COMUNICADO: Escala Group Announces Fiscal 2006 Third-quarter and Nine-month Earnings Results (1)

 

COMUNICADO: Escala Group Announces Fiscal 2006 Third-quarter and Nine-month Earnings Results (1)

Actualizado 10/05/2006 4:43:01 CET

NEW YORK, May 10 /PRNewswire/ --

-- Quarterly Net Income and EPS Grow 28% and 24%, Respectively

-- Nine-month Net Income and EPS Increase 42% and 41%, Respectively

-- Collectibles Revenues Rise 40% in 3Q

-- Gross Profit in Trading and Collectibles Improves 35% in 3Q

Escala Group (Nasdaq: ESCL) today announced financial results for the fiscal 2006 third quarter and nine months ended March 31, 2006, and also provides an update to its press release earlier today regarding the recent events involving Afinsa Bienes Tangibles, S.A., Escala's 67% stockholder.

Jose Miguel Herrero, President and CEO, commented, "We continue to monitor the situation in Spain carefully. The Company is undertaking to acquire all available information relating to these issues and intends to take all appropriate steps in response to them. We will provide investors with all material information as it becomes available to us."

Net income for the third quarter was US$10.4 million, or US$0.36 per diluted share, compared with net income of US$8.2 million, or US$0.29 per diluted share, for the third quarter of fiscal 2005. These figures reflect an increase of 28% in net income and 24% in diluted earnings per share. In calculating earnings per share, the diluted weighted average common shares outstanding for the third quarter of fiscal 2006 was 29,167,000 compared with 28,668,000 for the corresponding quarter of fiscal 2005.

For the first nine months of fiscal 2006, net income rose 42% to US$29.9 million in fiscal 2006 compared with US$21.0 million for the same period in fiscal 2005. Diluted earnings per share grew 41% to US$1.03 in the first nine months of fiscal 2006, versus US$0.73 in the corresponding period in fiscal 2005.

Total revenues, which include inventory sales plus commission income, were US$1.1 billion for the third quarter of fiscal 2006, versus US$55.7 million for the same quarter in fiscal 2005. Aggregate sales, which include inventory sales plus consignment sales and commission income, were US$1.2 billion over US$74.7 million for the same quarter of fiscal 2005.

Total revenues in the first nine months of fiscal 2006 were US$2.6 billion, compared with US$162.7 million during the first nine months of fiscal 2005. Aggregate sales for the same period increased to US$2.6 billion in fiscal 2006, versus US$210.7 million in fiscal 2005.

The dramatic growth in both total revenues and aggregate sales for the third quarter and the first nine months of fiscal 2006 is largely due to the acquisition of A-Mark Precious Metals in July 2005.

Gross profit for the third quarter of fiscal 2006, including both Collectibles and Trading revenues, rose 35% to US$29.3 million from US$21.7 million in the third quarter of fiscal 2005. For the full nine months, gross profit expanded to US$84.0 million, a 44% increase over fiscal 2005 nine-month gross profit of US$58.3 million. The growth in gross profit is attributable to the acquisitions of A-Mark Precious Metals and Greg Martin Auctions along with organic growth.

In the Company's core business segment of Collectibles, Escala recorded a 40% increase in revenues to US$77.8 million for the third quarter ended March 31, 2006, from US$55.7 million for the same three-month period in fiscal 2005. For the nine-month period of fiscal 2006, collectibles revenues grew to US$213.3, representing a 31% increase over collectibles revenues of US$162.7 million for the first nine months of fiscal 2005.

Within Collectibles, gross profit for the third quarter of fiscal 2006 increased to US$26.4 million, a 22% growth over US$21.7 million for the comparable quarter of fiscal 2005. For the full nine months of fiscal 2006, Escala realized a 34% increase in gross profit to US$78.1 million, versus US$58.3 million for the comparable period in fiscal 2005. Gross profit from Escala's business with Afinsa grew 37%, while gross profit from the Company's other Collectibles business increased 73%.

Excluding Trading, aggregate sales in Collectibles for the full nine months of fiscal 2006 grew 26% to US$265.2 million over US$210.7 million for the nine-month period in fiscal 2005. The Company's Auctions segment realized aggregate sales growth of 19% to US$82.3 million for the first nine months of fiscal 2006 from US$69.1 million for the comparable period in fiscal 2005. For the full nine months of fiscal 2006, Escala's Group Companies conducted a total of 175 live and Internet auctions and catalogue sales that included Europe, North America and Asia. These auctions represent a 10% increase over the 159 live and Internet auctions and catalogue sales conducted in the nine-month period of fiscal 2005.

Management will conduct a conference call to discuss third-quarter and nine-months fiscal 2006 earnings results at 9:00 a.m. EDT Wednesday, May 10, 2006. US participants should dial 800-866-5043, and international participants should dial +1-303-262-2190. The reservation number for the conference call is 11060168. The call can also be accessed live via the Internet or as a replay. Investors may access the webcast through the Investor Relations section of Escala Group's corporate website at http://www.escalagroup.com.

About Escala Group, Inc.

Escala Group is a global network of leading companies in the collectibles market with operations in North America, Europe and Asia as well as on the Internet. The company operates through a number of subsidiaries that specialize in various sectors of the collectibles markets, and is comprised of three business areas: auctions, merchant/dealer operations and trading.

Escala Group's North American auction and retail operations include Greg Manning Auctions division, Ivy & Manning Philatelic Auctions, Greg Manning Galleries, Greg Martin Auctions, Teletrade, Nutmeg Stamp Sales, Superior Sports, Bowers and Merena Auctions, North American Certified Trading, and H.R. Harmer. In Europe, the leading auction houses affiliated with the network are Auctentia Subastas (Afinsa Auctions) of Madrid, Spain; Corinphila Auktionen of Zurich, Switzerland; and the Koehler group of auction companies of Berlin and Wiesbaden, Germany. In Asia, Escala Group's auction operations are conducted through John Bull Stamp Auctions, Ltd, the oldest philatelic auction house in Hong Kong.

Merchant/dealer activities are conducted through Greg Manning Auctions and Central de Compras Coleccionables, S.L. of Madrid, which act as exclusive suppliers of philatelic material on a worldwide basis to Afinsa Bienes Tangibles, S.A. of Madrid, Spain, and through Spectrum Numismatics International, one of the largest wholesalers of rare coins in the U.S. Afinsa is Escala Group's majority shareholder.

The trading activities of Escala Group are conducted through A-Mark Precious Metals, one of the largest private sellers of bullion coins and bullion gold, silver and platinum to the wholesale marketplace.

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