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CU Earnings Report Released
MrEureka
Posts: 24,412 ✭✭✭✭✭
This earnings report is unbelievable!
Can anyone here explain how these guys are managing to lose so much money in the greatest coin market since 1980?
Or am I missing something? Is it just some sort accounting game?
Can anyone here explain how these guys are managing to lose so much money in the greatest coin market since 1980?
Or am I missing something? Is it just some sort accounting game?
Andy Lustig
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
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K S
Dork - Have it your way, but the market for plastic is also red hot.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
maybe I need to come in and show them how to run a tight ship and turn a profit. They must be bleeding money from the auction side of the CU business. At 90,000 submissions a month for grading at let's say $15 each average would put 16.2 million a year in revenue into the coffers. What can the overhead be? 8-10 million?
I would like to see the profit and loss statement just for PCGS.
As for the overhead, bulbs for the graders lamps aint free you know.
Camelot
& in those terms, i agree that your question is poignant.
K S
Karl - In the moderns market, plastic is hotter than coins. In the colonials market, coins are hotter than plastic. But overall, the markets for coins and plastic are BOTH "hot". But that's not what this thread is about, so let's leave this game alone for now, OK?
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
peacockcoins
I doubt it. Still, I'd really like to see a P/L breakdown for the various divisions. I'm most curious to see the statement for DHRC, since that's where I expect CU's upper management (i.e., HRH) might have the strongest bias against cutbacks.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Camelot
<< <i>Karl - In the moderns market, plastic is hotter than coins. In the colonials market, coins are hotter than plastic. But overall, the markets for coins and plastic are BOTH "hot". But that's not what this thread is about, so let's leave this game alone for now, OK? >>
huh???
mr-eureka, think for a second about what your saying. there's 2 possibilities here:
1. plastic mkt is HOT, yet mysteriously, c-u, which derives almost 100% from plastic does poorly.
do you really think this's possible??? totally defies all logic.
OR the alternative,
2. plastic mkt is NOT HOT, but it's a bunch of overblown hype, & that's why c-u, which derives almost 100% from plastic does poorly.
seems to me, #2 is the more reasonable & there's just a lot of hype in the mkt.
then again, "hype" is just "hot air", so may be plastic really is hot, if it's heated up by hot air.
K S
happy now?
K S
CU is a bunch of companies and not just PCGS. Could it be that the other divisions are doing badly?
K S
Coins
Professional Coin Grading Service
Bowers and Merena Galleries
David Hall Rare Coins
Sports
Professional Sports Authenticator
PSA/DNA Authentication Services
Superior Sports
Stamps
Professional Stamp Experts
Autographs
PSA/DNA Authentication Services
Odyssey Autographs & Memorabilia
Music
Good Rockin' Tonight
plastic.
K S
<< <i>louis, that's exactly right. & what does everything (of significance) on that list have in common?
plastic.
K S >>
I thought records were made out of vinyl?
peacockcoins
Seriously, I'd like to know what strategy CU has for returning to sustained profitability.
Maybe PCGS should be sold and taken private.
(of course, wallstreetman owns thousands of share because they're the best. & you buy only the best. right joy-of-moderns?)
K S
<< <i>Maybe PCGS should be sold and taken private. >>
to who, the png?
K S
(a) accounts receivable and inventory reserves and write-downs totaling $538,000,
(b) an increase in selling, general and administrative expense associated with relocation expenses of $315,000 relating to the move of the Bowers & Merena Division from Wolfeboro, NH to Mandeville, LA and
(c) a $1,477,000 non-cash goodwill impairment charge recorded as an operating expense in that quarter, that had the effect of writing-off the Company's remaining goodwill.
So..they moved and wrote off goodwill (goodwill is a premium associated with your reputation among other things).
The only real concern I see above is (a) ---> write-off of stiffs who didn't pay and clearly a correction of inventory values. Surprising in a good market.
Please note this is a 5 minute synopsis of a PR, not a professional evaluation.
Free Trial
bank rolled by a financial institution or a silent financial partner.
Camelot
Is that not in some SEC report somewhere?
The co. may have lost money, but what are all the salaries? It's easy to make your co. lose money at the end of the year so you don't have to pay the gov. any taxes - just bonus out salaries near the end of the year. Big Q though is wall street's position on the appropriateness of those salaries. It has been discussed before, but the total market cap for CLCT is only about $22M. I'm surprised all the critics of how they do things have not yet organized a hostile takeover so they can run it the way they want. In case anyone is interested, their stock is selling BELOW liquidation value.
<< <i>I'm surprised all the critics of how they do things have not yet organized a hostile takeover so they can run it the way they want. >>
TDN offered $10 mil in the forum last year for PCGS only, if memory serves...
If auctioned, I'll bet that PCGS alone would sell in excess of $25 million. (I can think of at least a half dozen serious buyers in that range.)
BTW, I do own a fair amount of CU stock. If the market hammers the stock due to the recent loss, I'll buy more.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>the coin hobby is better off if both NGC and PCGS are strong players. >>
i believe ngc & pcgs have small impact on the coin hobby, though i think their impact on the coin BUSINESS is huge. but i also believe the business would benefit if only 1 slabing co. existed.
why do you think there's benefit to having multiple plastic co's? it's not like there's any checks & balances going on!
K S
Here are some interesting facts: grading and authentification fees increased by 11%, grading and authentification fees represent 39% of total revenues for fiscal year 2003, coin grading submissions increased 24% and sportscard 10%.
I would say that going forward they are in good shape and should return to black numbers. Goodwill is gone and if they maintain the same margins the company should do well. This is just a quickie analysis but I don't see anything in their financial reports that is alarming.
how has the stock performed?
Accounting rules changed and now you have to do a test to see if any of it is impaired, simple this means will revenue streams justify the goodwill. CU decided to write off the goodwill under the new standards.
You at it this way, would you be willing to pay more to get the Coke name or RC Cola name. Obviously the Coke name, so it has some intagible value or goodwill. Also companies tend to sell at a multiple of earnings or cash flow and not at the depreciated asset value. The difference is accounted for in the purchase as goodwill.
Hope this helps and I am sure the accounts will correct me or add to this.
another enron perhaps?
its spookey now a days to wonder like "whats my 401k in and just how much is really there"
scarey
Go BIG or GO HOME. ©Bill
<< <i>Big things to look for: how much debt? what was the earnings forecast? did they have any one-time, non-recurring write-offs? >>
No debt, bank debt i.e. and yes several non-reoccuring charges.
Looking at the last year, I'd have to agree. But looking only at the last quarter, it's not so wonderful. Their losses greatly exceeded their write-offs for goodwill and bad debts.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Ok, ok - $15M!
<< <i>wonderful report....not only do they make a mint....they manage to figure a way not to pay taxes
Looking at the last year, I'd have to agree. But looking only at the last quarter, it's not so wonderful. Their losses greatly exceeded their write-offs for goodwill and bad debts. >>
Andy, if you are going to report those kinds of losses for the year, you write everything off in the 4th quarter that you can and more.
TDN, they do indeed have a powerful balance sheet.
Goodwill is "blue sky" - sometime in the past they must have included it as income to make their books look good.
Even though "coins" market is good, their retail operations lost money -> whether that is sports card values dropped and whatever else they deal in - makes it interesting and points out how tight the collectible retail market is.
It cost them to move Bowers and Marena - will they ever recoup that loss?
They have diversified to the point of losing focus on their "core" business
They lost half a million in auctions ??
<< <i>most of the losses were paper losses. >>
That might be an easy outlook to have if you are an outsider looking in or for someone contemplating buying the stock today. However, if someone purchased the stock at IPO, then those "paper losses" (goodwill) represent a price of $10,439,000 that was paid in excess of actual value. Might be easy enough to write off $10,439,000 when you pulled millions out at IPO, have sold millions of dollars in stock since the IPO and are being paid $450,000/year. However, if you are an original stockholder, then that writedown comes right out of the value of your stock!!
So, those people that trusted the leaders of CLCT and paid $25 per share at IPO, have been royally T-boned. Someone buying a 1000 shs. at IPO for $25,000, today has stock worth a big ol' $3,650. Even worse, someone paying $40,000 for a 1000 shs. in the first quarter of 2000, today has stock worth only $3,650.
Check out the stock's value over time:
CLCT chart
blue-chips for me, baby!
K S
Not true at all. The goodwill was the amount in excess of asset value paid for their acquisitions - it was never shown as income at any time.
These write-offs are real money. When you write off 1.5M in bad debts that is a real loss. Who's to say it won't happen next year or the next. What happens when the market turns down? Now is not the time to reorganize, they should be raking it in. It's not like this is a start-up. They've been around. One of the industry leaders. It should be running on all cylinders. If they can't get it right by now. When will they? They are bleeding, badly. The only thing saving them is the lack of debt.
Cash Down $450,000.00
Acct Rec. Down $2.5M
Advances Down $1.8M (future auction consignments)
etc, etc...
They can do all the paper tricks (Good Will) they want but what it comes down to is POSITIVE CASH FLOW. From what I see there doesn't appear to be any??
If this were my company, Heads Would Roll!!!