While the subject of slabbing pales in comparison to the recent events at the WTC and Pentagon, here's the press release from Collectors Universe -- a public company that grades & slabs coins, sports cards and stamps. This is the company that was at the convention in June on a exploratory basis. They have not announced if/when they will get into chip slabbing. Since their slabbing business has declined in the last quarter, perhaps they will focus on their existing businesses, and building their stamps business, rather than launch into chips. Time will tell.
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Collectors Universe Reports Financial Results For Its Fourth Quarter and Fiscal Year Ended June 30, 2001

Updated: Monday, September 17, 2001 08:15 AM ET

NEWPORT BEACH, Calif., Sept. 17 /PRNewswire/ -- Collectors Universe, Inc. (Nasdaq: CLCT, news, msgs) today announced financial results for the fourth quarter and fiscal year ended June 30, 2001.

Net revenues for the fiscal year ended June 30, 2001 increased by 24% to $52.4 million from $42.4 million in the fiscal year ended June 30, 2000. That increase was due to a 75% increase in auction and collectible sales to $31.4 million from $18.0 million in fiscal year ended June 30, 2000. However, grading and authentication revenues declined by 14% to $21.0 million in the fiscal year ended June 30, 2001 from $24.4 million in the prior fiscal year, largely due to an abrupt decline in grading and authentication submissions, particularly of sportscards, in the fourth quarter of fiscal 2001, when grading and authentication revenues declined by 29%, as compared to the same quarter of fiscal 2000. As a result, grading and authentication revenues represented only 40% and collectible sales revenues represented 60% of our total revenues in the fourth quarter and also for the entire fiscal year ended June 30, 2001; whereas, grading and authentication revenues represented approximately 55% and 57% and collectible sales revenues represented approximately 45% and 43%, of total net revenues for the fourth quarter and fiscal year ended June 30, 2000, respectively.
Gross profit margin on collectible sales revenues is substantially lower than on grading and authentication revenues. As a result, these changes in the mix of revenues had a dramatic effect on operating results during the fourth quarter and fiscal year ended June 30, 2001, by causing gross profit margin to decline in the fourth quarter and fiscal year ended June 30, 2001 to 35.3% and 41.6%, respectively, from 55.7% and 52.4%, respectively, in the fourth quarter and fiscal year ended June 30, 2000. Additionally, although collectible sales were higher in the fourth quarter of fiscal 2001 than in the fourth quarter of fiscal 2000, such sales slowed during the fourth quarter of fiscal 2001, reversing the trend of increasing collectible sales experienced earlier in fiscal 2001. Consequently, net loss was $1.5 million, or $0.06 per diluted share, in the fourth quarter of fiscal 2001, as compared to net income of $467,000, or $0.02 per diluted share, in the fourth quarter of fiscal 2000. And, for the entire fiscal year ended June 30, 2001, net loss was $649,000, or $0.03 per diluted share, as compared to net income of $1.5 million, or $0.06 per diluted share, for the fiscal year ended June 30, 2000.

On a pro forma basis, which excludes charges for goodwill and stock-based compensation, and assumes a 42% tax rate, net loss was $949,000, or $0.04 per diluted share, in the fourth quarter of fiscal 2001, as compared to pro forma net income of $847,000, or $0.03 per diluted share, for fourth quarter of fiscal 2000; and, pro forma net income for the fiscal year ended June 30, 2001 declined 36% to $1.6 million, or $0.06 per diluted share, from $2.5 million, or $0.10 per diluted share, for the prior fiscal year.

"During the fourth quarter, we experienced a sudden and abrupt decline in grading submissions and weaker auction and retail sales activity, which is continuing into the first quarter of the current fiscal year," said David G. Hall, chairman and chief executive officer. "We believe the abrupt decline in business activity is attributable to the weakening economic conditions in the United States. In response to these conditions, we have taken a number of precautionary actions, which affected our fourth quarter operating results, including increasing bad debt and inventory reserves. However, at the same time, we are initiating a number of actions that are designed to improve our operating results in what we expect will be a difficult year during fiscal 2002, including actions designed to improve operating margins on our collectible sales, to grow our stamp grading business, which is still in its infancy, and to reduce operating expenses.