Collectors Universe, Inc. reported that net revenues for the fourth quarter of 2008 fell 4 percent to $10.3 million, compared to the same period of the prior year.
Fourth quarter revenue results included a 14 percent decrease in coin grading revenues, which was substantially offset by a 10 percent increase in our non-coin revenues. For fiscal 2008, total service revenues increased by 2 percent compared to fiscal 2007.
The company—which provides authentication and grading services to dealers and collectors of high-value collectibles, diamonds and colored gemstones—reported a loss from continuing operations of $13.1 million for the quarter, ended June 30, compared with a $900,000 loss for the same period of the prior year. Results for the quarter reflect a non-cash impairment of $11.2 million related to the goodwill and other assets of the company’s jewelry businesses.
For fiscal year 2008, ended June 30, the company reported a 3.8 percent increase in net revenues to $42 million, year-over year. The increase was primarily due to revenue increases of $866,000, or 14 percent, generated by the company’s other-related services, and $772,000 generated by sales of coins consisting primarily of coins that we repurchased under its coin grading warranty policy. This partially offset by a $106,000, or a 0.3 percent, decline in grading and authentication service fees. Exclusive of those coin sales, which do not represent an integral part of its business, total service revenues increased by 1.9 percent in fiscal 2008.
The company reported a loss from continuing operations of $15.6 million for the year, compared to a loss of $700,000 in fiscal 2007. Again, 2008 results included the non-cash impairment of $11.2 million recorded in the fourth quarter.
Jewelry grading revenues increased by 24 percent quarter-over-quarter and by 35 percent year-over-year, driven by unit volume increases, the company said. In addition, focused jewelry sales and marketing efforts resulted in a 28 percent quarter-over-quarter decrease in sales and marketing expenses incurred in the company’s jewelry businesses.
“Our coin division results were lower primarily as a result of the coin trade show business while the remainder of the coin and collectibles divisions showed flat to modest growth,” said Michael Haynes, Collectors Universe chief executive officer. “Our jewelry division operating results improved as compared to the fourth quarter of the prior fiscal year ended June 30, 2007 and although the annual growth is slower than anticipated in part as a result of this macro-economic environment, we are seeing steady progress in this new market for the company.”
In the company’s Haynes added: “Our core business in the Collectibles Group is fundamentally healthy with large market shares and positive cash flows and with the recently implemented operational improvements to lower costs and increase efficiencies, we expect to realize improvement of operating margins. Although the initiative into the jewelry markets has yielded slower growth than anticipated, we are encouraged with the direction and progress of our jewelry business which demonstrates our efforts to increase market penetration are bearing fruit. Our balance sheet provides more than $20 million in cash, we have no debt and we expect positive cash flow from consolidated operations for fiscal 2009. The company is in a conservative posture to maintain a dominant position and market share in the Collectibles markets and to continue its growth in the Jewelry business.”