Looking at last years March qtr, we did 570K coins, 366K cards, $13.1M rev, and 22c GAAP after tax profit. Avg ticket prices are $16 for coins and $10 for cards. Gross margin last qtr was 60% but is typically 67% when running full out. We also had a 10%-20% price increase in Jan which affected coins submitted after Jan 1. There was a huge backlog of coins submitted prior to the increase. The company announced layoffs and cost savings of about $200K/qtr 1 qtr ago. Tax is 40%
We are on pace for 650K or more coins and 420 cards this qtr on a conservative basis. It could be higher. Each extra coin brings in $6 more in GAAP after tax profits. Each card brings in $4. We will see $480K more in coin GAAP profits and $216K in cards. Adding in the cost savings I get an extra 12c GAAP profits compared to last year or 34c total. non-cash expenses are about 5c/qtr, so we cover the dividend this qtr.
The results could be significantly better. It's possible we could see 700k coins or another 4c in GAAP profits. This also does not factor in the price increase across the board nor does it account for the new 1% surcharge on coins over $100k (if it is 0.01% of coins as per Don Willis, it would affect as many as 70 coins and bring in another $70K to the bottom line. That assumes the coins are only $100K each. 1 $1M coin would add $10k in profit)
It also looks like warranty claims are not running that bad. Only $12K in the last 30 days. Typically, it is more like 5X that.
Looks like they've been certifying 54K coins per week over the last 3 weeks or so. Why the large increase over 2012? Economic improvement? Collectors coming out of hibernation?. Thanks for your analysis.
The US Mint has been producing 2013 coins (gold/silver) at a record pace (see other posts). The Mint produces coins according to demand...if they have orders, they fulfill them. People feel with all the money printing that eventually, the dollar will collapse. So PCGS typically gets a % of the Mint coins to certify. More coins produced means more coins certified.
From the vintage side there have been a number of high profile collections that have come out of hiding. There was the $10M coin. All of this creates a buzz and adds. Then there is the expansion of Europe and Asia. Plus there was a huge influx of coins to beat the price increase which put the company behind from the very beginning of the year. also in early January you have the largest coin show of the year (FUN).
Timing of sales vs coins/cards graded. I don't know when they recognize revenue exactly. Is it when the coins are received, graded, or mailed back? If it is the latter, there could be a 4-7 day delay between their stats page and revenue for that qtr.