 2.5 | % |
Three
Months Ended September 30,
|
||||||||
2008
|
2007
|
|||||||
Included
in:
|
||||||||
Cost
of revenues
|
$ | 82,000 | $ | 61,000 | ||||
Selling
and marketing expenses
|
- | (7,000 | ) | |||||
General
and administrative expenses
|
196,000 | 192,000 | ||||||
$ | 278,000 | $ | 246,000 |
Fiscal Year Ending
June 30,
|
Amount
|
|||
2009
|
394,000 | |||
2010
|
271,000 | |||
2011
|
125,000 | |||
2012
|
16,000 | |||
$ | 806,000 |
Three
Months Ended September 30,
|
||||||||||||||||
2008
|
2007
|
|||||||||||||||
Amount
|
%
of
Revenues
|
Amount
|
%
of
Revenues
|
|||||||||||||
Interest income,
net
|
$ | 125,000 | 1.3 | % | $ | 444,000 | 4.1 | % |
Three
Months Ended September 30,
|
||||||||
2008
|
2007
|
|||||||
Income
tax expense (benefit)
|
$ | - | $ | (66,000 | ) |
Three
Months Ended September 30,
|
||||||||
2008
|
2007
|
|||||||
Loss
from discontinued operations (net of income taxes).
|
$ | (1,000 | ) | $ | (10,000 | ) |
Fiscal
Year
|
Amount
|
|||
2009
(remaining 9 months)
|
1,708,000 | |||
2010
|
1,415,000 | |||
2011
|
994,000 | |||
2012
|
1,022,000 | |||
2013
|
1,018,000 | |||
Thereafter
|
4,087,000 | |||
$ | 10,244,000 |
·
|
changes
in general economic conditions generally, including the current liquidity
crisis in the United States, or changes in conditions in the collectibles
or high-value assets markets in which we operate, including a possible
decline in the popularity of some high-value collectibles or assets, any
of which could reduce the volume of authentication and grading submissions
to us and, therefore, the grading fees we
generate;
|
·
|
a
lack of diversity in our sources of revenues and, more particularly, our
dependence on collectible coin authentication and grading for a
significant percentage of our total revenues, which makes us more
vulnerable to adverse changes in economic conditions, including volatility
in the prices of gold and other precious metals or recessionary or other
conditions that could lead to reduced coin and other collectibles
submissions or trade show activities that would, in turn, result in
reductions in our revenues and
income;
|
·
|
our
dependence on certain key executives and collectibles experts, the loss of
the services of any of which could adversely affect our ability to obtain
authentication and grading submissions and, therefore, could harm our
operating results;
|
·
|
the
fact that for the fiscal year ended June 30, 2008 and the three months
ended September 30, 2008, our six largest coin authentication and grading
customers accounted, in the aggregate, for approximately 10% and 12% of
our net revenues, respectively, which means that the loss of any of those
customers, or a significant reduction in their grading submissions to us,
could result in a decline in our revenues and a reduction in our operating
income;
|
·
|
increased
competition from other collectibles’ authentication and grading companies
that could result in reductions in collectibles submissions to us or could
require us to reduce the prices we charge for our services, either of
which could result in reductions in our revenue and
income;
|
·
|
the
risk that we will incur unanticipated liabilities under our authentication
and grading warranties that would increase our operating
expenses;
|
·
|
the
risk that warranty claims will increase to a higher level than in the past
such that we will have to recognize additional warranty accruals in
anticipation of these claims and our ongoing warranty accrual rate will
need to be increased to cover potential higher claims in the
future;
|
·
|
the
risk that new collectibles service offerings and business initiatives,
such as autograph, stamp and paper currency, and diamond and colored
gemstone grading services, will not gain market acceptance or will be
unsuccessful and will, as a result, increase our operating expenses and
reduce our overall profitability or cause us to incur losses and the risk
that these businesses will not make a material contribution to our net
revenues or achieve profitability;
|
·
|
the
risks involved in acquiring existing or commencing new authentication and
grading businesses, including the risks that we will be unable to
successfully integrate new businesses into our operations; that our new
businesses (in particular our diamond and colored gemstones businesses)
may not gain market acceptance; that business expansion may result in a
costly diversion of management time and resources from our existing
businesses and increase our operating expenses; that acquisition-related
goodwill and intangible assets may become impaired, which could adversely
impact our results of operations; and that we will not achieve adequate
returns on the investments we may make in acquiring other or establishing
new businesses, any of which would harm our profitability or cause us to
incur losses;
|
·
|
the
risks that we will encounter problems with or failures of our computer
systems that would interrupt our services or result in loss of data that
we need for our business; and
|
·
|
the
potential of increased government regulation of our businesses that could
cause operating costs to increase.
|
LEGAL
PROCEEDINGS
|
RISK
FACTORS
|
|
None
|
EXHIBITS
|
(a)
|
Exhibits:
|
|
Exhibit
3.3
|
Amended
and Restated Bylaws of Collectors Universe, Inc., as Adopted and Effective
September 28, 2008
|
|
Exhibit
31.1
|
Certification
of Chief Executive Officer Under Section 302 of the Sarbanes-Oxley Act of
2002
|
|
Exhibit
31.2
|
Certification
of Chief Financial Officer Under Section 302 of the Sarbanes-Oxley Act of
2002
|
|
Exhibit
32.1
|
Chief
Executive Officer Certification Under Section 906 of the Sarbanes-Oxley
Act of 2002
|
|
Exhibit
32.2
|
Chief
Financial Officer Certification Under Section 906 of the Sarbanes-Oxley
Act of 2002
|
COLLECTORS
UNIVERSE, INC.
|
||
Date: November
10, 2008
|
/s/
MICHAEL R. HAYNES
|
|
Michael
R. Haynes
|
||
Chief
Executive Officer
|
COLLECTORS
UNIVERSE, INC.
|
||
Date: November
10, 2008
|
/s/
JOSEPH J. WALLACE
|
|
Joseph
J. Wallace
|
||
Chief
Financial Officer
|
Number
|
Description
|
Exhibit
3.3
|
Amended
and Restated Bylaws of Collectors Universe, Inc., as Adopted and Effective
September 28, 2008
|
Exhibit
31.1
|
Certification
of Chief Executive Officer Under Section 302 of the Sarbanes-Oxley Act of
2002
|
Exhibit
31.2
|
Certification
of Chief Financial Officer Under Section 302 of the Sarbanes-Oxley Act of
2002
|
Exhibit
32.1
|
Chief
Executive Officer Certification Under Section 906 of the Sarbanes-Oxley
Act of 2002
|
Exhibit
32.2
|
Chief
Financial Officer Certification Under Section 906 of the Sarbanes-Oxley
Act of 2002
|