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Collectors Universe, Inc. (NASDAQ:CLCT)

F2Q2014 Earnings Conference Call

February 6, 2014 04:30 PM ET

Executives

Robert Deuster - CEO

Joe Wallace - CFO

Analyst

Ryan Mallory - Driehaus Capital Management

Matthew Furnas - RC Management

Jim Gentrup - Discovery Investments Research

Operator

Good afternoon, everyone, and thank you for joining us to discuss Collectors Universe's Financial Results for the Second Quarter ended December 31, 2013. With us today from management are Robert G. Deuster, Chief Executive Officer, and Joe Wallace, Chief Financial Officer. Management will provide a brief overview of the quarter, and then open the call up for your questions.

Comments made during today’s call may contain statements regarding the company’s expectations about its future financial performance, including forecasts and statements concerning business trends and profitability that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.

The Company’s actual results in the future may differ possibly materially from those forecast in this call due to a number of risks and uncertainties. Certain of these risks and uncertainties in addition to other risks are more fully described in the Company’s filings with the Securities and Exchange Commission. The forward-looking statements are made only as of the date of today’s conference call and the company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

With that, I would now like to turn the call over to Robert Deuster. Robert?

Robert Deuster

Thank you and welcome to today’s second quarter conference call. On our last call I reported that the start of our new fiscal year was robust and we again achieved a record performance in Q1. Our second quarter which is the one we are reporting on today has seasonally been our weakest one due to the end of the coin minting year and the state of the miasmatic market activity during the holiday rich quarter. I am please however to report today that we have not seen that traditional seasonality affect us this year and our fiscal 2014 Q2 results were excellent, and again a record for that period in Collectors' history.

Speaking of that 2014 will mark the 29th year of business operations for our claim business, which started in 1986 and we will soon grade our 28 millionth coin and 50 millionth item for all of Collectors Universe businesses. A significant factor for us this quarter is the growing presence we have in the international coin markets especially China. Revenue from our international operations now represent 8% of total company revenue compared to 2% during the first six months of the last two fiscal years.

Our total service revenue for the quarter came in at 13.5 million compared to 9.6 million in Q2 last year, reflecting strong growth trends in both of our grading businesses, PCGS and PSA/DNA. In particular our PCGS coin grading business revenues grew 58% over the same period last year aided by four times more international revenues than fiscal 2013 and strong show grading activity worldwide. The PSA/DNA card autograph results grew 16% year-over-year and now has delivered its 14th straight quarter-over-quarter revenue gain. Our reported services gross margin was 61% for the quarter, improving 250 basis points over the 2013 period.

We continue to see strength in volume overall thus giving us good economies of scale and improved efficiencies in operations. We graded 900,000 coins and cards in Q2 compared to 725,000 items in the previous year quarter. Also helping elevate gross margin was a continuing trend in improved average selling prices as a result of expanded services at higher grading fees and increased grading activity at show revenues. Because of this our reported operating income performance for the quarter was a healthy 2.1 million compared to the 971,000 in the prior year period.

Our reported fully diluted earnings per share for the quarter was $0.15, well ahead of the $0.07 reported last year. I will let Joe Wallace go into more of a detail on our financials during the quarter and year-to-date, but I am very pleased with the momentum gain during the earlier part of calendar 2013 and it has continued and will frame our potential for the second half of our fiscal 2014 performance.

The new coin year mintage is off to a strong start again with first day sales of American Eagles, Silver Eagles rather nearly selling out last month. Show grading activity as well has been strong since the first of the year and we will stay focused on taking advantage of these favorable conditions to increase our market presence and share in the coming quarters. We continue to see a trend toward high value rarity coin and card grading at show venues because it’s the fastest and most convenient way to get very desirable collectibles graded and perhaps marketed in a short period of time in an environment where dealers are present.

PCGS participates in national and international events as well as hosts nine members only shows for dealers, PSA/DNA attends the largest card shows around U.S. One of the most popular and well attended is the Long Beach Expo, held three times a year in Long Beach California. This expo is owned by Collectors Universe and hosts coin grading, dealer exposition and a major coin auction run by Heritage Auctions. It is also a popular venue for dealers in sports cards and memorabilia. The expo is in its fifth year of operations.

As I mentioned on our last earnings call, we’re off to a fast start in China with coin grading. Since opening in July of 2013, we have received more than $1 million in fees for grading coins in our Shanghai facility and now have monthly grading events planned throughout 2014. In addition to China we are running what we call express grading packages from our Paris and Hong Kong PCGS offices twice a month in between quarterly onsite grading events there. The express events allow us to consolidate coins submitted for grading to be done back in our California facility and returned to on a priority basis.

This allows us to better leverage our expert staff and infrastructure and deliver the best customer service and capability in these international markets. All of these actions are improving our world presence for the PCGS brands and is building a bigger international revenue contribution to our consolidated results. This strategic shift for us, these last 18 months is an important one, and it creates a more balanced revenue performance for PCGS and Collectors in the coming quarters and years.

PCGS recently announced to the coin market significant improvements to its primary coin holder. This new holder improves on the design and performance of the well-established holder that’s been in use by PCGS and has encapsulated many PCGS graded coins over the years. New features include a clear more scratch resistant plastic material, a very hi-tech and extremely difficult to copy hologram developed by DuPont and various covert tagging elements embedded throughout the holder.

All of this combined technology will make our holders more secure in its part of a continuous improvement program at PCGS to thwart fraud and counterfeiting activities in the new miasmatic market. This introduction is particularly timely because of the increased presence in markets like China where counterfeiting has historically been an issue.

Before I leave the discussion on the coin side of our business, I’d like to mention a few factors which create positive climate to think about our prospects going forward this year. The 2013 coin year saw strong demand in several segments of the market that seems to continue today. The U.S. Mint produced about $4 billion worth of new miasmatic and bullion coins gold and silver last year. As mentioned earlier, the 2014 mint sales were again strong and with the price of gold and silver down substantially from the beginning of 2013, it appears that customer demand for both bullion and the popular American eagle new miasmatic varieties remains high. If that trend continues, it boards well for a solid supply of coins to be graded by PCGS. China continues to produce increasing numbers of gold and silver pandas and more of them are being submitted for grading.

On the collectors’ side of the market, the high value end of the market was very strong last year, and many price coins sold at auction for record prices. Part of what is driving this is a number of rare coin collections that came up for sale but that also spread the demand for rare coins overall. It appears collectors want quality over quantity, and so auction companies serving the new miasmatic market had a very good year with sales approaching 393 million. The first auctions in January 2014 were also very good.

While PCGS is nearly two thirds of our service revenue, our PSA/DNA business makes up 25% of our consolidated total, and it too has been experiencing steady growth. This last quarter as I mentioned represented the 14th consecutive quarter-over-quarter revenue improvement with increasing profitability. That track record in our enthusiasm for this business is because it fits our strategic business model perfectly. It brings a high level of structure and security to the sports and autograph market for over many years counterfeiting and information on the quantity and quality of collectable items kept the market value of genuine items below their potential.

The authentication, grading and guarantee provided by PSA over the years and the information collected on 22 million items graded, greatly facilitates the site unseen buying and selling of cards and memorabilia with confidence and through many dealer based auction or online channels.

PSAs brand and their track record over the year have established them as the clear market leader. Like the coin market, graded items are much more highly valued than ungraded items. And this can be easily seen in the values realized at auction examples that I’ve given you in past calls, or perhaps sales you might have read about in the press. Not to leave without an example I will reference an auction sale only two months ago where an excellent example of the sign baseball by Jackie Robinson which was graded MINT 9 by PSA sold for a $105,000. This is the first time of Robinson’s signed single ball went for more than 50,000.

So what explains some of this high value bidding? Well, in the world of collectables having information on the quality and the quantity on in essence the rarity of an item and its historical significance is key to any collection. The many content services besides just grade provided by PSA to the market on items it has graded establishes a position or rank for an item based on a known population of like item and the price current sales have yielded that basically frames what items might be work. Access to PSAs online card fact, price guide, set registry and links to trading sites is all available free to the collector community, thus building awareness and brand loyalty for the PSA brand.

Just as a final note and perhaps timely reference to the Super Bowl we all saw last weekend. There is still a lot of counterfeiting of highly sort after sports memorabilia of high profiled players and events. PSA has been part of a long standing effort to throttle thwart counterfeiting effort, continuing a long standing practice we’ve had with the NFL for 15 years, PSA/DNA has treated all of this year’s footballs, pylons and coins used in the game with a covert marking only detectable by a very unique frequency of laser light. By doing this ahead of any signing or use, all objects collected, sold or purchased after the event can easily be certified genuine by us for the owner, thus protecting its ultimate value.

Now let me turn it over to Joe.

Joe Wallace

Thank you, Bob, and good afternoon, everyone. I will now give a brief overview of the financial results for the second quarter of fiscal 2014. For the quarter the company earned record second quarter service revenues, which comprise our grading authentication related services of $13.5 million, record second quarter operating income of 2.1 million and after tax income from continuing operations of 1.2 million or $0.15 per diluted share. This compares to service revenues of 9.6 million, operating income of 1 million and after tax income from continuing operations of 0.6 million or $0.07 per diluted share for the second quarter of fiscal ’13.

For the six months net services revenues were 27.7 million, operating income was 5 million and after tax income from continuing operations 2.9 million or $0.35 per diluted share. This compares to net service revenues of 20.3 million, operating income of 2.3 million and after tax income from continuing operations of 1.4 million or $0.17 per diluted share for the six months ended December 31, 2012.

Coin service revenues increased by 3.4 million or 58% for the quarter and 6.4 million or 52% for the six months, reflecting continuing momentum in the coin market up again in the second half of 2013. We earned higher average service fees and the number of coins authenticated and graded grew by 36% in the quarter and 33% in the six months. In addition our cards and autographs revenues increased by 0.5 million for the quarter and $1 million for the six months, representing increases of 16% in both periods. The second quarter revenue increase represent the 14th straight quarter-on-quarter revenue increase in our cards and autographs business.

The favorable market conditions that drove the revenue increase in the first half of the year appears to be continuing into our third fiscal quarter. However, due to its earning record coin revenues in the second half of fiscal 2013 achieving revenue growth in our coin business will be more challenging in the second half of fiscal ’14.

Our services gross profit margin increased to 61% and 62% in the second quarter first half of the year from 59% in both periods of the prior year. The improved gross profit margins primarily reflect the higher proportion and mix of coin service revenues in the quarter. Over the last three fiscal years our quarterly gross profit margins vary between 59% and 64%. Selling and marketing expenses represented 15.6% of revenues in both the second quarter and first half of fiscal ’14 compared with 16.2% of revenues in the same period of the prior year. The dollar increases reflect cost incurred for our Shanghai operation; business development; incentive cost and higher trade show costs.

G&A expenses represent 29.9% and 28.5% of revenues for the second quarter and first half of fiscal ‘14 compared with 32.4% and 30.4% of revenues for the same respective periods of fiscal ‘13. The dollar increases reflect cost incurred for our Shanghai operations, higher non-cash stock based compensation costs and higher personnel, salaries improvement and incentive cost. The resulting operating income was 2.1 million for the quarter and 5 million for the six months representing increases of a 116% for the quarter and 119% for the six months compared to prior year periods.

Turning to our balance sheet. The company’s cash position was 16.3 million at December 31, 2013 compared to 18.7 million at June 30. Net cash used to 2.4 million in the first half of the year comprised cash generated from continuing operation of 4 million and proceeds from the exercise of stock options 0.3 million offset by dividends paid to stockholders of 5.4 million, 0.8 million for capital expenditures, 0.3 million used on discontinued operations and 0.2 million for repurchase of common stock.

Income tax payments were 2.3 million in the first half of the year. At December 31, 2013 the company continue to have $3.7 million remaining or its previously announced stock buyback program. The company has not made any open market repurchase under this program since the fourth quarter of 2008. On January 28, 2014 the company announced its quarterly cash dividend of $0.325 per share to be paid on February 28, 2014 to stockholders of record on February 14, 2014.

With that I would like to thank you for your attention. Rob.

Robert Deuster

Okay, so that concludes our prepared remarks and now we would like to open it up for any questions you may have. Douglas.

Question-and-Answer Session

Operator

Thank you, sir. We will now begin the question and answer session. [Operator Instructions] Our first question is from the line of Ray [indiscernible] a Private Investor. Please go ahead.

Unidentified Analyst

Yes, overall the report sounds very optimistic, is there any explanation about the recent rapid run up in price of Collectors Universe and more importantly a rather dramatic drop in stock prices over the last two to three weeks?

Robert Deuster

I am sorry, what was the last part of that question? Excuse me.

Unidentified Analyst

Is there any explanation or feel for why the kind of dramatic drop in the common share price of Collectors Universe over the last two to three weeks?

Robert Deuster

Oh! I see, okay. Well, there isn’t any specific certainly company initiated announcements or results that have caused the stock price to sort of peak in the last few weeks and then it subsequently have come down a bit. We have over the last year reported some pretty good results and we're hoping that, that begins to put a little bit more of a spotlight on the companies. But there is nothing specific that I could tell you that would cause that particular behavior. I mean we are obviously pleased the stock is doing better than it was a year ago and so our job is just to continue to produce the results.

Unidentified Analyst

One final question please. The new sophisticated hologram, as I am looking on website, it indicates that will only be available for the Secure Plus holders or will that be available for all of holders?

Robert Deuster

We will ultimately move that across all of our holders, Secure Plus is just the initial stage but very quickly we will move to that as part of our standard holder.

Operator

Our next question is from the line of Ryan Mallory with Driehaus Capital Management. Please go ahead. Sorry, Mr. Mallory I don’t know if you might have muted your phone. Yes, there is a lot of interference on your line now. I am sorry sir, we are having a lot of trouble hearing you.

Robert Deuster

No, it's still coming across unintelligible, sorry.

Ryan Mallory - Driehaus Capital Management

I am sorry about that.

Robert Deuster

I mean we hear your first words but after that it breaks up.

Ryan Mallory - Driehaus Capital Management

Okay. [Question Inaudible]

Robert Deuster

I am afraid we haven’t been able to discern what you are saying sorry.

Operator

Our next question is from the line of Matthew Furnas with RC Management. Please go ahead.

Matthew Furnas - RC Management

Thank you. It seems like you guy's cash balances been coming down fairly steady over the last couple of quarters, kind of given your non-cash working capital being negative right now how much cash do you think you need to -- would you be comfortable with remaining on the balance sheet? When do you think will get to a position where we kind of are generating sufficient cash to meet the quarterly dividend?

Robert Deuster

Well, in terms of the cash that we will be comfortable on our balance sheet, we never really defined the number specifically, we've always looked may be to $10 million, just a number we want to keep on our balance sheet. But as you can probably see from our balance sheet, the company doesn’t require significant working capital. In terms of the outward looking, in terms of the dividend and funding the dividend obviously we need the business to grow. It’s been growing very significantly over the last 12 months and all the indicators are so far that, that growth is going to continue. So, we are looking and working every day and focus on meeting that dividend but we are at the mercy of the coin market specifically and growth opportunities overseas.

Matthew Furnas - RC Management

Okay, understood. So, if you’re saying its 10 million, you’d comfortable with and we’re paying 2.8 million for the dividend each quarter seems like it’s -- you really three, four quarters left before it starts to become a concern, is that accurate?

Robert Deuster

No, I don’t think so. I mean, you got to look at over the course of the 12 months, I mean we're going actually to our usually our busiest part of the year, if you look at what we are actually generating or probably with the cash we used last year in fiscal ’13 of the year -- we used about $2.5 million. So, you’re going to have plus and minus in different quarters based upon seasonality and activity in the business. So, we actually look at, we’ve got further running room than two or three quarters at this point. But we would expect to see the business pickup and generate positive cash over the next couple of quarters.

Operator

[Operator Instructions] Our next question is from the line of Jim Gentrup with Discovery Investments Research. Please go ahead.

Jim Gentrup - Discovery Investments Research

I’m just a little new to this story, so I’m just -- the questions may reflect this. You mentioned in your remarks that in the second half you had a pretty tough comparable over last year second half. I just want to know if you -- just tell us or remind us again what some of the growth drivers and do you expect s[that where] are you looking at just flat year-over-year type of growth. So, if you could just talk a little bit about your growth drivers going forward.

Robert Deuster

Sure. Well, last year in our third quarter which is what we’re in right now, which is the first to the second half quarters and we did 14.5 million in sales so that was a pretty big jump from the prior year. We have seen as I mentioned in my remarks that our first half of the year was a little bit stronger than we traditionally have seen so that is basically an indicator that we have a pretty active coin and card market out there.

One of the things that has helped us as well, is a year and half ago we had very little international revenue. Now, we’re 8% of our total is international including a big step up in China. So, we are counting on this company primarily growing through intrinsic means but international expansion is an important driver at the top line. We have also seen and I think I mentioned this as well that there is a preference by this market especially at the dealer level to actually have coins graded at show venues that brings a higher average selling price to us and allows us to once again expand our services at higher fees to make it more convenient and more accessible for dealers.

So, all of those things including the -- just raw activity of generating, the mints are running at very high capacities right now, just puts a lot more coins out there in the market. So, we’re in the middle of that and we’re certainly hopeful that as we track through the second half of the year, we’re able to see that continuing and we of course will work hard to take advantage of it to exceed the quarters of prior years. But it’s going to be -- its not going to be a comparable that is 30%, 40% growth like we’ve seen in the first half of the year but we’re certainly focused on growing this business in the second half over the prior year.

Jim Gentrup - Discovery Investments Research

Okay. And just and there is a follow up to that if you look at between your coin and your card business, which one of those would be the higher growth opportunity moving forward in the short and the long term.

Robert Deuster

Yes. The coin business is clearly the growth driver. It drives about two thirds of our revenue, its where the new market expansion is centered almost a 100%, the sports and memorabilia part of our business is essentially a U.S. based business. And so we’re looking to the coin side to be our growth driver.

Jim Gentrup - Discovery Investments Research

And then on the international comments you made about China, I think you said the million dollars of revenues since when -- since when did you open up China?

Robert Deuster

July of last year.

Jim Gentrup - Discovery Investments Research

Okay. And is that the main contributor then? I think you have an office open in Europe as well, correct?

Robert Deuster

Yes we have office in Paris and an office in Honk Kong and we have seen steady growth but not to the level of that growth in those two markets. But it's all tied together and one other things that we instituted as I mentioned is express grading which is different than what we did two years ago where we would basically send our grading teams overseas. Now we’re able to almost continue grading on a month-to-month basis.

So, while the growth in China we expect will be more dramatic, we’re certainly anticipating that Paris and Hong Kong will show a healthy gain in the coming years.

Jim Gentrup - Discovery Investments Research

Okay. And then assuming you do grow on the topline a little bit in the second half, can you talk a little bit about the expenses and where you have the most leverage?

Robert Deuster

Sure. To date, and we’re talking about our first half of the year, we did have in and I’m not exactly sure with the numbers, may you have it Joe, some additional onetime cost relative to opening offices and recruiting some people which shouldn’t repeat in the second of the year. But most of our cost structure is variable when we talk about upside revenue, I mean we have sales incentive programs et cetera that kick in at higher revenue levels but we have not had to expand our labor force much during this last year or so other than the overseas presence. So, I would think that we’d able to leverage our infrastructure pretty well into the second half -- you know assuming reasonable growth and we wouldn’t have to see expense levels rise dramatically from where they are.

Jim Gentrup - Discovery Investments Research

So, for example then just have -- if your graders are -- if they’re sitting ideal or I mean I guess how do you measure that the capacity you can kind of shut them on and off, whatever if you don’t have the same amount of coins to grade. Can you give me a little insight into how that works?

Robert Deuster

Sure. Well, we have a fix number of graders and we have the ability to expand that number periodically as we need to. But for the most part they are on a pretty steady flow and I would say in recent times they’ve been working very hard just to trying to keep up. But we’ve introduced some efficiencies into the operations and the way we do things with express shipments et cetera allow us to keep our graders more centralized so that we can flow more coins and cards through. So, there is a certain amount of fixed pay aspect to the graders but then there is also incentive pay that kicks in with the higher volumes that go through. So, it isn't totally fixed cost at the pay level there. But we do have capacity within our current -- should I say scope of greater hiring, we do have the ability to expand our volume with the current staff we have.

Jim Gentrup - Discovery Investments Research

Okay. And, if I could just ask one more?

Robert Deuster

Sure.

Jim Gentrup - Discovery Investments Research

Your sales and marketing expenses for a company like yours because if I understand you’re almost like one of only two in the U.S. that specializes in this, where do most of these expenses go to, I mean, is it just trying to get more dealers? Where do you spend most of your time with selling and marketing?

Robert Deuster

Okay, well there is a certain amount of variable cost in there that is incentive based on sales and marketing. But we have been focused in the last several years on building what we call content and web services. And so we have a number of folks that our employees rather that are focused on just simply enhancing our offerings by building contents. So that sales and marketing expense is over and above what you would traditionally see on the sales side. It’s more marketing support. And so that’s where some of those cost factors come in. And it’s something we’re going to continue. We feel that content is extremely important and the better educated the marketplace is about these collectibles the more of them there will be and the values will increase.

Jim Gentrup - Discovery Investments Research

And did you have a headcount that you gave and do you expect that to change more, can you just talk about that really quickly?

Joe Wallace

Out headcount is probably around 240 people to 250 people, it’s probably about 35 people into that headcount that are part-time. The headcount has probably increased less than 20 people over the last year.

Robert Deuster

It’s going to remain pretty steady going forward.

Operator

Our next question is from the line of [indiscernible]. Please go ahead.

Unidentified Analyst

I just need a real simple little math explanation on the balance sheet. Your accumulated deficit kept getting bigger as we make more money and that worth went down and I just haven't taken the time to try to figure out why could the Chief Financial Officer explain it to me?

Joe Wallace

Yes, if you look at our capital, the capital section of our balance sheet, there are a couple of things that go in there that are not I suppose rolled every quarter, but we do actually roll the activity on an annual basis. But what you’ve actually got going on is for example as we’ve recognized stock based compensation that’s classed by this part of additional paid in capital, and if we have some exercises of stock options that goes into additional paid in capital.

In terms of our accumulated deficit, we have net income that goes in there, and we’ve also got the dividend paid so it’s actually increases by way of net income and gets reduced by the dividend paid. So there is a couple of other things going in there, but what I would direct you to would be we want to see how the number is going to roll and the nature of the activity that goes on that part of the balance sheet just 5 or 10K and look at these stockholders equity roll go forward activities the prior years, it’s the same sort of stuff.

Unidentified Analyst

Got it. Simple explanation. I just didn’t catch it on the first look. Thank you.

Operator

[Operator Instructions] And at this time, I’m showing no further questions in queue I'd like to -- oh, wait, there is [indiscernible] Capital Management. Please go ahead.

Unidentified Analyst

I’m just curious as to what’s driving, it seems to be an inflection point in the demand for coin authentications and I was just wondering what specifically is driving that trend?

Joe Wallace

Yes, this is something that isn’t just brand new. It’s been going on for a number of years and in some cases decades. Traditionally, and if you look overseas, many of the coins are ungraded. In the United States obviously since 1986 or thereabouts we’ve been in the business, one of our competitors has been in the business. So there has been a process underway where coins are authenticated, graded, and obviously information about them is kept and promoted throughout the industry. So by doing that, you essentially create a fairly large market because we’ve done 28 million coins ourselves where you don’t need to physically inspect the coin outside of the holders, so it facilitates the buying, selling, trading, collecting of these objects and items in a fairly easy and confident way.

So there is now a clear recognition that if you grade a coin and get it authenticated that if there is some desire to remarket the coin or trade or whatever it’s probably going to have an increased value because then it will be recorded as such in the collection of coins around world. So I hope that isn’t too complicated an answer but the fact of the matter is it’s -- we interject ourselves between the buyers and sellers and we create a system that gives them confidence that they can market these items or collect these items and they know what they are worth.

Unidentified Analyst

I see, thank you. And could you comment briefly on your relationship with eBay and any material results that’s had on yourselves?

Joe Wallace

Yes, the relationship is pretty straight forward. It’s both in coins and cards. We have physical connections through our web presence and their web presence where for example in our price guides for both card and coins, certain coins that people are interested in, they would look up the value for them and there is essentially a little shop button that we have on our site which directs anybody on our site over to an eBay site or it could be one of dealer sites or whatever. So we’re basically creating a linkage to them where a lot of the collectible items are being offered for sale or trade by the collectors.

We obviously have -- the financial relationship isn’t material to speak of it at this stage but it is then a good solid relationship over a number of years and it’s obviously growing because eBay is an important part of this market from a buying and selling perspective. And so we feel really good about it. And we hope over the coming years, we’re able to expand more and more these electronic linkages between buyers and sellers because we think we play a pretty key role there.

Unidentified Analyst

Sure, okay. Thank you for your time and congratulations once again.

Operator

At this time, there are no further questions in queue. I would like to turn the call back over to management for closing remarks.

Joe Wallace

Great, well, thank you everyone for joining us this afternoon. We’re very pleased to present our results and look forward to doing so in the coming quarter. Thank you.

Operator

Thank you, ladies and gentlemen. That does conclude our conference for today. If you would like to listen to a replay of today’s conference, please dial 303-590-3030 or 800-406-7325 and enter the access code 4181738. We like to thank you again for your participation and you may now disconnect.

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