----

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| (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                                                                      |
|                                                                                                                 |                                                                                     |
|  ̈                                                                                                               | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|                                                                                                                 |
| For the transition period from              to |

----

| DELAWARE(State or other jurisdiction of incorporation or organization)                      | 94-2748530(I.R.S. Employer Identification No.) |
|---------------------------------------------------------------------------------------------|------------------------------------------------|
|                                                                                        |                                           |
| 2603 CAMINO RAMON, SUITE 200, SAN RAMON, CALIFORNIA(Address of principal executive offices) | 94583(Zip Code)                                |

| Registrant's telephone number, including area code (408) 945-8600 |
|-------------------------------------------------------------------|

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| Part I.     Financial Statements |       |
|-------------------------------------------------|------------|
|                                            | Item 1.    | Unaudited Consolidated Financial Statements |   |
|                                            |       | Condensed Statements of Income for the three-month and six-month periods ended June 30, 2012 and July 1, 2011 | 3 |
|                                            |       | Condensed Statements of Comprehensive Income for the three-month and six-month periods ended June 30, 2012 and July 1, 2011 | 4 |
|                                            |       | Condensed Balance Sheets as of June 30, 2012 and December 31, 2011 | 5 |
|                                            |       | Condensed Statements of Cash Flows for the six-month periods ended June 30, 2012 and July 1, 2011 | 6 |
|                                            |       | Notes to Condensed Financial Statements | 7 |
|                                            | Item 2.    | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 23 |
|                                            | Item 3.    | Quantitative and Qualitative Disclosures about Market Risk | 29 |
|                                            | Item 4.    | Controls and Procedures | 29 |
|                                            |       |   |   |
| Part II.   Other Information     | 30         |
|                                            | Item 1.    | Legal Proceedings | 30 |
|                                            | Item 1A.   | Risk Factors | 30 |
|                                            | Item 6.    | Exhibits | 30 |
|                                            | Signatures | 31 |

----

|                                                         |   | Three-month Period Ended:                |   |   | Six-month Period Ended: |   |
|--------------------------------------------------------------|--------|------------------------------------------|--------|--------|-------------------------|--------|
|                                                         |   | June 30,2012                             |   |   | July 1,2011             |   |   | June 30,2012 |   |   | July 1,2011 |   |
|                                                         |   | (in thousands, except per share amounts) |   |
|                                                         |   |                                     |   |   |                    |   |   |   |   |   |   |   |
| Net revenues                                                 |   | $                                        | 24,540 |   |                    | $      | - |   |   | $ | 39,347 |   |   | $ | - |   |
| Cost of revenues                                             |   |                                     | 15,002 |   |                    |   | - |   |   |   | 24,065 |   |   |   | - |   |
| Gross margin                                                 |   |                                     | 9,538  |   |                    |   | - |   |   |   | 15,282 |   |   |   | - |   |
|                                                         |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Operating expenses:                                          |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Selling, general and administrative                          |   |                                     | 6,819  |   |                    |   | 2,984 |   |   |   | 14,663 |   |   |   | 5,366 |   |
| Restructuring charges                                        |   |                                     |   |   |                    |   |   |   |   |   | - |   |   |   | 38 |   |
| Total operating expenses                                     |   |                                     | 6,819  |   |                    |   | 2,984 |   |   |   | 14,663 |   |   |   | 5,404 |   |
|                                                         |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) from continuing operations                     |   |                                     | 2,719  |   |                    |   | (2,984 | ) |   |   | 619 |   |   |   | (5,404 | ) |
|                                                         |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Interest and other income (expense), net                     |   |                                     | 177    |   |                    |   | 2,795 |   |   |   | (52 | ) |   |   | 8,127 |   |
|                                                         |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) from continuing operations before income taxes |   |                                     | 2,896  |   |                    |   | (189 | ) |   |   | 567 |   |   |   | 2,723 |   |
|                                                         |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Provision for income taxes                                   |   |                                     | (654   | )      |                    |   | (1,361 | ) |   |   | (793 | ) |   |   | (2,456 | ) |
|                                                         |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) from continuing operations, net of taxes       |   |                                     | 2,242  |   |                    |   | (1,550 | ) |   |   | (226 | ) |   |   | 267 |   |
|                                                         |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Income from discontinued operations, net of taxes            |   |                                     | -      |   |                    |   | 1,910 |   |   |   | - |   |   |   | 1,910 |   |
| Gain on disposal of discontinued operations, net of taxes    |   |                                     | -      |   |                    |   | 4,920 |   |   |   | - |   |   |   | 4,920 |   |
| Income from discontinued operations, net of taxes            |   |                                     | -      |   |                    |   | 6,830 |   |   |   | - |   |   |   | 6,830 |   |
|                                                         |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                                            |   |                                     | 2,242  |   |                    |   | 5,280 |   |   |   | (226 | ) |   |   | 7,097 |   |
|                                                         |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Net loss attributable to non-controlling interest            |   | $                                        | -      |   |                    | $      | - |   |   | $ | (580 | ) |   | $ | - |   |
|                                                         |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Net income attributable to Steel Excel Inc.                  |   | $                                        | 2,242  |   |                    | $      | 5,280 |   |   | $ | 354 |   |   | $ | 7,097 |   |
|                                                         |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) per share:                                     |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                        |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Income from continuing operations, net of taxes              |   | $                                        | 0.19   |   |                    | $      | (0.14 | ) |   | $ | (0.02 | ) |   | $ | 0.02 |   |
| Income (loss) from discontinued operations, net of taxes     |   | $                                        | -      |   |                    | $      | 0.63 |   |   | $ | - |   |   | $ | 0.63 |   |
| Net income attributable to Steel Excel Inc.                  |   | $                                        | 0.19   |   |                    | $      | 0.49 |   |   | $ | 0.03 |   |   | $ | 0.65 |   |
|                                                         |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Diluted                                                      |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) from continuing operations, net of taxes       |   | $                                        | 0.19   |   |                    | $      | (0.14 | ) |   | $ | (0.02 | ) |   | $ | 0.02 |   |
| Income (loss) from discontinued operations, net of taxes     |   | $                                        | -      |   |                    | $      | 0.63 |   |   | $ | - |   |   | $ | 0.63 |   |
| Net income attributable to Steel Excel Inc.                  |   | $                                        | 0.19   |   |                    | $      | 0.48 |   |   | $ | 0.03 |   |   | $ | 0.65 |   |
|                                                         |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Shares used to compute income (loss) per share:              |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                        |   |                                     | 11,588 |   |                    |   | 10,881 |   |   |   | 11,240 |   |   |   | 10,881 |   |
| Diluted                                                      |   |                                     | 11,605 |   |                    |   | 10,895 |   |   |   | 11,257 |   |   |   | 10,891 |   |

----

|                                                        |   | Three-month Period Ended: |   |   | Six-month Period Ended: |   |
|-------------------------------------------------------------|--------|---------------------------|--------|--------|-------------------------|--------|
|                                                        |   | June 30,2012              |   |   | July 1,2011             |   |   | June 30,2012 |   |   | July 1,2011 |   |
|                                                        |   | (in thousands)            |   |
|                                                        |   |                      |   |   |                    |   |   |   |   |   |   |   |
| Net income attributable to Steel Excel Inc.                 |   | $                         | 2,242  |   |                    | $      | 5,280 |   |   | $ | 354 |   |   | $ | 7,097 |   |
| Other comprehensive income (loss), net of taxes             |   |                      |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Net foreign currency translation adjustment, net of taxes:  |   |                      |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment, net of taxes       |   |                      | (27    | )      |                    |   | 7 |   |   |   | (22 | ) |   |   | 159 |   |
| Release of foreign currency translation gains, net of taxes |   |                      | -      |   |                    |   | - |   |   |   | - |   |   |   | (2,542 | ) |
| Subtotal                                                    |   |                      | (27    | )      |                    |   | 7 |   |   |   | (22 | ) |   |   | (2,383 | ) |
| Net unrealized gain on marketable securities, net of taxes  |   |                      | 75     |   |                    |   | 858 |   |   |   | 858 |   |   |   | 76 |   |
|                                                        |   |                      |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income                                        |   |                      | 2,290  |   |                    |   | 6,145 |   |   |   | 1,190 |   |   |   | 4,790 |   |
| Comprehensive loss attributable to non-controlling interest |   |                      | -      |   |                    |   | - |   |   |   | (580 | ) |   |   | - |   |
|                                                        |   |                      |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income attributable to Steel Excel Inc.       |   | $                         | 2,290  |   |                    | $      | 6,145 |   |   | $ | 1,770 |   |   | $ | 4,790 |   |

----

|                                                              |   | June 30, 2012  |    |   | December 31, 2011 |   |
|-------------------------------------------------------------------|--------|----------------|---------|--------|-------------------|--------|
|                                                              |   | (in thousands) |    |
|                                                              |   |           |    |   |              |   |
| Assets                                                            |   |           |    |   |              |   |
| Current assets:                                                   |   |           |    |   |              |   |
| Cash and cash equivalents                                         |   | $              | 70,869  |   |              | $      | 8,487 |   |
| Marketable securities                                             |   |           | 188,207 |   |              |   | 314,941 |   |
| Accounts receivable, net of allowance of $0 and $80, respectively |   |           | 24,654  |   |              |   | 4,660 |   |
| Prepaid expenses and other current assets                         |   |           | 3,113   |   |              |   | 2,055 |   |
| Total current assets                                              |   |           | 286,843 |   |              |   | 330,143 |   |
| Property and equipment, net                                       |   |           | 75,873  |   |              |   | 21,060 |   |
| Goodwill                                                          |   |           | 40,103  |   |              |   | 8,244 |   |
| Intangible assets, net                                            |   |           | 45,013  |   |              |   | 5,786 |   |
| Other long-term assets                                            |   |           | 4,314   |   |              |   | 3,444 |   |
|                                                              |   |           |    |   |              |   |   |   |
| Total assets                                                      |   | $              | 452,146 |   |              | $      | 368,677 |   |
|                                                              |   |           |    |   |              |   |   |   |
| Liabilities and Stockholders' Equity                              |   |           |    |   |              |   |   |   |
| Current liabilities:                                              |   |           |    |   |              |   |   |   |
| Accounts payable                                                  |   | $              | 3,416   |   |              | $      | 1,841 |   |
| Accrued and other liabilities                                     |   |           | 8,759   |   |              |   | 3,826 |   |
| Current portion of capital lease obligations                      |   |           | 405     |   |              |   | - |   |
| Current portion of long-term debt                                 |   |           | 4,000   |   |              |   | - |   |
| 3/4% convertible senior subordinated notes                        |   |           | 346     |   |              |   | 346 |   |
| Total current liabilities                                         |   |           | 16,926  |   |              |   | 6,013 |   |
| Other long-term liabilities                                       |   |           | 10,760  |   |              |   | 10,737 |   |
| Deferred income taxes                                             |   |           | 5,586   |   |              |   | 30 |   |
| Capital lease obligations, net of current portion                 |   |           | 1,190   |   |              |   | - |   |
| Long-term debt, net of current portion                            |   |           | 11,000  |   |              |   | - |   |
| Total liabilities                                                 |   |           | 45,462  |   |              |   | 16,780 |   |
|                                                              |   |           |    |   |              |   |   |   |
| Commitments and contingencies (Note 9)                            |   |           |    |   |              |   |   |   |
|                                                              |   |           |    |   |              |   |   |   |
| Stockholders' equity:                                             |   |           |    |   |              |   |   |   |
| Common stock                                                      |   |           | 12,932  |   |              |   | 10,892 |   |
| Additional paid-in capital                                        |   |           | 213,891 |   |              |   | 160,755 |   |
| Accumulated other comprehensive income                            |   |           | 505     |   |              |   | 743 |   |
| Retained earnings                                                 |   |           | 179,433 |   |              |   | 179,079 |   |
| Total Steel Excel stockholders' equity                            |   |           | 406,761 |   |              |   | 351,469 |   |
| Non-controlling interest                                          |   |           | (77     | )      |              |   | 428 |   |
| Total stockholders' equity                                        |   |           | 406,684 |   |              |   | 351,897 |   |
|                                                              |   |           |    |   |              |   |   |   |
| Total liabilities and stockholders' equity                        |   | $              | 452,146 |   |              | $      | 368,677 |   |

----

|                                                                                                                   |   | Six-month Period Ended: |     |
|------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|----------|
|                                                                                                                   |   | June 30, 2012           |     |   | July 1, 2011 |   |
|                                                                                                                   |   | (in thousands)          |     |
| Cash Flows from Operating Activities:                                                                                  |   |                    |     |   |   |   |
| Net income                                                                                                             |   | $                       | 354      |   |   | $ | 7,097 |   |
| Less: Income from discontinued operations, net of taxes                                                                |   |                    | -        |   |   |   | (6,830 | ) |
| Income from continuing operations, net of taxes                                                                        |   |                    | 354      |   |   |   | 267 |   |
| Adjustments to reconcile income from continuing operations, net of taxes to net cash provided by operating activities: |   |                    |     |   |   |   |   |   |
| Net loss attributable to non-controlling interest                                                                      |   |                    | (580     | ) |   |   | - |   |
| Stock-based compensation expense                                                                                       |   |                    | 436      |   |   |   | 460 |   |
| Depreciation and amortization                                                                                          |   |                    | 5,963    |   |   |   | 1,412 |   |
| Impairment of long-lived assets                                                                                        |   |                    | 1,981    |   |   |   | - |   |
| Deferred income taxes                                                                                                  |   |                    | 275      |   |   |   | 1,365 |   |
| Gain on release of foreign currency translation, net of taxes                                                          |   |                    | -        |   |   |   | (2,542 | ) |
| Changes in operating assets and liabilities, net of assets acquired and liabilities assumed:                           |   |                    |     |   |   |   |   |   |
| Accounts receivable                                                                                                    |   |                    | (12,761  | ) |   |   | - |   |
| Prepaid expenses and other current assets                                                                              |   |                    | (293     | ) |   |   | 1,268 |   |
| Assets held for sale                                                                                                   |   |                    | -        |   |   |   | 6,216 |   |
| Other assets                                                                                                           |   |                    | (166     | ) |   |   | (83 | ) |
| Accounts payable                                                                                                       |   |                    | 506      |   |   |   | (258 | ) |
| Accrueds and other liabilities                                                                                         |   |                    | (1,348   | ) |   |   | (4,144 | ) |
| Net cash (used in) provided by operating activities of continuing operations                                           |   |                    | (5,633   | ) |   |   | 3,961 |   |
| Net cash provided by operating activities of discontinued operations                                                   |   |                    | -        |   |   |   | 6,848 |   |
| Net cash (used in) provided by operating activities                                                                    |   |                    | (5,633   | ) |   |   | 10,809 |   |
|                                                                                                                   |   |                    |     |   |   |   |   |   |
| Cash Flows from Investing Activities:                                                                                  |   |                    |     |   |   |   |   |   |
| Purchases of businesses, net of cash acquired                                                                          |   |                    | (52,492  | ) |   |   | - |   |
| Purchases of property and equipment                                                                                    |   |                    | (4,073   | ) |   |   | - |   |
| Investment by non-controlling interest                                                                                 |   |                    | 75       |   |   |   | - |   |
| Purchases of marketable securities                                                                                     |   |                    | (392,898 | ) |   |   | (478,222 | ) |
| Sales of marketable securities                                                                                         |   |                    | 490,932  |   |   |   | 383,143 |   |
| Maturities of marketable securities                                                                                    |   |                    | 27,500   |   |   |   | 49,571 |   |
| Net cash provided by (used in) investing activities                                                                    |   |                    | 69,044   |   |   |   | (45,508 | ) |
|                                                                                                                   |   |                    |     |   |   |   |   |   |
| Cash Flows from Financing Activities:                                                                                  |   |                    |     |   |   |   |   |   |
| Repayments on capital lease obligations                                                                                |   |                    | (32      | ) |   |   | - |   |
| Repayments on long-term debt                                                                                           |   |                    | (1,000   | ) |   |   | - |   |
| Proceeds from issuance of common stock                                                                                 |   |                    | -        |   |   |   | 29 |   |
| Net cash (used in) provided by financing activities                                                                    |   |                    | (1,032   | ) |   |   | 29 |   |
|                                                                                                                   |   |                    |     |   |   |   |   |   |
| Effect of foreign currency translation on cash and cash equivalents                                                    |   |                    | 3        |   |   |   | 288 |   |
|                                                                                                                   |   |                    |     |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents                                                                   |   |                    | 62,382   |   |   |   | (34,382 | ) |
|                                                                                                                   |   |                    |     |   |   |   |   |   |
| Cash and cash equivalents, beginning of period                                                                         |   |                    | 8,487    |   |   |   | 38,276 |   |
|                                                                                                                   |   |                    |     |   |   |   |   |   |
| Cash and cash equivalents, end of period                                                                               |   | $                       | 70,869   |   |   | $ | 3,894 |   |

----

----

|                          |   | Amount         |   |
|-------------------------------|--------|----------------|--------|
|                          |   | (in thousands) |   |
|                          |   |           |   |
| Property and equipment        |   | $              | 23,842 |   |
| Intangible assets             |   |           | 14,300 |   |
| Accrued expenses              |   |           | (137   | ) |
| Total net identifiable assets |   |           | 38,005 |   |
|                          |   |           |   |   |
| Goodwill                      |   |           | 10,126 |   |
|                          |   |           |   |   |
| Net assets acquired           |   | $              | 48,131 |   |

----

|                                           |   | Amount         |    |
|------------------------------------------------|--------|----------------|---------|
|                                           |   | (in thousands) |    |
|                                           |   |           |    |
| Cash                                           |   | $              | 3,561   |   |
| Accounts receivable                            |   |           | 7,233   |   |
| Prepaid expense and other current assets       |   |           | 782     |   |
| Property and equipment                         |   |           | 29,787  |   |
| Identifiable intangible assets                 |   |           | 27,300  |   |
| Other long-term assets                         |   |           | 714     |   |
| Accounts payable                               |   |           | (1,036  | ) |
| Accrued expenses and other current liabilities |   |           | (6,074  | ) |
| Long-term debt                                 |   |           | (16,000 | ) |
| Capital lease obligations                      |   |           | (1,622  | ) |
| Deferred tax liabilities                       |   |           | (5,510  | ) |
| Total net identifiable assets                  |   |           | 39,135  |   |
|                                           |   |           |    |   |
| Goodwill                                       |   |           | 23,529  |   |
|                                           |   |           |    |   |
| Net assets acquired                            |   | $              | 62,664  |   |

----

|                                        |   | Three-month Period Ended: |   |   | Six-month Period Ended: |   |
|---------------------------------------------|--------|---------------------------|--------|--------|-------------------------|--------|
|                                        |   | June 30, 2012             |   |   | July 1, 2011            |   |   | June 30, 2012 |   |   | July 1, 2011 |   |
|                                        |   | (in thousands)            |   |
|                                        |   |                      |   |   |                    |   |   |   |   |   |   |   |
| Net revenues                                |   | $                         | 36,901 |   |                    | $      | 19,687 |   |   | $ | 62,799 |   |   | $ | 39,498 |   |
| Net income attributable to Steel Excel Inc. |   | $                         | 3,406  |   |                    | $      | 5,425 |   |   | $ | 2,701 |   |   | $ | 4,378 |   |
| Basic net income per share                  |   | $                         | 0.29   |   |                    | $      | 1.81 |   |   | $ | 0.24 |   |   | $ | 0.40 |   |
| Diluted net income per share                |   | $                         | 0.29   |   |                    | $      | 0.50 |   |   | $ | 0.24 |   |   | $ | 0.40 |   |

|                                                 |   | Shares |   |   | WeightedAverageExercisePrice |   |   | WeightedAverageContractualTerm(Years) |   |   | AggregateInstrinsicValue |   |
|------------------------------------------------------|--------|--------|--------|--------|------------------------------|--------|--------|---------------------------------------|--------|--------|--------------------------|--------|
|                                                 |   |   |   |   |                         |   |   |                                  |   |   |                     |   |
| Outstanding at December 31, 2011                     |   |   | 94     |   |                         | $      | 31.89  |                                  |   |   |                     |   |   |   |
| Granted                                              |   |   | -      |   |                         | $      | -      |                                  |   |   |                     |   |   |   |
| Exercised                                            |   |   | -      |   |                         | $      | -      |                                  |   |   |                     |   |   |   |
| Forfeited                                            |   |   | -      |   |                         | $      | -      |                                  |   |   |                     |   |   |   |
| Expired                                              |   |   | (29    | )      |                         | $      | 37.80  |                                  |   |   |                     |   |   |   |
| Outstanding at June 30, 2012                         |   |   | 65     |   |                         | $      | 30.54  |                                  |   |   | 7.76                     |   |   | $ | 4,712.50 |   |
|                                                 |   |   |   |   |                         |   |   |                                  |   |   |                     |   |   |   |   |   |
| Options vested and expected to vest at June 30, 2012 |   |   | 65     |   |                         | $      | 30.54  |                                  |   |   | 7.76                     |   |   | $ | 4,712.50 |   |
|                                                 |   |   |   |   |                         |   |   |                                  |   |   |                     |   |   |   |   |   |
| Options exercisable at June 30, 2012                 |   |   | 40     |   |                         | $      | 31.84  |                                  |   |   | 6.97                     |   |   | $ | - |   |

----

|                                                    |   | Shares |   |   | WeightedAverageGrant-DateFair Value |   |
|---------------------------------------------------------|--------|--------|--------|--------|-------------------------------------|--------|
|                                                    |   |   |   |   |                                |   |
| Non-vested restricted stock units at December 31, 20111 |   |   | 17     |   |                                | $      | 0.010 |   |
| Awarded                                                 |   |   | 15     |   |                                | $      | 0.001 |   |
| Vested                                                  |   |   | (13    | )      |                                | $      | 0.010 |   |
| Forfeited                                               |   |   | -      |   |                                | $      | - |   |
| Non-vested restricted stock units at June 30, 20121     |   |   | 19     |   |                                | $      | 0.010 |   |

|   | (1) | Non-vested restricted stock units at each period included shares to certain non-employee directors in which vesting will occur immediately if the relationship between the Company and the non-employee director ceases for any reason. These non-vested shares were recognized and fully expensed as stock-based compensation in the Condensed Statements of Income at the date of grant or the date of modification. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                            |   | Three-month Period Ended: |   |   | Six-month Period Ended: |   |
|-------------------------------------------------|--------|---------------------------|--------|--------|-------------------------|--------|
|                                            |   | June 30, 2012             |   |   | July 1, 2011            |   |   | June 30, 2012 |   |   | July 1, 2011 |   |
|                                            |   | (in thousands)            |   |   | (in thousands)          |   |
| Stock-based compensation expense by caption:    |   |                      |   |   |                    |   |   |   |   |   |   |   |
| Selling, marketing and administrative           |   | $                         | 411    |   |                    | $      | 452 |   |   | $ | 436 |   |   | $ | 460 |   |
|                                            |   |                      |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Stock-based compensation expense by award type: |   |                      |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Stock options                                   |   | $                         | 26     |   |                    | $      | 12 |   |   | $ | 42 |   |   | $ | 16 |   |
| Retricted stock                                 |   |                      | 385    |   |                    |   | 440 |   |   |   | 394 |   |   |   | 444 |   |
| Total                                           |   | $                         | 411    |   |                    | $      | 452 |   |   | $ | 436 |   |   | $ | 460 |   |

----

|                                            |   | June 30, 2012 |   |   | July 1, 2011 |   |
|-------------------------------------------------|--------|---------------|--------|--------|--------------|--------|
|                                            |   |          |   |   |         |   |
| Expected life (in years)                        |   |          | 1      |   |         |   | 4 |   |
| Risk-free interest rates                        |   |          | 0.2    | %      |         |   | 1.5 | % |
| Expected volatility                             |   |          | 58     | %      |         |   | 44 | % |
| Dividend yield                                  |   |          | -      |   |         |   | - |   |
| Weighted average fair value of restricted stock |   | $             | 27.00  |   |         | $      | 11.09 |   |

|                                        |   | Cost           |    |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |   |   | EstimatedFair Value |   |
|---------------------------------------------|--------|----------------|---------|--------|----------------------|--------|--------|-----------------------|--------|--------|---------------------|--------|
|                                        |   | (in thousands) |    |
| Available-for-sale securities:              |   |           |    |   |                 |   |   |                  |   |   |                |   |
| Short-term deposits                         |   | $              | 44,592  |   |                 | $      | -      |                  |   | $      | -                   |   |   | $ | 44,592 |   |
| Mutual funds                                |   |           | 10,000  |   |                 |   | 135    |                  |   |   | -                   |   |   |   | 10,135 |   |
| United States government securities         |   |           | 117,794 |   |                 |   | 253    |                  |   |   | (7                  | )      |   |   | 118,040 |   |
| Government agencies                         |   |           | 2,501   |   |                 |   | 3      |                  |   |   | -                   |   |   |   | 2,504 |   |
| Corporate securities                        |   |           | 4,720   |   |                 |   | 43     |                  |   |   | (208                | )      |   |   | 4,555 |   |
| Commercial paper                            |   |           | 35,805  |   |                 |   | 21     |                  |   |   | -                   |   |   |   | 35,826 |   |
| Corporate obligations                       |   |           | 33,842  |   |                 |   | 9      |                  |   |   | (12                 | )      |   |   | 33,839 |   |
| Total available-for-sale securities         |   |           | 249,254 |   |                 |   | 464    |                  |   |   | (227                | )      |   |   | 249,491 |   |
| Amounts classified as cash equivalents      |   |           | (61,284 | )      |                 |   | (1     | )                     |   |   | 1                   |   |   |   | (61,284 | ) |
| Amounts classified as marketable securities |   | $              | 187,970 |   |                 | $      | 463    |                  |   | $      | (226                | )      |   | $ | 188,207 |   |

----

|                                        |   | Cost           |    |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |   |   | EstimatedFair Value |   |
|---------------------------------------------|--------|----------------|---------|--------|----------------------|--------|--------|-----------------------|--------|--------|---------------------|--------|
|                                        |   | (in thousands) |    |
| Available-for-sale securities:              |   |           |    |   |                 |   |   |                  |   |   |                |   |
| Short-term deposits                         |   | $              | 3,029   |   |                 | $      | -      |                  |   | $      | -                   |   |   | $ | 3,029 |   |
| United States government securities         |   |           | 309,189 |   |                 |   | 593    |                  |   |   | (3                  | )      |   |   | 309,779 |   |
| Government agencies                         |   |           | 3,505   |   |                 |   | 21     |                  |   |   | -                   |   |   |   | 3,526 |   |
| Corporate obligations                       |   |           | 1,513   |   |                 |   | 8      |                  |   |   | -                   |   |   |   | 1,521 |   |
| Total available-for-sale securities         |   |           | 317,236 |   |                 |   | 622    |                  |   |   | (3                  | )      |   |   | 317,855 |   |
| Amounts classified as cash equivalents      |   |           | (2,914  | )      |                 |   | -      |                  |   |   | -                   |   |   |   | (2,914 | ) |
| Amounts classified as marketable securities |   | $              | 314,322 |   |                 | $      | 622    |                  |   | $      | (3                  | )      |   | $ | 314,941 |   |

|                       |   | Less than 12 Months |   |   | 12 Months or Greater  |   |   | Total     |   |
|----------------------------|--------|---------------------|--------|--------|-----------------------|--------|--------|-----------|--------|
|                       |   | FairValue           |   |   | GrossUnrealizedLosses |   |   | FairValue |   |   | GrossUnrealizedLosses |   |   | FairValue |   |   | GrossUnrealizedLosses |   |
|                       |   | (in thousands)      |   |
|                       |   |                |   |   |                  |   |   |      |   |   |   |   |   |   |   |   |   |   |
| U.S. government securities |   | $                   | 64,129 |   |                  | $      | (7     | )         |   | $ | - |   |   | $ | - |   |   | $ | 64,129 |   |   | $ | (7 | ) |
| Corporate securities       |   |                | 3,631  |   |                  |   | (208   | )         |   |   | - |   |   |   | - |   |   |   | 3,631 |   |   |   | (208 | ) |
| Corporate obligations      |   |                | 18,461 |   |                  |   | (13    | )         |   |   | - |   |   |   | - |   |   |   | 18,461 |   |   |   | (13 | ) |
| Total                      |   | $                   | 86,221 |   |                  | $      | (228   | )         |   | $ | - |   |   | $ | - |   |   | $ | 86,221 |   |   | $ | (228 | ) |

|                       |   | Less than 12 Months |   |   | 12 Months or Greater  |   |   | Total     |   |
|----------------------------|--------|---------------------|--------|--------|-----------------------|--------|--------|-----------|--------|
|                       |   | FairValue           |   |   | GrossUnrealizedLosses |   |   | FairValue |   |   | GrossUnrealizedLosses |   |   | FairValue |   |   | GrossUnrealizedLosses |   |
|                       |   | (in thousands)      |   |
|                       |   |                |   |   |                  |   |   |      |   |   |   |   |   |   |   |   |   |   |
| U.S. government securities |   | $                   | 15,186 |   |                  | $      | (3     | )         |   | $ | - |   |   | $ | - |   |   | $ | 15,186 |   |   | $ | (3 | ) |

----

|                                      |   | June 30, 2012  |    |   | December 31, 2011   |   |
|-------------------------------------------|--------|----------------|---------|--------|---------------------|--------|
|                                      |   | Cost           |    |   | EstimatedFair Value |   |   | Cost |   |   | EstimatedFair Value |   |
|                                      |   | (in thousands) |    |
|                                      |   |           |    |   |                |   |   |   |   |   |   |   |
| Mature in one year or less                |   | $              | 229,591 |   |                | $      | 229,664 |   |   | $ | 256,764 |   |   | $ | 257,050 |   |
| Mature after one year through three years |   |           | 19,645  |   |                |   | 19,809 |   |   |   | 60,473 |   |   |   | 60,805 |   |
| Total                                     |   | $              | 249,236 |   |                | $      | 249,473 |   |   | $ | 317,237 |   |   | $ | 317,855 |   |

----

|                                        |   | Total          |    |   | Quoted Pricesin ActiveMarkets forIdenticalAssets(Level 1) |   |    | SignificantOtherObservableInputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |
|---------------------------------------------|--------|----------------|---------|--------|-----------------------------------------------------------|--------|---------|-------------------------------------------|--------|--------|----------------------------------------|--------|
|                                        |   | (in thousands) |    |
|                                        |   |           |    |   |                                                      |   |    |                                      |   |   |                                   |   |
| Cash, including short-term deposits1        |   | $              | 53,888  |   |                                                      | $      | 53,888  |                                      |   | $      | -                                      |   |   | $ | - |   |
| Mutual funds2                               |   |           | 10,135  |   |                                                      |   | 10,135  |                                      |   |   | -                                      |   |   |   | - |   |
| United States government securities2        |   |           | 118,040 |   |                                                      |   | 118,040 |                                      |   |   | -                                      |   |   |   | - |   |
| Government agencies2                        |   |           | 2,504   |   |                                                      |   | 2,504   |                                      |   |   | -                                      |   |   |   | - |   |
| Corporate securities2                       |   |           | 4,555   |   |                                                      |   | 4,555   |                                      |   |   | -                                      |   |   |   | - |   |
| Commercial paper3                           |   |           | 35,826  |   |                                                      |   | -       |                                      |   |   | 35,826                                 |   |   |   | - |   |
| Corporate oligations4                       |   |           | 33,838  |   |                                                      |   | -       |                                      |   |   | 33,838                                 |   |   |   | - |   |
| Non-controlling interests in certain funds5 |   |           | 1,117   |   |                                                      |   | -       |                                      |   |   |                                   |   |   |   | 1,117 |   |
|                                        |   | $              | 259,903 |   |                                                      | $      | 189,122 |                                      |   | $      | 69,664                                 |   |   | $ | 1,117 |   |

|   | (1) | At June 30, 2012, the Company recorded $54.1 million and $0.1 million within “Cash and cash equivalents” and “Marketable securities,” respectively. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Recorded within “Marketable securities.” |
|--------|-----|------------------------------------------------------|

|   | (3) | At June 30, 2012, the Company recorded $14.8 million and $21.0 million within “Cash and cash equivalents” and “Marketable securities,” respectively. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | At June 30, 2012, the Company recorded $2.0 million and $31.8 million within “Cash and cash equivalents” and “Marketable securities,” respectively. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | Recorded within “Other long-term assets.” |
|--------|-----|-------------------------------------------------------|

|                                        |   | Total          |    |   | Quoted Pricesin ActiveMarkets forIdenticalAssets(Level 1) |   |    | SignificantOtherObservableInputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |
|---------------------------------------------|--------|----------------|---------|--------|-----------------------------------------------------------|--------|---------|-------------------------------------------|--------|--------|----------------------------------------|--------|
|                                        |   | (in thousands) |    |
|                                        |   |           |    |   |                                                      |   |    |                                      |   |   |                                   |   |
| Cash, including short-term deposits1        |   | $              | 8,601   |   |                                                      | $      | 8,601   |                                      |   | $      | -                                      |   |   | $ | - |   |
| United States government securities2        |   |           | 309,780 |   |                                                      |   | 309,780 |                                      |   |   | -                                      |   |   |   | - |   |
| Government agencies2                        |   |           | 3,526   |   |                                                      |   | 3,526   |                                      |   |   | -                                      |   |   |   | - |   |
| Corporate oligations2                       |   |           | 1,521   |   |                                                      |   | -       |                                      |   |   | 1,521                                  |   |   |   | - |   |
| Non-controlling interests in certain funds3 |   |           | 1,117   |   |                                                      |   | -       |                                      |   |   | -                                      |   |   |   | 1,117 |   |
| Total                                       |   | $              | 324,545 |   |                                                      | $      | 321,907 |                                      |   | $      | 1,521                                  |   |   | $ | 1,117 |   |

|   | (1) | At December 31 2011, the Company recorded $8.5 million and $0.1 million within “Cash and cash equivalents” and “Marketable securities,” respectively. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Recorded within “Marketable securities.” |
|--------|-----|------------------------------------------------------|

|   | (3) | Recorded within “Other long-term assets.” |
|--------|-----|-------------------------------------------------------|

----

|                        |   | June 30, 2012  |   |   | December 31, 2011 |   |
|-----------------------------|--------|----------------|--------|--------|-------------------|--------|
|                        |   | (in thousands) |   |
|                        |   |           |   |   |              |   |
| Rigs and workover equipment |   | $              | 41,770 |   |              | $      | 11,750 |   |
| Other equipment             |   |           | 22,561 |   |              |   | 3,205 |   |
| Land and improvements       |   |           | 6,977  |   |              |   | 5,677 |   |
| Buildings                   |   |           | 4,930  |   |              |   | - |   |
| Vehicles                    |   |           | 1,412  |   |              |   | 648 |   |
| Furniture and fixtures      |   |           | 229    |   |              |   | 100 |   |
| Assets in progress          |   |           | 1,067  |   |              |   | - |   |
|                        |   |           | 78,946 |   |              |   | 21,380 |   |
| Accumulated depreciation    |   |           | (3,073 | )      |              |   | (320 | ) |
| Property and equipment, net |   | $              | 75,873 |   |              | $      | 21,060 |   |

----

|                   |   | Cost           |   |   | AccumulatedAmortization |   |   | Net    |   | AmortizationMethod |   | EstimatedUseful Life (in years) |          |
|------------------------|--------|----------------|--------|--------|-------------------------|--------|--------|--------|--------|--------------------|--------|---------------------------------|---------------|
|                   |   | (in thousands) |   |   |                    |   |   |
| Sports-Related:        |   |           |   |   |                    |   |   |   |   |               |   |                            |          |
| Customer relationships |   | $              | 235    |   |                    | $      | (43    | )      |   |               | 192    |                            | Straight-line |   |   | 5 |   |
|                   |   |           |   |   |                    |   |   |   |   |               |   |                            |          |   |   |   |   |
| Oilfield Servicing:    |   |           |   |   |                    |   |   |   |   |               |   |                            |          |   |   |   |   |
| Customer relationships |   |           | 43,100 |   |                    |   | (2,169 | )      |   |               | 40,931 |                            | Accelerated   |   |   | 10 |   |
| Trade names            |   |           | 4,100  |   |                    |   | (210   | )      |   |               | 3,890  |                            | Accelerated   |   |   | 5 |   |
|                   |   |           | 47,200 |   |                    |   | (2,379 | )      |   |               | 44,821 |                            |          |   |   |   |   |
| Intangible assets, net |   | $              | 47,435 |   |                    | $      | (2,422 | )      |   | $                  | 45,013 |                            |          |   |   |   |   |

|                   |   | Cost           |   |   | AccumulatedAmortization |   |   | Net    |   | AmortizationMethod |   | EstimatedUseful Life (in years) |          |
|------------------------|--------|----------------|--------|--------|-------------------------|--------|--------|--------|--------|--------------------|--------|---------------------------------|---------------|
|                   |   | (in thousands) |   |   |                    |   |   |
| Sports-Related:        |   |           |   |   |                    |   |   |   |   |               |   |                            |          |
| Customer relationships |   | $              | 235    |   |                    | $      | (20    | )      |   |               | 215    |                            | Straight-line |   |   | 5 |   |
|                   |   |           |   |   |                    |   |   |   |   |               |   |                            |          |   |   |   |   |
| Oilfield Servicing:    |   |           |   |   |                    |   |   |   |   |               |   |                            |          |   |   |   |   |
| Customer relationships |   |           | 4,700  |   |                    |   | (29    | )      |   |               | 4,671  |                            | Accelerated   |   |   | 10 |   |
| Trade names            |   |           | 900    |   |                    |   | -      |   |   |               | 900    |                            | Accelerated   |   |   | 5 |   |
|                   |   |           | 5,600  |   |                    |   | (29    | )      |   |               | 5,571  |                            |          |   |   |   |   |
| Intangible assets, net |   | $              | 5,835  |   |                    | $      | (49    | )      |   | $                  | 5,786  |                            |          |   |   |   |   |

|                            |   | Sports-Related |   |   | OilfieldServices |   |
|---------------------------------|--------|----------------|--------|--------|------------------|--------|
|                            |   | (in thousands) |   |
| For the year ended December 31: |   |           |   |   |             |   |
| 2012 (remaining six months)     |   | $              | 24     |   |             | $      | 5,102 |   |
| 2013                            |   |           | 47     |   |             |   | 8,534 |   |
| 2014                            |   |           | 47     |   |             |   | 6,565 |   |
| 2015                            |   |           | 47     |   |             |   | 5,267 |   |
| 2016                            |   |           | 27     |   |             |   | 4,216 |   |
| Thereafter                      |   |           | -      |   |             |   | 15,137 |   |
|                            |   | $              | 192    |   |             | $      | 44,821 |   |

----

|                                |   | Sports-Related |   |   | Oilfield Services |   |   | Total  |   |
|-------------------------------------|--------|----------------|--------|--------|-------------------|--------|--------|--------|--------|
|                                |   | (in thousands) |   |
|                                |   |           |   |   |              |   |   |   |   |
| Balance, December 31, 2011          |   | $              | 1,989  |   |              | $      | 6,255  |   |   | $ | 8,244 |   |
| Acquired goodwill                   |   |           | -      |   |              |   | 33,655 |   |   |   | 33,655 |   |
| Accumulated impairment (see Note 3) |   |           | (1,796 | )      |              |   | -      |   |   |   | (1,796 | ) |
| Balance, June 30, 2012              |   | $              | 193    |   |              | $      | 39,910 |   |   | $ | 40,103 |   |

|                                   |   | June 30, 2012  |   |   | December 31, 2011 |   |
|----------------------------------------|--------|----------------|--------|--------|-------------------|--------|
|                                   |   | (in thousands) |   |
|                                   |   |           |   |   |              |   |
| Tax-related                            |   | $              | 1,263  |   |              | $      | 56 |   |
| Accrued compensation and related taxes |   |           | 5,163  |   |              |   | 1,593 |   |
| Deferred revenue                       |   |           | 744    |   |              |   | 278 |   |
| Professional services                  |   |           | 17     |   |              |   | 485 |   |
| Accrued workers compensation           |   |           | -      |   |              |   | 1,233 |   |
| Other                                  |   |           | 1,572  |   |              |   | 181 |   |
| Total                                  |   | $              | 8,759  |   |              | $      | 3,826 |   |

|                    |   | June 30, 2012  |   |   | December 31, 2011 |   |
|-------------------------|--------|----------------|--------|--------|-------------------|--------|
|                    |   | (in thousands) |   |
|                    |   |           |   |   |              |   |
| Tax-related             |   | $              | 7,340  |   |              | $      | 10,737 |   |
| Phantom stock liability |   |           | 3,420  |   |              |   | - |   |
|                    |   | $              | 10,760 |   |              | $      | 10,737 |   |

----

|                            |   | Amount         |   |
|---------------------------------|--------|----------------|--------|
|                            |   | (in thousands) |   |
|                            |   |           |   |
| For the year ended December 31: |   |           |   |
| 2012 (remaining six months)     |   | $              | 1,000  |   |
| 2013                            |   |           | 4,000  |   |
| 2014                            |   |           | 4,000  |   |
| 2015                            |   |           | 6,000  |   |
|                            |   | $              | 15,000 |   |

|                            |   | Amount         |   |
|---------------------------------|--------|----------------|--------|
|                            |   | (in thousands) |   |
| For the year ended December 31: |   |           |   |
| 2012 (remaining six months)     |   | $              | 357    |   |
| 2013                            |   |           | 467    |   |
| 2014                            |   |           | 431    |   |
| 2015                            |   |           | 431    |   |
| 2016                            |   |           | 425    |   |
|                            |   | $              | 2,111  |   |

| For the year ended December 31:                   |   |   |   |
|---------------------------------------------------|--------|--------|--------|
| 2012 (remaining six months)                       |   | $      | 258    |   |
| 2013                                              |   |   | 489    |   |
| 2014                                              |   |   | 458    |   |
| 2015                                              |   |   | 458    |   |
| 2016                                              |   |   | 51     |   |
| Total minimum lease payments                      |   |   | 1,714  |   |
| Less amount representing interest                 |   |   | (119   | ) |
|                                              |   |   |   |   |
| Present value of net minimum lease payments       |   |   | 1,595  |   |
| Less current portion                              |   |   | (405   | ) |
|                                              |   |   |   |   |
| Capital lease obligations, net of current portion |   | $      | 1,190  |   |

----

|                                      |   | Three-Month Period Ended: |   |   | Six-Month Period Ended: |   |
|-------------------------------------------|--------|---------------------------|--------|--------|-------------------------|--------|
|                                      |   | June 30, 2012             |   |   | July 1, 2011            |   |   | June 30, 2012 |   |   | July 1, 2011 |   |
|                                      |   | (in thousands)            |   |   | (in thousands)          |   |
|                                      |   |                      |   |   |                    |   |   |   |   |   |   |   |
|  Interest income, net                |   | $                         | 192    |   |                    | $      | 2,168 |   |   | $ | 568 |   |   | $ | 3,558 |   |
|  Realized currency translation gains |   |                      | 57     |   |                    |   | 252 |   |   |   | 106 |   |   |   | 4,098 |   |
|  Write-off of loan to The Show       |   |                      | -      |   |                    |   | - |   |   |   | (500 | ) |   |   | - |   |
|  Other                               |   |                      | (72    | )      |                    |   | 375 |   |   |   | (226 | ) |   |   | 471 |   |
|                                      |   | $                         | 177    |   |                    | $      | 2,795 |   |   | $ | (52 | ) |   | $ | 8,127 |   |

----

|                          |   | Sports-        |   |   | Oilfield |   |    | General   |   |   |         |   |
|-------------------------------|--------|----------------|--------|--------|----------|--------|---------|-----------|--------|--------|--------------|--------|
|                          |   | Related        |   |   | Services |   |    | Corporate |   |   | Consolidated |   |
|                          |   | (in thousands) |   |
|                          |   |           |   |   |     |   |    |      |   |   |         |   |
| Net revenues                  |   | $              | 1,596  |   |     | $      | 37,751  |      |   | $      | -            |   |   | $ | 39,347 |   |
|                          |   |           |   |   |     |   |    |      |   |   |         |   |   |   |   |   |
| Income (loss) from operations |   | $              | (3,385 | )      |     | $      | 9,039   |      |   | $      | (5,035       | )      |   | $ | 619 |   |
|                          |   |           |   |   |     |   |    |      |   |   |         |   |   |   |   |   |
| Total assets                  |   | $              | 6,510  |   |     | $      | 182,005 |      |   | $      | 263,631      |   |   | $ | 452,146 |   |
|                          |   |           |   |   |     |   |    |      |   |   |         |   |   |   |   |   |
| Accounts receivable           |   | $              | 189    |   |     | $      | 24,465  |      |   | $      | -            |   |   | $ | 24,654 |   |
|                          |   |           |   |   |     |   |    |      |   |   |         |   |   |   |   |   |
| Property and equipment, net   |   | $              | 5,885  |   |     | $      | 69,988  |      |   | $      | -            |   |   | $ | 75,873 |   |

----

|                                                   |   | Three-Month Period Ended:                |   |   | Six-Month Period Ended: |   |
|--------------------------------------------------------|--------|------------------------------------------|--------|--------|-------------------------|--------|
|                                                   |   | June 30, 2012                            |   |   | July 1, 2011            |   |   | June 30, 2012 |   |   | July 1, 2011 |   |
|                                                   |   | (in thousands), except per share amounts |   |
| Numerators (basic and diluted)                         |   |                                     |   |   |                    |   |   |   |   |   |   |   |
| Income (loss) from continuing operations, net of taxes |   | $                                        | 2,242  |   |                    | $      | (1,550 | ) |   | $ | (226 | ) |   | $ | 267 |   |
| Income from discontinued operations, net of taxes      |   | $                                        | -      |   |                    | $      | 6,830 |   |   | $ | - |   |   | $ | 6,830 |   |
| Net income attributable to Steel Excel Inc.            |   | $                                        | 2,242  |   |                    | $      | 5,280 |   |   | $ | 354 |   |   | $ | 7,097 |   |
|                                                   |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Denominators                                           |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Basic weighted-average shares outstanding              |   |                                     | 11,588 |   |                    |   | 10,881 |   |   |   | 11,240 |   |   |   | 10,881 |   |
| Effect of dilutive securities:                         |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Stock-based awards                                     |   |                                     | 17     |   |                    |   | 14 |   |   |   | 17 |   |   |   | 10 |   |
| Diluted weighted-average shares outstanding            |   |                                     | 11,605 |   |                    |   | 10,895 |   |   |   | 11,257 |   |   |   | 10,891 |   |
|                                                   |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Net (loss) income per share:                           |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                  |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) from continuing operations, net of taxes |   | $                                        | 0.19   |   |                    | $      | (0.14 | ) |   | $ | (0.02 | ) |   | $ | 0.02 |   |
| Income from discontinued operations, net of taxes      |   | $                                        | -      |   |                    | $      | 0.63 |   |   | $ | - |   |   | $ | 0.63 |   |
| Net income attributable to Steel Excel Inc.            |   | $                                        | 0.19   |   |                    | $      | 0.49 |   |   | $ | 0.03 |   |   | $ | 0.65 |   |
| Diluted                                                |   |                                     |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) from continuing operations, net of taxes |   | $                                        | 0.19   |   |                    | $      | (0.14 | ) |   | $ | (0.02 | ) |   | $ | 0.02 |   |
| Income from discontinued operations, net of taxes      |   | $                                        | -      |   |                    | $      | 0.63 |   |   | $ | - |   |   | $ | 0.63 |   |
| Net income attributable to Steel Excel Inc.            |   | $                                        | 0.19   |   |                    | $      | 0.48 |   |   | $ | 0.03 |   |   | $ | 0.65 |   |

|                                       |   | Three-Month Period Ended:                |   |   | Six-Month Period Ended: |   |
|--------------------------------------------|--------|------------------------------------------|--------|--------|-------------------------|--------|
|                                       |   | June 30, 2012                            |   |   | July 1, 2011            |   |   | June 30, 2012 |   |   | July 1, 2011 |   |
|                                       |   | (in thousands), except per share amounts |   |
|                                       |   |                                     |   |   |                    |   |   |   |   |   |   |   |
| Outstanding stock options                  |   |                                     | 59     |   |                    |   | - |   |   |   | 59 |   |   |   | - |   |
| Outstanding restricted stock               |   |                                     | 3      |   |                    |   | - |   |   |   | 3 |   |   |   | - |   |
| 3/4% Convertible senior subordinated notes |   |                                     | 3      |   |                    |   | 3 |   |   |   | 3 |   |   |   | 3 |   |

|                                                                |   | Six-Month Period Ended: |           |
|---------------------------------------------------------------------|--------|------------------------------|----------------|
|                                                                |   |                         | June 30, 2012  |   |   |   | July 1, 2011 |   |
|                                                                |   |                         | (in thousands) |   |
| Acquisition of SWH, Inc. through issuance of common stock           |   | $                            | 54,742         |   |   | $ | - |   |
| Net unrealized gains on available-for-sale securities, net of taxes |   | $                            | 382            |   |   | $ | 76 |   |

----

----

|                                    |   | Sports-Related |   |   | OilfieldServices |   |   | GeneralCorporate |   |   | Consolidated |   |
|-----------------------------------------|--------|----------------|--------|--------|------------------|--------|--------|------------------|--------|--------|--------------|--------|
|                                    |   |           |   |   |             |   |   |             |   |   |         |   |
| Three-month period:                     |   |           |   |   |             |   |   |             |   |   |         |   |
| Net revenues                            |   | $              | 1,079  |   |             | $      | 23,461 |             |   | $      | -            |   |   | $ | 24,540 |   |
| Gross margin                            |   | $              | 790    |   |             | $      | 8,748  |             |   | $      | -            |   |   | $ | 9,538 |   |
| Gross margin as percent of net revenues |   |           | 73.2   | %      |             |   | 37.3   | %                |   |   | n/a          |   |   |   | 38.9 | % |
|                                    |   |           |   |   |             |   |   |             |   |   |         |   |   |   |   |   |
| Six-month period:                       |   |           |   |   |             |   |   |             |   |   |         |   |   |   |   |   |
| Net revenues                            |   | $              | 1,596  |   |             | $      | 37,751 |             |   | $      | -            |   |   | $ | 39,347 |   |
| Gross margin                            |   | $              | 971    |   |             | $      | 14,311 |             |   | $      | -            |   |   | $ | 15,282 |   |
| Gross margin as percent of net revenues |   |           | 60.8   | %      |             |   | 37.9   | %                |   |   | n/a          |   |   |   | 38.8 | % |

|                                |   | Three-month Period Ended |   |   | Six-month Period Ended |   |
|-------------------------------------|--------|--------------------------|--------|--------|------------------------|--------|
|                                |   | June 30, 2012            |   |   | July 1, 2011           |   |   | June 30, 2012 |   |   | July 1, 2011 |   |
|                                |   |                     |   |   |                   |   |   |   |   |   |   |   |
| Selling, general and administrative |   | $                        | 6,819  |   |                   | $      | 2,984 |   |   | $ | 14,663 |   |   | $ | 5,366 |   |

----

|                                     |   | Three-month Period Ended |   |   | Six-month Period Ended |   |
|------------------------------------------|--------|--------------------------|--------|--------|------------------------|--------|
|                                     |   | June 30, 2012            |   |   | July 1, 2011           |   |   | June 30, 2012 |   |   | July 1, 2011 |   |
|                                     |   |                     |   |   |                   |   |   |   |   |   |   |   |
| Interest and other income (expense), net |   | $                        | 177    |   |                   | $      | 2,795 |   |   | $ | (52 | ) |   | $ | 8,127 |   |

----

----

----

|                        |   | Payments Due by Period |   |
|-----------------------------|--------|------------------------|--------|
|                        |   | Total                  |   |   | Less Than1 Year |   |   | 1-3 Years |   |   | 4-5 Years |   |   | After5 Years |   |
|                        |   | (in thousands)         |   |
|                        |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-term debt              |   | $                      | 15,000 |   |   | $ | 1,000 |   |   | $ | 14,000 |   |   | $ | - |   |   | $ | - |   |
| Capital lease obligations   |   |                   | 1,714  |   |   |   | 258 |   |   |   | 1,405 |   |   |   | 51 |   |   |   | - |   |
| Operating lease obligations |   |                   | 2,111  |   |   |   | 357 |   |   |   | 1,329 |   |   |   | 425 |   |   |   | - |   |
| Total                       |   | $                      | 18,825 |   |   | $ | 1,615 |   |   | $ | 16,734 |   |   | $ | 476 |   |   | $ | - |   |

----

----

| 2.1† | Share Acquisition Agreement, dated as of April 30, 2012, by and among Steel Excel Inc., BNS Holding, Inc., SWH, Inc. and SPH Group Holdings LLC.                                  |
|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1*       | Unofficial Composite Certificate of Incorporation of Steel Excel Inc. as currently in effect.                                                                                     |
| 4.1*       | Specimen Common Stock Certificate.                                                                                                                                                |
| 4.2† | First Amendment to the Tax Benefits Preservation Plan, dated as of May 1, 2012, by and between Steel Excel Inc. and Registrar and Transfer Company, as Rights Agent.              |
| 31.1*      | Certification of the Principal Executive Officer, John J. Quicke, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                      |
| 31.2*      | Certification of the Principal Financial Officer, Mark. A. Zorko, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                      |
| 32.1*      | Certifications of the Principal Executive Officer, John J. Quicke, and the Principal Financial Officer, Mark A. Zorko, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 101.INS**  | XBRL Instance Document.                                                                                                                                                           |
| 101.SCH**  | XBRL Taxonomy Extension Schema Document.                                                                                                                                          |
| 101.CAL**  | XBRL Taxonomy Extension Calculation Linkbase Document.                                                                                                                            |
| 101.DEF**  | XBRL Taxonomy Extension Definition Linkbase Document.                                                                                                                             |
| 101.LAB**  | XBRL Taxonomy Extension Label Linkbase Document.                                                                                                                                  |
| 101.PRE**  | XBRL Taxonomy Extension Presentation Linkbase Document.                                                                                                                           |

| * Filed herewith.                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** Furnished with this Form 10-Q. In accordance with Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for the purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under these sections. |
| † Incorporated by reference to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on May 2, 2012.                                                                                                                                                                                                                                                                                                                          |

----

| Steel Excel Inc.                                                                         |                                                              |
|------------------------------------------------------------------------------------------|-------------------------------------------------------------------|
|                                                                                     |                                                              |   |
|                                                                                     | /s/ John J. Quicke                                                | Date: August 9, 2012 |
| John J. QuickeInterim President and Chief Executive Officer(principal executive officer) |
|                                                                                     |                                                              |   |
|                                                                                     | /s/ Mark A. Zorko                                                 |   |
|                                                                                     | Mark A. ZorkoChief Financial Officer(principal financial officer) | Date: August 9, 2012 |