Spectrum Group International, Inc. Announces Fiscal Second Quarter 2013 Financial Results

Spectrum Group International, Inc. Announces Fiscal Second Quarter 2013 Financial Results

IRVINE, Calif.--(BUSINESS WIRE)-- Spectrum Group International, Inc. (SPGZ.PK) today announced financial results for the second quarter of fiscal year 2013, which ended December 31, 2012.

Highlights for the Three and Six Months ended December 31, 2012:

  • Total revenue of $1.74 billion and $3.40 billion for the three and six months ended December 31, 2012
    • Trading segment revenue of $1.69 billion and $3.30 billion for the three and six months ended December 31, 2012
    • Collectibles segment revenue of $47.7 million and $98.9 million for the three and six months ended December 31, 2012
  • Gross profit of $11.5 million and $21.6 million for the three and six months ended December 31, 2012
  • Pre-tax income (loss) from continuing operations of $0.5 million and $(0.1) million for the three and six months ended December 31, 2012

Revenues for the three months ended December 31, 2012 decreased $391.5 million, or 18.4%, to $1.74 billion from $2.13 billion in the year-ago quarter. Revenues for the six months ended December 31, 2012 decreased $985.7 million, or 22.5%, to $3.40 billion from $4.39 billion in the year-ago quarter. Trading revenues decreased $401.9 million, or 19.2%, for the three months ended December 31, 2012 and decreased $978.9 million, or 22.9%, for the six months ended December 31, 2012 compared with the same periods last year. This decrease was primarily due to a slight decrease in average precious metals prices and a decrease in the ounces of precious metals sold. Collectible segment revenues increased $10.4 million, or 27.9%, for the three months ended December 31, 2012 and decreased $6.8 million, or 6.5%, for the six months ended December 31, 2012. The increase for the three-month period is due primarily to stronger second quarter sales in our numismatics business as a result of improved market conditions. The decrease for the six-month period is due to weaker sales in the first quarter of fiscal 2013 compared to the first quarter of fiscal 2012, due in part to lower hammer prices at auction impacting our commissions.

Gross profit for the three months ended December 31, 2012 increased $1.5 million, or 15.2%, to $11.5 million, or a gross profit margin of 0.7%, from $9.9 million, or a gross profit margin of 0.5% in 2011. Trading segment gross profit decreased by $0.7 million, or 9.6%, to $6.5 million, or a gross profit margin of 0.39% for the three months ended December 31, 2012. The decrease was due primarily to less price volatility and a decrease in volumes. Collectibles segment gross profit increased by $2.2 million, or 80.3%, to $4.9 million from $2.7 million. The increase was due primarily to sales of a higher percentage of higher margin numismatic materials. Gross profit for the six months ended December 31, 2012 decreased $6.3 million to $21.6 million, or a gross profit margin of 0.6%, from $28.0 million, or a gross profit margin of 0.6% in 2011. Trading and Collectibles segments contributed to this decrease, with individual decreases of $4.0 million and $2.3 million, respectively, during this period.

Pre-tax income from continuing operations for the three months ended December 31, 2012 was $0.5 million, as compared with pre-tax loss of $1.1 million for the comparable quarter in the prior fiscal year. Pre-tax loss for the six months ended December 31, 2012 was $0.1 million, compared to pre-tax income of $5.7 million for the six months ended December 31, 2011. Included in operating expenses for the three and six months ended December 31, 2011 was a $2.1 million reserve in connection with the claim against M.F. Global, Inc., of which settlement in the second quarter of fiscal 2013 resulted in a $0.7 million recovery of the reserve, or an increase of $2.8 million in pre-tax income. The increase to pre-tax income in the three-month period is primarily due to this increase as well as the increase in gross profit of $1.5 million described above and the impact of a $1.1 million decrease in general and administrative expenses. The decrease in general and administrative expenses is due to an effort to reduce spending in our Collectibles segment. For the six-month period, the decrease in pre-tax income is due to a $2.2 million decrease in interest income primarily from our Trading segment's lending business, and the impact of unrealized gain (loss) on foreign currency, which declined by $4.7 million gain to $1.5 million loss.

More information regarding the Company's financial results for the quarter ended December 31, 2012 is set forth in the Company's Report on Form 10-Q, as filed with the Securities and Exchange Commission on February 13, 2013.

           
Three Months Ended
   
 

December

December

Increase/ Increase/
in thousands, except per share data

31, 2012

31, 2011

(Decrease) (Decrease)
(unaudited)

(1)

 

$

%

(unaudited)
Revenues

 

 

$

1,736,289 $ 2,127,808 $ (391,519 ) (18.4 )%
Gross profit 11,459 9,945 1,514 15.2 %
Operating expenses 11,345 15,554 (4,209 ) (27.1 )%
Operating income (loss) 114 (5,609 ) 5,723 102.0 %
Pre-tax income (loss) from continuing operations 523 (1,083 ) 1,606 148.3 %
Provision for income taxes (income tax benefit) 1,062 (127 ) 1,189 936.2 %
Loss from continuing operations (539 ) (956 ) 417 43.6 %
Net income (loss) from discontinued operations (483 ) 483 100.0 %
Net income (loss) (539 ) (1,439 ) 900 62.5 %
Less: net income attributable to non-controlling interest 699 444 255 57.4 %
Net income (loss) attributable to Spectrum Group International, Inc.

 

 

$

160 $ (995 ) $ 1,155 116.1 %

Earnings (loss) per share

 

Basic - continuing operations

 

 

$

0.01 $ (0.02 ) $ 0.03 (150.0 )%
Basic - discontinued operations

 

 

$

$ (0.01 ) $ 0.01 NM
Diluted - continued operations

 

 

$

0.01 $ (0.02 ) $ 0.03 (150.0 )%
Diluted - discontinued operations

 

 

$

$ (0.01 ) $ 0.01 NM
Basic - attributable to Spectrum Group International, Inc.

 

 

$

0.01 $ (0.03 ) $ 0.04 (133.3 )%
Diluted - attributable to Spectrum Group International, Inc.

 

 

$

0.01 $ (0.03 ) $ 0.04 (133.3 )%

_________________

(1) Adjusted to reflect discontinued operations.

NM = not meaningful

           
Six Months Ended
   

December

31, 2011

December

(1)

 

Increase/ Increase/
in thousands, except per share data

31, 2012

(restated) (Decrease) (Decrease)
(unaudited) (unaudited) $

%

 
Revenues

 

$

3,401,156 $ 4,386,862 $ (985,706 ) (22.5 )%
Gross profit

21,639

27,970 (6,331 ) (22.6 )%
Operating expenses 22,762 30,235 (7,473 ) (24.7 )%
Operating income (loss) (1,123 ) (2,265 ) 1,142 50.4 %
Pre-tax income (loss) from continuing operations (144 ) 5,729 (5,873 ) (102.5 )%
Provision for income taxes 1,170 2,843 (1,673 ) (58.8 )%
Net income (loss) from continuing operations (1,314 ) 2,886 (4,200 ) (145.5 )%
Net income (loss) from discontinued operations (663 ) 312 (975 ) (312.5 )%
Net income (loss) (1,977 ) 3,198 (5,175 ) (161.8 )%
Less: net (income) loss attributable to non-controlling interest 615 (1,020 ) 1,635 (160.3 )%
Net income (loss) attributable to Spectrum Group International, Inc.

 

$

(1,362 ) $ 2,178 $ (3,540 ) (162.5 )%

Earnings (loss) per share

Basic - continuing operations

 

$

(0.02 ) $ 0.06 $ (0.08 ) (133.3 )%
Basic - discontinued operations

 

$

(0.02 ) $ 0.01 $ (0.03 ) NM
Diluted - continuing operations

 

$

(0.02 ) $ 0.06 $ (0.08 ) (133.3 )%
Diluted - discontinued operations

 

$

(0.02 ) $ 0.01 $ (0.03 ) NM
Basic - attributable to Spectrum Group International, Inc.

 

$

(0.04 ) $ 0.07 $ (0.11 ) (157.1 )%
Diluted - attributable to Spectrum Group International, Inc.

 

$

(0.04 ) $ 0.07 $ (0.11 ) (157.1 )%

_____________

(1) Adjusted to reflect discontinued operations.

NM = not meaningful

About Spectrum Group International, Inc.

Spectrum Group International, Inc. (together with its subsidiaries, "we," the "Company" or "SGI") is a global trading and collectibles network. We are a trader of precious metals and an auctioneer of coins and wine, serving both collectors and dealers. We are also a merchant/dealer of certain collectibles. Our collectibles offerings span the price spectrum from modest to ultra-high end. Furthermore, we offer loans to coin dealers, collectors and investors backed by their precious metals, rare coins, and other collectibles as collateral.

Our Trading business is conducted through A-Mark Precious Metals, Inc. ("A-Mark") and its subsidiaries. A-Mark is a full-service precious metal trading company, and an official distributor for many government mints throughout the world. A-Mark products include gold, silver, platinum and palladium for storage and delivery in the form of coins, bars, wafers and grain, and our services include financing, leasing, consignment, hedging and various customized financial programs. A-Mark's subsidiary, Collateral Finance Corporation, provides financing on a wide array of bullion and numismatic products.

Our Collectibles business operates as an integrated network of leading companies concentrating on numismatic (coins) and rare and fine vintage wine. We have offices and auction houses in North America, Europe and Asia. In addition to traditional live auctions, we also conduct Internet and telephone auctions.

Spectrum Group's Collectibles companies in the numismatics field include Stack's Bowers Galleries (rare coin and currency auction house), Stack's Bowers and Ponterio (world and ancient coins and currency auction house), Teletrade (online coin auctions), and Spectrum Numismatics International (wholesale rare coin dealer), all based in Irvine, California. Spectrum Wine Auctions is engaged in the sale by auction of rare and fine vintage wine.

SAFE HARBOR STATEMENT

Statements in this press release that relate to future plans, objectives, expectations, performance, events and the like are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. Future events, risks and uncertainties, individually or in the aggregate, could cause actual results to differ materially from those expressed or implied in these statements. Factors that could cause actual results to differ are identified in our public filings with the Securities and Exchange Commission (SEC), and include the fact that we have disclosed that you should not rely upon our previously published financial statements and the fact that we have not filed all of our reports required by the Securities Exchange Act of 1934. More information about factors that could affect our business and financial results included in our public filings with the SEC, which are available on the SEC's website located at www.sec.gov.

The words "should," "believe," "estimate," "expect," "intend," "anticipate," "foresee," "plan" and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates on which they were made. Additionally, any statements related to future improved performance and estimates of revenues and earnings per share are forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements.

 
SPECTRUM GROUP INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
       
December 31, June 30, 2012
2012 (1)
ASSETS

Learn about investing from the comfort of your own home.

Portfolio Basics

Take the first steps to building your portfolio.

View Course »

Investment Strategies

Learn the strategies you need to build a winning portfolio

View Course »

Add a Comment

*0 / 3000 Character Maximum