WOODLAND HILLS, CA--(Marketwire - Aug 14, 2012) -  Great American Group, Inc. (OTCBB: GAMR)

• Total revenues of $19.7 million, an increase of 100% from a year ago
• Operating income of $0.8 million, versus an operating loss of $2.2 million a year ago
• Net income of $0.6 million, versus a net loss of $2.2 million a year ago
• Diluted earnings per share of $0.02, versus a diluted loss per share of $0.08 a year ago

Great American Group, Inc. (OTCBB: GAMR) ("Great American Group" or the "Company"), a leading provider of asset disposition, valuation and appraisal services, today announced financial results for its second quarter ended June 30, 2012.

Second Quarter Results
For the second quarter ended June 30, 2012, the Company reported total revenues of $19.7 million, an increase of 100% from revenues of $9.8 million in the second quarter of 2011. Revenues from services and fees were $13.3 million, compared to $9.6 million in the same period the prior year. Revenues from sale of goods were $6.4 million, compared to $0.3 million in the second quarter of 2011. The increase in total revenues during the quarter was primarily due to increases in the auction and liquidation segment of $6.7 million, an increase in revenues in the valuation and appraisal services segment of $0.3 million, and revenues of $2.8 million from the UK retail stores segment, as a result of the Company's investment in Shoon Trading Limited ("Shoon"), a shoe retailer with operations in the United Kingdom. This represents a new reportable segment in our financial statements. 

"During the quarter we experienced improvements in our financial results from the previous year," said Andrew Gumaer, Chief Executive Officer of Great American Group. "Our enhanced performance reflects increased activity in our auction and liquidation segment from operations in the United Kingdom and contributions from our GA Keen Realty Advisors division. The new UK retail stores segment operates eleven Shoon retail stores in the United Kingdom and is complementary to our continued expansion in the UK. As we head into the second half of 2012, we remain highly focused on the execution of our business initiatives and achieving our financial objectives to position the business for continued growth and profitability."

Direct cost of services was $5.0 million, compared to $3.5 million a year ago. The increase in direct cost of services was primarily the result of an increase in the number of fee and commission engagements in the second quarter of 2012, where the Company contractually bills fees, commissions and reimbursable expenses, in the auction and liquidation segment as well as an increase in headcount which resulted in an increase in salaries, wages and benefits in the valuation and appraisal segment compared to the same period in 2011. Cost of goods sold was $4.1 million in the second quarter of 2012, compared to $0.4 million in the second quarter of the prior year. The increase in cost of goods sold in the second quarter of 2012 included costs of goods sold of $1.5 million related to retail sales from the Shoon stores located in the United Kingdom.

Selling, general and administrative expenses were $9.8 million, compared to $8.2 million in the second quarter of 2011. The increase in selling, general and administrative expenses was primarily the result of an increase of $0.5 million in the auction and liquidation segment and $1.1 million in the UK retail stores segment which is new in the second quarter as a result of the consolidation of Shoon on May 4, 2012. The increase in selling, general and administrative expenses of $0.1 million related to corporate overhead was offset by the decrease in selling, general and administrative expenses $0.1 million in the valuation and appraisal segment.

On May 4, 2012, the Company invested $0.1 million for a 40% interest in the common stock of Shoon. Shoon purchased the rights to operate the former Shoon internet business and retail stores that were in administration in the United Kingdom. As part of the investment, the Company has also loaned Shoon approximately $1.3 million that is collateralized by retail inventory. The Company, together with its 40% investment in the common stock of Shoon and its control of the majority of the board or directors, is deemed to be the primary beneficiary of Shoon. As such, for generally accepted accounting principles in the United States, the Company is required to consolidate the operations of Shoon. The results of operations of Shoon from May 4, 2012, the date of investment, through June 30, 2012, have been included in the Company's condensed consolidated statements of operations. 

In addition, during the second quarter, the Company recorded a gain on bargain purchase of $1.4 million since the fair value of assets acquired in the Shoon transaction exceeded consideration paid. The gain on bargain purchase is record net of tax and is included as a separate component of other income (expense) in the condensed consolidated statements of operations.

Income from operations before provision for income taxes was $1.5 million during the second quarter of 2012, compared to loss from operations before benefit for income taxes of $3.1 million in the second quarter of 2011. Excluding the gain from bargain purchase of $1.4 million included in other income related to the investment and consolidation of Shoon, income from operation before provision for income taxes was $0.2 million during the second quarter of 2012. During the second quarter of 2012, the Company recorded a provision for income taxes of $0.1 million, compared with a benefit for income taxes of $0.9 million in the second quarter of 2011. Overall, in the second quarter of 2012, the Company generated net income of $0.6 million, or $0.02 per diluted share, compared with net loss of $2.2 million, or $0.08 per diluted share, in the second quarter of 2011.

Six Month Results
For the first six months of 2012, the Company reported total revenues of $39.0 million, compared to $23.6 million in the first six months of 2011. Revenues from services and fees were $30.2 million, compared to $22.6 million a year ago. Sales of goods were $8.8 million compared to $1.1 million in the same period of 2011.

Total operating expenses were $35.8 million, compared to $25.6 million in 2011. Operating income was $3.2 million, compared to an operating loss of $1.9 million in the prior year. Earnings from operations before income taxes were $3.3 million, compared to a loss from operations before income taxes of $2.9 million during the first six months of 2011. The Company recorded a provision for income taxes of $0.8 million during the first six months of 2012, compared to a benefit for income taxes of $0.2 million in the same period of 2011. Net income during the first six months of 2012 was $1.7 million, or $0.06 per diluted share, compared with a net loss of $2.8 million, or $(0.10) in the same period of 2011.

Financial Position
At June 30, 2012, the Company had $23.4 million in cash and cash equivalents, an increase of $8.4 million, from $15.0 million at December 31, 2011. Working capital was $29.0 million at June 30, 2012.

Conference Call
The Company will host a conference call at 4:30 p.m. EDT on Tuesday, August 14, 2012, to discuss results for the second quarter ended June 30, 2012. To participate in the event by telephone, please dial (877) 941-1427, 10 minutes prior to the start time (to allow time for registration) and use conference ID #4550214. International callers should dial (480) 629-9664. A digital replay will be available beginning August 14, 2012, at 7:30 p.m. EDT, through August 21, 2012, at 11:59 p.m. EDT. To access the replay, dial (877) 870-5176 (U.S.), and use passcode 4550214. International callers should dial (858) 384-5517 and enter the same passcode. The call will also be broadcast over the Internet and can be accessed on the Investor Relations section of the Company's Web site at www.greatamerican.com. To listen to the webcast, please visit the site at least 15 minutes prior to the start of the call in order to register, download and install any necessary audio software. A replay of the call will also be available for 90 days on the Web site.

About Great American Group, Inc.

Great American Group, Inc. is a leading provider of asset disposition solutions and valuation and appraisal services to a wide range of retail, wholesale and industrial clients, as well as lenders, capital providers, private equity investors and professional service firms. Great American Group has offices in Atlanta, Boston, Charlotte, Chicago, Dallas, London, Los Angeles, New York and San Francisco. For more information, please visit www.greatamerican.com.

*Great American Group and the Eagle Design are trademarks registered in the US Patent and Trademark Office and are exclusive property of Great American Group, Inc.

Forward-Looking Statements
This press release may contain forward-looking statements by Great American Group that are not based on historical fact, including, without limitation, statements containing the words "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and similar expressions and statements. Because these forward-looking statements involve known and unknown risks and uncertainties, there are important factors that could cause actual results, events or developments to differ materially from those expressed or implied by these forward-looking statements. Such factors include those risks described from time to time in Great American Group's filings with the SEC, including, without limitation, the risks described in Great American Group's proxy statement/prospectus filed with the SEC on July 19, 2012, and its Annual Report on Form 10-K for the year ended December 31, 2011. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. All information is current as of the date this press release is issued, and Great American Group undertakes no duty to update this information.

Note Regarding Use of Non-GAAP Financial Measures
Certain of the information set forth herein, including Adjusted EBITDA, may be considered non-GAAP financial measures. Great American Group believes this information is useful to investors because it provides a basis for measuring Great American Group's performance against the contingent share earnout provisions in the AAMAC transaction. In addition, Great American Group's management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measures in evaluating Great American Group's operating performance, capital resources and cash flow. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-financial measures as reported by Great American Group may not be comparable to similarly titled amounts reported by other companies.

GAMR-F

(FINANCIAL TABLES FOLLOW)

GREAT AMERICAN GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Dollars in thousands, except par value)
				June 30,			December 31,
				2012			2011
				(Unaudited)
Assets
Current assets:
	Cash and cash equivalents			$	23,435		$	15,034
	Restricted cash				100			-
	Accounts receivable, net				5,816			7,482
	Advances against customer contracts				4,917			5,276
	Inventory				2,331			-
	Goods held for sale or auction				10,286			12,934
	Loan receivable				779			8,306
	Note receivable - related party				3,750			3,844
	Deferred income taxes				4,895			4,460
	Prepaid expenses and other current assets				961			1,110
		Total current assets			57,270			58,446
Property and equipment, net					960			916
Goodwill					5,688			5,688
Other intangible assets, net					140			140
Deferred income taxes					9,915			10,504
Other assets					1,022			664
		Total assets		$	74,995		$	76,358
Liabilities and Equity (Deficit)
Current liabilities:
	Accounts payable and accrued liabilities			$	11,703		$	13,718
	Auction and liquidation proceeds payable				625			18
	Mandatorily redeemable noncontrolling interests				2,562			3,408
	Revolving credit facility				2,044			1,942
	Current portion of long-term debt				1,724			1,724
	Note payable				9,577			11,555
	Current portion of capital lease obligation				28			29
		Total current liabilities			28,263			32,394
Capital lease obligation, net of current portion					-			13
Long-term debt, net of current portion					52,207			52,207
		Total liabilities			80,470			84,614
Commitments and contingencies
Great American Group, Inc. stockholders' equity (deficit):
	Preferred stock, $0.0001 par value; 10,000,000 shares authorized; none issued				-			-
	Common stock, $0.0001 par value; 135,000,000 shares authorized; 30,002,975 and 31,001,609 issued and outstanding as of June 30, 2012 and December 31, 2011, respectively				4			4
	Additional paid-in capital				3,082			3,177
	Retained earnings (deficit)				(9,504)			(11,190)
	Accumulated other comprehensive income (loss)				16			(247)
		Total Great American Group, Inc. stockholders' equity (deficit)			(6,402)			(8,256)
Noncontrolling interests					927			-
		Total equity (deficit)			(5,475)			(8,256)
		Total liabilities and equity (deficit)		$	74,995		$	76,358

GREAT AMERICAN GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Statement of Operations and Comprehensive Income (Loss)
(Dollars in thousands, except share data)
				Three Months Ended June 30,								Six Months Ended June 30,
				2012				2011				2012				2011
Revenues:
	Services and fees			$	13,298			$	9,569			$	30,198			$	22,572
	Sale of goods				6,353				262				8,773				1,075
		Total revenues			19,651				9,831				38,971				23,647
Operating expenses:
	Direct cost of services				5,001				3,479				11,253				8,291
	Cost of goods sold				4,128				405				6,277				1,313
	Selling, general and administrative expenses				9,758				8,160				18,277				15,951
		Total operating expenses			18,887				12,044				35,807				25,555
		Operating income (loss)			764				(2,213	)			3,164				(1,908	)
Other income (expense):
	Other expense				-				(6	)			-				(10	)
	Interest income				77				153				156				290
	Income (loss) from equity investment in Great American Real Estate, LLC				(40	)			(416	)			(120	)			(348	)
	Gain from bargain purchase				1,366				-				1,366				-
	Interest expense				(646	)			(625	)			(1,273	)			(953	)
		Income (loss) before income taxes			1,521				(3,107	)			3,293				(2,929	)
(Provision) benefit for income taxes					(57	)			858				(762	)			154
		Net income (loss)			1,464				(2,249	)			2,531				(2,775	)
Net income attributable to noncontrolling interests					845				-				845				-
		Net income (loss) attributable to Great American Group, Inc.		$	619			$	(2,249	)		$	1,686			$	(2,775	)
Basic income (loss) per share				$	0.02			$	(0.08	)		$	0.06			$	(0.10	)
Diluted income (loss) per share				$	0.02			$	(0.08	)		$	0.06			$	(0.10	)
Weighted average basic shares outstanding					28,682,975				28,460,392				28,682,292				28,410,908
Weighted average diluted shares outstanding					29,599,424				28,460,392				29,598,741				28,410,908
Comprehensive income (loss):
Net income (loss)				$	1,464			$	(2,249	)		$	2,531			$	(2,775	)
Other comprehensive income (loss):
	Change in cumulative translation adjustment				52				(110	)			263				(130	)
Other comprehensive income (loss), net of tax					52				(110	)			263				(130	)
Comprehensive income (loss)					1,516				(2,359	)			2,794				(2,905	)
Comprehensive income attributable to noncontrolling interests					(845	)			-				(845	)			-
Comprehensive income attributable to Great American Group, Inc.				$	671			$	(2,359	)		$	1,949			$	(2,905	)

GREAT AMERICAN GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statement of Equity (Deficit)

(Dollars in thousands, except share data)

		Preferred Stock					Common Stock
		Shares		Amount			Shares			Amount			Additional Paid-in Capital				Retained Earnings (Deficit)				Accumulated Other Comprehensive Loss				Noncontrolling Interests			Total Equity (Deficit)
Balance, January 1, 2012		-		$	-		31,001,609			$	4		$	3,177			$	(11,190	)		$	(247	)		$	-		$	(8,256	)
Net income for the six months ended June 30, 2012																		1,686								845			2,531
Foreign currency translation adjustment																						263							263
Formation of noncontrolling interests																										78			78
Cancellation of founders contingent shares held in escrow							(1,000,000	)																					-
Purchase of noncontrolling interest in subsidiary														(95	)														(95	)
Changes in noncontrolling interests																										4			4
Adjustment from restricted stock awards							1,366																						-
Balance, June 30, 2012		-		$	-		30,002,975			$	4		$	3,082			$	(9,504	)		$	16			$	927		$	(5,475	)

GREAT AMERICAN GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Statement of Cash Flows
(Dollars in thousands)
						Six Months Ended June 30,
						2012				2011
Cash flows from operating activities:
	Net income (loss)					$	2,531			$	(2,775	)
	Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
		Depreciation and amortization					410				439
		Impairment of goods held for sale or auction					122				-
		Share-based payments					-				421
		Effect of foreign currency on operations					405				(118	)
		Non-cash interest					(3	)			(580	)
		Loss (income) from equity investment in Great American Real Estate, LLC					120				416
		Gain from bargain purchase					(1,366	)			-
		Loss on disposal of assets					2				3
		Deferred income taxes					154				(159	)
		Income allocated to mandatorily redeemable noncontrolling interests					992				1,393
		Change in operating assets and liabilities:
			Accounts receivable and advances against customer contracts				2,025				894
			Inventory				1,421				-
			Goods held for sale or auction				2,431				665
			Loan receivable				7,527				-
			Prepaid expenses and other assets				(206	)			(388	)
			Accounts payable and accrued expenses				(3,233	)			(1,949	)
			Auction and liquidation proceeds payable				607				(1,405	)
				Net cash provided by (used in) operating activities			13,939				(3,143	)
Cash flows from investing activities:
	Acquisition of business						(1,246	)			-
	Purchase of noncontrolling interest in subsidiary						(95	)			-
	Purchases of property and equipment						(297	)			(233	)
	Decrease in note receivable - related party						94				2,706
	Increase in note receivable						-				(2,409	)
	Equity investment in Great American Real Estate, LLC						(120	)			(156	)
	Increase in restricted cash						(100	)			-
				Net cash used in investing activities			(1,764	)			(92	)
Cash flows from financing activities:
	Repayments of capital lease obligations						(14	)			(13	)
	Proceeds from revolving line of credit						102				2,290
	Repayments of notes payable						(1,978	)			-
	Payment of employment taxes on vesting of restricted stock						-				(108	)
	Proceeds from formation of noncontrolling interests						78				-
	Distribution to noncontrolling interests						(1,824	)			(1,612	)
				Net cash (used in) provided by financing activities			(3,636	)			557
				Increase (decrease) in cash and cash equivalents			8,539				(2,678	)
				Effect of foreign currency on cash			(138	)			(12	)
				Net increase (decrease) in cash and cash equivalents			8,401				(2,690	)
Cash and cash equivalents, beginning of period							15,034				20,080
Cash and cash equivalents, end of period						$	23,435			$	17,390
Supplemental disclosures:
	Interest paid					$	1,275			$	193
	Taxes paid						278				-

GREAT AMERICAN GROUP, INC. AND SUBSIDIARIES
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization
(Unaudited)
(Dollars in thousands)
				Three Months Ended June 30,								Six Months Ended June 30,
				2012				2011				2012				2011
Adjusted EBITDA Reconciliation:
Net income (loss) as reported				$	619			$	(2,249	)		$	1,686			$	(2,775	)
Adjustments:
	Provision (benefit) for income taxes				57				(858	)			762				(154	)
	Interest expense				646				625				1,273				953
	Interest income				(77	)			(153	)			(156	)			(290	)
	Depreciation and amortization				209				218				410				439
	Share based compensation				-				63				-				421
		Total EBITDA adjustments			835				(105	)			2,289				1,369
Adjusted EBITDA				$	1,454			$	(2,354	)		$	3,975			$	(1,406	)