Major changes @ CU subject of message boards

DCAMFranklin · February 18, 2004 5:00AM

Interesting reading:

CU

tradedollarnut · February 18, 2004 5:07AM

Several posters over there insist on spinning wild theories about happenings at CU. The last one was that CU is selling off divisions to raise cash in order to avoid bankruptcy. Yeah...right...

Bear · February 18, 2004 5:07AM

The company is begining to concentrate its personnel and resources to what it does best.

Most of us have been reccommending and predicting such a move for some time now.

This is a big and necessary step in the right direction.I say well done.

Russ · February 18, 2004 5:08AM

I see it's the SSDD over at sleepy hollow.

Russ, NCNE

coinchallenged · February 18, 2004 5:16AM

Great for the grading business, bad for the stock holders.

Bear · February 18, 2004 5:18AM

Actually, good for the stock holders. Bottom line, profits go up, stock goes up.

What good is an empire that loses money.

IrishMike · February 18, 2004 5:20AM

If you read last years financials you would have to wonder why they even bother with the sportscards business any more. Its seems to be a money loser all the way around.

coinchallenged · February 18, 2004 5:22AM

Unfortunatley there aren't any dividends being paid out, so profits going up isn't going to help stock holder. Another problem though is that the stock was built on buying up all of the top companies in their fields and now they're being sold off. Time will tell.

tradedollarnut · February 18, 2004 5:26AM

My best guess is neutral for the shareholders. The multiple to earnings is likely to drop since the growth prospects are now limited. However, profits are much more likely to continue and the possibility of dividends in the future is enhanced.

nwcs · February 18, 2004 5:39AM

The only thing I'm concerned about, and I'm not at this juncture, is the life of this message board.

Russ · February 18, 2004 5:40AM

<< <i>Unfortunatley there aren't any dividends being paid out, so profits going up isn't going to help stock holder. >>

Huh?

Russ, NCNE

291fifth · February 18, 2004 6:03AM

This seems to be natural progression from a business standpoint. If I recall CU wrote off all of its "goodwill" in the last part of 2003.

Because so much of the CU stock is held by the top management and no dividend is being paid I doubt if this stock will gain much favor with investors. From a business standpoint these new moves to sell off losing operations make a great deal of sense. Unfortunately, the failure of these now-expendable business operations to prosper does not say much for the CU management team.

ClausUrch · February 18, 2004 6:10AM

What I want to know..."By how many days is this going to speed up my economy submissions???"

BigAl · February 18, 2004 6:13AM

It's not uncommon for a business to sell a division or component, happens all the time. this term "held for sale" is an accounting term which gives the company the ability to report these division losses "below the line" ie. not co-mingled with your regular operations---this is done specifically to aid in consistency and comparability of financial statement reporting and to paint a more accurate pic of continuing operations. hence, specific (strict) criteria must be met for company to qualify for "held for sale" status--you cannot merely wake up one day and decide that a component of your business is "held for sale".

The poster wondered why the company did not "at least make an announcement". well...publishing this info in a company's Q is notification.

Sequitur · February 18, 2004 6:45AM

From the press release, attached to the 8-K:

NEWPORT BEACH, Calif., Feb. 18 /PRNewswire-FirstCall/ -- Collectors Universe, Inc. . . . announced that it has decided to exit the commerce segment of its business, comprised of collectible auction and sales businesses, in order to reposition the Company to focus strictly on the grading and authentication businesses and on growth opportunities in the services segment of the collectibles markets. As a result of this decision, the businesses that comprise its commerce segment -- Bowers and Merena, Superior Sports Auctions, Kingswood Coin Auctions, Odyssey Publications, Lyn Knight Currency Auctions and DHRC, have been classified as held for sale and the related operating results have been classified as discontinued operations; while the Company's grading and authentication businesses -- PCGS, PSA, PSA-DNA and PSE -- comprise its continuing operations.

* * *

Mr. Haynes also stated that orderly disposition of the inventory and receivables assets in the collectibles sales segment is expected to free up a significant amount of cash, further strengthen the Company's ability to generate free cash flow, and reduce balance sheet risk considerably. "That said, we are aware that there are challenges as well as opportunities that will result from this decision," Haynes continued. "We have reduced our top line by over 50% and we must begin to rebuild revenues. Additionally, we will have to make sure that our cost structure is the appropriate size for our revenue base."

Not exactly sure what "classified as discontinued operations" means for Bowers, Kingswood, and DHRC, but they no longer are a part of CU's operations. But "orderly disposition of inventory" sounds as though they are going to sell their inventory and close up shop.

Anyone think this has something to do with perceived conflicts of interest, i.e. selling the very merchandise which you are purportedly grading "independently"? I doubt these segments were losing money.

oreville · February 18, 2004 6:50AM

I thin k this is outstanding stuff that CLCT is doing!

I had been begging David Hall to do just that!!!!!

This stock will go up 50% within the next year as a result of this move!

Mark · February 18, 2004 6:51AM

It would be downright amusing if ANR bought the B&M name!

Mark

BigAl · February 18, 2004 6:58AM

Anyone think this has something to do with perceived conflicts of interest, i.e. selling the very merchandise which you are purportedly grading "independently"?

No----Similar to what Bear said, better use of assets, larger return on investment, merely concentrating on their core business strengths.

doubt these segments were losing money

They were, $782,000 in the 4th Qtr. to be exact. see the Q.

tradedollarnut · February 18, 2004 6:58AM

I doubt these segments were losing money.

Apparently, they were:

....discontinued operations suffered a loss of $782,000, or $0.13 per diluted share in the second quarter of 2004, compared to a loss of $579,000, or $0.09 per diluted share, in the second quarter of 2003.....

IrishMike · February 18, 2004 6:58AM

Nope its nothing to do with conflict of interest and everything to do with those operations being a drag on earnings. Its a good move for the company.

jbsteven · February 18, 2004 7:03AM

So is Daid Hall selling DHRC?

oreville · February 18, 2004 7:18AM

jbstevens: Rome was not built in a Day!

islemangu · February 18, 2004 7:32AM

....this seems like positive change and good mangement

Sequitur · February 18, 2004 8:21AM

<<I doubt these segments were losing money.

Apparently, they were:

....discontinued operations suffered a loss of $782,000, or $0.13 per diluted share in the second quarter of 2004, compared to a loss of $579,000, or $0.09 per diluted share, in the second quarter of 2003..... >>

What I should have said was I doubt the coin-related divisions were losing money (those are the divisions I highlighted in my previous post). Perhaps the losses are attributable to the sports card and memorabilia market. I haven't looked at breakout numbers, and I'm not sure whether they have been publicly disclosed to shareholders. But in this market, can you see a coin auction house losing money?

I could be wrong, of course, especially since it appears the coin-related businesses were not strong enough to lift the entire collectable sales division out of the red. A precursor of things to come?

coinchallenged · February 18, 2004 9:51AM

<< <i>
This stock will go up 50% within the next year as a result of this move! >>

The stock never broke $10 a share when everyone was excited about it. Even if it doubles, its still really only $8.00 a share due to the reverse split, same price it was 4 years ago or so. I look for CU to go private within a year. I feel bad for the few people who went to Louisiana with B&M when they left NH. Chances are the company will move again.

jbsteven · February 18, 2004 9:56AM

<< <i>Rome was not built in a Day >>

But was it destroyed in a day?

Bear · February 18, 2004 9:58AM

Rome is still there. Except now, instead of an Empire , its just a city.

Lakesammman · February 18, 2004 12:18PM

The only surprise to me is the sale of DHRC.

I sent a card into PSA 2 months ago. It was returned in the same used box and wrapping paper I sent it in. It was clear that they were scraping the bottom of the barrel to save money. The B&M and Kingswood auctions have been aweful.

Congrats to CU for cutting the losses. As a shareholder, I think it's about time.

coinchallenged · February 18, 2004 1:01PM

Who is Peter Ma? I heard he was let go.

fishcooker · February 18, 2004 1:10PM

Ahhhhhhh.... good ole American Management. Buy up companies to "diversify" and to drive the stock up. Then sell off companies to "focus on core business" and drive the stock up.

At some point somebody has to actually lead and manage.......... or the stock won't go up.

MrEureka · February 18, 2004 9:11PM

So is Daid Hall selling DHRC?

Let's just say I had a dream last night that ANR bought DHRC and Ray Merena came out of retirement to run it. Of course that could NEVER happen, right?

pontiacinf · February 18, 2004 9:24PM

"see it's the SSDD over at sleepy hollow."

lol...

Trime · February 18, 2004 9:49PM

I thought I had a reasonable grasp of business operations and financial sheets until I began to look at those of publically held coin related businesses.

Major changes @ CU subject of message boards

Comments

Leave a Comment