Press Releases
Superior Galleries Reports 26% Year Over Year Increase in First-Quarter Revenues
Conference call scheduled for today at 1:30 p.m. Pacific Time
Beverly Hills, California - (Business Wire) - October 25, 2005 - Superior Galleries, Inc. ("Superior") (OTC Bulletin Board: SPGR) reported the second-highest quarterly revenues in its history for its fiscal year 2006 first quarter ended September 30, 2005. The Company recorded revenues of $11.7 million in the September quarter, an increase of $2.4 million, or 26%, from $9.2 million for the prior-year first quarter ended September 30, 2004.
Management attributed the revenue growth to continued strong market demand for rare coins in both its wholesale and retail sales channels, as well as to the benefits of investments in its operations and higher levels of inventory due to the availability of additional financing. Management believes that the Company's recently revised arrangement with Stanford Financial Group's member company Stanford Coins & Bullion (SC&B) will contribute to revenue growth in the future. Under the arrangement, Superior serves as SC&B's preferred rare coin supplier and exclusive auctioneer. Further, Stanford Financial, which is the Company's largest shareholder, is recommending that its investor clients diversify their portfolios to include rare coins, as a hedge against inflation and other potential effects of geopolitical and financial uncertainty.
Superior Galleries recorded a net loss of $105,000, or $0.02 per basic and diluted share, for the quarter ended September 30, 2005, versus net income of $125,000, or $0.03 per basic share, $0.02 diluted, for the prior year's first quarter.
The year-over-year comparisons in part reflect expenditures that the Company has made in expanding its live-auction and online sales channels and strengthening its operational infrastructure. First-quarter 2006 results include approximately $66,000 in investor relations expenses and $80,000 in expenses related to new policies mandating the expensing of employee stock options, neither of which items impacted the year-ago quarter.
"During the past four quarters, we have made great strides in constructing a multi-faceted platform for future growth," commented Silvano DiGenova, Chairman and CEO of Superior Galleries. "Our online-only auctions, which bring us incremental sales and potential long-term, high-volume customers at very low cost, are now launched and running on a monthly basis. We will continue to make improvements to the functionality of our web site as part of our overall on-line strategy."
Mr. DiGenova continued, "In recent months, we have also bolstered our management team with key high-level appointments while reducing first-quarter losses compared to the last two quarters. And the support of Stanford Financial continues to benefit us. This support is evident not only in terms of the expanded line of credit and Stanford's investment of $2.5 million in our Series E Convertible Preferred stock in March, 2005, but also on the auction floor. Stanford Coins & Bullion was one of the largest consignors at our recent Beverly Hills Elite Auction event, and we are optimistic that this key relationship will continue to benefit us going forward."
Conference call today at 1:30 p.m. Pacific time
Superior Galleries will hold a conference call, today, Tuesday, October 25, 2005 at 1:30 p.m. Pacific Time to discuss its first-quarter financial results.
To participate in the conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: (877) 586-7724. International callers should dial (706) 679-0614. There is no pass code required for this call.
If you are unable to participate in the call at this time, a replay will be available on Tuesday, October 25 at 3:00 p.m. PDT, through Tuesday, November 1 at 9:00 p.m. PDT. To access the replay dial (800) 642-1687 and enter the conference ID number 1209670. International callers please dial (706) 645-9291.
Additionally, a transcript and audio webcast replay of the conference call will be made available on the Superior Galleries web site at www.sgbh.com following the conclusion of the live call.
Superior Galleries, Inc. is a publicly traded company, acting as a dealer and auctioneer in rare coins and other fine collectibles. The firm markets its products through its prestigious location in Beverly Hills, California and the company's web site at www.sgbh.com.
Included in this release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including express and implied statements concerning future growth potential, future revenues and revenue growth, income, results of operations, expansion plans and expectations. Although the company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that the expectations reflected in such forward looking statements will prove to have been correct. These forward-looking statements are subject to certain risks and uncertainties, including market and other conditions that may affect our ability to expand our auction and dealer activities and control our operating costs, changes in investment recommendations by financial advisors and risks identified in our SEC filings. Investors and others are advised that our preferred supplier arrangement with Stanford Coin and Bullion can be terminated by either party at any time. The company's actual results could differ materially from those anticipated in the forward looking statements as a result of certain factors including sales levels, operating costs, distribution and competition trends, consumer preferences and other market factors. Past sales performance may not be indicative of future results. No assurances are given that sales trends or sales performance on behalf of consignors or customers will continue.
Superior Galleries, Inc.
Statements of Operations
(Unaudited)
(in thousands, except for per share data)
Three Months Ended
September September
30, 2005 30, 2004
----------------- ----------------
Net sales $ 10,948 $ 8,513
Commission income 705 757
----------------- ----------------
Total revenue 11,653 9,270
Cost of revenue 9,342 7,216
----------------- ----------------
Gross profit 2,311 2,054
Selling, general and
administrative expenses 2,301 1,854
----------------- ----------------
Income from operations 10 200
----------------- ----------------
Other income (expense)
Interest income 113 101
Interest expense (227) (175)
Other expense, net - -
----------------- ----------------
Total other income
(expense) (114) (74)
----------------- ----------------
Income (loss) before provision
for taxes (104) 126
Income tax provision 1 1
----------------- ----------------
Net income (loss) $ (105) $ 125
================= ================
Net income (loss) per share
basic $ (0.02) $ 0.03
================= ================
fully diluted $ (0.02) $ 0.02
================= ================
Weighted average number of
common shares outstanding
basic 4,820 4,497
================= ================
fully diluted 4,820 8,170
================= ================
Superior Galleries, Inc.
Balance Sheets
(in thousands)
September June 30,
30, 2005 2005
(Unaudited)
---------------- ---------------
Assets
Current assets
Cash $ 695 $ 417
Accounts receivable, net of
allowance for uncollectible
accounts of $154 (Sep. 2005)
and $122 (Jun. 2005) 6,906 4,969
Auction and customer advances 3,176 4,950
Inventories 9,226 8,713
Prepaid expense and other 372 346
--------------- ---------------
Total current assets 20,375 19,395
Property and equipment, net 197 220
--------------- ---------------
Total assets $ 20,572 $ 19,615
=============== ===============
Liabilities and Stockholders' Equity
Current liabilities
Line of credit --
related party $ 8,000 $ 9,250
Line of credit 2,200 2,200
Accounts payable and
accrued expenses 7,483 5,154
Notes payable to a
related party 350 350
Notes payable 650 650
Series A stock redemption
payable 206 275
--------------- ---------------
Total current liabilities 18,889 17,879
--------------- ---------------
Long-term liabilities
Notes payable to a
related party, net of
current portion 350 400
--------------- ---------------
Total long-term liabilities 350 400
--------------- ---------------
Total liabilities 19,239 18,279
--------------- ---------------
Superior Galleries, Inc.
Balance Sheets, continued
(in thousands)
September June 30,
30, 2005 2005
(Unaudited)
------------- -----------
Commitments and contingencies
Stockholders' equity (deficit)
Preferred stock, 693 shares
undesignated, none outstanding
Series B convertible preferred stock
$1.00 par value
3,400 shares designated 3,400
shares issued and outstanding
with a liquidation preference
of $3,400 2,967 2,967
Series D convertible preferred stock
$1.00 par value
2,000 shares designated 2,000 shares
issued and outstanding with a
liquidation preference of $2,000 1,931 1,931
Series E convertible preferred stock
$1.00 par value
2,500 shares designated 2,500 shares
issued and outstanding with a
liquidation preference of $2,500 2,488 2,488
Common stock, $0.001 par value, 20,000
Shares authorized; 4,820 as of
September 30, 2005 and June 30, 2005 5 5
Additional paid in capital 8,562 8,459
Accumulated deficit (14,620) (14,514)
------------ -----------
Total stockholders' equity
(deficit) 1,333 1,336
------------ -----------
Total liabilities and stockholders'
equity (deficit) $ 20,572 $ 19,615
============ ===========
See the Company's filing with the SEC on Form 10Q for notes to
financial statements.
Contact:
Superior Galleries, Inc., Beverly Hills, California
Paul Biberkraut, CFO, at 310-203-9855 or paulb@sgbh.com
www.sgbh.com
Investor Relations Contacts:
CCG Investor Relations
Sean Collins, Partner, at 310-477-9800
www.ccgir.com
American Capital Ventures, Inc.
Howard Gostfrand, President, 305-918-7000 or hg@amcapventures.com
www.amcapventures.com
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