Collectors Universe: Dividend Boost is Nice, but Needs Consistent Profitability

Nov.15.07 | About: Collectors Universe, (CLCT)

Collectors Universe (NASDAQ:CLCT) more than tripled its quarterly dividend from $.08 to $.25, but reported another quarter of losses. For the quarter ended Sep. 30, CLCT reported net revenues of $10.8 million and a loss from continuing operations of $100,000, or $0.01 per diluted share, versus net revenues of $9.9 million and income from continuing operations of $383,000, or $0.04 per diluted share in the prior year quarter.

Collectors Universe, which values collectibles and grades diamonds and other gemstones, still has a strong balance sheet. It ended the quarter with $37.6M in cash and equivalents, but used $4.8 million during the quarter. Going forward, CEO Michael Haynes expressed optimism about the jewelry division, but sounded doubtful that the collectible segment would turn around in the coming quarter:

The upcoming December quarter, our second fiscal quarter, is our most challenging seasonal quarter for the collectibles group, while it is the best quarter of the year for the jewelry segment due to the holiday season. We expect that our jewelry segment will show significant growth in the second quarter over the prior year’s second quarter and a higher growth rate from the first fiscal quarter of 2008 to the second fiscal quarter of 2008 than the corresponding periods of fiscal 2007.

Bottom line: the dividend boost is nice, but Collectors Universe needs to return to consistent profitability.

Disclosure: No position.