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Any of you CU investors have an annual report?
wayneherndon
Posts: 2,348 ✭✭✭
Mr. Eureka's thread got me to wondering how much the grade guarantee costs a major TPG annually. Numbers I'm interested in are annual reserve for buybacks and annual revenues. Some of the buyback reserves will relate to authenticity but I suspect the majority is for grade.
WH
WH
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Amounts in thousands.
Warranty reserve, June 30, 2002 $302
..........Charged to cost of revenues in FY2002 $317
..........Cash payments in FY2002 ($315)
Warranty reserve, June 30, 2003 $304
..........Charged to cost of revenues in FY2003 $646
..........Payments in FY2003 ($458)
Warranty reserve June 30, 2004 $492
..........Charged to cost of revenues in FY2004 $530
..........Payments in FY2004 ($413)
Warranty reserve at June 30, 2005 $609
New collectors, please educate yourself before spending money on coins; there are people who believe that using numismatic knowledge to rip the naïve is what this hobby is all about.
WH
Coins accounted for 60% of revenues in 2003, 66% in 2004 and 69% in 2005.
New collectors, please educate yourself before spending money on coins; there are people who believe that using numismatic knowledge to rip the naïve is what this hobby is all about.
WH
<< <i>These are the numbers for CLCT as a whole. They aren't broken out by operating unit (PCGS, PSA, etc.)
Amounts in thousands.
Warranty reserve, June 30, 2002 $302
..........Charged to cost of revenues in FY2002 $317
..........Cash payments in FY2002 ($315)
Warranty reserve, June 30, 2003 $304
..........Charged to cost of revenues in FY2003 $646
..........Payments in FY2003 ($458)
Warranty reserve June 30, 2004 $492
..........Charged to cost of revenues in FY2004 $530
..........Payments in FY2004 ($413)
Warranty reserve at June 30, 2005 $609 >>
I suspect these numbers are in thousand$--wouldn't make sense for a publicly traded company otherwise.
Maybe the disclosure requirement is why PCGS WON'T CLARIFY THE SO-CALLED GUARANTY OF AUTHENTICITY!!!!!!!
<<I suspect these numbers are in thousand$>>
Both quotes are from your post.
New collectors, please educate yourself before spending money on coins; there are people who believe that using numismatic knowledge to rip the naïve is what this hobby is all about.
<< <i><<Amounts in thousands. >>
<<I suspect these numbers are in thousand$>>
Both quotes are from your post. >>
That's not the point. The point is:
WHY WON'T PCGS CLARIFY THE SO-CALLED GUARANTY OF AUTHENTICITY!!!!!!!
Here's a relevant quote from CU's most recent 10-Q: We offer a warranty covering the coins, sportscards, stamps and currency we authenticate and grade. Under the warranty, if any collectible that was previously graded by us is later submitted to us for re-grading and either (i) receives a lower grade upon that resubmittal or (ii) is determined not to have been authentic, we will offer to purchase the collectible or pay the difference in value of the item at its original grade as compared with its lower grade. However, this warranty is voided if the collectible, upon resubmittal to us, is not in the same tamper resistant holder in which it was placed at the time we last graded it. I think this quote certainly has relevance to the question that you might have asked once or twice or three hundred times.
Mark
<< <i>mbt:
Here's a relevant quote from CU's most recent 10-Q: We offer a warranty covering the coins, sportscards, stamps and currency we authenticate and grade. Under the warranty, if any collectible that was previously graded by us is later submitted to us for re-grading and either (i) receives a lower grade upon that resubmittal or (ii) is determined not to have been authentic, we will offer to purchase the collectible or pay the difference in value of the item at its original grade as compared with its lower grade. However, this warranty is voided if the collectible, upon resubmittal to us, is not in the same tamper resistant holder in which it was placed at the time we last graded it. I think this quote certainly has relevance to the question that you might have asked once or twice or three hundred times.
Mark >>
Thanks.
Unfortunately, the statement is vague and ambiguious at best, to wit:
If a coin " is determined not to have been authentic, we will offer to purchase the collectible".
At what price??? Why not state the guaranty expressly and publicly (not merely in an SEC disclosure document)?
Notice that there is no specific reserve for the guaranty of authenticity--that's because it is illusory!!!!
<< <i>Unfortunately, the statement is vague and ambiguious at best, to wit:
If a coin " is determined not to have been authentic, we will offer to purchase the collectible".
At what price??? Why not state the guaranty expressly and publicly (not merely in an SEC disclosure document)?
Notice that there is no specific reserve for the guaranty of authenticity--that's because it is illusory!!!! >>
Your statement starts off with an opinion that PCGS's statement is vague and ambiguous. You are partially correct. However, you need to keep in mind that in SEC reporting, the exact details of a guaranty program is not normally completely spelled out. I can think of only a handful of public companies in the United States that completely spells out the entire details of a warranty program in the SEC reporting and those were very simple warranty programs.
In practice, I have observed PCGS's practice to award the owner of a slabbed counterfeit coin the lesser of the purchase price paid for the coin, the PCGS prices posted on the PCGS internet site for a genuine coin at the time of purchase at the grade assigned, or the time of discovery of the PCGS error. On the other hand, when the coin is obviously slabbed as a different coin through a mechanical error in describing the coin (such as a coding error) then the guaranty does not apply. Example, my 1878-S Morgan silver dollar in MS-64 slabbed erroneously by PCGS as an 1878-S trade dollar, also in MS-64 which is worth a lot more money. Certainly, my slab as attributed is not authentic! But no reasonable person would expect anyone to believe or expect that I had a Trade dollar in my hands.
Next; your comment:
<< <i>Notice that there is no specific reserve for the guaranty of authenticity--that's because it is illusory!!!! >>
It is extremely rare for any public company to break down the specific reserves for the various things that can go wrong with a specific product and instead of attempting to create an illusion of preciseness of how much warranty reserve for each component of the product the company has provided for it "lumps" them together.
For you to suggest separation of such warranty reserves for grading errors versus authentication errors would be comparable to suggesting that automotive manufacturers, for example, to separate their warranty reserves on new cars sold by automotive component such as water pumps versus radiators versus engines versus windshield wiper motors, etc. It simply is not done in public reporting to such detail. It creates a false sense of preciseness which is equally dangerous to the reader of the financial statement.
Hope this helps.
In the meantime, happy, healthy New Year!