Needham Growth Conference January 13, 2015

Transcription

1 Needham Growth Conference January 13, 2015

2 Cautionary Statements Regarding Forward-Looking Information This presentation may contain statements regarding the Company s current expectations or beliefs about its future financial performance. Such statements are forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended (the 1933 Act ) and Section 21E of the Securities Exchange Act of 1934, as amended. Other than statements of historical fact, all statements, projections or forecasts that may be contained in this presentation regarding Company s future financial performance or future financial condition, or as to trends in its business or markets, are forward-looking statements. The Company s actual financial performance in the future may differ, possibly materially, from the expected financial performance that may be set forth in this presentation due to a number of risk factors and uncertainties. Those risk factors and uncertainties, in addition to others, are more fully described in the Risk Factors section of the Company s annual report on Form 10-K dated August 28, 2014, as filed with the SEC. 1

3 Our Mission Provide the Gold Standard for Certification and Quality Assessment of Vintage, Rare and Modern Coins, Trading Cards, Currency, Memorabilia and Autographs Worldwide. Our Strategy Build Brand on Our Heritage and Expertise. Use Information Technology to Provide Structure & Valuation to Our Core Markets. Expand Globally into Unserved Markets. 2

4 Served Markets 3

5 Company Locations 4

6 Company Headquarters in Newport Beach, California Professional Coin Grading Service Founded In 1986 By David Hall, a Well- Respected Collectibles Expert Public Since 1999 (NASDAQ: CLCT) Employs 270 Worldwide More than 53 Million Items Certified and Graded, our Primary Source Of Revenue 5

7 Value Proposition Why Certify? 6

8 Grading Process Submissions Accepted at Offices & Shows Evaluated & Graded by Experts Encapsulated 7

9 Grading Scale - Coins 8a

10 Grading Scale - Cards 8b

11 How We Are Growing Our Businesses 23% & EXPOS 8% 69% Very Focused Core Market Growth Strategy Leverage Market Leadership Position Increase Served Market Via New Services and Geographic Expansion Increase Profitability Through Efficiency and Technology FY 2014 Revenue $ 61M The Digital Window Into High Value Collectibles 9

12 Professional Coin Grading Service Founded 1986 Worldwide Served Market Share >50% < 20% Of Available Market 1200 Dealer Network In US.. Expanding Network Overseas 29.5 Million Coins Graded To Date. Est. $30 Billion Current Market Value Modern Vintage World World s Largest Online Information and Pricing Database Of PCGS Graded Coins Direct Links for Collectors To Online Markets Such As ebay, Collectors Corner 10

13 Two Official Submission Centers Shanghai & Guangzhou PCGS China Broad Network of Authorized Dealers in Place Mandarin Language, Data-Filled Website 2015 Marks Entry into Chinese Currency Grading 11

14 International Presence Expanding International Mix of Revenue has Grown to 6% of Total Company in the Last 3 Years In-Country Grading is Now Augmented With Express Grading in Hong Kong and Paris With Twice Monthly Shipments to CA Facilities Preference for Graded Coins is Growing Due to Transparency of Global Market Information and Pricing 4 12

15 Enhanced Value 13

16 Rare Coin Values Ultra Rarity Index 10 Rarest PCGS graded US coins Valued at 3 different quality levels annually 14

17 Rare Coin Values 15

18 Founded 1991 Trading Cards Tickets Unopened Packs Founded 1998 Autographs Bats Gloves Photos Awards Rings Served Market Share >90% >500,000 Certified Listed On ebay Today Served Market Share >75% Available Market Is Huge New Jersey Submission Center Combined >23 Million Items Certified To Date with ~$1.8 Billion Market Value 16

19 Enhanced Value 19 17

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23 Set Registry Online Collecting Tool Available Free to Coin, Card & Autograph Collectors Important Tool in Stimulating Market Activity The Set Registry allows users to Organize, Analyze and Compete in a secure online environment. 173,485 Sets Registered 21

24 Dealer To Dealer Network (Subscription Service) Over 600 Members Facilitates Coin Transaction Information Sight Seen/Unseen, Rule Based Trading System Typically 200,000 Bid / Ask Prices For All Types Of Certified Coins Online Spot Prices For Gold, Silver, Platinum, Palladium Collectors Corner Marketplace 22

25 CCE Online 23

26 Collectors Corner 24

27 FY 2014 $ 61M 5yr CAGR 11% $9.7 $4.4 $14.4 $25.7 $4.1 $43.7 PCGS PSA/DNA CAE Financials FY LTM 9/30/14 Revenue $44.4M $48.4M $49M $60.5M $62.5M % International 1% 2% 3% 6% 6% Gross Profit % 61% 60% 61% 63% 63% Operating Profit % * 24% 22% 21% 24% 24% Net Income % 12% 14% 12% 12% 12% EPS $.65 $.85 $.71 $.90 $.91 YE Stock Price $ $14.8 $14.7 $13.3 $19.6 $22 Dividend Yield 8.6% 8.9% 9.8% 6.6% 5.9% FY 2010 $ 39.8M June Fiscal YE Price on 1/8/15 - $20.80 * Before Non Cash Stock Based Compensation 25

28 Balance Sheet and Cash Flow No Debt..$18.1M Of Cash As Of (9/30/2014) Low Capital Intensity. approx.$1m Per Year Annual Free Cash Flow ( Continuing Ops). Last 5 Year Avg. Is $10 M and Growing Current Annual Dividend Expense $10.7M ( $1.3 Per Share) Collectors Universe is Primarily An Intrinsic Growth Business Healthy Cash Flow Generation and Low Capital Investment Requirements Provide a Stable Base for Our Current Dividend Policy 26

29 Investment Thesis Clear Strategy Focus On What We Know and Do Well Experienced Management Team. Long Tenured Vertical Market Experts/Presidents Attractive Business Model Substantially Unserved Global Market Pricing Model Supported by Increasing Palette of Services and Information High Gross Margins Substantially Variable Cost Structure Modest Annual Capital Requirements Very High Competitive Barriers to Entry Because of Expertise and Technology Strong Balance Sheet Conservative No Debt Structured to Support Dividend Strategy 27

30 Thank You 28