This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

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

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
Current assets
Cash and cash equivalents $ 22,401 $ 25,305
Receivables and secured loans, net – trading operations 113,081 127,995
Accounts receivable and consignor advances, net – collectibles operations 11,091 20,428
Inventory, net 145,964 157,849
Prepaid expenses and other assets 3,611 2,770
Deferred tax assets 13,192 13,192
Current assets of discontinued operations   8,273  
Total current assets 309,340 355,812
Property and equipment, net 12,999 11,710
Goodwill 5,986 6,765
Other purchased intangible assets, net 6,731 7,157
Restricted cash 593 550
Income taxes receivable 2,637 2,637
Deferred tax assets – non-current 1,615 1,207
Other assets 567 943
Non-current assets of discontinued operations   1,115  
Total assets $ 340,468   $ 387,896  
 
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and consignor payables $ 101,760 $ 95,787
Liability on borrowed metals 35,139 27,076
Obligation under product financing arrangement 4,778 15,576
Accrued expenses and other current liabilities 7,460 9,921
Income taxes payable 16,138 17,860
Lines of credit 80,634 92,669
Debt obligation, current portion 498 154
Current liabilities of discontinued operations   8,224  
Total current liabilities 246,407 267,267
 
Deferred and other long term tax liabilities 8,652 8,010
Debt obligations, net of current portion 6,175 6,574
Other long-term liabilities 636   168  
Total liabilities 261,870   282,019  
 
Commitments and contingencies    
Redeemable non-controlling interest 59   124  
Stockholders’ equity:
Preferred stock, $0.01 par value, authorized 10,000 shares; issued and outstanding: none
Common stock, $0.01 par value, authorized 40,000 shares; issued and outstanding: 30,628 and 32,537 at December 31, 2012 and June 30, 2011, respectively 306 327
Additional paid-in capital 209,666 242,418
Accumulated other comprehensive income 6,660 6,389
Accumulated deficit (139,668 ) (156,777 )
Total Spectrum Group International, Inc. stockholders’ equity 76,964 92,357
Non-controlling interest 1,575   13,396  
Total stockholders’ equity 78,539   105,753  
Total liabilities, redeemable non-controlling interest and stockholders’ equity $ 340,468   $ 387,896  
           
(1) The condensed consolidated balance sheet as of June 30, 2012 has been derived from the audited consolidated financial statements included in the Company’s 2012 Annual Report on Form 10-K, adjusted to reflect discontinued operations.
               
SPECTRUM GROUP INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
 

Three Months

Three Months

Six Months

Six Months
Ended Ended

Ended

Ended

December 31,

December 31,

December 31,

December 31,

2012

2011

2012

2011

 

(1)

 

 

(1)

 

Revenues:
Sales of precious metals $ 1,688,625 $ 2,090,527 $ 3,302,240 $ 4,281,113
Collectibles revenues:
Sales of inventory 44,900 33,913 91,174 93,813
Auction services 2,764   3,368   7,742   11,936  
Total revenues 1,736,289   2,127,808   3,401,156   4,386,862  
Cost of sales:
Cost of precious metals sold 1,682,113 2,083,325 3,290,564 4,265,429
Cost of collectibles sold 41,829 33,497 85,246 89,883
Auction services expense 888   1,041   3,707   3,580  
Total cost of sales 1,724,830   2,117,863   3,379,517   4,358,892  
Gross profit 11,459   9,945   21,639   27,970  
Operating expenses:
General and administrative 5,105 6,162 10,233 12,703
M.F. Global, Inc. loss provision (recovery) (711 ) 2,094 (711 ) 2,094
Salaries and wages 6,383 6,846 12,167 14,614
Depreciation and amortization 568   452   1,073   824  
Total operating expenses 11,345   15,554   22,762   30,235  
Operating income (loss) 114   (5,609 )   (1,123 ) (2,265 )  
Interest and other income (expense):
Interest income 2,464 3,286 4,652 6,910
Interest expense (1,331 ) (1,275 ) (2,413 ) (2,563 )
Other income, net 83 1,036 222 408
Unrealized gain (loss) on foreign exchange (807 ) 1,479   (1,482 ) 3,239  
Total interest and other income (expense) and unrealized gain (loss) on foreign exchange 409   4,526   979   7,994  
Income (loss) from continuing operations before provision for income taxes 523 (1,083 ) (144 ) 5,729
Provision for income taxes (income tax benefit) 1,062   (127 )   1,170   2,843  
Income (loss) from continuing operations (539 ) (956 ) (1,314 ) 2,886
Income (loss) from discontinued operations, net of tax, attributable to Spectrum Group International, Inc.   (483 )   (663 ) 312  
Net income (loss) (539 ) (1,439 ) (1,977 ) 3,198
Less: net (income) loss attributable to non-controlling interests 699   444   615   (1,020 )  
Net income (loss) attributable to Spectrum Group International, Inc. $ 160   $ (995 )   $ (1,362 ) $ 2,178  
 
Basic and diluted income (loss) per share:
Basic – continuing operations $ 0.01   $ (0.02 )   $ (0.02 ) $ 0.06  
Basic – discontinued operations $   $ (0.01 )   $ (0.02 ) $ 0.01  
Diluted – continuing operations $ 0.01   $ (0.02 )   $ (0.02 ) $ 0.06  
Diluted – discontinued operations $   $ (0.01 )   $ (0.02 ) $ 0.01  
Basic – net income (loss) $ 0.01   $ (0.03 )   $ (0.04 ) $ 0.07  
Diluted – net income (loss) $ 0.01   $ (0.03 )   $ (0.04 ) $ 0.07  
 
Weighted average shares outstanding
Basic 30,628   32,652   31,706   32,645  
Diluted 30,835   32,652   31,706   32,992  
           
(1) Adjusted to reflect discontinued operations.
       
SPECTRUM GROUP INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 
Six Months Ended Six Months Ended
December 31, 2012 December 31, 2011
 

(1)

 

 
Cash flows from operating activities:
Net income (loss) $ (1,977 ) $ 3,198
(Income) loss from discontinued operations, net of tax, attributable to Spectrum Group International, Inc. 663   (312 )  
Income (loss) from continuing operations (1,314 ) 2,886
Adjustments to reconcile income from continuing operations to net cash provided by (used in) operating activities — continuing operations:
Net unrealized (gains) losses on foreign currency 1,482 (3,239 )
Depreciation and amortization 1,073 824
Provision for (recovery of) bad debts (660 ) 2,094
Provision for inventory reserve 10 49
Share based compensation 191 311
Gain on sale of Stamps business (17 )
Loss on abandonment of property of equipment 204 76
Changes in assets and liabilities:
Receivables and secured loans 15,625 (94,161 )
Accounts receivable and consignor advances 4,298 5,011
Inventory 11,297 36,996
Prepaid expenses and other assets (1,407 ) (498 )
Liabilities on borrowed metals 8,063 10,539
Accounts payable, accrued expenses and other liabilities 3,792 64,418
Income taxes receivable/payable (1,051 ) 1,486
Deferred taxes and other long-term liabilities (408 ) (1,554 )
Accrued litigation settlement   (680 )  
Net cash provided by operating activities — continuing operations 41,178 24,558
Net cash provided by (used in) operating activities — discontinued operations (1,238 ) 280  
Net cash provided by operating activities 39,940   24,838  
Cash flows from investing activities:
Capital expenditures for property and equipment (1,565 ) (2,313 )
Change in restricted cash (43 ) 593
Purchases/sales of marketable securities (138 )
Divestiture of business 7,750    
Net cash provided by (used in) investing activities — continuing operations 6,142 (1,858 )
Net cash used in investing activities — discontinued operations (22 ) (27 )  
Net cash provided by (used in) investing activities 6,120   (1,885 )  
Cash flows from financing activities:
Borrowings (repayments) under lines of credit, net (12,035 ) (13,533 )
Borrowings (repayments) on notes payable (55 ) (52 )
Obligation under product financing arrangement (10,798 )
Issuance of common stock 25,213
Retirement of repurchased common stock (51,178 )
Repurchase of restricted stock (1 )
Distributions paid to non-controlling interest   (6 )  
Net cash used in financing activities – continuing operations (48,854 ) (13,591 )
Net cash provided by (used in) financing activities – discontinued operations    
Net cash used in financing activities (48,854 ) (13,591 )  
Effects of exchange rates on cash (110 ) 998  
Net increase in cash and cash equivalents (2,904 ) 10,360
Cash and cash equivalents, beginning of period 25,305   24,181  
Cash and cash equivalents, end of period $ 22,401   $ 34,541  
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest expense $ 1,982   $ 1,224  
Income taxes $ 2,618   $ 751  
Non-cash items
Purchase of equipment under capital lease $ (573 ) $  
           
(1) Adjusted to reflect discontinued operations.




4 of 5

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs