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RAPAPORT... Collectors Universe Inc., parent company of GCAL and AGL diamond and gemstone grading services, reported fiscal year sales rose 10 percent to $40.5 million and the company reported a loss of $515,000, which was down from a profit of $3.7 million in fiscal 2006.
"This is our first 12 month cycle in the Jewelry Group where we have invested in promotional activity and operations to lay the foundation for our future growth," said Michael R. Haynes company CEO. "The jewelry sales cycle requires marketing investment from January to June for the holiday season from October through December, and we believe we will benefit from those investments both in the 2007 holiday season and in future holiday seasons. For our Collectibles businesses, we have invested in technology systems that we expect will both improve operating efficiency and expand our markets with web-based initiatives."
During Collectors Universe's fourth quarter sales fell $100,000 to $10.7 million, for three months ending June 30, 2007, the gross profit margin fell 10 percentage points to 49 percent. Operating expenses rose 30 percent to $7 million -- $859,000 of which was from selling and marketing expenses primarily associated with promotion costs for the jewelry businesses.
Collectors Universe reported an operating loss of $1.8 million for fourth quarter, down from operating income of $939,000 one year earlier. Costs of $1.3 million were attributed to investments to the jewelry businesses.
Net loss for the fourth fiscal quarter ended at $840,000, down from a profit of $904,000 one year earlier.
For the fiscal year, sales rose on account of an annual increase of 2 percent for grading and authentication fees and a 75 percent increase in other related services, which includes the company's collectibles convention business. Gross profit margin dropped 8 percentage points to 52 percent.
The operating loss was $2.9 million for the fiscal year, down from an operating income of $3.8 million. The reduction in operating income reflects an increased operating loss of $4.1 million for the jewelry businesses.
Haynes said, "For our Jewelry Group, the 2007 holiday season is expected to provide increased volume and greater recognition and distribution of our diamond grading service certificates. Although the colored stone services are in an earlier stage of development, we should see continuing improvement in the volume of submissions. Our Collectibles group will launch a number of growth initiatives in the first two quarters of fiscal 2008, principally in our largest divisions in coins and sports cards."
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