XOTC:GAMR Quarterly Report 10-Q Filing - 6/30/2012

Effective Date 6/30/2012

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________

 

FORM 10-Q

 

(Mark One)  
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
For the quarterly period ended June 30, 2012
Or
 
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
For the transition period from              to

 

Commission File Number 000-54010
_________________

 

GREAT AMERICAN GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)

 

Delaware 27-0223495
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer Identification No.)
   
21860 Burbank Boulevard, Suite 300
South Woodland Hills, CA
91367
(Address of Principal Executive Offices) (Zip Code)

 

(818) 884-3737
(Registrant’s telephone number, including area code)
__________________

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one)

 

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company x
  (Do not check if a smaller reporting company)

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  o No x

 

As of August 10, 2012, there were 30,002,975 shares of the Registrant’s common stock, par value $0.0001 per share, outstanding.

 

 
 

 

Great American Group, Inc.

Quarterly Report on Form 10-Q

For The Quarter Ended June 30, 2012

Table of Contents

 

     
    Page
     
PART I. FINANCIAL INFORMATION  
Item 1 Unaudited Financial Statements 3
  Condensed Consolidated Balance Sheets as of June 30, 2012 and December 31, 2011 3
  Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, 2012 and 2011 4
  Condensed Consolidated Statement of Equity (Deficit) for the six months ended June 30, 2012 and 2011 5
  Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2012 and 2011 6
  Notes to Condensed Consolidated Financial Statements 7
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations 22
Item 3 Quantitative and Qualitative Disclosures About Market Risk 36
Item 4 Controls and Procedures 36
PART II. OTHER INFORMATION  
Item 1 Legal Proceedings 36
Item 1A Risk Factors 37
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 43
Item 3 Defaults Upon Senior Securities 43
Item 4 Mine Safety Disclosures 43
Item 5 Other Information 43
Item 6 Exhibits 43
  Signatures 44

 

2
 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements

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 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

3
 

 

GREAT AMERICAN GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(Unaudited)

(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)
Total 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)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

4
 

 

GREAT AMERICAN GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Equity (Deficit)

For the Six Months Ended June 30, 2012 and 2011

(Unaudited)

(Dollars in thousands)

 

                   Accumulated         
                   Additional   Retained   Other       Total 
   Preferred Stock   Common Stock   Paid-in   Earnings   Comprehensive   Noncontrolling   Equity 
   Shares   Amount   Shares   Amount   Capital   (Deficit)   Loss   Interests   (Deficit) 
                                     
Balance, January 1, 2011      $    30,559,036   $4   $2,878   $(11,792)  $7   $   $(8,903)
Net loss for the six months ended June 30, 2011                            (2,775)             (2,775)
Foreign currency translation adjustment                                 (130)        (130)
Vesting of restricted stock, net of shares withheld for employment taxes             241,298         (108)                  (108)
Share based compensation                       421                   421 
Balance, June 30, 2011      $    30,800,334   $4   $3,191   $(14,567)  $(123)  $   $(11,495)
                                              
                                              
                                              
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)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

5
 

 

GREAT AMERICAN GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(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

XOTC:GAMR Quarterly Report 10-Q Filling

XOTC:GAMR Stock - Get Quarterly Report SEC Filing of XOTC:GAMR stocks, including company profile, shares outstanding, strategy, business segments, operations, officers, consolidated financial statements, financial notes and ownership information.

XOTC:GAMR Quarterly Report 10-Q Filing - 6/30/2012
Name |  Ticker |  Star Rating |  Market Cap |  Stock Type |  Sector |  Industry Star Rating |  Investment Style |  Total Assets |  Category |  Top Holdings |  Top Sectors |  Symbol |  Title Star Rating |  Category |  Total Assets |  Top Holdings |  Top Sectors |  Symbol |  Name Title |  Date |  Author |  Collection |  Interest |  Popularity Topic |  Sector |  Key Indicators |  User Interest |  Market Cap |  Industry Name |  Ticker |  Star Rating |  Market Cap |  Stock Type |  Sector |  Industry Star Rating |  Investment Style |  Total Assets |  Category |  Top Holdings |  Top Sectors |  Symbol / Ticker |  Title Star Rating |  Category |  Total Assets |  Symbol / Ticker |  Name Title |  Date |  Author |  Collection |  Popularity |  Interest Title |  Date |  Company |  Symbol |  Interest |  Popularity Topic |  Sector |  Key Indicators |  User Interest |  Market Cap |  Industry Name |  Ticker |  Popularity |  Our Choices |  Most Recent Title |  Date |  Company |  Symbol |  Interest |  Popularity

Previous: XOTC:GAMR Quarterly Report 10-Q Filing - 3/31/2012  |  Next: XOTC:GAMR Quarterly Report 10-Q/A Filing - 6/30/2012