Nov 15,2010

Great American Group®* Announces Third Quarter 2010 Financial Results

WOODLAND HILLS, CA -- (MARKET WIRE) -- 11/15/10 -- 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 third quarter ended September 30, 2010.

Third Quarter Results

For the third quarter ended September 30, 2010, the Company reported total revenues of $13.9 million, compared to revenues of $15.0 million in the third quarter of 2009. Revenues from services and fees were $13.5 million, compared to $11.0 million in the same period the prior year. Revenues from sales of goods were $0.4 million, compared to $4.1 million in the third quarter of 2009. The decline in total revenues during the quarter was primarily the result of reduced revenues in the Company's auction and liquidation segment. This decline resulted from an overall lack of retail liquidation opportunities across the industry as economic conditions for retailers and credit markets improved from the prior year.

"We are disappointed with our results during the third quarter. Although our reported results reflect sequential improvements from the second quarter, we continue to face challenges in the auction and liquidations business environment as economic conditions for retailers and creditors have continued to improve," said Andrew Gumaer, Chief Executive Officer of Great American Group. "We completed the previously announced review of our operations to reduce operating expenses and streamline operations in September 2010. This resulted in a reduction in employee headcount of approximately 7%, reduction in salaries to our senior executives, and other expense reductions. We believe these measures will result in annual cost savings of approximately $2.2 million, and we would expect to see some of the financial benefits of these cost savings during the fourth quarter of 2010. We have also recently experienced increased activity related to the auction of machinery and equipment, which we believe is a sign our business is beginning to improve."

Direct costs of services were $2.9 million, compared to $4.8 million a year ago. The decrease in direct costs of services was the result of a decrease in the number of fee and commission engagements in the third quarter of 2010, where the Company contractually bills fees, commissions and reimbursable expenses in the auction and liquidation segment, and a reduction in personnel during the second quarter of 2010 in the valuation and appraisal segment, which resulted in a decrease in salaries and wages in the third quarter of 2010 as compared to 2009. Cost of goods sold was $0.6 million in the third quarter of 2010, compared to $3.9 million in the third quarter of the prior year, primarily as a result of fewer auction engagements where the company sells assets.

Selling, general and administrative expenses were $8.0 million, compared to $7.2 million in the same period a year ago. The increase in selling, general and administrative expenses was primarily attributed to increases in payroll and operating expenses from the ongoing expansion of the Company's European operations and advertising and promotional expenses. Selling, general and administrative expenses during the third quarter of 2009 included a $2.4 million credit from the deferred compensation plan for the Phantom Equityholders. Excluding this credit, selling, general and administrative expenses were $9.6 million during the third quarter of 2009, which included approximately $2.2 million of accounting, legal and consulting expenses as a result of the Acquisition on July 31, 2009.

Operating income for the third quarter ended September 30, 2010 was $2.4 million, compared to an operating loss of $0.9 million during the third quarter of 2009.

Interest expense during the period declined to $0.8 million from $2.3 million a year ago, primarily as a result of a decrease in interest expense from significantly lower borrowings during the third quarter ended September 30, 2010, as compared to the same period in 2009, when the Company had more retail liquidation engagements. Interest expense during the third quarter of 2010 was primarily comprised of interest expense on the notes payable to the former Great American Members and Phantom Equityholders. Interest expense also reflects the interest rate reduction from 12.0% to 3.75% on $52.4 million of the $55.6 million of notes payable to the former Great American Members and certain Phantom Equityholders that was effective February 1, 2010.

Income from operations before provision for income taxes was $1.3 million during the third quarter ended September 30, 2010, compared to a loss from operations of $3.5 million in the third quarter of 2009.

The Company recorded a provision for income taxes of $0.9 million during the third quarter ended September 30, 2010, compared with a benefit for income taxes of $7.6 million in the same period of 2009. For the third quarter of 2010, the Company generated net income of $0.5 million, or $0.02 per diluted share, compared with net income of $4.0 million in the same period a year ago.

Nine Month Results

For the first nine months of 2010, the Company generated total revenues of $31.1 million, compared to $72.0 million in the same period of 2009. Revenues from services and fees were $26.4 million, compared to $60.8 million a year ago. Sales of goods were $4.7 million, compared to $11.2 million in the first nine months of 2009.

Total operating expenses were $41.7 million for the first nine months of 2010, compared to $48.2 million in 2009. Operating loss was $10.5 million for the first nine months of 2010, compared to operating income of $23.8 million in the same period in 2009. Loss from operations before a benefit for income taxes was $14.1 million for the first nine months of 2010, compared to income from operations of $14.0 million during the first nine months of 2009. The Company recorded a benefit for income taxes of $5.0 million during the first nine months of 2010, compared with a benefit for income taxes of $7.6 million during the same period in 2009. Net loss during the first nine months of 2010 was $9.1 million, or $(0.33) per diluted share, compared with net income of $21.5 million in the same period of 2009.

Financial Position

At September 30, 2010, the Company had $21.0 million in cash and cash equivalents, compared to $38.0 million at December 31, 2009. Working capital was $25.0 million and total long-term debt was $53.9 million at September 30, 2010. During the first nine months of 2010, the Company used $6.9 million in cash from operations.

Promissory Notes

On October 27, 2010 the Company entered into agreements with $51.3 million of the $53.9 million principal amount outstanding of the subordinated, unsecured promissory notes payable to the Great American Members and Phantom Equityholders, whereby the noteholders agreed to allow the Company to defer payment of the interest payments due on each of October 31, 2010, January 31, 2011, and April 30, 2011, until July 31, 2011.

Supplemental Information

During the quarter ended September 30, 2010, the Company generated adjusted earnings before interest, taxes, depreciation and amortization of $3.1 million.

Conference Call

The Company will host a conference call at 4:30 p.m. EST on Monday, November 15, 2010, to discuss results for the third quarter ended September 30, 2010. To participate in the event by telephone, please dial (877) 941-4776 10 minutes prior to the start time (to allow time for registration) and use conference ID #4384586. International callers should dial (480) 629-9762. A digital replay will be available beginning November 15, 2010, at 7:30 p.m. EST, through November 22, 2010, at 11:59 p.m. EST. To access the replay, dial (877) 870-5176 (U.S.), and use passcode 4384586. International callers should dial (858) 384-5517 and enter the same passcode. The call will also be broadcast live 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 live 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, 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 dated July 17, 2009 and filed with the SEC on July 20, 2009, and its Annual Report on Form 10-K for the year ended December 31, 2009 and its subsequent Reports on Form 10-Q and 8-K. 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 selling, general and administrative expenses, excluding certain charges and 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 prior periods excluding the impact of extraordinary events. 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)





                                                 September 30, December 31,

                                                     2010          2009

                                                  ----------    ----------

                                                  (Unaudited)

                            Assets

Current assets:

  Cash and cash equivalents                       $   21,018    $   37,989

  Restricted cash                                        195           459

  Accounts receivable, net                             2,277         2,628

  Advances against customer contracts                    806            58

  Income taxes receivable                                 --         1,100

  Goods held for sale or auction                      13,995        15,014

  Note receivable - related party                      6,246            --

  Deferred income taxes                                3,270         8,475

  Prepaid expenses and other current assets              894           981

                                                  ----------    ----------

     Total current assets                             48,701        66,704

Property and equipment, net                            1,474         1,411

Goodwill                                               5,688         5,688

Other intangible assets, net                             262           382

Deferred income taxes                                 13,404         3,238

Other assets                                             665         1,250

                                                  ----------    ----------

     Total assets                                 $   70,194    $   78,673

                                                  ==========    ==========

         Liabilities and Stockholders' Equity (Deficit)

Current liabilities:

  Accounts payable and accrued liabilities        $    5,534    $    9,192

  Auction and liquidation proceeds payable             4,021           446

  Mandatorily redeemable noncontrolling interests      2,926         2,619

  Current portion of long-term debt                    1,724        11,123

  Note payable                                        11,705        11,705

  Current portion of capital lease obligation             25            25

                                                  ----------    ----------

     Total current liabilities                        25,935        35,110

Capital lease obligation, net of current

 portion                                                  51            69

Long-term debt, net of current portion                52,169        44,494

                                                  ----------    ----------

     Total liabilities                                78,155        79,673

                                                  ----------    ----------

Commitments and contingencies

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; 30,559,036

   and 30,022,478 issued and outstanding as of

   September 30, 2010 and December 31, 2009,

   respectively                                            4             3

  Additional paid-in capital                           1,928          (249)

  Retained earnings (deficit)                         (9,886)         (754)

  Accumulated other comprehensive loss                    (7)           --

                                                  ----------    ----------

     Total stockholders' equity (deficit)             (7,961)       (1,000)

                                                  ----------    ----------

     Total liabilities and stockholders' equity

      (deficit)                                   $   70,194    $   78,673

                                                  ==========    ==========







                GREAT AMERICAN GROUP, INC. AND SUBSIDIARIES

              Condensed Consolidated Statements of Operations

                               (Unaudited)

                (Dollars in thousands, except share data)



                              Three Months Ended       Nine Months Ended

                                 September 30,           September 30,

                            ----------------------  ----------------------

                               2010        2009        2010        2009

                            ----------  ----------  ----------  ----------

Revenues:

  Services and fees         $   13,499  $   10,980  $   26,408  $   60,767

  Sale of goods                    359       4,056       4,732      11,197

                            ----------  ----------  ----------  ----------

    Total revenues              13,858      15,036      31,140      71,964

                            ----------  ----------  ----------  ----------

Operating expenses:

  Direct cost of services        2,852       4,792      10,938      12,540

  Cost of goods sold               561       3,851       6,098       9,553

  Selling, general and

   administrative expenses       8,018       7,246      24,617      26,084

                            ----------  ----------  ----------  ----------

    Total operating

     expenses                   11,431      15,889      41,653      48,177

                            ----------  ----------  ----------  ----------

    Operating income (loss)      2,427        (853)    (10,513)     23,787

Other income (expense):

  Other income (expense)          (401)       (341)     (1,268)       (580)

  Interest income                  157          12         334          20

  Interest expense                (848)     (2,328)     (2,640)     (9,272)

                            ----------  ----------  ----------  ----------

    Income (loss) from

     continuing operations

     before benefit for

     income taxes                1,335      (3,510)    (14,087)     13,955

(Provision) benefit for

 income taxes                     (880)      7,610       4,955       7,610

                            ----------  ----------  ----------  ----------

    Income (loss) from

     continuing operations         455       4,100      (9,132)     21,565

Loss from discontinued

 operations                          -         (67)          -         (67)

                            ----------  ----------  ----------  ----------

    Net income (loss)       $      455  $    4,033      (9,132)     21,498

                            ==========  ==========  ==========  ==========



Weighted average basic

 shares outstanding         28,160,667  22,088,614  28,020,733  14,445,101

Weighted average diluted

 shares outstanding         29,129,099  23,472,774  28,020,733  14,906,487

Basic earnings (loss)

 per share                  $     0.02  $     0.18       (0.33)       1.49

Diluted earnings (loss)

 per share                  $     0.02  $     0.17       (0.33)       1.44



PRO FORMA COMPUTATION RELATED TO CONVERSION TO

C CORPORATION FOR INCOME TAX PURPOSES (unaudited):

Historical (loss) income

 from operations before

 income taxes                           $   (3,510)             $   13,955

Pro forma benefit (provision)

 for income taxes                            1,383                  (5,498)

                                        ----------              ----------

Pro forma income (loss)

 from continuing operations                 (2,127)                  8,457

Pro forma loss from

 discontinued operations,

 net of tax                                    (41)                    (41)

                                        ----------              ----------

    Pro forma net (loss)

     income                             $   (2,168)             $    8,416

                                        ==========              ==========

Pro forma weighted average

 basic shares outstanding               22,088,614              14,445,101

Pro forma weighted average

 diluted shares outstanding             22,088,614              14,906,487

Pro forma basic (loss)

 earnings per share                     $    (0.10)             $     0.58

Pro forma diluted (loss)

 earnings per share                     $    (0.10)             $     0.56









                GREAT AMERICAN GROUP, INC. AND SUBSIDIARIES

              Condensed Consolidated Statement of Cash Flows

                              (Unaudited)

                        (Dollars in thousands)



                                                       Nine Months Ended

                                                         September 30,

                                                     ---------------------

                                                        2010       2009

                                                     ---------   ---------

Cash flows from operating activities:

  Net income (loss)                                  $  (9,132)  $  21,498

  Adjustments to reconcile net income (loss) to net

   cash provided by (used in) operating activities:

     Depreciation and amortization                         580         465

     Provision (recoveries) of doubtful accounts            45         (24)

     Impairment of goods held for sale or auction        1,308          67

     Share-based payments                                3,430       1,543

     Effect of foreign currency on operations               (6)          -

     Non-cash interest                                    (316)          9

     Loss on disposal of assets                              3          15

     Deferred income taxes                              (4,961)     (7,610)

     Income allocated to mandatorily redeemable

      noncontrolling interests                           1,174       1,311

     Change in operating assets and liabilities:

       Accounts receivable and advances against

        customer contracts                                (442)      5,140

       Income taxes receivable                           1,100           -

       Goods held for sale or auction                     (289)      2,325

       Prepaid expenses and other assets                   672      (2,159)

       Accounts payable and accrued expenses            (3,658)     (3,237)

       Auction and liquidation proceeds payable          3,575       1,658

       Accrued compensation plans                            -       4,005

                                                     ---------   ---------

         Net cash provided by (used in) operating

          activities                                    (6,917)     25,006

                                                     ---------   ---------

Cash flows from investing activities:

  Purchases of property and equipment                     (526)       (666)

  Increase in note receivable - related party           (5,930)          -

  Decrease (increase) in restricted cash                   264     (21,303)

                                                     ---------   ---------

         Net cash used in investing activities          (6,192)    (21,969)

                                                     ---------   ---------

Cash flows from financing activities:

  Payment of note payable                               (1,724)     (4,383)

  Repayments of long-term debt                               -      (4,086)

  Repayments of capital lease obligations                  (18)       (134)

  Payment of employment taxes on vesting of

   restricted stock                                     (1,132)          -

  Proceeds from reverse merger dated July 31, 2009           -      70,409

  Distributions to stockholders                              -     (33,853)

  Distribution to noncontrolling interests                (987)     (1,116)

                                                     ---------   ---------

         Net cash provided by (used in) financing

          activities                                    (3,861)     26,837

                                                     ---------   ---------

         Increase (decrease) in cash and cash

          equivalents                                  (16,970)     29,874

         Effect of foreign currency on cash                 (1)          -

                                                     ---------   ---------

         Net increase (decrease) in cash and cash

          equivalents                                  (16,971)     29,874

Cash and cash equivalents, beginning of period          37,989      16,965

                                                     ---------   ---------

Cash and cash equivalents, end of period             $  21,018   $  46,839

                                                     =========   =========

Supplemental disclosures:

  Interest paid                                      $   3,134   $   6,654



Supplemental disclosures of noncash investing and

 financing activities

  Deferred compensation arrangements                 $       -       1,022

  Issuance of notes payable from reverse merger

   dated July 31, 2009                                       -      60,000









                GREAT AMERICAN GROUP, INC. AND SUBSIDIARIES

                       Segment Financial Information

                                (Unaudited)

                          (Dollars in thousands)



                                    Three Months Ended   Nine Months Ended

                                       September 30,       September 30,

                                    ------------------  ------------------

                                      2010      2009      2010      2009

                                    --------  --------  --------  --------

Auction and Liquidation reportable

 segment:

   Revenues - Services and fees     $  8,563  $  5,772  $ 10,957  $ 44,424

   Revenues - Sale of goods              359     4,056     4,732    11,197

                                    --------  --------  --------  --------

     Total revenues                    8,922     9,828    15,689    55,621

   Direct cost of services              (680)   (2,381)   (4,200)   (5,778)

   Cost of goods sold                   (561)   (3,851)   (6,098)   (9,553)

   Selling, general, and

    administrative expenses           (2,083)   (1,549)   (5,678)   (3,747)

   Depreciation and amortization         (32)      (20)      (85)      (51)

                                    --------  --------  --------  --------

   Segment income                      5,566     2,027      (372)   36,492

                                    --------  --------  --------  --------

Valuation and Appraisal reportable

 segment:

   Revenues                            4,936     5,208    15,451    16,343

   Direct cost of revenues            (2,172)   (2,411)   (6,738)   (6,762)

   Selling, general, and

    administrative expenses           (1,893)   (1,957)   (6,324)   (5,962)

   Depreciation and amortization         (39)      (46)     (125)     (118)

                                    --------  --------  --------  --------

   Segment income                        832       794     2,264     3,501

                                    --------  --------  --------  --------

Consolidated operating income from

 reportable segments                   6,398     2,821     1,892    39,993

Corporate and other expenses          (3,971)   (3,674)  (12,405)  (16,206)

Interest income                          157        12       334        20

Other income (expense)                  (401)     (341)   (1,268)     (580)

Interest expense                        (848)   (2,328)   (2,640)   (9,272)

                                    --------  --------  --------  --------

     Income (loss) from continuing

      operations before benefit for

      income taxes                      1,335    (3,510)  (14,087)   13,955

(Provision) Benefit for income

 taxes                                  (880)    7,610     4,955     7,610

                                    --------  --------  --------  --------

     Income (loss) from continuing

      operations                         455     4,100    (9,132)   21,565

Loss from discontinued operations          -       (67)        -       (67)

                                    --------  --------  --------  --------

     Net income (loss)              $    455  $  4,033  $ (9,132) $ 21,498

                                    ========  ========  ========  ========

Capital expenditures:

   Auction and Liquidation segment  $    155  $    239  $    510  $    381

   Valuation and Appraisal segment         -       154        15       285

                                    --------  --------  --------  --------

     Total                          $    155  $    393  $    525  $    666

                                    ========  ========  ========  ========







                 GREAT AMERICAN GROUP, INC. AND SUBSIDIARIES

  Adjusted Earnings Before Interest, Taxes, Depreciation And Amortization

                         (Unaudited Adjusted EBITDA)

                           (Dollars in thousands)



                                                     Three Months Ended

                                                        September 30,

                                                   -----------------------

                                                      2010         2009

                                                   ----------   ----------



Adjusted EBITDA Reconciliation:



Net income as reported                             $      455   $    4,033

Adjustments:

  Provision for income taxes                              880       (7,610)

  Interest expense                                        848        2,328

  Interest income                                        (157)         (12)

  Depreciation and amortization                           204          171

  Share based compensation                                932          100

  Deferred compensation - Phantom stock plan                -       (2,428)

                                                   ----------   ----------

    Total EBITDA Adjustments                            2,707       (7,451)

                                                   ----------   ----------



Adjusted EBITDA                                    $    3,162   $   (3,418)

                                                   ==========   ==========





                                                     Nine Months Ended

                                                        September 30,

                                                   -----------------------

                                                      2010         2009

                                                   ----------   ----------

Adjusted EBITDA Reconciliation:



Net income (loss) as reported                      $   (9,132)  $   21,498

Adjustments:

  Benefit for income taxes                             (4,955)      (7,610)

  Interest expense                                      2,640        9,272

  Interest income                                        (334)          20

  Depreciation and amortization                           580          465

  Share based compensation                              3,430        1,543

  Deferred compensation - Phantom stock plan                -        4,005

                                                   ----------   ----------

    Total EBITDA Adjustments                            1,361        7,655

                                                   ----------   ----------



Adjusted EBITDA                                    $   (7,771)  $   29,153

                                                   ==========   ==========

Investor Contacts:



Great American GroupPhil Ahn

SVP, Strategy & Corporate Development

818-884-3737



Addo CommunicationsAndrew Blazier

310-829-5400

Email Contact



or



Press Contact:

Great American GroupLaura Wayman

847-444-1400 ext. 312

Email Contact



Source: Great American Group, Inc.

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