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Collectors Universe Sells Majority of Auction Businesses To Unit of Greg Manning
Auctions
NEWPORT BEACH, Calif., Feb. 19 /PRNewswire-FirstCall/ -- Collectors Universe,
Inc. , the leading provider of value-added grading and authentication services
and products to dealers and collectors of high-end collectibles, today reported
that in accordance with the plans to reposition the corporate strategy to focus
on its grading and authentication business, the Company has sold its Bowers &
Merena, KingswoodCoin Auctions and Superior Sports Auction Divisions to
Spectrum Numismatics International, Inc. ("Spectrum Numismatics"), a unit of
Greg Manning Auctions, Inc. .
Commenting on the decision, Chief Executive Officer Michael Haynes stated, "We
have been analyzing the results from our two segments, and we decided to
reposition the company and return our focus to our core competency as the
leading grader and authenticator of high-end collectibles. We believe that our
opportunities for profitable growth in the grading and authentication business
are significant and to achieve the maximum value for our shareholders, it is
necessary to devote all of our resources to that single objective."
In the sale to Spectrum Numismatics, Collectors Universe has sold businesses and
operations comprised of the Bowers & Merena, Kingswood and Superior Sports
Auctions names. Under the terms of the agreement, the Company will receive $2.5
million in cash for the assets of these businesses, exclusive of their accounts
receivable and inventory, which the Company will retain. The Company plans to
collect the receivables and sell the inventory in the ordinary course, which is
expected to generate approximately $8 million of additional cash for the
Company. The businesses sold to Spectrum Numismatics had net revenues of $13.9
million in the fiscal year 2003, and represented 44% of the revenue from the
commerce segment of the Company's business, and 27% of total net revenues, in
fiscal 2003.
Collectors Universe also plans to sell its remaining assets in Odyssey Auctions,
which represented 6% of collectible sales segment revenue in fiscal year 2003.
Earlier in fiscal 2004, the Company sold its currency auction business, operated
by its wholly owned subsidiary, Lyn Knight Currency Auctions, Inc. This
business accounted for 10% of the commerce segment's revenue in fiscal year
2003.
For the fiscal year ended June 30, 2003, the Company's collectibles auction and
sale businesses generated 61% of Collectors Universe's total revenues. At
September 30, 2003, this segment accounted for $6.4 million, or 93% of the
Company's total net accounts receivable and $7.2 million, or all of the
Company's net inventories. The Company plans to reinvest the cash provided by
the sale of the assets and inventory and the collection of accounts receivable
into the continuing operations of the grading and authentication businesses.
Leveraging Dominant Brands Key to Growth
David Hall, President and Founder of Collectors Universe, said, "We have
successfully developed our brand names in the grading and authentication
businesses, beginning with the original brand, PCGS. By focusing our attention
on these brands and the possible future expansion of our authentication business
into vertical and horizontal markets, we believe that we can best leverage our
successful experience in managing and creating these brands and direct our
capital for a maximum return on investment."
About Collectors Universe
Collectors Universe, Inc. is the leading provider of products and essential
services to the high-end collectibles market. The Collectors Universe brands
are among the strongest and best known in their respective markets. The Company
grades and authenticates collectible coins, sportscards, stamps, and autographs.
This information is accessible to collectors and dealers at the Company's web
site, http://www.collectors.com/ , and is also published in print.
Forward-Looking Statements
This news release contains statements regarding our expectations about our
future financial performance that are "forward-looking statements" as defined in
the Private Securities Litigation Reform Act of 1995. Forward-looking
statements can be identified by the use of words such as "believe," "expect,"
"anticipate," "intend," "plan," "estimate," "project," or words of similar
meaning, or future or conditional verbs such as "will," "would," "should,"
"could," or "may." Our actual results in the future may differ, possibly
materially, from our current expectations as set forth in the forward looking
statements contained in this release due to a number of risks and uncertainties.
Those risks and uncertainties include, but are not limited to: changes in
general economic conditions, and changes in conditions in the collectibles
markets in which we operate, such as a possible decline in the popularity of
some high-end collectibles, either of which could reduce the volume of grading
submissions and, therefore, the grading fees we generate potential losses on
owned collectible merchandise or the need to adjust these inventories to fair
market value through inventory write downs; our dependence on a limited number
of key management personnel the loss of any of which could adversely affect
future financial performance; and seasonality and potential fluctuations in
quarterly operating results and quarterly cash flows. Certain of these risks
and uncertainties, in addition to other risks, are more fully described in the
Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2003, as
filed with the Securities and Exchange Commission. These forward-looking
statements are made only as of the date of this news release, and the Company
undertakes no obligation to update or revise theforward-looking statements,
whether as a result of new information, future events or otherwise. In
addition, although we believe that our strategy to exit the commerce segment of
our business and focus substantially all of our resources on our gradingand
services segment will better enable us to achieve improvements in the
profitability, there is no assurance that our strategy will prove to be
successful. Among other things, one consequence of our strategy is that there
will be a significant decline in our revenues. As a result, our profitability
will suffer if we are unable to reduce our general and administrative expenses
to bring them in line with our lower revenue base. Also, there is a practical
limit on the amount by which expenses can bereduced as a means of improving
profitability. As a result, our success in the future will depend as well on
our ability to achieve internal growth in our grading businesses and to find and
take advantage of opportunities to acquire other businesses that provide value
added services to the collectibles markets. There is no assurance that we will
be able to achieve such growth and growth by acquisition presents a number of
risks including an inability to integrate newly acquired businesses into
existing operations successfully.
DATASOURCE: Collectors Universe, Inc.
CONTACT: Michael Lewis, Chief Financial Officer of Collectors Universe,
Inc., +1-949-567-1375, ; or Investors/Analyst
Information, Brandi Piacente of Financial Relations Board, +1-415-248-3430,
, for Collectors Universe, Inc.
Web site: http://www.collectors.com/