Jewelry grading 'steady' for Collectors Universe

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Jewelry grading 'steady' for Collectors Universe

October 03, 2008

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Newport Beach, Calif.—Collectors Universe Inc., the parent company of two diamond- and gemstone-grading laboratories, reported revenues fell 4 percent in the fourth quarter of 2008 despite steady growth in its jewelry division.

Collectors Universe, the parent company of the Gem Certification and Assurance Lab (GCAL) and American Gemological Laboratories (AGL), reported net revenues of $10.3 million and a loss from continuing operations of $13.1 million in the final quarter of 2008, compared with net revenues of $10.7 million and a loss from continuing operations of $0.9 million for the same period in 2007.

For the fiscal year 2008, net revenues equaled $42 million and losses from continuing operations totaled $15.6 million, compared with net revenues of $40.5 million and a loss from continuing operations of $0.7 million in fiscal year 2007.

The company reports that while its coin-grading business is down, jewelry-grading revenues increased by 24 percent quarter-over-quarter and 35 percent year-over-year, an increase driven by unit volume increases.

"Our coin division results were lower primarily as a result of the coin trade show business, while the remainder of the coin and collectibles divisions showed flat to modest growth," Collectors Universe Chief Executive Officer Michael Haynes said in a statement. "Our jewelry division operating results improved as compared to the fourth quarter of the prior fiscal year ended June 30, 2007, and, although the annual growth is slower than anticipated in part as a result of this macro-economic environment, we are seeing steady progress in this new market for the company."

In addition, more focused jewelry sales and marketing efforts resulted in a 28 percent quarter-over-quarter decrease in expenses in this area for Collectors Universe.

The company also began implementing a cost-reduction program in the fourth-quarter of 2008, with the aim of reducing operating expenses by $4 million on an annualized basis.

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