Great American Group Announces Second Quarter 2014 Financial Results

LOS ANGELES, Aug. 14, 2014 /PRNewswire/ -- Great American Group, Inc. (OTCBB: GAMR) today announced financial results for its second quarter ended June 30, 2014. Great American Group is a leading provider of asset disposition and auction solutions, advisory and valuation services, capital investment, and real estate advisory services. Through its combination with B. Riley & Co., LLC on June 18, 2014, the Company also provides a full array of investment banking, equity research, and sales & trading services to corporate, institutional and high net worth investors.

For the second quarter ended June 30, 2014, the Company reported total revenues of $14.9 million, a decrease from $15.2 million in the second quarter of 2013. Great American Group also reported Adjusted EBITDA of $1.1 million in the second quarter of 2014, an increase from $0.3 million in the second quarter of 2013. For the second quarter of 2014, net loss was $0.8 million compared to a net loss of $1.5 million for the second quarter of 2013. Diluted net loss per share was $(0.16) in the second quarter of 2014 compared to diluted net loss per share of $(1.07) in the second quarter of 2013.

In the second quarter of 2014, Great American Group completed a number of strategic initiatives to reposition the Company. On June 3, 2014, the Company completed a 1 for 20 reverse stock split that reduced the outstanding common shares from 30,002,975 to 1,500,107 common shares. On June 5, 2014, Great American Group completed a capital raise of approximately $51.4 million through the issuance of 10,289,300 shares of common stock in a private placement. The Company used $30.0 million of the proceeds to retire the entire $48.8 million of principal owed on the long-term debt to the former Great American Group members at a substantial discount. The retirement of the long-term debt will save the Company approximately $1.8 million in annual interest expense.

On June 18, 2014, Great American Group completed the combination with B. Riley & Co., LLC in an all-stock transaction in which 4,191,512 shares of common stock were issued to the B. Riley & Co., LLC selling shareholders. As a result of the private placement and B. Riley & Co., LLC transactions, the Company had 15,977,482 of common shares outstanding at June 30, 2014.

On a proforma basis assuming Great American Group and B. Riley & Co., LLC were combined for the entire second quarter of 2014, the Company's proforma revenues were $21.9 million. In addition, proforma Adjusted EBITDA was $2.8 million and proforma net income was $0.8 million for the second quarter of 2014.

"The combination of Great American Group and B. Riley allows us to leverage the expertise found across the vast platform of financial services offered by the two companies. Our goal is to identify opportunities that will further scale the business and ultimately enhance shareholder value," said Bryant Riley, Chairman and Chief Executive Officer of Great American Group. "Our professionals have been working collaboratively across service lines to take maximum advantage of the synergies created by this unique combination. In addition to focusing on revenue generation, we are also mindful of costs. We already have implemented a number of initiatives which should result in future annual cost savings of over $7 million, and we continue to review our cost structure to reduce annual overhead expense. I'd like to emphasize that we see plenty of opportunities to grow and leverage off of the great talent and existing assets that we have on both sides of the Company. Additionally, we think that the combined platform, balance sheet, and public company structure will attract new talent and also enhance and incentivize our current employees."

Financial Position
At June 30, 2014, the Company had $43.0 million in cash and cash equivalents and $0.1 million of restricted cash compared to cash and cash equivalents of $18.9 million and restricted cash of $0.3 million at December 31, 2013. The private placement and retirement of the long-term debt payable to the former Great American Group members at a substantial discount to the principal balance increased the equity of the Company to $90.1 million at June 30, 2014.

Other Corporate Matters 
The Company announced today that Tom Kelleher was appointed President of Great American Group, Inc. Mr. Kelleher has been with B. Riley & Co., LLC for 17 years and he will continue to serve in his role as the Chief Executive Officer of B. Riley & Co., LLC.

Conference Call
The Company will host a conference call today at 4:30 p.m. ET to discuss results for the second quarter ended June 30, 2014. To participate in the event by telephone, please dial 877-407-0789, 10 minutes prior to the start time (to allow time for registration) and use conference ID: 13589107. International callers should dial + 1 201-689-8562. A replay will be available beginning August 14, 2014, at 7:30 p.m. ET, through August 21, 2014, at 11:59 p.m. ET. To access the replay, please dial 877-870-5176 (U.S.), and use passcode 13589107. International callers should dial +1 858-384-5517 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 website at www.greatamerican.com. A replay of the call will also be available for 90 days on the website.

About Great American Group, Inc. (OTCBB: GAMR)
Great American Group, which recently combined with B. Riley & Co. to create a diversified financial services firm, is a leading provider of asset disposition and auction solutions, advisory and valuation services, capital investment, and real estate advisory services for an extensive array of companies. Great American Group efficiently deploys resources with sector expertise to assist companies, lenders, capital providers, private equity investors and professional service firms in maximizing the value of their assets. B. Riley & Co. is a leading investment bank which provides a full array of corporate finance, research, and sales & trading to corporate, institutional and high net worth individuals. The corporate headquarters is located in Los Angeles with additional offices in Atlanta, Boston, Charlotte, N.C., Chicago, Dallas, Melville, N.Y., New York, Newport Beach, Calif., Norwalk, Conn., San Francisco, London, Milan and Munich. For more information, call 818-884-3737 or visit www.greatamerican.com.

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 May 16, 2013, and its Annual Report on Form 10-K for the year ended December 31, 2013. 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 may be considered non-GAAP financial measures. Great American Group believes this information is useful to investors because it provides a basis for measuring the performance of the Company on a combined basis with B. Riley & Co. In addition, the Company's management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measures in evaluating the Company'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 the Company may not be comparable to similarly titled amounts reported by other companies.

Investor Contact:
Great American Group                                                   
Phillip Ahn
Chief Financial Officer & Chief Operating Officer 
818-884-3737    

Note: The unaudited proforma financial information in the table above summarizes the combined results of operations of the Company and B. Riley and Co., LLC and the related impact of the new employment agreements with Bryant Riley, Andrew Gumaer and Harvey Yellen that became effective upon the acquisition of B. Riley and Co., LLC on a pro forma basis, as though they had occurred as of January 1, 2013. The pro forma financial information presented includes the effects of adjustments related to the amortization charges from the acquired intangible assets. The pro forma financial information as presented above is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the earlier period presented, nor does it intend to be a projection of future results.

SOURCE Great American Group