##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2010
 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: 1-11988
 
 SPECTRUM GROUP INTERNATIONAL, INC.
 (Exact Name of Registrant as Specified in Its Charter)
 Delaware
    
    22-2365834(State of Incorporation)
    
    (IRS Employer I.D. No.)
 
 (Address of Principal Executive Offices) (Zip Code)
 
  o þ
 o þ
  Large accelerated filer o
Accelerated Filer o
Non-accelerated filer o(Do not check if smaller reporting company)
Smaller reporting company þ o þ




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##### 



SPECTRUM GROUPS INTERNATIONAL, INC.
FORM 10-Q
For the Quarter Ended March 31, 2010
 Table of Contents
 PagePart I.
    
    Financial InformationItem 1.
    
    Condensed Consolidated Financial Statements (UNAUDITED):Condensed Consolidated Balance Sheets as of March 31, 2010 and June 30, 2009
    
    
    3Condensed Consolidated Statements of Operations for the Three Months and Nine Months Ended
March 31, 2010 and 2009
    
    
    4Condensed Consolidated Statement of Stockholders Equity for the Nine Months Ended March 31,
2010
    
    
    5Condensed Consolidated Statements of Cash Flows for the Nine Months ended March 31, 2010 and
2009
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    26Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    38Item 4.
    
    Controls and Procedures
    
    
    38Part II.
    
    Other InformationItem 1.
    
    Legal Proceedings
    
    
    39Item 1A.
    
    Risk Factors
    
    
    39Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    39Item 3.
    
    Defaults Upon Senior Securities
    
    
    39Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    39Item 5.
    
    Other Information
    
    
    39Item 6.
    
    Exhibits
    
    
    39Signatures
    
    
    
    
    40ExhibitsExhibit 10.1
    
    Amended and Restated Employment
Agreement, dated as of May 13, 2010, between Spectrum Group International, Inc. and Gregory N. Roberts
    
    
    41Exhibit 31.1
    
    Certification of Chief Executive Officer Under Section 302 of the Sarbanes-Oxley Act of 2002
    
    
    59Exhibit 31.2
    
    Certification of Chief Financial Officer Under Section 302 of the Sarbanes-Oxley Act of 2002
    
    
    60Exhibit 32.1
    
    Certification of Chief Executive Officer Under Section 906 of the Sarbanes-Oxley Act of 2002
    
    
    61Exhibit 32.2
    
    Certification of Chief Financial Officer Under Section 906 of the Sarbanes-Oxley Act of 2002
    
    
    62EX-10.1EX-31.1EX-31.2EX-32.1EX-32.2
  2




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##### Table of Contents



PART IFINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 
 SPECTRUM GROUP INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
(Unaudited)
 March 31,
    
    
    June 30,2010
    
    
    2009(1)(Audited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    28,734
    
    
    $
    17,545Restricted cash
    
    
    
    
    
    
    650Short-term investments and marketable securities
    
    
    1,211
    
    
    
    8,175Receivables and secured loans, net  trading operations
    
    
    34,292
    
    
    
    46,214Accounts receivable and consignor advances, net  collectibles operations
    
    
    6,596
    
    
    
    7,006Inventory, net
    
    
    128,133
    
    
    
    115,654Prepaid expenses and other assets
    
    
    1,711
    
    
    
    2,028Deferred tax asset
    
    
    86
    
    
    
    Total current assets
    
    
    200,763
    
    
    
    197,272Property and equipment, net
    
    
    2,486
    
    
    
    2,668Goodwill
    
    
    6,375
    
    
    
    5,960Other purchased intangibles, net
    
    
    7,956
    
    
    
    8,301Other assets
    
    
    547
    
    
    
    126Income tax receivables
    
    
    5,910
    
    
    
    3,424Deferred tax asset
    
    
    954
    
    
    
    398Total assets
    
    $
    224,991
    
    
    $
    218,149LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable and consignor payables
    
    $
    49,900
    
    
    $
    20,788Liability on borrowed metals
    
    
    33,552
    
    
    
    15,100Accrued expenses and other current liabilities
    
    
    12,896
    
    
    
    23,161Accrued litigation settlement
    
    
    
    
    
    
    6,556Income taxes payable
    
    
    8,625
    
    
    
    6,582Line of credit
    
    
    21,000
    
    
    
    52,750Deferred tax liability
    
    
    
    
    
    
    1,920Total current liabilities
    
    
    125,973
    
    
    
    126,857Deferred tax liability
    
    
    2,935
    
    
    
    189Total liabilities
    
    
    128,908
    
    
    
    127,046Commitments, contingencies and subsequent eventsStockholders equity:Spectrum Group International, Inc. stockholders equity:Preferred stock, $.01 par value, authorized 10,000 shares; issued and outstanding: none
    
    
    
    
    
    
    Common stock, $.01 par value, authorized 40,000 shares; issued and outstanding: 31,893
and 28,309 at March 31, 2010 and June 30, 2009, respectively
    
    
    319
    
    
    
    283Additional paid-in capital
    
    
    241,001
    
    
    
    233,385Accumulated other comprehensive income
    
    
    6,749
    
    
    
    8,419Accumulated deficit
    
    
    (162,534
    )
    
    
    (161,298
    )Total Spectrum Group International, Inc. stockholders equity
    
    
    85,535
    
    
    
    80,789Noncontrolling interests
    
    
    10,548
    
    
    
    10,314Total stockholders equity
    
    
    96,083
    
    
    
    91,103Total liabilities and stockholders equity
    
    $
    224,991
    
    
    $
    218,149
 
 (1)
    
    The condensed consolidated balance sheet as of June 30, 2009 has been
derived from the audited consolidated financial statements included in the Companys 2009
Annual Report on Form 10-K.  3




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##### Table of Contents



SPECTRUM GROUP INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)
(Unaudited)
 Three Months Ended
    
    
    Three Months Ended
    
    
    Nine Months Ended
    
    
    Nine Months EndedMarch 31, 2010
    
    
    March 31, 2009
    
    
    March 31, 2010
    
    
    March 31, 2009Revenues:Sales of precious metals
    
    $
    1,334,979
    
    
    $
    1,041,334
    
    
    $
    3,928,155
    
    
    $
    3,020,523Collectibles revenues:Sales of inventory
    
    
    32,185
    
    
    
    33,250
    
    
    
    109,920
    
    
    
    97,709Auction commissions earned
    
    
    5,226
    
    
    
    3,901
    
    
    
    16,072
    
    
    
    12,994Total revenue
    
    
    1,372,390
    
    
    
    1,078,485
    
    
    
    4,054,147
    
    
    
    3,131,226Cost of sales:Cost of precious metals sold
    
    
    1,330,561
    
    
    
    1,027,211
    
    
    
    3,913,274
    
    
    
    2,983,631Cost of collectibles sold
    
    
    30,288
    
    
    
    31,420
    
    
    
    101,882
    
    
    
    91,905Total cost of sales
    
    
    1,360,849
    
    
    
    1,058,631
    
    
    
    4,015,156
    
    
    
    3,075,536Gross profit
    
    
    11,541
    
    
    
    19,854
    
    
    
    38,991
    
    
    
    55,690Operating expenses:General and administrative
    
    
    8,239
    
    
    
    8,356
    
    
    
    21,195
    
    
    
    21,710Salaries and wages
    
    
    6,422
    
    
    
    9,766
    
    
    
    20,469
    
    
    
    25,827Depreciation and amortization
    
    
    455
    
    
    
    460
    
    
    
    1,325
    
    
    
    1,351Total operating expenses
    
    
    15,116
    
    
    
    18,582
    
    
    
    42,989
    
    
    
    48,888Operating (loss) income
    
    
    (3,575
    )
    
    
    1,272
    
    
    
    (3,998
    )
    
    
    6,802Interest and other income (expense):Interest income
    
    
    1,636
    
    
    
    1,543
    
    
    
    4,505
    
    
    
    3,862Interest expense
    
    
    (330
    )
    
    
    (432
    )
    
    
    (1,130
    )
    
    
    (1,892
    )Other income (expense), net
    
    
    (12
    )
    
    
    (375
    )
    
    
    68
    
    
    
    359Unrealized gains on foreign exchange
    
    
    1,592
    
    
    
    1,769
    
    
    
    1,059
    
    
    
    4,740Total interest and other income, net
    
    
    2,886
    
    
    
    2,505
    
    
    
    4,502
    
    
    
    7,069(Loss) income before income taxes
    
    
    (689
    )
    
    
    3,777
    
    
    
    504
    
    
    
    13,871Income tax provision
    
    
    2,490
    
    
    
    520
    
    
    
    506
    
    
    
    2,331Net (loss) income
    
    
    (3,179
    )
    
    
    3,257
    
    
    
    (2
    )
    
    
    11,540Less: Net income attributable to the
noncontrolling interests
    
    
    (339
    )
    
    
    (1,165
    )
    
    
    (1,234
    )
    
    
    (3,221
    )Net (loss) income attributable to Spectrum
Group International, Inc.
    
    $
    (3,518
    )
    
    $
    2,092
    
    
    $
    (1,236
    )
    
    $
    8,319Earnings (Loss) per share attributable to
Spectrum Group International, Inc.Basic
    
    $
    (0.11
    )
    
    $
    0.07
    
    
    $
    (0.04
    )
    
    $
    0.27Diluted
    
    $
    (0.11
    )
    
    $
    0.07
    
    
    $
    (0.04
    )
    
    $
    0.26Weighted average shares outstandingBasic
    
    
    31,985
    
    
    
    31,616
    
    
    
    31,895
    
    
    
    30,748Diluted
    
    
    31,985
    
    
    
    32,089
    
    
    
    31,895
    
    
    
    31,448
  4




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SPECTRUM GROUP INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
(in thousands)
(Unaudited)
 TotalSpectrumGroupAccumulated
    
    
    
    
    
    
    International,Common
    
    
    Common
    
    
    Additional
    
    
    Other
    
    
    
    
    
    
    Inc.
    
    
    
    
    
    
    TotalStock
    
    
    Stock
    
    
    Paid-in
    
    
    Comprehensive
    
    
    Accumulated
    
    
    Stockholders
    
    
    Noncontrolling
    
    
    Stockholdersin Shares
    
    
    in $
    
    
    Capital
    
    
    Income (Loss)
    
    
    Deficit
    
    
    Equity
    
    
    Interests
    
    
    EquityBalance, June 30,
2009
    
    
    28,309
    
    
    $
    283
    
    
    $
    233,385
    
    
    $
    8,419
    
    
    $
    (161,298
    )
    
    $
    80,789
    
    
    $
    10,314
    
    
    $
    91,103Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,236
    )
    
    
    (1,236
    )
    
    
    1,234
    
    
    
    (2
    )Changes in
unrealized gain on
marketable
securities, net of
tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (183
    )
    
    
    
    
    
    
    (183
    )
    
    
    
    
    
    
    (183
    )Changes in
cumulative foreign
currency
translation
adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,487
    )
    
    
    
    
    
    
    (1,487
    )
    
    
    
    
    
    
    (1,487
    )Dividend paid to
noncontrolling
interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,000
    )
    
    
    (1,000
    )Issuances of common
stock for vested
restricted stock
grants
    
    
    306
    
    
    
    3
    
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Taxes paid in
exchange for
cancellation of
restricted shares
    
    
    
    
    
    
    
    
    
    
    (133
    )
    
    
    
    
    
    
    
    
    
    
    (133
    )
    
    
    
    
    
    
    (133
    )Share based
compensation
    
    
    
    
    
    
    
    
    
    
    1,229
    
    
    
    
    
    
    
    
    
    
    
    1,229
    
    
    
    
    
    
    
    1,229Issuances of common
stock for legal
settlement
    
    
    3,278
    
    
    
    33
    
    
    
    6,523
    
    
    
    
    
    
    
    
    
    
    
    6,556
    
    
    
    
    
    
    
    6,556Balance, March 31,
2010
    
    
    31,893
    
    
    $
    319
    
    
    $
    241,001
    
    
    $
    6,749
    
    
    $
    (162,534
    )
    
    $
    85,535
    
    
    $
    10,548
    
    
    $
    96,083
  5




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SPECTRUM GROUP INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)
(Unaudited)
 Nine Months Ended
    
    
    Nine Months EndedMarch 31, 2010
    
    
    March 31, 2009Cash
flows from operating activities:Net (loss) income
    
    $
    (2
    )
    
    $
    11,540Adjustments to reconcile net (loss) income to net cash  provided by
operating activities:Depreciation and amortization
    
    
    1,325
    
    
    
    1,351Provision for bad debts
    
    
    59
    
    
    
    69Provision for inventory reserves
    
    
    310
    
    
    
    1,142Stock based compensation
    
    
    1,229
    
    
    
    707Provision for deferred income taxes
    
    
    184
    
    
    
    97Gain on sale of marketable securities
    
    
    (135
    )
    
    
    Loss on abandonment of property and equipment
    
    
    114
    
    
    
    Changes in assets and liabilities:Accounts receivable and consignor advances
    
    
    351
    
    
    
    (267
    )Receivables and secured loans
    
    
    11,922
    
    
    
    (12,899
    )Litigation settlement receivable
    
    
    
    
    
    
    5,975Inventory
    
    
    (12,779
    )
    
    
    5,743Prepaid expenses and other assets
    
    
    (103
    )
    
    
    1,801Accounts payable, accrued expenses and other liabilities
    
    
    18,847
    
    
    
    1,658Income taxes
    
    
    (443
    )
    
    
    4,117Accrued litigation settlement
    
    
    
    
    
    
    (6,995
    )Net cash provided by  operating activities
    
    
    20,879
    
    
    
    14,039Cash flows from investing activities:Capital expenditures for property and equipment
    
    
    (726
    )
    
    
    (908
    )Cash paid for acquisitions, net of cash acquired
    
    
    (774
    )
    
    
    (672
    )Cash paid for other intangibles
    
    
    (20
    )
    
    
    (39
    )Cash proceeds from sales of marketable securities
    
    
    1,049
    
    
    
    (1,473
    )Maturity (purchase) of short-term investments
    
    
    6,049
    
    
    
    (630
    )(Increase) decrease in restricted cash
    
    
    650
    
    
    
    (650
    )Net cash provided by (used in) investing activities
    
    
    6,228
    
    
    
    (4,372
    )Cash flows from financing activities:Borrowings under lines of credit, net
    
    
    (31,750
    )
    
    
    (16,847
    )Liability on borrowed metals
    
    
    18,452
    
    
    
    (2,176
    )Repurchase of shares issued for class action settlement
    
    
    
    
    
    
    (1,197
    )Dividend paid to noncontrolling interest
    
    
    (1,000
    )
    
    
    Taxes paid on behalf of employees with respect to vesting of restricted shares
    
    
    (133
    )
    
    
    (98
    )Net cash (used in) financing activities
    
    
    (14,431
    )
    
    
    (20,318
    )Effects of exchange rates on cash
    
    
    (1,487
    )
    
    
    (7,379
    )Net increase (decrease) in cash and cash equivalents
    
    
    11,189
    
    
    
    (18,030
    )Cash and cash equivalents, beginning of period
    
    
    17,545
    
    
    
    35,860Cash and cash equivalents, end of period
    
    $
    28,734
    
    
    $
    17,830
  6




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SPECTRUM GROUP INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of Presentation
  Unaudited Interim Financial Information
    Correction of an Error
  7




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##### Table of Contents



Business Segments
 Trading
  Collectibles
  European Operations
  Significant Accounting Policies
  Comprehensive (Loss) Income
  8




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##### Table of Contents



Nine months ended
    
    
    Nine months endedMarch 31, 2010
    
    
    March 31, 2009(in thousands)
    
    
    (in thousands)Net (loss) income
    
    $
    (2
    )
    
    $
    11,540Other comprehensive (loss) income, net of tax:Changes in unrealized (loss) gain on marketable
securities, net of tax
    
    
    (183
    )
    
    
    94Foreign currency translation adjustment
    
    
    (1,487
    )
    
    
    (7,379
    )Other comprehensive (loss)
    
    
    (1,670
    )
    
    
    (7,285
    )Less: Total comprehensive income attributable to
noncontrolling interests
    
    
    (1,234
    )
    
    
    (3,221
    )Total comprehensive (loss) income attributable to
Spectrum Group International, Inc.
    
    $
    (2,906
    )
    
    $
    1,034
 Foreign Currency Translation Gains (Losses)
  Income Taxes
    9




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##### Table of Contents



Earnings per Share
    Three months ended
    
    Three months ended
    
    Nine months ended
    
    Nine months endedMarch 31, 2010
    
    March 31, 2009
    
    March 31, 2010
    
    March 31, 2009(thousands of shares)
    
    (thousands of shares)
    
    (thousands of shares)
    
    (thousands of shares)Basic weighted average shares outstanding
    
    
    31,985
    
    
    
    31,616
    
    
    
    31,895
    
    
    
    30,748Effect of common stock equivalents  stock options
and stock issuable under employee compensation
plans
    
    
    
    
    
    
    473
    
    
    
    
    
    
    
    700Diluted weighted average shares outstanding
    
    
    31,985
    
    
    
    32,089
    
    
    
    31,895
    
    
    
    31,448
 Subsequent Events
  Recent Accounting Pronouncements
   10




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##### Table of Contents



2. CUSTOMER CONCENTRATIONS
  Three months ended
    
    
    Three months ended
    
    
    Nine months ended
    
    
    Nine months endedMarch 31, 2010
    
    
    March 31, 2009
    
    
    March 31, 2010
    
    
    March 31, 2009(in thousands)
    
    
    (in thousands)
    
    
    (in thousands)
    
    
    (in thousands)in
$s
    
    
    as a %
    
    
    in $s
    
    
    as a %
    
    
    in $s
    
    
    as a %
    
    
    in $s
    
    
    as a %Total Trading segment
revenues
    
    $
    1,334,979
    
    
    
    100.0
    %
    
    $
    1,041,334
    
    
    
    100.0
    %
    
    $
    3,928,155
    
    
    
    100.0
    %
    
    $
    3,020,523
    
    
    
    100.0
    %Trading segment customer
concentrationsCustomer A
    
    $
    289,569
    
    
    
    21.7
    %
    
    $
    271,393
    
    
    
    26.1
    %
    
    $
    1,031,505
    
    
    
    26.3
    %
    
    $
    647,269
    
    
    
    21.4
    %Customer B
    
    
    158,771
    
    
    
    11.9
    %
    
    
    81,557
    
    
    
    7.8
    %
    
    
    401,804
    
    
    
    10.2
    %
    
    
    169,155
    
    
    
    5.6
    %Total
    
    $
    448,340
    
    
    
    33.6
    %
    
    $
    352,950
    
    
    
    33.9
    %
    
    $
    1,433,309
    
    
    
    36.5
    %
    
    $
    816,424
    
    
    
    27.0
    %
  March 31, 2010
    
    
    June 30, 2009(in thousands)
    
    
    (in thousands)in $s
    
    
    as a %
    
    
    in $s
    
    
    as a %Trading segment accounts receivable
    
    $
    9,638
    
    
    
    100.0
    %
    
    $
    16,205
    
    
    
    100.0
    %Trading segment customer concentrationsCustomer A
    
    $
    2,879
    
    
    
    29.9
    %
    
    $
    3,894
    
    
    
    24.0
    %Customer B
    
    
    2,501
    
    
    
    25.9
    %
    
    
    2,535
    
    
    
    15.6
    %Total
    
    $
    5,380
    
    
    
    55.8
    %
    
    $
    6,429
    
    
    
    39.6
    %
  March 31, 2010
    
    
    June 30, 2009(in thousands)
    
    
    (in thousands)in $s
    
    
    as a %
    
    
    in $s
    
    
    as a %Trading segment secured loans
    
    $
    21,587
    
    
    
    100.0
    %
    
    $
    17,727
    
    
    
    100.0
    %Trading segment customer concentrationsCustomer A
    
    $
    5,117
    
    
    
    23.7
    %
    
    $
    3,043
    
    
    
    17.2
    %Customer B
    
    
    3,500
    
    
    
    16.2
    %
    
    
    2,600
    
    
    
    14.7
    %Customer C
    
    
    2,745
    
    
    
    12.7
    %
    
    
    2,502
    
    
    
    14.1
    %Customer D
    
    
    2,493
    
    
    
    11.5
    %
    
    
    1,724
    
    
    
    9.7
    %Customer E
    
    
    2,456
    
    
    
    11.4
    %
    
    
    1,402
    
    
    
    7.9
    %Total
    
    $
    16,311
    
    
    
    75.5
    %
    
    $
    11,271
    
    
    
    63.6
    %
 11




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3. RECEIVABLES
  March 31, 2010
    
    
    June 30, 2009(in thousands)
    
    
    (in thousands)Customer trade receivables
    
    $
    6,094
    
    
    $
    9,138Wholesale trade advances and other
    
    
    567
    
    
    
    3,493Secured loans
    
    
    21,587
    
    
    
    17,727Due from brokers
    
    
    2,977
    
    
    
    3,574Subtotal
    
    
    31,225
    
    
    
    33,932Less: allowance for doubtful accounts
    
    
    (109
    )
    
    
    (319
    )Subtotal
    
    
    31,116
    
    
    
    33,613Derivative assets  futures contracts
    
    
    2,286
    
    
    
    10,875Derivative assets  forward contracts
    
    
    890
    
    
    
    1,726Receivables, net
    
    $
    34,292
    
    
    $
    46,214
       March 31, 2010
    
    
    June 30, 2009(in thousands)
    
    
    (in thousands)Auction and trade
    
    $
    7,087
    
    
    $
    7,555Less: allowance for doubtful accounts
    
    
    (491
    )
    
    
    (549
    )Accounts receivable from collectibles operations, net
    
    $
    6,596
    
    
    $
    7,006
  12




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##### Table of Contents



Balance, June 30, 2009
    
    $
    (868
    )Provision for losses
    
    
    (59
    )Charge off to reserve
    
    
    306Foreign currency exchange rate charges
    
    
    21Balance, March 31, 2010
    
    $
    (600
    )
 4. INVENTORIES
     March 31, 2010
    
    
    June 30, 2009(in thousands)
    
    
    (in thousands)Trading segment inventory
    
    $
    99,779
    
    
    $
    92,043Less: provision for losses
    
    
    (104
    )
    
    
    (104
    )Trading, net
    
    $
    99,675
    
    
    $
    91,939Collectibles segment inventory
    
    $
    30,329
    
    
    $
    26,719Less: provision for losses
    
    
    (1,871
    )
    
    
    (3,004
    )Collectibles, net
    
    $
    28,458
    
    
    $
    23,715Total inventory, gross
    
    $
    130,108
    
    
    $
    118,762Less: provision for losses
    
    
    (1,975
    )
    
    
    (3,108
    )Net inventory
    
    $
    128,133
    
    
    $
    115,654
 13




---



##### Table of Contents



Balance, June 30, 2009
    
    $
    (3,108
    )Provision for losses
    
    
    (310
    )Charge off to reserve
    
    
    1,409Foreign currency exchange rate changes
    
    
    34Balance, March 31, 2010
    
    $
    (1,975
    )
 5. GOODWILL AND OTHER PURCHASED INTANGIBLE ASSETS
  Balance, June 30, 2009
    
    $
    5,960Additions through acquisitions
    
    
    415Balance, March 31, 2010
    
    $
    6,375
  March 31, 2010
    
    
    June 30, 2009Estimated
    
    
    (in thousands)
    
    
    (in thousands)Useful Lives
    
    
    Gross Carrying
    
    
    Accumulated
    
    
    Net Book
    
    
    Gross Carrying
    
    
    Accumulated
    
    
    Net Book(Years)
    
    
    Amount
    
    
    Amortization
    
    
    Value
    
    
    Amount
    
    
    Amortization
    
    
    ValueTrademarks
    
    Indefinite
    
    $
    2,604
    
    
    $
    
    
    
    $
    2,604
    
    
    $
    2,536
    
    
    $
    
    
    
    $
    2,536Customer lists
    
    5  15
    
    
    9,326
    
    
    
    (4,016
    )
    
    
    5,310
    
    
    
    9,161
    
    
    
    (3,500
    )
    
    
    5,661Non-competes and other
    
    4
    
    
    2,248
    
    
    
    (2,206
    )
    
    
    42
    
    
    
    2,302
    
    
    
    (2,198
    )
    
    
    104$
    14,178
    
    
    $
    (6,222
    )
    
    $
    7,956
    
    
    $
    13,999
    
    
    $
    (5,698
    )
    
    $
    8,301
    Years ending June 30:
    
    (in thousands)2010 (remaining 3 months)
    
    $
    1792011
    
    
    6552012
    
    
    5852013
    
    
    5252014
    
    
    508Thereafter
    
    
    2,900Total
    
    $
    5,352
 14




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##### Table of Contents



6. ACCOUNTS PAYABLE AND CONSIGNOR PAYABLES
  March 31, 2010
    
    
    June 30, 2009(in thousands)
    
    
    (in thousands)Trade payables to customers and other accounts payable
    
    $
    13,184
    
    
    $
    5,909Advances from customers
    
    
    26,136
    
    
    
    5,834Net liabilities on margin accounts
    
    
    9,649
    
    
    
    3,041Due to brokers
    
    
    146
    
    
    
    648Other accounts payable
    
    
    273
    
    
    
    Derivative liabilities  open purchases and sales commitments
    
    
    512
    
    
    
    5,356$
    49,900
    
    
    $
    20,788
 7. INCOME TAXES
  Three months ended
    
    
    Three months ended
    
    
    Nine months ended
    
    
    Nine months endedMarch 31, 2010
    
    
    March 31, 2009
    
    
    March 31, 2010
    
    
    March 31, 2009(in thousands)
    
    
    (in thousands)
    
    
    (in thousands)
    
    
    (in thousands)Current:Federal
    
    $
    706
    
    
    $
    306
    
    
    $
    (2,360
    )
    
    $
    1,371State
    
    
    1,967
    
    
    
    144
    
    
    
    2,078
    
    
    
    646Foreign
    
    
    (3
    )
    
    
    72
    
    
    
    605
    
    
    
    323Total current tax provision
    
    
    2,670
    
    
    
    522
    
    
    
    323
    
    
    
    2,340Deferred:Federal
    
    
    640
    
    
    
    (10
    )
    
    
    708
    
    
    
    (45
    )State
    
    
    10
    
    
    
    7
    
    
    
    32
    
    
    
    31Foreign
    
    
    (830
    )
    
    
    1
    
    
    
    (557
    )
    
    
    5Total deferred tax (benefit) provision
    
    
    (180
    )
    
    
    (2
    )
    
    
    183
    
    
    
    (9
    )Income tax provision
    
    $
    2,490
    
    
    $
    520
    
    
    $
    506
    
    
    $
    2,331
   Three months ended
    
    
    Three months ended
    
    
    Nine months ended
    
    
    Nine months endedMarch 31, 2010
    
    
    March 31, 2009
    
    
    March 31, 2010
    
    
    March 31, 2009U.S.
    
    $
    247
    
    
    $
    4,191
    
    
    $
    219
    
    
    $
    13,593Foreign
    
    
    (936
    )
    
    
    (414
    )
    
    
    285
    
    
    
    278(Loss) income
before income taxes
and noncontrolling
interests
    
    $
    (689
    )
    
    $
    3,777
    
    
    $
    504
    
    
    $
    13,871
   15




---



##### Table of Contents



UTBs
    
    
    FIN 48 PayableBalance as of June 30, 2009
    
    $
    26,587
    
    
    $
    2,475Increase as a result of tax positions taken during the current period
    
    
    126
    
    
    
    1,805Increase as a result of additional interest and penalties during the current period
    
    
    
    
    
    
    312Balance as of March 31, 2010
    
    $
    26,713
    
    
    $
    4,592
  8. FINANCING AGREEMENTS
    16




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##### Table of Contents



9. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
       17




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March 31, 2010
    
    
    June 30, 2009(in thousands)
    
    
    (in thousands)Trading inventory, net
    
    $
    99,675
    
    
    $
    91,939Less unhedgeable inventory:Commemorative coins
    
    
    (740
    )
    
    
    (3,413
    )Premiums on metals positions
    
    
    (870
    )
    
    
    (1,477
    )Subtotal
    
    
    98,065
    
    
    
    87,049Commitments at market:Open inventory purchase commitments
    
    
    129,005
    
    
    
    131,844Open inventory sale commitments
    
    
    (77,114
    )
    
    
    (38,370
    )Margin sale commitments
    
    
    (19,751
    )
    
    
    (7,358
    )Premiums on open commitment positions
    
    
    211
    
    
    
    32Inventory borrowed from suppliers
    
    
    (33,552
    )
    
    
    (15,100
    )Advances on industrial metals
    
    
    585
    
    
    
    700Inventory subject to price risk
    
    
    97,449
    
    
    
    158,797Inventory subject to derivative financial instruments:Precious metals forward contracts at market values
    
    
    23,822
    
    
    
    27,731Precious metals futures contracts at market values
    
    
    77,745
    
    
    
    132,651Total market value of derivative financial instruments
    
    
    101,567
    
    
    
    160,382Net inventory subject to price risk, Company consolidated basis
    
    $
    (4,118
    )
    
    $
    (1,585
    )Effects of open related party transactions between A-Mark and affiliates:Net inventory subject to price risk, Company consolidated basis
    
    $
    (4,118
    )
    
    $
    (1,585
    )Open inventory purchase commitments with affiliates
    
    
    3,815
    
    
    
    1,088Premiums on open commitment positions with affiliates
    
    
    (2
    )
    
    
    Net inventory subject to price risk, A-Mark stand-alone basis
    
    $
    (305
    )
    
    $
    (497
    )
    18




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##### Table of Contents



10. NONCONTROLLING INTERESTS
     March 31, 2010
    
    
    June 30, 2009(in thousands)
    
    
    (in thousands)Auctentia  20% interest in Spectrum PMI
    
    $
    9,237
    
    
    $
    9,167Winter Games Bullion Ventures, LLC  50% outside interest
    
    
    1,311
    
    
    
    1,147Total
    
    $
    10,548
    
    
    $
    10,314
  Three Months Ended
    
    
    Three Months Ended
    
    
    Nine Months Ended
    
    
    Nine Months EndedMarch 31, 2010
    
    
    March 31, 2009
    
    
    March 31, 2010
    
    
    March 31, 2009(in thousands)
    
    
    (in thousands)
    
    
    (in thousands)
    
    
    (in thousands)Auctentia  20% interest in Spectrum PMI
    
    $
    307
    
    
    $
    1,049
    
    
    $
    1,070
    
    
    $
    2,641Winter Games Bullion Ventures, LLC  50% interest
    
    
    32
    
    
    
    116
    
    
    
    164
    
    
    
    580Total
    
    $
    339
    
    
    $
    1,165
    
    
    $
    1,234
    
    
    $
    3,221
  March 31, 2010
    
    
    June 30, 2009(in thousands)
    
    
    (in thousands)Cash
    
    $
    2,020
    
    
    $
    154Receivables
    
    
    82
    
    
    
    21Inventories
    
    
    679
    
    
    
    3,516Prepaid expenses
    
    
    
    
    
    
    Total Assets
    
    $
    2,781
    
    
    $
    3,691Accounts payable and other liabilities
    
    $
    159
    
    
    $
    1,397Members equity
    
    
    2,622
    
    
    
    2,294Total liabilities and members equity
    
    $
    2,781
    
    
    $
    3,691
  Three Months Ended
    
    
    Three Months Ended
    
    
    Nine Months Ended
    
    
    Nine Months EndedMarch 31, 2010
    
    
    March 31, 2009
    
    
    March 31, 2010
    
    
    March 31, 2009(in thousands)
    
    
    (in thousands)
    
    
    (in thousands)
    
    
    (in thousands)Sales
    
    $
    3,135
    
    
    $
    3,705
    
    
    $
    25,132
    
    
    $
    39,369Cost of products sold
    
    
    2,698
    
    
    
    3,172
    
    
    
    24,154
    
    
    
    37,534Gross profit
    
    
    437
    
    
    
    533
    
    
    
    978
    
    
    
    1,835Operating and other expenses
    
    
    374
    
    
    
    300
    
    
    
    650
    
    
    
    674Net income
    
    $
    63
    
    
    $
    233
    
    
    $
    328
    
    
    $
    1,161
 19




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##### Table of Contents



11. COMMITMENTS AND CONTINGENCIES
  12. LITIGATION
  13. STOCKHOLDERS EQUITY
 Stock Option Plan
   Employee Stock Options
  WeightedAverageWeighted
    
    
    
    
    
    
    per ShareAverage
    
    
    Intrinsic Value
    
    
    Grant DateOptions
    
    
    Exercise Price
    
    
    (in thousands)
    
    
    Fair ValueOutstanding at June 30, 2009
    
    
    604,325
    
    
    $
    6.09
    
    
    $
    104
    
    
    $
    4.63Granted through stock option plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at March 31, 2010
    
    
    604,325
    
    
    $
    6.09
    
    
    $
    104
    
    
    $
    4.63Shares exercisable at March 31, 2010
    
    
    604,325
    
    
    $
    6.09
    
    
    $
    104
    
    
    $
    4.63
 20




---



##### Table of Contents



Options Outstanding
    
    
    Options ExercisableWeighted
    
    
    Weighted
    
    
    
    
    
    
    WeightedExercise Price
    
    
    Number of
    
    
    Average
    
    
    Average
    
    
    Number of
    
    
    AverageRanges
    
    
    Shares
    
    
    Remaining
    
    
    Exercise
    
    
    Shares
    
    
    ExerciseFrom
    
    
    To
    
    
    Outstanding
    
    
    Contractual Life
    
    
    Price
    
    
    Exercisable
    
    
    Price$
    1.00
    
    
    $
    5.00
    
    
    
    391,250
    
    
    
    3.0
    
    
    $
    2.29
    
    
    
    391,250
    
    
    $
    2.295.01
    
    
    
    10.00
    
    
    
    26,200
    
    
    
    3.5
    
    
    
    8.96
    
    
    
    26,200
    
    
    
    8.9610.01
    
    
    
    15.00
    
    
    
    186,875
    
    
    
    4.0
    
    
    
    13.65
    
    
    
    186,875
    
    
    
    13.65604,325
    
    
    
    3.3
    
    
    $
    6.09
    
    
    
    604,325
    
    
    $
    6.09
   WeightedAverage ShareShares
    
    
    Price at Grant DateOutstanding at June 30, 2009
    
    
    676,682
    
    
    $
    2.54Shares granted
    
    
    508,226
    
    
    
    2.65Shares issued
    
    
    (306,002
    )
    
    
    2.61Shares forfeited
    
    
    
    
    
    
    Shares withheld for employee taxes
    
    
    (64,011
    )
    
    
    2.66Outstanding at March 31, 2010
    
    
    814,895
    
    
    $
    2.56Vested but unissued at March 31, 2010
    
    
    92,502
 Stock Appreciation Rights (SARs)
 Certain Anti-Takeover Provisions
  21




---



##### Table of Contents



14. SEGMENT AND GEOGRAPHIC INFORMATION
   Three Months Ended
    
    
    Three Months Ended
    
    
    Nine Months Ended
    
    
    Nine Months EndedMarch 31, 2010
    
    
    March 31, 2009
    
    
    March 31, 2010
    
    
    March 31, 2009(in thousands)
    
    
    (in thousands)
    
    
    (in thousands)
    
    
    (in thousands)Revenues:Trading
    
    $
    1,334,979
    
    
    $
    1,041,334
    
    
    $
    3,928,155
    
    
    $
    3,020,523Collectibles:Coins
    
    
    33,079
    
    
    
    30,168
    
    
    
    111,070
    
    
    
    87,176Stamps
    
    
    2,820
    
    
    
    6,385
    
    
    
    12,224
    
    
    
    22,318Others
    
    
    1,512
    
    
    
    598
    
    
    
    2,698
    
    
    
    1,209Total Collectibles
    
    
    37,411
    
    
    
    37,151
    
    
    
    125,992
    
    
    
    110,703Total revenues
    
    $
    1,372,390
    
    
    $
    1,078,485
    
    
    $
    4,054,147
    
    
    $
    3,131,226
 Three Months Ended
    
    
    Three Months Ended
    
    
    Nine Months Ended
    
    
    Nine Months EndedMarch 31, 2010
    
    
    March 31, 2009
    
    
    March 31, 2010
    
    
    March 31, 2009(in thousands)
    
    
    (in thousands)
    
    
    (in thousands)
    
    
    (in thousands)Revenues by geographic region:United States
    
    $
    1,352,996
    
    
    $
    1,076,880
    
    
    $
    4,029,221
    
    
    $
    3,124,178Asia Pacific
    
    
    52
    
    
    
    698
    
    
    
    750
    
    
    
    911Europe
    
    
    19,342
    
    
    
    907
    
    
    
    24,176
    
    
    
    6,137Total revenues
    
    $
    1,372,390
    
    
    $
    1,078,485
    
    
    $
    4,054,147
    
    
    $
    3,131,226
 Three Months Ended
    
    
    Three Months Ended
    
    
    Nine Months Ended
    
    
    Nine Months EndedMarch 31, 2010
    
    
    March 31, 2009
    
    
    March 31, 2010
    
    
    March 31, 2009(in thousands)
    
    
    (in thousands)
    
    
    (in thousands)
    
    
    (in thousands)Operating (loss) income:Trading
    
    $
    1,213
    
    
    $
    7,851
    
    
    $
    5,184
    
    
    $
    20,459Collectibles
    
    
    (2,066
    )
    
    
    (3,322
    )
    
    
    (1,365
    )
    
    
    (7,552
    )Corporate expenses
    
    
    (2,722
    )
    
    
    (3,257
    )
    
    
    (7,817
    )
    
    
    (6,105
    )Total operating (loss) income
    
    $
    (3,575
    )
    
    $
    1,272
    
    
    $
    (3,998
    )
    
    $
    6,802
 Three Months Ended
    
    
    Three Months Ended
    
    
    Nine Months Ended
    
    
    Nine Months EndedMarch 31, 2010
    
    
    March 31, 2009
    
    
    March 31, 2010
    
    
    March 31, 2009(in thousands)
    
    
    (in thousands)
    
    
    (in thousands)
    
    
    (in thousands)Depreciation and amortization:TradingDepreciation and amortization
    
    $
    165
    
    
    $
    250
    
    
    $
    504
    
    
    $
    747CollectiblesDepreciation and amortization
    
    
    290
    
    
    
    210
    
    
    
    821
    
    
    
    604Total depreciation and amortization
    
    $
    455
    
    
    $
    460
    
    
    $
    1,325
    
    
    $
    1,351
 22




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##### Table of Contents



March 31,
    
    
    June 30,2010
    
    
    2009(in thousands)
    
    
    (in thousands)Inventories by segment/geographic region:Trading:United States
    
    $
    99,675
    
    
    $
    91,939Europe
    
    
    
    
    
    
    Total Trading
    
    
    99,675
    
    
    
    91,939Collectibles:United States
    
    
    26,993
    
    
    
    22,256Europe
    
    
    1,345
    
    
    
    1,277Asia
    
    
    120
    
    
    
    182Total Collectibles
    
    
    28,458
    
    
    
    23,715Total inventories
    
    $
    128,133
    
    
    $
    115,654
 March 31,
    
    
    June 30,2010
    
    
    2009(in thousands)
    
    
    (in thousands)Total assets by segment/geographic region:Trading:United States
    
    $
    150,547
    
    
    $
    151,986Europe
    
    
    155
    
    
    
    Total Trading
    
    
    150,702
    
    
    
    151,986Collectibles:United States
    
    
    43,395
    
    
    
    38,485Europe
    
    
    19,853
    
    
    
    19,791Asia
    
    
    1,227
    
    
    
    1,398Total Collectibles
    
    
    64,475
    
    
    
    59,674Corporate and other
    
    
    9,814
    
    
    
    6,489Total assets
    
    $
    224,991
    
    
    $
    218,149
 March 31,
    
    
    June 30,2010
    
    
    2009(in thousands)
    
    
    (in thousands)Total long-term assets by segment/geographic region:Trading:United States
    
    $
    10,161
    
    
    $
    10,451Europe
    
    
    38
    
    
    
    Total Trading
    
    
    10,199
    
    
    
    10,451Collectibles:United States
    
    
    4,736
    
    
    
    4,740Europe
    
    
    2,377
    
    
    
    1,036Asia
    
    
    150
    
    
    
    145Total Collectibles
    
    
    7,263
    
    
    
    5,921Corporate and other
    
    
    6,766
    
    
    
    4,505Total long-term assets
    
    $
    24,228
    
    
    $
    20,877
 15. FAIR VALUE MEASUREMENTS
 Valuation Hierarchy
  
    
    Level 1  inputs to the valuation methodology are quoted prices (unadjusted) for
identical assets or liabilities in active markets.
 23




---



##### Table of Contents




    
    Level 2  inputs to the valuation methodology include quoted prices for similar assets
and liabilities in active markets, and inputs that are observable for the asset or
liability, either directly or indirectly, for substantially the full term of the financial
instrument.
    
    Level 3  inputs to the valuation methodology are unobservable and significant to the
fair value measurement.
  Assets and Liabilities Measured at Fair Value on a Recurring Basis
 March 31, 2010( in thousands)Quoted Price inActive Markets forIdentical
    
    
    Significant Other
    
    
    SignificantInstruments
    
    
    Observable Inputs
    
    
    Unobservable(Level 1)
    
    
    (Level 2)
    
    
    Inputs (Level 3)
    
    
    Total BalanceAssets:Commodities
    
    $
    99,675
    
    
    $
    
    
    
    $
    
    
    
    $
    99,675Derivative assets  futures contracts
    
    
    
    
    
    
    2,286
    
    
    
    
    
    
    
    2,286Derivative assets  forward contracts
    
    
    
    
    
    
    890
    
    
    
    
    
    
    
    890Total assets valued at fair value:
    
    $
    99,675
    
    
    $
    3,176
    
    
    $
    
    
    
    $
    102,851Liabilities:Liability on borrowed metals
    
    $
    (33,552
    )
    
    $
    
    
    
    $
    
    
    
    $
    (33,552
    )Liability on margin accounts
    
    
    (9,649
    )
    
    
    
    
    
    
    
    
    
    
    (9,649
    )Derivative liabilities  open sales
and purchase commitments
    
    
    
    
    
    
    (512
    )
    
    
    
    
    
    
    (512
    )Total liabilities valued at fair value:
    
    $
    (43,201
    )
    
    $
    (512
    )
    
    $
    
    
    
    $
    (43,713
    )
  Marketable Securities
  Commodities
  Derivatives
  Margin Liability
   24




---



##### Table of Contents



16. SUPPLEMENTAL CASH FLOW INFORMATION
 Nine Months Ended
    
    
    Nine Months EndedMarch 31, 2010
    
    
    March 31, 2009(in thousands)
    
    
    (in thousands)Supplemental disclosure of cash flow information:Interest paid
    
    $
    927
    
    
    $
    1,467Income taxes paid
    
    $
    1,440
    
    
    $
    485Supplemental disclosure of non-cash transactions:Issuance of 3,277,777 shares pursuant to legal settlement
    
    $
    (6,556
    )
    
    $
    
 25




---



##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 FORWARD LOOKING STATEMENTS
   INTRODUCTION
  
    
    Overview.This section provides a general description of our business, as well as
recent significant transactions and events that we believe are important in understanding
the results of operations, as well as to anticipate future trends in those operations.
 
    
    Results of operations.This section provides an analysis of our results of operations
presented in the accompanying consolidated statements of operations by comparing the
results for the three months and nine months ended March 31, 2010 and 2009.
 
    
    Financial condition and liquidity and capital resources.This section provides an
analysis of our cash flows, as well as a discussion of our outstanding debt that existed as
of March 31, 2010. Included in the discussion of outstanding debt is a discussion of the
amount of financial capacity available to fund our future commitments, as well as a
discussion of other financing arrangements.
 
    
    Critical accounting estimates.This section discusses those accounting policies that
both are considered important to our financial condition and results, and require
significant judgment and estimates on the part of management in their application. In
addition, all of our significant accounting policies, including critical accounting
policies, are summarized in Note 1 to the accompanying consolidated financial statements.
 
    
    Recent accounting pronouncements.This section discusses new accounting pronouncements,
dates of implementation and impact on our accompanying consolidated financial statements,
if any.
 26




---



##### Table of Contents



Overview
 Business
   Trading
   Collectibles
  RESULTS OF OPERATIONS
 Overview of Results of Operations for the Three and Nine Months Ended March 31, 2010 and 2009
 Condensed Consolidated Results of Operations
  % of
    
    
    
    
    
    
    % of
    
    
    Increase/
    
    
    % of Increase/2010
    
    
    Revenue
    
    
    2009
    
    
    Revenue
    
    
    (decrease)
    
    
    (decrease)Revenue
    
    $
    1,372,390
    
    
    
    100.0
    %
    
    $
    1,078,485
    
    
    
    100.0
    %
    
    $
    293,905
    
    
    
    27.3
    %Gross profit
    
    
    11,541
    
    
    
    0.8
    %
    
    
    19,854
    
    
    
    1.8
    %
    
    
    (8,313
    )
    
    
    (41.9
    )%General and administrative expenses
    
    
    8,239
    
    
    
    0.6
    %
    
    
    8,356
    
    
    
    0.8
    %
    
    
    (117
    )
    
    
    (1.4
    )%Salaries and wages
    
    
    6,422
    
    
    
    0.5
    %
    
    
    9,766
    
    
    
    0.9
    %
    
    
    (3,344
    )
    
    
    (34.2
    )%Depreciation and amortization
    
    
    455
    
    
    
    0.0
    %
    
    
    460
    
    
    
    0.0
    %
    
    
    (5
    )
    
    
    (1.1
    )%Operating (loss) income
    
    
    (3,575
    )
    
    
    (0.3
    )%
    
    
    1,272
    
    
    
    0.1
    %
    
    
    (4,847
    )
    
    
    (381.1
    )%Interest income
    
    
    1,636
    
    
    
    0.1
    %
    
    
    1,543
    
    
    
    0.1
    %
    
    
    93
    
    
    
    6.0
    %Interest expense
    
    
    (330
    )
    
    
    (0.0
    )%
    
    
    (432
    )
    
    
    (0.0
    )%
    
    
    102
    
    
    
    (23.6
    )%Other (expense) income, net
    
    
    (12
    )
    
    
    (0.0
    )%
    
    
    (375
    )
    
    
    (0.0
    )%
    
    
    363
    
    
    
    (96.8
    )%Unrealized gains on foreign exchange
    
    
    1,592
    
    
    
    0.1
    %
    
    
    1,769
    
    
    
    0.2
    %
    
    
    (177
    )
    
    
    (10.0
    )%(Loss) income before income taxes
    
    
    (689
    )
    
    
    (0.1
    )%
    
    
    3,777
    
    
    
    0.4
    %
    
    
    (4,466
    )
    
    
    (118.2
    )%
 27




---



##### Table of Contents



% of
    
    
    
    
    
    
    % of
    
    
    Increase/
    
    
    % of Increase/2010
    
    
    Revenue
    
    
    2009
    
    
    Revenue
    
    
    (decrease)
    
    
    (decrease)Income tax provision
    
    
    2,490
    
    
    
    0.1
    %
    
    
    520
    
    
    
    0.1
    %
    
    
    1,970
    
    
    
    378.8
    %Net (loss) income
    
    
    (3,179
    )
    
    
    (0.2
    )%
    
    
    3,257
    
    
    
    0.3
    %
    
    
    (6,436
    )
    
    
    (197.6
    )%Less: Net income attributable to the
noncontrolling interests
    
    
    (339
    )
    
    
    (0.0
    )%
    
    
    (1,165
    )
    
    
    (0.1
    )%
    
    
    826
    
    
    
    (70.9
    )%Net (loss) income attributable to Spectrum Group
International, Inc.
    
    $
    (3,518
    )
    
    
    (0.2
    )%
    
    $
    2,092
    
    
    
    0.2
    %
    
    $
    (5,610
    )
    
    
    (268.2
    )%Earnings (Loss) per share attributable to Spectrum
Group International, Inc.Basic
    
    $
    (0.11
    )
    
    
    
    
    
    $
    0.07
    
    
    
    
    
    
    $
    (0.18
    )
    
    
    (257.1
    )%Diluted
    
    $
    (0.11
    )
    
    
    
    
    
    $
    0.07
    
    
    
    
    
    
    $
    (0.18
    )
    
    
    (257.1
    )%Weighted average shares outstandingBasic
    
    
    31,985
    
    
    
    
    
    
    
    31,616Diluted
    
    
    31,985
    
    
    
    
    
    
    
    32,089
  % of
    
    
    
    
    
    
    % of
    
    
    Increase/
    
    
    % of Increase/2010
    
    
    Revenue
    
    
    2009
    
    
    Revenue
    
    
    (decrease)
    
    
    (decrease)Revenue
    
    $
    4,054,147
    
    
    
    100.0
    %
    
    $
    3,131,226
    
    
    
    100.0
    %
    
    $
    922,921
    
    
    
    29.5
    %Gross profit
    
    
    38,991
    
    
    
    1.0
    %
    
    
    55,690
    
    
    
    1.8
    %
    
    
    (16,699
    )
    
    
    (30.0
    )%General and administrative expenses
    
    
    21,195
    
    
    
    0.5
    %
    
    
    21,710
    
    
    
    0.7
    %
    
    
    (515
    )
    
    
    (2.4
    )%Salaries and wages
    
    
    20,469
    
    
    
    0.5
    %
    
    
    25,827
    
    
    
    0.8
    %
    
    
    (5,358
    )
    
    
    (20.7
    )%Depreciation and amortization
    
    
    1,325
    
    
    
    0.0
    %
    
    
    1,351
    
    
    
    0.0
    %
    
    
    (26
    )
    
    
    (1.9
    )%Operating (loss) income
    
    
    (3,998
    )
    
    
    (0.1
    )%
    
    
    6,802
    
    
    
    0.3
    %
    
    
    (10,800
    )
    
    
    (158.8
    )%Interest income
    
    
    4,505
    
    
    
    0.1
    %
    
    
    3,862
    
    
    
    0.1
    %
    
    
    643
    
    
    
    16.6
    %Interest expense
    
    
    (1,130
    )
    
    
    (0.0
    )%
    
    
    (1,892
    )
    
    
    (0.1
    )%
    
    
    762
    
    
    
    (40.3
    )%Other income (expense), net
    
    
    68
    
    
    
    0.0
    %
    
    
    359
    
    
    
    0.0
    %
    
    
    (291
    )
    
    
    (81.1
    )%Unrealized gains on foreign exchange
    
    
    1,059
    
    
    
    0.0
    %
    
    
    4,740
    
    
    
    0.2
    %
    
    
    (3,681
    )
    
    
    (77.7
    )%Income before income taxes
    
    
    504
    
    
    
    0.0
    %
    
    
    13,871
    
    
    
    0.5
    %
    
    
    (13,367
    )
    
    
    (96.4
    )%Income tax provision
    
    
    506
    
    
    
    (0.0
    )%
    
    
    2,331
    
    
    
    0.1
    %
    
    
    (1,825
    )
    
    
    (78.3
    )%Net (loss) income
    
    
    (2
    )
    
    
    0.0
    %
    
    
    11,540
    
    
    
    0.4
    %
    
    
    (11,542
    )
    
    
    (100.0
    )%Less: Net income attributable to the
noncontrolling interests
    
    
    (1,234
    )
    
    
    (0.0
    )%
    
    
    (3,221
    )
    
    
    (0.1
    )%
    
    
    1,987
    
    
    
    (61.7
    )%Net (loss) income attributable to Spectrum Group
International, Inc.
    
    $
    (1,236
    )
    
    
    0.0
    %
    
    $
    8,319
    
    
    
    0.3
    %
    
    $
    (9,555
    )
    
    
    (114.9
    )%Earnings (Loss) per share attributable to Spectrum
Group International, Inc.Basic
    
    $
    (0.04
    )
    
    
    
    
    
    $
    0.27
    
    
    
    
    
    
    $
    (0.31
    )
    
    
    (114.8
    )%Diluted
    
    $
    (0.04
    )
    
    
    
    
    
    $
    0.26
    
    
    
    
    
    
    $
    (0.30
    )
    
    
    (115.4
    )%Weighted average shares outstandingBasic
    
    
    31,895
    
    
    
    
    
    
    
    30,748Diluted
    
    
    31,895
    
    
    
    
    
    
    
    31,448
 28




---



##### Table of Contents



Revenues and Gross Profit
         Operating Expenses
  29




---



##### Table of Contents



Interest Income
  Interest Expense
 Other Income (Expense)
 Provision
for Income Taxes
 Noncontrolling Interests
 Net
(Loss) Income
 30




---



##### Table of Contents



Earnings
per Share
 Trading Operations
  % of
    
    
    
    
    
    
    % of
    
    
    $ Increase/
    
    
    % Increase/(thousands of dollars)
    
    2010
    
    
    Revenue
    
    
    2009
    
    
    Revenue
    
    
    (Decrease)
    
    
    (Decrease)Trading revenues
    
    $
    1,334,979
    
    
    
    100.0
    %
    
    $
    1,041,334
    
    
    
    100.0
    %
    
    $
    293,645
    
    
    
    28.2
    %Gross profit
    
    
    4,418
    
    
    
    0.3
    %
    
    
    14,123
    
    
    
    1.4
    %
    
    
    (9,705
    )
    
    
    (68.7
    )%General and administrative expenses
    
    
    997
    
    
    
    0.0
    %
    
    
    772
    
    
    
    0.1
    %
    
    
    225
    
    
    
    29.2
    %Salaries and wages
    
    
    2,043
    
    
    
    0.2
    %
    
    
    5,250
    
    
    
    0.5
    %
    
    
    (3,207
    )
    
    
    (61.1
    )%Depreciation and amortization
    
    
    165
    
    
    
    0.0
    %
    
    
    250
    
    
    
    0.0
    %
    
    
    (85
    )
    
    
    (33.9
    )%Operating income
    
    $
    1,213
    
    
    
    0.1
    %
    
    $
    7,851
    
    
    
    0.8
    %
    
    $
    (6,638
    )
    
    
    (84.5
    )%
  % of
    
    
    
    
    
    
    % of
    
    
    $ Increase/
    
    
    % Increase/(thousands of dollars)
    
    2010
    
    
    Revenue
    
    
    2009
    
    
    Revenue
    
    
    (Decrease)
    
    
    (Decrease)Trading revenues
    
    $
    3,928,155
    
    
    
    100.0
    %
    
    $
    3,020,523
    
    
    
    100.0
    %
    
    $
    907,632
    
    
    
    30.0
    %Gross profit
    
    
    14,881
    
    
    
    0.4
    %
    
    
    36,892
    
    
    
    1.2
    %
    
    
    (22,011
    )
    
    
    (59.7
    )%General and administrative expenses
    
    
    2,386
    
    
    
    0.1
    %
    
    
    2,082
    
    
    
    0.1
    %
    
    
    304
    
    
    
    14.6
    %Salaries and wages
    
    
    6,807
    
    
    
    0.2
    %
    
    
    13,604
    
    
    
    0.5
    %
    
    
    (6,797
    )
    
    
    (50.0
    )%Depreciation and amortization
    
    
    504
    
    
    
    0.0
    %
    
    
    747
    
    
    
    0.0
    %
    
    
    (243
    )
    
    
    (32.5
    )%Operating income
    
    $
    5,184
    
    
    
    0.1
    %
    
    $
    20,459
    
    
    
    0.6
    %
    
    $
    (15,275
    )
    
    
    (74.7
    )%
 Revenues
 Gross profit
   31




---



##### Table of Contents



General and administrative expenses
 Salaries and wages
 Depreciation and amortization
 Collectibles Operations
  For the three months ended March 31,% of
    
    
    
    
    
    
    % of
    
    
    $ Increase
    
    
    % Increase/(thousands of dollars)
    
    2010
    
    
    Revenue
    
    
    2009
    
    
    Revenue
    
    
    (decrease)
    
    
    DecreaseCollectibles Revenues
    
    $
    37,411
    
    
    
    100.0
    %
    
    $
    37,151
    
    
    
    100.0
    %
    
    $
    260
    
    
    
    0.7
    %Revenues by Collectible Type:Numismatics
    
    $
    33,079
    
    
    
    88.4
    %
    
    $
    30,170
    
    
    
    81.2
    %
    
    $
    2,909
    
    
    
    9.6
    %Philatelics
    
    
    2,820
    
    
    
    7.5
    %
    
    
    6,385
    
    
    
    17.2
    %
    
    
    (3,565
    )
    
    
    (55.8
    )%Militaria, wine and other
    
    
    1,512
    
    
    
    4.1
    %
    
    
    596
    
    
    
    1.6
    %
    
    
    916
    
    
    
    153.7
    %$
    37,411
    
    
    
    100.0
    %
    
    $
    37,151
    
    
    
    100.0
    %
    
    $
    260
    
    
    
    0.7
    %
  For the nine months ended March 31,% of
    
    
    
    
    
    
    % of
    
    
    $ Increase
    
    
    % Increase/(thousands of dollars)
    
    2010
    
    
    Revenue
    
    
    2009
    
    
    Revenue
    
    
    (decrease)
    
    
    DecreaseCollectibles Revenues
    
    $
    125,992
    
    
    
    100.0
    %
    
    $
    110,703
    
    
    
    100.0
    %
    
    $
    15,289
    
    
    
    13.8
    %Revenues by Collectible Type:Numismatics
    
    $
    111,070
    
    
    
    88.2
    %
    
    $
    87,178
    
    
    
    78.7
    %
    
    $
    23,892
    
    
    
    27.4
    %Philatelics
    
    
    12,224
    
    
    
    9.7
    %
    
    
    22,318
    
    
    
    20.2
    %
    
    
    (10,094
    )
    
    
    (45.2
    )%Militaria, wine and other
    
    
    2,698
    
    
    
    2.1
    %
    
    
    1,207
    
    
    
    1.1
    %
    
    
    1,492
    
    
    
    123.6
    %$
    125,992
    
    
    
    100.0
    %
    
    $
    110,703
    
    
    
    100.0
    %
    
    $
    15,289
    
    
    
    13.8
    %
 Revenues
 32




---



##### Table of Contents



% of
    
    
    
    
    
    
    % of
    
    
    $ Increase/
    
    
    % Increase/(thousands of dollars)
    
    2010
    
    
    Revenue
    
    
    2009
    
    
    Revenue
    
    
    (Decrease)
    
    
    (Decrease)Collectibles revenue
    
    $
    37,411
    
    
    
    100.0
    %
    
    $
    37,151
    
    
    
    100.0
    %
    
    $
    260
    
    
    
    0.7
    %Gross profit
    
    
    7,123
    
    
    
    19.0
    %
    
    
    5,730
    
    
    
    15.4
    %
    
    
    1,393
    
    
    
    24.3
    %Selling, general and administrative expenses
    
    
    5,260
    
    
    
    14.1
    %
    
    
    5,185
    
    
    
    14.0
    %
    
    
    75
    
    
    
    1.5
    %Salaries and wages
    
    
    3,644
    
    
    
    9.7
    %
    
    
    3,659
    
    
    
    9.8
    %
    
    
    (15
    )
    
    
    (0.4
    )%Depreciation and amortization
    
    
    285
    
    
    
    0.8
    %
    
    
    208
    
    
    
    0.6
    %
    
    
    77
    
    
    
    36.9
    %Operating (loss)
    
    $
    (2,066
    )
    
    
    (5.6
    )%
    
    $
    (3,322
    )
    
    
    (9.0
    )%
    
    $
    1,256
    
    
    
    (37.8
    )%
  % of
    
    
    
    
    
    
    % of
    
    
    $ Increase/
    
    
    % Increase/(thousands of dollars)
    
    2010
    
    
    Revenue
    
    
    2009
    
    
    Revenue
    
    
    (Decrease)
    
    
    (Decrease)Collectibles revenue
    
    $
    125,992
    
    
    
    100.0
    %
    
    $
    110,703
    
    
    
    100.0
    %
    
    $
    15,289
    
    
    
    13.8
    %Gross profit
    
    
    24,110
    
    
    
    19.1
    %
    
    
    18,798
    
    
    
    17.0
    %
    
    
    5,312
    
    
    
    28.3
    %Selling, general and administrative expenses
    
    
    13,365
    
    
    
    10.6
    %
    
    
    15,540
    
    
    
    14.0
    %
    
    
    (2,175
    )
    
    
    (14.0
    )%Salaries and wages
    
    
    11,303
    
    
    
    9.0
    %
    
    
    10,211
    
    
    
    9.2
    %
    
    
    1,092
    
    
    
    10.7
    %Depreciation and amortization
    
    
    807
    
    
    
    0.6
    %
    
    
    599
    
    
    
    0.5
    %
    
    
    208
    
    
    
    34.7
    %Operating (loss)
    
    $
    (1,365
    )
    
    
    (1.1
    )%
    
    $
    (7,552
    )
    
    
    (6.7
    )%
    
    $
    6,187
    
    
    
    (81.9
    )%
 Gross profit
 Selling, general and administrative expenses
 Salaries and wages
 33




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##### Table of Contents



Depreciation and amortization
 34




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##### Table of Contents



FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
  (thousands of dollars)
    
    2010
    
    2009Cash provided by  operating activities
    
    $
    20,879
    
    
    $
    14,039Cash provided by (used in) investing activities
    
    
    6,228
    
    
    
    (4,372
    )Cash (used in) financing activities
    
    
    (14,431
    )
    
    
    (20,318
    )
        35




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##### Table of Contents



Part II, Item 1: Legal Proceedings
  Contractual Obligations, Contingent Liabilities, and Commitments
   36




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##### Table of Contents



CRITICAL ACCOUNTING ESTIMATES
  37




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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
     38




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##### Table of Contents



PART IIOTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5. OTHER INFORMATION
   
 ITEM 6. EXHIBITS
 Exhibit 10.1
    
    Amended and Restated Employment
Agreement, dated as of May 13, 2010, between Spectrum Group
International, Inc. and Gregory N. RobertsExhibit 31.1
    
    Certification of Chief Executive Officer Under Section 302 of the Sarbanes-Oxley Act of 2002Exhibit 31.2
    
    Certification of Chief Financial Officer Under Section 302 of the Sarbanes-Oxley Act of 2002Exhibit 32.1
    
    Chief Executive Officer Certification Under Section 906 of the Sarbanes-Oxley Act of 2002Exhibit 32.2
    
    Chief Financial Officer Certification Under Section 906 of the Sarbanes-Oxley Act of 2002
 39




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##### Table of Contents



SIGNATURES
  Date: May 14, 2010
    SPECTRUM GROUP INTERNATIONAL, INC.By:
    /s/ Gregory N. RobertsName:
    Gregory N. RobertsTitle:
    President and Chief Executive Officer  Signatures
    
    Title(s)
    
    Date/s/ Gregory N. Roberts

Gregory N. Roberts
    
    President, Chief Executive
Officer and Director
(Principal Executive
Officer)
    
    May 14, 2010/s/ Paul Soth

Paul Soth
    
    Chief Financial Officer and
Executive Vice President
(Principal Financial
Officer)
    
    May 14, 2010/s/ Thor Gjerdrum

Thor Gjerdrum
    
    Formerly Chief Financial Officer and
Executive Vice President
    
    May 14, 2010
 40