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 September 30, 2013



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 (State of Incorporation)		22-2365834 (IRS Employer I.D. No.)

1063 McGaw, Suite 250

Irvine, CA 92614

(Address of Principal Executive Offices) (Zip Code)

(949) 748-4800

__________________________________________________

(Registrant’s Telephone Number, Including Area Code)

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

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

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



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

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

As of ~~May~~October 828, 2013, the registrant had 3031,~~555~~113,~~742~~401 shares of Common Stock outstanding, par value $0.01 per share.

SPECTRUM GROUP INTERNATIONAL, INC.

FORM 10-Q

For the Quarter Ended ~~March~~September 3130, 2013

Table of Contents

			Page
PART I	Financial Information
	Item 1.	Condensed Consolidated Financial Statements (UNAUDITED)
		Condensed Consolidated Balance Sheets as of March 31, 2013 and June 30, 2012	3
		Condensed Consolidated Balance Sheets as of September 30, 2013 and June 30, 2013	3
		Condensed Consolidated Statements of Operations for the Three and Nine Months Ended March 31, 2013 and 2012	4
		Condensed Consolidated Statements of Operations for the Three Months Ended September 30, 2013 and 2012	4
		Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended March 31, 2013 and 2012	5
		Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended September 30, 2013 and 2012	5
		Condensed Consolidated Statements of Stockholders' Equity for the Nine Months Ended March 31,	6
		Condensed Consolidated Statements of Stockholders' Equity for the Three Months Ended September 30, 2013	5
		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2013 and 2012	7
		Condensed Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2013 and 2012	6
		Notes to Condensed Consolidated Financial Statements	87
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3135
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4143
	Item 4.	Controls and Procedures	4244
PART II	Other Information
	Item 1.	Legal Proceedings	4244
	Item 1A.	Risk Factors	4244
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4244
	Item 3.	Defaults Upon Senior Securities	4245
	Item 4.	Submission of Matters to a Vote of Security Holders	4345
	Item 5.	Other Information	4345
	Item 6.	Exhibits	4345
Signatures			4345
	Exhibit 31.1	Certification of Chief Executive Officer Under Section 302 of the Sarbanes-Oxley Act of 2002
	Exhibit 31.2	Certification of Chief Financial Officer Under Section 302 of the Sarbanes-Oxley Act of 2002
	Exhibit 32.1	Chief Executive Officer Certification Under Section 906 of the Sarbanes-Oxley Act of 2002
	Exhibit 32.2	Chief Financial Officer Certification Under Section 906 of the Sarbanes-Oxley Act of 2002
	Exhibit 101.INS	XBRL Instance Document
	Exhibit 101.SCH	XBRL Taxonomy Extension Schema Document
	Exhibit 101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
	Exhibit 101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
	Exhibit 101.LAB	XBRL Taxonomy Extension Definition Label Linkbase Document
	Exhibit 101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

Table of Contents

PART I—FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SPECTRUM GROUP INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(unaudited)

	March 31, 2013			June 30, 2012 (1)
	September 30, 2013			June 30, 2013
ASSETS
Current assets:
Cash and cash equivalents	$	2843,~~083~~529		$	2523,~~305~~643
Receivables and secured loans, net — trading operations	8663,~~009~~345			~~127~~109,~~995~~696
Accounts receivable and consignor advances, net — collectibles operations	1416,~~287~~468			2012,~~428~~347
Inventory, net	~~133~~195,~~147~~733			~~157~~188,~~849~~253
Prepaid expenses and other assets	32,~~134~~496			2,~~770~~306
Deferred tax assets	—3,630			133,~~192~~630
Current assets of discontinued operations	—			8,273
Total current assets	325,201			339,875
Total current assets	264,660			355,812
Property and equipment, net	14,391			13,908
Property and equipment, net	13,260			11,710
Goodwill	4,884			4,884
Goodwill	5,986			6,765
Other purchased intangibles, net	6,134			6,317
Other purchased intangibles, net	6,522			7,157
Restricted cash	606			602
Restricted cash	597			550
Income tax receivables	2,696			1,836
Income tax receivables	888			2,637
Deferred tax assets - non-current	3,387			3,387
Deferred tax assets — non-current	2,486			1,207
Other assets	157			566
Other assets	566			943
Total assets	$	357,456		$	371,375
Non-current assets of discontinued operations	—			1,115
Total assets	$	294,965		$	387,896
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and consignor payables	$	6281,~~589~~658		$	95,~~787~~839
Liability on borrowed metals	3613,~~514~~308			2720,~~076~~117
Obligation under product financing arrangement	945,~~821~~456			1538,~~576~~554
Accrued expenses and other current liabilities	9,~~043~~586			910,~~921~~693
Income taxes payable	—7,783			176,~~860~~364
Lines of credit	7899,~~561~~833			92100,~~669~~857
Deferred tax liability	1,877			—
Debt obligations, current portion	163			161
Debt obligations, current portion	365			154
Total current liabilities	257,787			272,585
Current liabilities of discontinued operations	—			8,224
Long term tax liabilities	9,361			9,322
Total current liabilities	198,770			267,267
Debt obligations, net of current portion	8,741			8,788
Deferred and other long-term tax liabilities	9,122			8,010
Other long-term liabilities	1,829			1,888
Debt obligations, net of current portion	6,138			6,574
Total liabilities	277,718			292,583
Other long-term liabilities	697			168
Total liabilities	214,727			282,019
Commitments and contingencies
Redeemable non-controlling interest	14			124
Redeemable non-controlling interest, VIE	119			160
Stockholders’ equity:
Preferred stock, $.01 par value, authorized 10,000 shares; issued and outstanding: none	—			—
Preferred stock, $0.01 par value, authorized 10,000 shares; issued and outstanding: none	—			—
Common stock, $.01 par value, authorized 40,000 shares; issued and outstanding: 30,555 and 32,723 at March 31, 2013 and June 30, 2012, respectively	306			327
Common stock, $0.01 par value, authorized 40,000 shares; issued and outstanding: 30,848 and 30,909 at September 30, 2013 and June 30, 2013, respectively	308			309
Additional paid-in capital	~~210~~206,~~234~~687			~~242~~206,~~418~~655
Accumulated other comprehensive income	6,~~634~~605			6,~~389~~605
Accumulated deficit	(~~138~~133,~~916~~981		)	(~~156~~134,~~777~~937		)
Total Spectrum Group International, Inc. stockholders’ equity	78,258			92,357
Total stockholders’ equity	79,619			78,632
Non-controlling interest	1,966			13,396
Total liabilities, redeemable non-controlling interests, and stockholders’ equity	$	357,456		$	371,375
Total stockholders’ equity	80,224			105,753
Total liabilities, redeemable non-controlling interest and stockholders’ equity	$	294,965		$	387,896

(1) The condensed consolidated balance sheet as of June 30, 2012 has been derived from the audited consolidated financial statements included in the Company's 2012 Annual Report on Form 10-K, adjusted to reflect discontinued operations. See ~~note~~accompanying ~~3 of the~~ Notes to Condensed Consolidated Financial Statements.

See accompanying notes to Condensed Consolidated Financial Statements

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SPECTRUM GROUP INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

	Three Months Ended						~~Nine Months Ended~~
	March 31, 2013			March 31, 2012 (1)			March 31, 2013			March 31, 2012 (1)
	September 30, 2013			September 30, 2012
Revenues:
Sales of precious metals	$	1,~~825~~492,~~450~~113		$	1,~~816~~613,~~231~~615		$	~~5,127,690~~		$	~~6,097,344~~
Collectibles revenues:
Sales of inventory	3735,~~819~~131			4046,~~120~~274			~~128,993~~			~~133,933~~
Auction services	67,~~325~~556			4,~~921~~978			~~14,067~~			~~16,857~~
Total revenues	1,~~869~~534,~~594~~800			1,~~861~~664,~~272~~867			~~5,270,750~~			~~6,248,134~~
Cost of sales:
Cost of precious metals sold	1,~~817~~484,~~707~~940			1,~~810~~608,~~664~~451			~~5,108,271~~			~~6,076,093~~
Cost of collectibles sold	3733,~~246~~729			3843,~~678~~417			~~122,492~~			~~128,561~~
Auction services expense	12,~~062~~802			~~846~~2,819			~~4,769~~			~~4,426~~
Total cost of sales	1,~~856~~521,~~015~~471			1,~~850~~654,~~188~~687			~~5,235,532~~			~~6,209,080~~
Gross profit	13,~~579~~329			1110,~~084~~180			~~35,218~~			~~39,054~~
Operating expenses:
General and administrative	45,~~995~~397			5,~~546~~128			~~15,228~~			~~18,249~~
M.F. Global, Inc. loss provision	—			—			(711		)	2,094
Salaries and wages	6,269			5,784
Salaries and wages	7,524			7,047			19,691			21,661
Depreciation and amortization	557			505
Depreciation and amortization	570			490			1,643			1,314
Total operating expenses	12,223			11,417
Total operating expenses	13,089			13,083			35,851			43,318
Operating income (loss)	1,106			(1,237		)
Operating income (loss)	490			(1,999		)	(633		)	(4,264		)
Interest and other income (expense):
Interest and other income (expense):
Interest income	1,634			2,188
Interest income	1,785			3,205			6,437			10,115
Interest expense	(1,199		)	(1,082		)
Interest expense	(672		)	(1,326		)	(3,085		)	(3,889		)
Other income, net	49			139
Other income, net	25			47			247			455
Unrealized gain (loss) on foreign exchange	25			(675		)
Unrealized gain (loss) on foreign exchange	(54		)	(869		)	(1,536		)	2,370
Total interest and other income	509			570
Total interest, other income (expense) and unrealized gain (loss) on foreign exchange	1,084			1,057			2,063			9,051
Income (loss) from continuing operations before provision for income taxes	1,615			(667		)
Income (loss) from continuing operations before provision for income taxes	1,574			(942		)	1,430			4,787
Provision for income taxes (income tax benefit)	700			(16		)
Provision for income taxes (income tax benefit)	525			(711		)	1,695			2,132
Income (loss) from continuing operations	915			(651		)
Income (loss) from continuing operations	1,049			(231		)	(265		)	2,655
Loss from discontinued operations, net of tax, attributable to Spectrum Group International, Inc.	—			(787		)
Income (loss) from discontinued operations, net of tax, attributable to Spectrum Group International, Inc.	50			(252		)	(613		)	60
Net income (loss)	915			(1,438		)
Net income (loss)	1,099			(483		)	(878		)	2,715
Less: net loss (income) attributable to non-controlling interests	41			(84		)
Less: net (income) loss attributable to non-controlling interests	(347		)	(138		)	268			(1,158		)
Net income (loss) attributable to Spectrum Group International, Inc.	$	956		$	(1,522	)
Net income (loss) attributable to Spectrum Group International, Inc.	$	752		$	(621	)	$	(610	)	$	1,557
Basic and diluted income (loss) per share attributable to Spectrum Group International, Inc.:
Basic and diluted income (loss) per share attributable to Spectrum Group International, Inc.:
Basic - continuing operations	$	0.03		$	(0.02	)
Basic - continuing operations	$	0.02		$	(0.01	)	$	—		$	0.05
Basic - discontinued operations	$	—		$	(0.03	)
Basic - discontinued operations	$	—		$	(0.01	)	$	(0.02	)	$	—
Diluted - continuing operations	$	0.03		$	(0.02	)
Diluted - continuing operations	$	0.02		$	(0.01	)	$	—		$	0.05
Diluted - discontinued operations	$	—		$	(0.03	)
Diluted - discontinued operations	$	—		$	(0.01	)	$	(0.02	)	$	—
Basic - net income (loss)	$	0.03		$	(0.05	)
Basic - net income (loss)	$	0.02		$	(0.02	)	$	(0.02	)	$	0.05
Diluted - net income (loss)	$	0.03		$	(0.05	)
Diluted - net income (loss)	$	0.02		$	(0.02	)	$	(0.02	)	$	0.05
Weighted average shares outstanding
Weighted average shares outstanding
Basic	30,918			32,783
Basic	30,640			32,723			31,356			32,659
Diluted	31,501			32,783
Diluted	30,895			32,723			31,356			32,902

~~_______________________________~~See accompanying Notes to Condensed Consolidated Financial Statements

(1) Adjusted to reflect discontinued operations. See note 3 of the notes to Condensed Consolidated Financial Statements.

See accompanying notes to Condensed Consolidated Financial Statements

Table of Contents

SPECTRUM GROUP INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~INCOME (~~LOSS)

(in thousands)

(unaudited)

	Three Months Ended						~~Nine Months Ended~~
	March 31, 2013			March 31, 2012 (1)			March 31, 2013			March 31, 2012 (1)
	September 30, 2013			September 30, 2012
Net income (loss) from continuing operations	$	~~1,049~~915		$	(~~231~~651	)	$	~~(265~~	)	$	~~2,655~~
Other comprehensive income (loss) before tax from continuing operations:
Other comprehensive income before tax from continuing operations:
Foreign currency translation adjustments	~~(45~~—		)	~~932~~586			~~1,338~~			~~(2,165~~		)
Other comprehensive income (loss) before tax from continuing operations	(45		)	932			1,338			(2,165		)
Other comprehensive income before tax from continuing operations	—			586
Income tax expense (benefit) related to components of other comprehensive income from continuing operations	~~(19~~—		)	12(138		)	~~555~~			~~(1,222~~		)
Other comprehensive income, net of tax, from continuing operations	1,023			689			518			1,712
Other comprehensive loss, net of tax, from continuing operations	915			73
Other comprehensive income (loss), net of tax, from discontinued operations	50—			(~~469~~683		)	~~(128~~		)	~~(831~~		)
Comprehensive income	1,073			220			390			881
Comprehensive loss	915			(610		)
Less: comprehensive income (loss) attributable to non-controlling interest	(347		)	(138		)	268			(1,158		)
Less: comprehensive loss attributable to non-controlling interest	—			(84		)
Comprehensive income (loss) attributable to Spectrum Group International, Inc.	~~726~~$	915		82$	(694	)	~~658~~			~~(277~~		)

~~_______________________________~~See accompanying Notes to Condensed Consolidated Financial Statements

(1) Adjusted to reflect discontinued operations. See note 3 of the notes to Condensed Consolidated Financial Statements.

See accompanying notes to Condensed Consolidated Financial Statements

Table of Contents

SPECTRUM GROUP INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands, except per share data)

(unaudited)

	Common Stock (Shares)		Common Stock ($)			Additional Paid-in Capital			Accumulated Other Comprehensive Income			Accumulated Deficit			Total Spectrum Group International, Inc. Stockholders’ Equity			~~Non-controlling Interests (1)~~			~~Total Stockholders’ Equity~~
Balance, June 30, 2012	32,723		327			242,418			6,389			(156,777		)	92,357			13,396			105,753
Balance, June 30, 2013	30,909		$	309		$	206,655		$	6,605		$	(134,937	)	$	78,632
Comprehensive income (loss):
Net income	—		—			—			—			956			956
Net loss	—		—			—			—			(610		)	(610		)	(158		)	(768		)
Share based compensation	—		—			144			—			—			144
Change in cumulative foreign currency translation adjustment, net of tax	—		—			—			1,268			—			1,268			—			1,268
Issuance of common stock for stock option exercise	12		—			33			—			—			33
Comprehensive loss	—		—			—			—			—			658			(158		)	500
Repurchase/retirement of common stock - former director	(73	)	(1		)	(145		)	—			—			(146		)
Share based compensation	—		—			902			—			—			902			—			902
Balance, September 30, 2013	30,848		$	308		$	206,687		$	6,605		$	(133,981	)	$	79,619
Issuance of common stock for restricted stock grants	88		1			(1		)	—			—			—			—			—
Taxes paid in exchange for cancellation of restricted stock	(3	)	—			—			—			—			—			—			—
Repurchase of restricted stock units	—		—			(1		)	—			—			(1		)	—			(1		)
Repurchase of common stock	(124	)	(1		)	(247		)	—			—			(248		)	—			(248		)
Exercise of stock options	50		1			104									105						105
Sale of Stamps business	—		—			(7,192		)	(1,023		)	7,393			(822		)	—			(822		)
Retirement of repurchased Afinsa and Auctentia common stock and interest in Spectrum Precious Metals, Inc.	(15,610	)	(156		)	(51,022		)	—			11,272			(39,906		)	(11,272		)	(51,178		)
Issuance of common stock	13,431		134			25,079			—			—			25,213			—			25,213
Restricted capital of foreign subsidiary	—		—			194			—			(194		)	—			—			—
Balance, March 31, 2013	30,555		$	306		$	210,234		$	6,634		$	(138,916	)	$	78,258		$	1,966		$	80,224

~~(1)~~See ~~Net~~accompanying ~~income~~Notes ~~(loss) attributable~~ to ~~non-controlling~~Condensed ~~interests~~Consolidated ~~for~~Financial ~~the nine months ended March 31, 2013 excludes $110,000 relating to redeemable non-controlling interests which are reflected in temporary equity as of March 31, 2013~~Statements.

~~See~~ ~~accompanying notes to Condensed Consolidated Financial Statements.~~5

Table of Contents

SPECTRUM GROUP INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(~~in thousands~~unaudited)

	Nine Months Ended
	Three Months Ended
	March 31, 2013			March 31, 2012 (1)
(in thousands)	September 30, 2013			September 30, 2012
Cash flows from operating activities:
Net income (loss)	$	~~(878~~915	)	$	2(1,~~715~~438	)
(Income) loss from discontinued operations, net of tax, attributable to Spectrum Group International, Inc.	613			(60		)
Loss from discontinued operations, net of tax, attributable to Spectrum Group International, Inc.	—			787
Income (loss) from continuing operations	~~(265~~915		)	~~2,655~~(651		)
Adjustments to reconcile income from continuing operations to net cash provided by operating activities — continuing operations:
Net unrealized (gains) losses on foreign currency	~~1,536~~(25		)	~~(2,370~~675		)
Depreciation and amortization	~~1,643~~557			~~1,314~~505
Provision for bad debts	~~(610~~—		)	~~2,094~~42
Provision for inventory reserve	19			485
Share based compensation	144			72
Share based compensation	902			430
Gain on sale of Stamps business	—			(17		)
Gain on sale of Stamps business	(17		)	—
Loss on abandonment of property and equipment	—			179
Loss on abandonment of property and equipment	—			75
Changes in assets and liabilities:
Receivables and secured loans	4246,~~697~~375			(1118,~~478~~346		)
Accounts receivable and consignor advances	1(4,~~052~~121		)	~~1,220~~(179		)
Inventory	24(7,~~105~~480		)	2(26,~~171~~741		)
Prepaid expenses and other assets	~~(929~~219		)	61(1,303		)
Liabilities on borrowed metals	9(6,~~438~~809		)	~~14,753~~436
Accounts payable, consignor payables, accrued expenses and other liabilities	(3315,~~733~~288		)	~~(29~~50,~~307~~946		)
Income taxes receivable/payable	~~(14,970~~600		)	(82,~~332~~593		)
Deferred taxes and other long-term tax liabilities	~~13,790~~—			~~6,660~~(739		)
Accrued litigation settlement	—			(755		)
Net cash provided by operating activities — continuing operations	15,087			2,286
Net cash provided by (used in) operating activities — continuing operations	44,658			(20,324		)
Net cash used in operating activities — discontinued operations	—			(1,353		)
Net cash used in operating activities — discontinued operations	(1,163		)	(4,316		)
Net cash provided by operating activities	15,087			933
Net cash provided by (used in) operating activities	43,495			(24,640		)
Cash flows from investing activities:
Capital expenditures for property and equipment	(~~1,916~~857		)	(~~2,596~~858		)
Change in restricted cash	(474		)	~~593~~(22		)
Purchases/sales of marketable securities	—			68
Cash transferred with sale of subsidiary	—			(3,935		)
Divestiture of business	~~7,750~~—			—7,750
Net cash provided by (used in) investing activities — continuing operations	5,787			(1,935		)
Net cash (used in) provided by investing activities — continuing operations	(861		)	2,935
Net cash used in investing activities — discontinued operations	~~(22~~—		)	(3822		)
Net cash provided by (used in) investing activities	5,765			(1,973		)
Net cash (used in) provided by investing activities	(861		)	2,913
Cash flows from financing activities:
Borrowings (repayments) under lines of credit, net	(141,~~108~~024		)	1527,~~508~~896
Repayments on notes payable and capital lease obligations	(~~320~~105		)	(7927		)
Obligation under product financing arrangement	(56,~~755~~902		)	18(15,~~314~~576		)
Issuance of common stock	~~25,213~~—			525,242
Retirement of repurchased Afinsa and Auctentia common stock and interest in Spectrum Precious Metals, Inc.	~~(51,178~~—		)	—(51,178		)
Repurchase of common stock	(~~248~~146		)	—
Proceeds from exercise of stock options	~~105~~33			—
Contribution from non-controlling interest	—			150
Repurchase of restricted stock	—			(1		)
Repurchase of restricted stock	(1		)	—
Net cash provided by (used in) financing activities — continuing operations	5,660			(13,644		)
Distributions paid to non-controlling interest	—			(6		)
Net cash provided by (used in) financing activities — continuing operations	(46,292		)	33,892
Net cash provided by (used in) financing activities — discontinued operations	—			—
Net cash used in financing activities	(46,292		)	33,892
Net cash provided by (used in) financing activities	5,660			(13,644		)
Effects of exchange rate changes on cash	~~(190~~—		)	~~752~~152
Net increase in cash and cash equivalents	2,778			8,031
Net increase (decrease) in cash and cash equivalents	19,886			(9,646		)
Cash and cash equivalents, beginning of period	2523,~~305~~643			2425,~~181~~305
Cash and cash equivalents, end of period	$	2843,~~083~~529		$	3215,~~212~~659
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest expense	$	~~2,770~~999		$	~~2,766~~965
Income taxes	$	~~2,961~~246		$	13,~~184~~099
Non-cash investing and financing activities:
Purchase of equipment under capital lease	$	~~665~~—		$	—(573	)

~~_______________________~~See accompanying Notes to Condensed Consolidated Financial Statements

~~(1)~~ ~~Adjusted to reflect discontinued operations. See note 3 of the notes to Condensed Consolidated Financial Statements.~~6

See accompanying notes to Condensed Consolidated Financial Statements

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SPECTRUM GROUP INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

Basis of Presentation

The condensed consolidated financial statements reflect the financial condition, results of operations, ~~comprehensive income (loss),~~ and cash flows of Spectrum Group International, Inc. and its subsidiaries (the “Company” or “SGI”), and were prepared using accounting principles generally accepted in the United States (“U.S. GAAP”). The Company conducts its operations in two reportable segments: Trading and Collectibles. Each of these reportable segments represent an aggregation of operating segments that meet the aggregation criteria set forth in the Segment Reporting Topic 280 of the FASB Accounting Standards Codification (“ASC”).

Unaudited Interim Financial Information

The accompanying interim condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. These interim condensed consolidated financial statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary to present fairly the condensed consolidated balance sheets, condensed consolidated statements of operations, condensed consolidated statements of comprehensive ~~income (~~loss), condensed consolidated statements of stockholders’ equity, and condensed consolidated statements of cash flows for the periods presented in accordance with U.S. GAAP. Operating results for the three ~~and nine~~ months ended ~~March~~September 3130, 2013 are not necessarily indicative of the results that may be expected for the year ending June 30, ~~2013~~2014 or for any other interim period during such year. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been omitted in accordance with the rules and regulations of the SEC. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, ~~2012~~2013 (the “~~2012~~2013 Annual Report”), as filed with the SEC. Amounts related to disclosure of June 30, ~~2012~~2013 balances within these interim condensed consolidated financial statements were derived from the aforementioned audited consolidated financial statements and notes thereto included in the ~~2012~~2013 Annual Report.

The condensed consolidated financial statements include the accounts of the Company and all of its wholly-owned ~~and majority-owned~~ subsidiaries. All significant inter-company accounts and transactions including inter-company profits and losses, and inter-company balances have been eliminated in consolidation.

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. These estimates include, among others, determination of lower of cost or market estimates for inventory and allowances for doubtful accounts, impairment assessments of long-lived assets and intangibles, valuation reserve determinations on deferred tax assets, calculations of loss accruals and other complex contingent liabilities, and revenue recognition judgments. Significant estimates also include the Company's fair value determinations with respect to its financial instruments and precious metals materials. Actual results could materially differ from those estimates.

Consolidated Joint Ventures

The Company's condensed consolidated financial statements also include the financial results of Calzona Ventures, LLC ("Calzona"). Based on The Company's contractual arrangements with the members of Calzona, it has determined that Calzona is a variable interest entity, or VIE, for which The Company is the primary beneficiary and are required to consolidate in accordance with ASC subtopic 810-10, or ASC 810-10, Consolidation: Overall. Despite the Company's lack of greater than 50% member interest ownership, there exists a parent-subsidiary relationship between SGI and Calzona, whereby through contractual arrangements, the member interest holders of Calzona have effectively assigned all of their voting rights underlying their member interest in Calzona to the Company. In addition, through these agreements, the Company has the ability and intention to absorb all of the expected losses of Calzona (Note 13).

Business Segments

Trading Segment

The Company's trading business is conducted through its wholly-owned subsidiary, A-Mark Precious Metals, Inc. (“A-Mark”) and its subsidiaries. A-Mark is a full-service precious metals trading company. Its products include gold, silver, platinum and palladium for storage and delivery in the form of coins, bars, wafers and grain. The Company's trading-related services include financing, ~~leasing,~~ consignment, hedging and various customized financial programs. At June 30, 2012, the Company owned 80% of A-Mark through its 80% ownership interest in Spectrum PMI, Inc. (“SPMI”), which owns all of the common stock of A-Mark. The remaining 20% of SPMI was owned by Auctentia, S.L. (“Auctentia”), a wholly owned subsidiary of Afinsa Bienes Tangibles, S.A. En Liquidacion (“Afinsa”), which, together with Auctentia, owned approximately 57% of the Company's outstanding common stock.

OnA-Mark ~~September~~has ~~25,~~a ~~2012,~~wholly ~~the~~owned ~~Company~~subsidiary, ~~purchased~~Collateral ~~from~~Finance ~~Afinsa~~Corporation ~~and~~("CFC"). ~~Auctentia~~Through ~~a total of 15~~CFC,~~609,796~~ ~~shares~~a oflicensed ~~common~~California ~~stock~~Finance Lender, asA-Mark aoffers ~~result~~loans ofon ~~which~~precious ~~the~~metals ~~combined~~and ~~holdings~~rare ofcoins ~~Afinsa~~ and ~~Auctentia~~other ~~were~~collectibles ~~reduced~~collateral ~~from 57%~~ to ~~9.9%~~coin ~~of the Company's common stock outstanding. In addition~~dealers, ~~the~~collectors ~~Company~~and ~~repurchased all of Auctentia's remaining 20% interest in Spectrum PMI, Inc~~investors.

~~Through~~A-Mark ~~its~~has ~~subsidiary Collateral Finance Corporation (“CFC”),~~ a ~~licensed~~wholly ~~California~~owned ~~Finance Lender~~subsidiary, A-Mark ~~offers~~Trading ~~loans~~AG, on("AMTAG"). ~~precious~~AMTAG ~~metals~~promotes ~~and~~A-Mark ~~rare~~bullion ~~coins~~products ~~collateral~~in toCentral ~~coin dealers, collectors~~ and ~~investors~~Eastern Europe.

~~Collectibles~~ ~~Segment~~7

The Company's collectibles business operates as an integrated network of global companies concentrating on numismatic (coins and currencies) and rare and fine vintage wines. Products are offered by way of auction or private treaty sales. The Company has offices and auction houses in North America, Europe and Asia. In addition to traditional live auctions, the Company also conducts Internet and telephone auctions, and engages

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inA-Mark ~~retail~~has ~~sales.~~a ~~Until~~wholly ~~the~~owned ~~first~~subsidiary, ~~quarter~~Transcontinental ofDepository ~~fiscal 2013~~Services, ~~when~~("TDS"). ~~the~~TDS ~~Company~~offers ~~sold~~worldwide ~~its~~storage ~~Stamps~~solutions ~~division~~to ~~(defined below)~~institutions, itdealers ~~also was an auctioneer~~ and ~~merchant/dealer of philatelic materials~~consumers.

Collectibles Segment

European Operations

The European Operations (the “European Operations”) comprised European companies of the Stamps division (the “Stamps division”) of the Collectibles segment. The Stamps division iswas primarily engaged in the sale of philatelic (stamps) materials by auction. All but one of the European companies ~~were~~was sold on September 13, 2012. See discontinued operations, below (Note 3).

Discontinued Operations

In accordance with the provisions of the Presentation of Financial Statements Topic 205 of the ASC, the results of the ~~following~~European ~~entities~~Operation are ~~now~~ presented as discontinued operations in the condensed consolidated financial statements through the date of dissolution, as applicable (Note 3).

Stamps Division

On September 13, 2012, the Company completed the sale of its Stamps division for approximately $7.8 million and recognized a gain on sale of $~~17,000~~0.02 million (Note 3).

Greg Martin Auctions, Inc.

Through January 2011, the Company's wholly owned subsidiary, Greg Martin Auctions, Inc. (“GMA”), operated as an auction house offering antique guns, and armor. On December 1, 2010, the Company executed an agreement to sell certain assets of GMA to a third party for $325,000. The transaction closed on January 31, 2011.

See Note 3 for further information regarding discontinued operations.

Consolidated Joint Ventures

The Company includes in its consolidated financial statements the results of operations and financial position of a joint venture, which is a variable interest entity in which the Company or its wholly-owned subsidiaries are the primary beneficiaries (Note 13).

In determining that the Company or its subsidiaries is the primary beneficiary, the Company evaluated both qualitative and quantitative considerations of the VIE, including, among other things, its capital structure, terms of contracts between the Company and its subsidiaries and the VIE, which interests create or absorb variability, related party relationships and the design of the VIE.

Reclassifications

Certain previously reported amounts have been reclassified to conform to the current consolidated financial statement presentation.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Summary of Significant Accounting Policies

There have been no significant changes to the Company's significant accounting policies during the ~~nine~~three months ended ~~March~~September 3130, 2013. See Note 2 to the Company's consolidated financial statements included in the Company's ~~2012~~2013 Annual Report on Form 10-K for a comprehensive description of the Company's significant accounting policies.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk vary based on the business segment. Both segments are subject to the risks associated with holding cash and cash equivalents. Cash and cash equivalents are maintained with several financial institutions and, at times, balances may exceed federally insured limits. All of the Company's non-interest bearing balances were fully insured at June 30, 2012 due to a temporary federal program in effect from December 31, 2010 through December 31, 2012. Beginning in calendar 2013, insurance coverage reverted to $250,000 per depositor at each financial institution, and the Company's non-interest bearing cash balances may exceed federally insured limits.

Concentrations specific to the Company's business segments are as follows:

Trading Segment

Assets that potentially subject the Company to concentrations of credit risk consist principally of receivables, loans of inventory to customers, and inventory hedging transactions. Concentration of credit risk with respect to receivables is limited due to the large number of customers composing the Company's customer base, the geographic dispersion of the customers, and the collateralization of substantially all receivable balances. Based on an assessment of credit risk, the Company typically grants collateralized credit to its customers. Credit risk with respect to loans of inventory to customers is minimal, as substantially all amounts are secured by letters of credit issued by creditworthy financial institutions. The Company enters into inventory hedging transactions, principally utilizing metals commodity futures contracts traded on national futures exchanges or forwards contracts with only major creditworthy financial institutions. Substantially all of these transactions are secured by the underlying metals positions.

Collectibles Segment

The Company may extend trade credit and release goods sold to the purchasers prior to the receipt of payments in connection with auction sales or private treaty sales. In addition, the Company may extend advances to consignors on collectibles inventory held for future auctions. The Company evaluates each customer's creditworthiness at period-end and specifically identifies trade receivables and consignor advances for risk of loss based on analysis of several factors including a specific review of the collectability of customer accounts, historical collection experience, current economic and business conditions, and aging of accounts, and provides an allowance for the portion of receivables or advances for which collection is doubtful. The Company continuously monitors payments from its customers and maintains allowances for doubtful accounts for

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estimated losses in the period they become known. The Company charges off uncollectible receivables and advances when management deems it appropriate based upon analysis of each account.

In limited situations, trade credit is extended in the sale of consigned products. When consigned goods are delivered to purchasers prior to the receipt of payments, the Company may be deemed to have assumed risk of loss associated with the trade credit, and the responsibility of collections from the purchasers. Losses to date under these situations have not been material. The terms and provisions of the Company's auctions and consignment agreements do not require the Company to extend such credit and obligate the Company to pay the consignors only after the Company has received payments from the purchasers.

Cash Equivalents

The Company considers all highly liquid investments with remaining maturities of three months or less, when purchased, to be cash equivalents. The Company had $185,000 of cash equivalents as of September 30, 2013 and June 30, 2013.

Restricted Cash

During the fourth quarter of fiscal 2011, the Company purchased a building to serve as its new corporate headquarters. The building was acquired with cash and the assumption of a note, for which the lender required the Company to place $1~~,121,000~~.1 million of cash in escrow consisting of $~~768,000~~0.8 million for building improvements and a leasing reserve totaling $~~353,000~~0.3 million. As of ~~March~~September 3130, 2013, the Company had remaining restricted cash of $~~597~~0.6 million,~~000,~~ consisting of $~~245,000~~0.25 million for building improvements and $~~352,000~~0.35 million for leasing reserve. During the three months ended September 30, 2013, the Company spent $0 and added $4,169 of restricted cash for building improvements.

~~Foreign Currency Translation~~Inventories

~~Assets~~Trading and liabilities denominated in foreign currency are translated into U.S. dollars using the exchange rates in effect at the balance sheet date. Statements of operations accounts are translated at the average exchange rates during the year. The impact of exchange rate fluctuations from translation of assets and liabilities is included in accumulated other comprehensive income, a component of stockholders' equity. Gains and losses resulting from other foreign currency transactions are included in interest and other income (expense) in the condensed consolidated statements of operations. For the three and nine months ended March 31, 2013 and 2012, the Company recognized unrealized gains (losses) of $(54,000) and $(1.5) million and $(0.9) million and $2.4 million, respectively, on foreign exchange in the condensed consolidated statements of operations in connection with the transaction adjustments of intercompany Euro denominated loans, owed by SGI to certain of its subsidiaries included in its European Operations. On January 2, 2013, upon the conversion of Euro denominated notes to U.S. dollars, the Company changed the functional currency of its European Operations. See Note 3 for further information regarding discontinued operations. As of March 31, 2012, Euro denominated loans owed by SGI to certain of its subsidiaries was $31.1 million.Inventories

Inventories principally include bullion and bullion coins and are stated at published market values plus purchase premiums paid by the Company on acquisition of the metal. The Company also protects substantially all of its physical inventories from market risk through commodity hedge transactions (see Note 11). Market risk gains (losses) are generally offset by the results of hedging transactions, which have been reflected as net (gain) loss on derivative instruments, which is a component of cost of precious metals sold in the condensed consolidated statements of operations. Inventories include amounts borrowed from suppliers under arrangements to purchase precious metals on an unallocated basis. Unallocated or pool metal represents an unsegregated inventory position that is due on demand, in a specified physical form, based on the total ounces of metal held in the position. Amounts under these arrangements require delivery either in the form of precious metals or cash, and the corresponding obligations related to liabilities on borrowed metals are reflected on the condensed consolidated balance sheets. The Company mitigates market risk of its physical inventories through commodity hedge transactions.

The Company periodically loans metals to customers on a short-term consignment basis, charging interest fees based on the value of the metals loaned. Such metal inventories are removed at the time the customers elect to price and purchase the metals, and the Company records a corresponding sale and receivable. Substantially all inventories loaned under consignment arrangements are secured by letters of credit issued by major financial institutions for the benefit of the Company or under an all-risk insurance policy with the Company as the loss-payee.

Inventory includes amounts for obligations under product financing agreements. A-Mark entered into an agreement for the sale of gold and silver at a fixed price to a third party. This inventory is restricted under this agreement and the Company is allowed to repurchase the inventory at an agreed-upon price based on the spot price on the repurchase date. The third party charges monthly interest as a percentage of the market value of the outstanding obligation; such monthly charges are classified in interest expense. These transactions do not qualify as sales and therefore have been accounted for as financing arrangements and reflected in the condensed consolidated balance sheet under obligation under product financing arrangement. The obligation is stated at the amount required to repurchase the outstanding inventory. Both the product financing obligation and the underlying inventory (which is entirely restricted) are carried at fair value, with changes in fair value included as component of Cost of precious metals sold.

Collectibles Inventories

The Collectibles segment's inventories are stated at the lower of cost or management's estimate of net realizable value, and are accounted for under the specific identification method in which the value is calculated based on a detailed physical count of the inventory and the cost on the purchase date. In instances where bulk purchases are made, the cost allocation is based on the relative market values of the respective goods. On a quarterly basis, the Company reviews the age and turnover of its inventory to determine whether any inventory has declined in value, and incurs a charge to operations for such declines. The Company records write-downs based on two methodologies; specific write-downs on certain items based on declines in the marketplace, and estimated write-downs based on inventory aging depending on the category and type of inventory (where such percentages are supported by historical experience). If actual market conditions are less favorable than those projected by management and the Company's estimates prove to be inaccurate, additional write-downs or adjustments may be required.

The Company has agreements with certain suppliers and employees to share the net profits or losses attributable to the sale of specified items of inventory. The Company determines the selling price of the inventory and acts as the principal in these transactions; taking title to the inventory and bearing risk of loss, collection, delivery and return. The cost associated with the profit sharing is reflected in cost of collectibles sold for suppliers and salaries and wages expense for employees in the condensed consolidated statements of operations.

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Derivative Financial Instruments

The Company’s inventory, purchase and sale commitments transactions consist of precious metals bearing products. The value of these assets and liabilities is intimately linked to the prevailing price of the underlying precious metal commodity. The Company seeks to minimize the effect of price changes of the underlying commodity and enters into inventory hedging transactions, principally utilizing metals commodity futures contracts traded on national futures exchanges or forward contracts with only major credit worthy financial institutions. All of the Company's commodity derivative contracts are under master netting arrangements and include both asset and liability positions. Substantially all of these transactions are secured by the underlying metals positions. Notional balance of the Company derivative instruments are reported on Note 11.

Commodity futures and forward contract transactions are recorded at fair value on the trade date.

Open futures and forward contracts are reflected in receivables or payables in the condensed consolidated balance sheet as the difference between the original contract value and the market value; or at fair value. The change in unrealized gain (loss) on open contracts from one period to the next is reflected in net (gain) loss on derivative instruments, which is a component of cost of precious metals sold in the condensed consolidated statements of operations.

Net (gain) loss on derivative instruments, which is included in the cost of sales, includes amounts recorded on the Company's outstanding metals forwards and futures contracts and on open physical purchase and sale commitments. The Company records changes in the market value of its metals forwards and futures contracts as income or loss, the effect of which is to offset changes in market values of the underlying metals positions.

The Company records the difference between market value and trade value of the underlying commodity contracts as a derivative asset or liability, as well as recording an unrealized gain or loss on derivative instruments in the Company's consolidated statements of operations. During the three months ended September 30, 2013, the Company recorded a net unrealized loss on open future commodity and forward contracts and open purchase and sale commitments of $15.9 million and a net realized loss on future commodity contracts of $1.7 million. During the three months ended September 30, 2012, the Company recorded a net unrealized gain on open future commodity and forward contracts and open purchase and sale commitments of $41.0 million and a net realized loss on future commodity contracts of $20.8 million.

Goodwill and Other Purchased Intangible Assets

The Company evaluates goodwill and other indefinite life intangibles for impairment annually in the fourth quarter of the fiscal year (or more frequently if indicators of potential impairment exist) in accordance with the Intangibles - Goodwill and Other Topic 350 of the ASC. Other finite life intangible assets are evaluated for impairment when events or changes in business circumstances indicate that the carrying amount of the assets may not be recoverable. The Company may first qualitatively assess whether relevant events and circumstances make it more likely than not that the fair value of the reporting unit's goodwill is less than its carrying value. If, based on this qualitative assessment, we determine that goodwill is more likely than not to be impaired, the two-step impairment test is performed. This first step in this test involves comparing the fair value of each reporting unit to its carrying value, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, the second step in the test is performed, which is measurement of the impairment loss. The impairment loss is calculated by comparing the implied fair value of goodwill, as if the reporting unit has been acquired in a business combination, to its carrying amount. There were no impairment charges to the Company's goodwill and purchased intangibles during the three months ended September 30, 2013 or 2012.

The Company utilizes the discounted cash flow method to determine the fair value of its Stack's-Bowers Numismatics, LLC ("SBN") reporting unit. In calculating the implied fair value of the reporting unit's goodwill, the present value of the reporting unit's expected future cash flows is allocated to all of the other assets and liabilities of that unit based on their fair values. The excess of the present value of the reporting unit's expected future cash flows over the amount assigned to its other assets and liabilities is the implied fair value of goodwill. In calculating the implied value of the Company's trade names, the Company uses the present value of the relief from royalty method.

Estimates critical to these calculations include projected future cash flows, discount rates, royalty rates, customer attrition rates and foreign exchange rates. Imprecision in estimating unobservable market inputs can impact the carrying amount of assets in the balance sheet. Although the Company believes its valuation methods are appropriate, the use of different methodologies or assumptions to determine the fair value of certain assets could result in a different estimate of fair value at the reporting date.

Long-Lived Assets

Long-lived assets, other than goodwill and purchased intangible assets with indefinite lives, are evaluated for impairment when events or changes in business circumstances indicate that the carrying amount of the assets may not be recoverable. In evaluating impairment, the carrying value of the asset is compared to the undiscounted estimated future cash flows expected to result from the use of the asset and its eventual disposition. An impairment loss is recognized when estimated future cash flows are less than the carrying amount. Estimates of future cash flows may be internally developed or based on independent appraisals and significant judgment is applied to make the estimates. Changes in the Company's strategy, assumptions and/or market conditions could significantly impact these judgments and require adjustments to recorded amounts of long-lived assets. For the three months ended September 30, 2013 and 2012, no impairment of long-lived assets was identified.

Consolidated Joint Ventures

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The Company includes in its condensed consolidated financial statements the results of operations and financial position of joint ventures which are VIEs in which the Company or its wholly-owned subsidiary are the primary beneficiaries (Note 13). The joint ventures consist of

Calzona.

In determining that the Company or its subsidiaries is the primary beneficiary, the Company evaluated both qualitative and quantitative

considerations of the VIE, including, among other things, its capital structure, terms of contracts between the Company and its subsidiaries and

the VIE, which interests create or absorb variability, related party relationships and the design of the VIE.

Consignor Advances and Payables

Consignor advances are cash advances on inventory consigned from a third party for sale by the Company at a later date at which time the advance will be deducted from the proceeds due to the consignors if and when such inventory is sold. Consignor advances are short-term in duration and typically bear interest at prevailing rates. Consignor payables represent amounts due to consignors for the sale of their inventory by the Company. Such amounts do not bear interest.

Revenue Recognition

Trading Segment

Revenues are recognized when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable, no obligations remain and collection is probable. The Company records sales of precious metals upon the transfer of title, which occurs upon receipt by customer. The Company records revenues from its metal assaying and melting services after the related services are completed, and the effects of forward sales contracts are reflected in revenue at the date the related precious metals are delivered or the contracts expire.

The Company accounts for its metals and sales contracts using settlement date accounting. Pursuant to such accounting, the Company recognizes the sales or purchases of the metals at the settlement date. During the period between trade and settlement dates, the Company has essentially entered into a forward contract that meets the definition of a derivative in accordance with the Derivatives and Hedging Topic 815 of the ASC. The Company records the derivatives at the trade date with corresponding unrealized gains or losses which are reflected in the cost of precious metals sold in the condensed consolidated statements of operations. The Company adjusts the derivatives to fair value on a daily basis until the transactions are physically settled. Sales are recognized in the condensed consolidated statements of operations.

Collectibles Segment

The Company's Collectibles segment derives revenues from two primary sources: auctions and private treaty sales.

Auction Sales

In its role as auctioneer, the Company functions as an agent accepting properties on consignment from its selling clients. The Company sells properties as an agent of the consignors, billing the buyers for properties purchased, receiving payments from the buyers, and remitting to the consignors their portion of the buyers' payments after deducting the Company's commissions, expenses, applicable taxes and advances. Throughout this process, the Company does not take title to the properties consigned to it and risk of loss transfers from the consignor directly to the buyer of properties purchased. The Company's commissions include those earned from the buyers (“buyers' premium revenue”) and those earned from the consignors (“sellers' commission revenue”), both of which are calculated as a percentage of the value of the final bid at auction (the “hammer price”) of property sold at auction. The Company recognizes revenues, in the manner discussed in the following paragraph, from the buyers' premiums and sellers' commissions upon delivery of property sold at auction for owned property and at the close of the auction for consigned property. Commissions earned for the three months ended September 30, 2013 and 2012, totaled $7.6 million and $5.0 million, respectively.

The Company currently recognizes revenue as follows:

For auctions of consigned product, revenue is recognized upon delivery of the related service elements. The first service element in the auction of consigned product consists of cataloging, appraising, preparation and performance of the auction. Revenue related to this element is recognized upon completion of the auction. The second service element relates to the processing, packaging and delivery of the sold consigned product and the collection of the sales consideration on behalf of the consignor. Revenue related to this element is recognized upon cash receipt from the purchaser, and coincides with delivery of the consigned product to the purchaser. Since each delivered service element has standalone value to the customer and delivery or performance of any undelivered service elements is probable, revenue is allocated to each separate unit of accounting based on the relative selling price of the element as a result of the lack of reliable vendor specific objective evidence or third-party evidence of the selling price. Significant inputs in determining the selling price of each service element include time employees spent working on these elements and their cost plus a markup.


2.	For auctions of owned product, revenue is recognized when title of the product passes to the customer upon delivery, which, based on Company operational policies, usually occurs when the sales consideration is collected.

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3.	For the wholesale sale of owned products, revenue is recognized upon the transfer of title to the customer, which occurs upon delivery.

The Company does not provide guarantees with respect to the authenticity of property offered for sale at its live auctions, however it does authenticate the materials sold via its Internet auctions. All property presented for sale at live auction is sold as genuine and as described by the Company in its auction catalogues. In the event that auctioned property is deemed to be other than authentic (in the opinion of a competent authority mutually acceptable to the buyer and the Company), the Company refunds the purchase price if returned within a specified time period. Historically, returns have not been material and the Company sells large collections on an “as is” basis.

Private Treaty Sales

The Company engages in private treaty sales of both consigned property and sales of owned inventory to third parties (merchant/dealer relationships and direct to consumer sales). Private treaty sales of consigned property occur when an owner of property arranges with the Company to sell such consigned property to a third party at a privately negotiated price. In such a transaction, the owner may set selling price parameters for the Company, or the Company may solicit selling prices for the owner, and the owner may reserve the right to reject any selling price. The Company does not guarantee a fixed price to the owner, which would be payable regardless of the actual sales price ultimately received. The Company recognizes private treaty sales of consigned property at an amount equal to a percentage of the sales price. Such amounts of revenue are recorded on a net basis as commissions earned and are recognized upon delivery of property sold, which occurs upon cash receipt. The Company recognizes private treaty sales of owned property upon delivery of the property.

Stock Based Compensation

The Company has equity plans that provide for the awards of restricted stock, stock options and other equity grants to officers, employees, non-employee directors and consultants (Note 15). The Company recognizes stock-based compensation expense in accordance with ASC Topic 718, Stock Compensation, based on the fair value of the stock award on the grant date, net of estimated forfeitures, recognized ratably over the service period of the award. The fair value of restricted stock grants is based on the quoted market price at the date of grant. The fair value of stock option grants is calculated using the Black-Scholes valuation model, which is consistent with the Company's valuation techniques previously utilized for options in footnote disclosures required under Topic 718 of the ASC. The Black-Scholes valuation model requires the input of subjective assumptions including estimating the length of time employees will retain their stock options before exercising them (the “expected term”), the estimated volatility of the common stock price over the expected term and the number of options that will ultimately not complete their vesting requirements (“forfeitures”). Changes in these subjective assumptions can materially affect the estimate of stock-based compensation and, consequently, the related amount recognized as an expense in the condensed consolidated statements of operations. As required under the accounting rules, the Company reviews its valuation assumptions at each grant date and, as a result, is likely to change its valuation assumptions used to value employee stock-based awards granted in future periods. The estimation of stock awards that will ultimately vest requires significant judgment. Actual results, and future changes in estimates, may materially differ from the Company's current estimates.

Marketing

Marketing, advertising and promotion costs are expensed as incurred. Marketing, advertising and promotion expenses were $0.2 million and $0.4 million, respectively, for the three months ended September 30, 2013 and September 30, 2012.

Shipping and Handling

Shipping and handling costs represent costs associated with shipping product to customers, and receiving product from vendors. Shipping and handling costs incurred totaled $1.9 million and $1.1 million for the three months ended September 30, 2013 and September 30, 2012, respectively, and are included in general and administrative expenses in the condensed consolidated statements of operations.

Income Taxes

The Company estimates its provision for income taxes in each of the tax jurisdictions in which it conducts business, in accordance with the provisions of the Income Taxes Topic 740 of the ASC. The Company computes its annual tax rate based on the statutory tax rates and tax planning opportunities available to it in the various jurisdictions in which it earns income. Significant judgment is required in determining the Company's annual tax rate and in evaluating uncertainty in its tax positions. The Company recognizes a benefit for tax positions that it believes will more likely than not be sustained upon examination. The amount of benefit recognized is the largest amount of benefit that the Company believes has more than a 50% probability of being realized upon settlement. The Company regularly monitors its tax positions and adjusts the amount of recognized tax benefit based on its evaluation of information that has become available since the end of its last financial reporting period. The annual tax rate includes the impact of these changes in recognized tax benefits. When adjusting the amount of recognized tax benefits, the Company does not consider information that has become available after the balance sheet date, but does disclose the effects of new information whenever those effects would be material to the Company's consolidated financial statements. The difference between the amount of benefit taken or expected to be taken in a tax return and the amount of benefit recognized for financial reporting represents unrecognized tax benefits. The total unrecognized tax benefit is $27.7 million; $79.64 million of this amount is presented as an accrued liability in the consolidated balance sheet as of ~~March~~September 3130, 2013 and is presented within deferred and other long-term tax liabilities. The potential interest and/or penalties associated with an uncertain tax position are recorded in provision for income taxes (income tax benefit) in the condensed consolidated statements of operations.

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The Company records valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized. When assessing the need for valuation allowances, the Company considers future taxable income and ongoing prudent and feasible tax planning strategies. Should a change in circumstances lead to a change in judgment about the realizability of deferred tax assets in future years, the Company would adjust related valuation allowances in the period that the change in circumstances occurs, along with a corresponding increase or charge to income.

Changes in recognized tax benefits and changes in valuation allowances could be material to the Company's results of operations for any period, but is not expected to be material to the Company's consolidated financial position.

~~Earnings~~The ~~Per~~Company ~~Share~~files a consolidated federal income tax return and combined or consolidated state income tax returns in various state jurisdictions. In addition, certain of the Company's subsidiaries file separate income tax returns in various state and foreign jurisdictions.

Basic earnings per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share utilizing the treasury stock method, adjusts the weighted average number of common shares for common stock issuable upon exercise of stock options and other commitments to issue common stock in periods in which they have a dilutive effect, and when the stock awards exercise price is lower than the Company's average share price for the period.

A reconciliation of shares used in calculating basic and diluted earnings per common shares follows. In computing basic earnings per share for the three months ended March 31, 2013, the Company excluded 547,000 shares of common stock and 37,500 stock appreciation rights (“SARs”), where exercise prices were in excess of the quoted market price of the Company's common stock and 123,001 unvested restricted stock units because inclusion would be anti-dilutive. Since the Company incurred a net loss for the nine months ended March 31, 2013, basic and diluted loss per share were the same because the inclusion of 1,682,501 potential common shares, related to 1,139,500 outstanding stock options, 505,501 restricted stock grants, and 37,500 SARs, in the computation of net loss per share would have been anti-dilutive. Since the Company incurred a net loss for the three months ended March 31, 2012, basic and diluted loss per share were the same because the inclusion of 1,148,898 potential common shares, related to 640,750 outstanding stock options, 470,648 restricted stock grants, and 37,500 SARs, in the computation of net loss per share would have been anti-dilutive. In computing diluted earnings per share for the nine months ended March 31, 2012, the Company excluded options to purchase 318,750 shares of common stock and 37,500 SARS where exercise prices were in excess of the quoted market price of the Company's common stock and 468,148 unvested restricted stock units because inclusion would be anti-dilutive. There is no dilutive effect of stock appreciation rights as such obligations are not settled and were out of the money at March 31, 2013 and 2012.

A reconciliation of basic and diluted shares is as follows:

	Three Months Ended		Nine Months Ended
in thousands	March 31, 2013	March 31, 2012	March 31, 2013	March 31, 2012
Basic weighted average shares outstanding (1)	30,640	32,723	31,356	32,659
Effect of common stock equivalents — stock options and stock issuable under employee compensation plans	255	—	—	243
Diluted weighted average shares outstanding	30,895	32,723	31,356	32,902

(1) Basic weighted average shares outstanding includes the effect of vested but unissued restricted stock grants (see note 15).

Recent Accounting Pronouncements

In ~~March~~July 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“"ASU”") No. 2013-0511, ~~Parent's~~Income ~~Accounting~~Taxes ~~for~~(Topic ~~the~~740): ~~Cumulative~~Presentation ~~Translation~~of ~~Adjustment~~an ~~upon~~Unrecognized ~~Derecognition~~Tax ofBenefit ~~Certain~~When ~~Subsidiaries~~a orNet ~~Groups~~Operating ofLoss ~~Assets~~Carryforward, ~~within~~ a ~~Foreign~~Similar ~~Entity~~Tax Loss, or ofa anTax ~~Investment~~Credit inCarryforward ~~a Foreign Entity~~Exists. ~~The~~This ~~amendment~~ASU requires ~~the~~an ~~release~~entity ofto ~~the~~present ~~cumulative~~an ~~translation~~unrecognized ~~adjustment~~tax ~~into~~benefit ~~net~~as ~~income~~a ~~when~~reduction of a ~~parent~~deferred ~~either~~tax ~~sells~~asset for a ~~part~~net oroperating ~~all~~loss of(NOL) ~~its~~carryforward, ~~investment~~or insimilar atax ~~foreign~~loss ~~entity~~ or notax ~~longer~~credit ~~holds~~carryforward, rather than as a ~~controlling~~liability ~~financial~~when ~~interest~~(1) inthe auncertain ~~subsidiary~~tax position would reduce the NOL or ~~group~~other carryforward under the tax law of ~~assets~~the ~~that~~applicable isjurisdiction aand ~~nonprofit~~(2) ~~activity~~the orentity aintends ~~business~~to ~~within~~use athe ~~foreign~~deferred ~~entity~~tax asset for that purpose. ~~This~~ ~~update~~The ASU does not require new recurring disclosures. It is effective prospectively for ~~annual~~fiscal years, and interim periods within those years, beginning after December 15, 2013 and December 15, 2014, for public and nonpublic entities, respectively. Early adoption and retrospective application are permitted. The adoption of the accounting principles in this update ~~are~~is not anticipated to have a material impact on the Company's consolidated financial position or results of operations.

In 10July 2012, the FASB issued ASU No. 2012-02, Intangibles - Goodwill and Other, Testing Indefinite-Lived Intangible Assets for Impairment. This ASU allows an entity to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test for indefinite-lived intangible assets. An organization that elects to perform a qualitative assessment no longer is required to perform the quantitative impairment test for an indefinite-lived intangible asset unless it is more likely than not that the asset is impaired. The ASU, which applies to all entities, is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The Company adopted this guidance in the first quarter of fiscal year 2013, as allowed by the early adoption provisions within the guidance. The adoption of the accounting principles in this update did not have a material impact on the Company's consolidated financial position or results of operations.

interim periods beginning on or after January 1, 2013. The Company adopted this guidance in the third quarter of fiscal year 2013. The adoption of the accounting principles in this update did not have a material impact on the Company's consolidated financial position or results of operations.

In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income, the objective of which is to improve the comparability, consistency and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income. The amendment eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholder's equity, requiring that all non-owner changes in stockholder's equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, except as it pertains to reclassifications out of accumulated other comprehensive income. The FASB has deferred such changes in ASU No. 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05, which was issued in December 2011. The adoption of the accounting principles in these updates did not have a material impact on the Company's consolidated financial position or results of operations. The FASB issued ASUpdate No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to address concerns raised in the initial issuance of ASU 2011-05, Comprehensive Income, for which the Board deferred the effective date of certain provisions relating to the presentation of reclassification adjustments in the income statement. With the issuance of ASU 2013-02 entities are now required to disclose:


•	For items reclassified out of accumulated other comprehensive income (AOCI) and into net income in their entirety, the effect of the reclassification on each affected net income line item; and


•	for AOCI reclassification items that are not reclassified in their entirety into net income, a cross reference to other required U.S. GAAP disclosures.

This information may be provided either in the notes or parenthetically on the face of the statement that reports net income as long as all the information is disclosed in a single location. However, an entity is prohibited from providing this information parenthetically on the face of the statement that reports net income if it has items that are not reclassified in their entirety into net income. For public entities, the guidance is effective for annual reporting periods beginning after December 15, 2012 and interim periods within those years. The Company adopted this guidance in the first quarter of fiscal year 2014. The adoption of the accounting principles in this update did not have a material impact on the Company's consolidated financial position or results of operations.

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In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The amendments in this update require an entity to disclose significant amounts reclassified out of accumulated other comprehensive income into net income by the respective line items of net income in its entirety in the same reporting period. These amendments are effective for the Company prospectively for reporting periods beginning after December 15, 2012. Adoption of the accounting principles in this update did not have a material impact on the Company's consolidated financial position or results of operations.

In December 2011, the FASB issued ASU No. 2011-11, Disclosures about Offsetting Assets and Liabilities. The amendments in this update require an entity to disclose gross and net information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The FASB later clarified in ASU No. 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, that the scope of these amendments applies to derivatives, including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions that are either offset or subject to an enforceable master netting arrangement or similar agreement. These amendments are effective for fiscal years beginning on or after January 1, 2013, and interim periods within those annual periods. The adoption of the accounting principles in this update are not anticipated to have a material impact on the Company's consolidated financial position or results of operations.

3. DISCONTINUED OPERATIONS

Stamps Division

On September 13, 2012, the Company completed the sale of its Stamps division for approximately $7.8 million, of which $400,000 iswas held in escrow. During the three months ended September 30, 2013, the Company received all escrow funds. The Company recorded a gain on sale of $~~17,000~~0.02 million from the transaction. In accordance with the provisions of the Presentation of Financial Statements Topic 205 of the ASC, the results of the Stamps division are now presented in the condensed consolidated financial statements as discontinued operations.

~~Greg~~The ~~Martin~~following ~~Auctions,~~results ~~Inc~~of operations of the Stamps division have been presented as discontinued operations in the condensed consolidated statements of operations for all periods presented.

On December 1, 2010, the Company executed an agreement to sell certain assets of its wholly owned subsidiary Greg Martin Auctions, Inc. ("GMA") for $325,000. The transaction closed on January 31, 2011. In December 2011, the Company liquidated the remaining assets and liabilities of GMA.



	Three Months Ended
in thousands	September 30, 2013		September 30, 2012
Revenues	$	—	$	185
Loss from discontinued operations:
Loss from discontinued operations, excluding taxes and gain on sales of assets	—		(1,080		)
Income tax benefit	—		(293		)
Loss from discontinued operations	$	—	$	(787	)

The table below presents assets and liabilities of discontinued operations as of March 31, 2013 and June 30, 2012:

in thousands	March 31, 2013		June 30, 2012
Assets
Current assets:
Accounts receivable and consignor advances, net - collectible operations	$	—	$	7,270
Inventory, net	—		589
Prepaid expenses and other assets	—		414
Total current assets	—		8,273
Property and equipment, net	—		513
Goodwill	—		238
Other purchased intangibles, net	—		225
Other assets	—		139
Total assets	$	—	$	9,388
Liabilities
Accounts payable and consignor payables	$	—	$	6,004
Accrued expenses and other current liabilities	—		2,046
Income taxes payable	—		174
Total liabilities	$	—	$	8,224

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The following results of operations of the Stamps division and GMA have been presented as discontinued operations in the condensed consolidated statements of operations for all periods presented. In July 2011, the Company received $255,000 from GMA's buyer to finalize the transaction. As a result of finalizing this transaction, the Company recognized a gain of $55,000.

	Three Months Ended						Nine Months Ended
in thousands	March 31, 2013			March 31, 2012			March 31, 2013			March 31, 2012
Revenues	$	—		$	2,128		$	185		$	8,068
Income (loss) from discontinued operations:
Income (loss) from discontinued operations, excluding taxes and gain on sales of assets	—			(254		)	(1,080		)	60
Income tax benefit	(50		)	(2		)	(467		)	—
Income (loss) from discontinued operations	$	50		$	(252	)	$	(613	)	$	60


4.	CUSTOMER CONCENTRATIONS

Customers providing 10 percent or more of the Company's Trading segment revenues for the three ~~and nine~~ months ended ~~March~~September 3130, 2013 and 2012 are listed below:

Three Months Ended

~~Three Months Ended~~

~~Nine Months Ended~~

March 31, 2013

March 31, 2012

March 31, 2013

March 31, 2012

September 30, 2013

September 30, 2012

in thousands

Amount

Percent

Amount

Percent

~~Amount~~

~~Percent~~

~~Amount~~

~~Percent~~

Total Trading segment revenue

$1,492,113

~~1,825,450~~

100.0

1,~~816~~613,~~231~~615

~~100.0~~

%100.0

~~5,127,690~~

~~100.0~~

~~6,097,344~~

~~100.0~~

Trading segment customer concentrations

Customer A

$312,545

~~301,644~~

1620.59

~~489~~95,~~628~~219

~~27.0~~

%5.9

~~559,611~~

~~10.9~~

~~1,373,017~~

~~22.5~~

Customer B

168,680

~~231,272~~

1211.73

6013,~~206~~119

~~3.3~~

0.8

~~497,646~~

~~9.7~~

~~296,922~~

~~4.9~~

Customer C

24,427

~~39,988~~

21.26

~~248~~527,~~958~~416

~~13.7~~

32.7

~~759,214~~

~~14.8~~

~~910,332~~

~~14.9~~

Total

$505,652

~~572,904~~

3133.49

~~798~~635,~~792~~754

~~44.0~~

%39.4

~~1,816,471~~

~~35.4~~

~~2,580,271~~

~~42.3~~

Customers providing 10 percent or more of the Company's Trading segment's accounts receivable, excluding $3934.52 million and $3935.26 million of secured loans as of ~~March~~September 3130, 2013 and June 30, ~~2012~~2013, respectively, are listed below:

	March 31, 2013				June 30, 2012
	September 30, 2013				June 30, 2013
in thousands	Amount		Percent		Amount		Percent
Trading segment accounts receivable	$	3622,~~814~~641	100.0	%	$	8658,~~537~~777	100.0	%
Trading segment customer concentrations
Customer D	$	20,875	56.7	%	$	55,803	64.5	%
Customer B	$	—	—	%	$	44,185	75.2	%
Customer B	3,747		10.2	%	$	7,423	8.6	%
Customer D	—		—		8,593		14.6
Total	$	~~24,622~~—	~~66.9~~—	%	$	6352,~~226~~778	7389.18	%

~~Customers~~ ~~providing 10 percent or more of the Company's Trading segment's secured loans as of March 31, 2013 and June 30, 2012, respectively, are listed below:~~14

	March 31, 2013				June 30, 2012
in thousands	Amount		Percent		Amount		Percent
Trading segment secured loans	$	39,500	100.0	%	$	39,201	100.0	%
Trading segment customer concentrations
Customer E	$	12,500	31.6	%	$	—	—	%
Customer F	9,339		23.6		8,539		38.9
Customer G	—		—		6,707		17.1	%
Total	$	21,839	55.2	%	$	15,246	38.9	%

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Customers providing 10 percent or more of the Company's Trading segments' secured loans as of September 30, 2013 and June 30, 2013, respectively, are listed below:



	September 30, 2013				June 30, 2013

in thousands	Amount		Percent		Amount		Percent
Trading segment secured loans	$	34,208	100.0	%	$	35,585	100.0	%
Trading segment customer concentrations
Customer E	$	13,286	38.8	%	$	15,800	44.4	%
Customer F	3,909		11.4		3,659		10.3
Total	$	17,195	50.3	%	$	19,459	54.7	%

The loss of any of the above customers of the Trading segment could have a material adverse effect on the operations of the Company.

For the three ~~and nine~~ months ended ~~March~~September 3130, 2013 and 2012 and as of ~~March~~September 3130, 2013 and June 30, ~~2012~~2013, the Collectibles segment had no reportable concentrations.

1215

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5.	RECEIVABLES

Receivables and secured loans from the Company's trading segment consist of the following as of ~~March~~September 3130, 2013 and June 30, ~~2012~~2013:

in thousands	~~March~~September 3130, 2013			June 30, ~~2012~~2013
Customer trade receivables	$	171,~~462~~966		$	5838,~~518~~154
Wholesale trade advances	162,~~657~~604			1520,~~456~~623
Secured loans	3934,~~500~~208			3935,~~201~~585
Due from M.F. Global, Inc. trustee	—			5,692
Due from other brokers and other	18,071			—
Due from other brokers and other	2,695			6,871
Subtotal	56,849			94,362
Subtotal	76,314			125,738
Less: allowance for doubtful accounts	(30		)	(104		)
Less: allowance for doubtful accounts	(104		)	(102		)
Subtotal	56,819			94,258
Less: M.F. Global, Inc. trustee reserve	—			(1,016		)
Derivative assets — futures contracts	4,496			14,967
Subtotal	76,210			124,620
Derivative assets — forward contracts	2,030			471
Derivative assets — futures contracts	8,584			3,375
Receivables and secured loans, net — trading operations	$	63,345		$	109,696
Derivative assets — open purchase and sales commitments	1,205			—
Derivative assets — forward contracts	10			—
Receivables and secured loans, net — trading operations	$	86,009		$	127,995

Customer trade receivables represent short-term, non-interest bearing amounts due from metal sales and are ~~generally~~ secured by the related metals stored with the Company, a letter of credit issued on behalf of the customer, or other secured interests in assets of the customer.

Wholesale trade advances represent advances of refined materials to customers, secured by unrefined materials received from the customer. These advances are limited to a portion of the unrefined materials received. These advances are ~~secured~~unsecured, short-term, non-interest bearing advances made to wholesale metals dealers and government mints.

Secured loans represent short term loans made to customers of CFC. Loans are fully secured by bullion, numismatic and semi-numismatic material which are held in safekeeping by CFC. As of ~~March~~September 3130, 2013 and June 30, ~~2012~~2013, the loans carried average effective interest rates of 98.0% and 98.20%, respectively. Due from brokers principally consists of the margin requirements held at brokers related to open futures contracts.

~~Until~~On ~~October~~September 3127, ~~2011~~2013, ~~A-Mark~~CFC ~~maintained~~paid a$350 ~~segregated~~thousand ~~commodities~~to ~~account~~a ~~with~~borrower ~~M.F.~~of ~~Global,~~CFC ~~Inc.~~in ~~(“MFGI”).~~exchange ~~A-Mark~~for ~~used~~the ~~this~~right ~~account~~ to ~~enter~~assume ~~into~~a ~~future~~portfolio ~~transactions~~of toshort-term ~~hedge~~loan ~~the~~receivables ~~risk~~totaling ~~related~~$12.8 ~~to its positions with counterparties and physical inventories~~million. The ~~MFGI~~loans ~~filed~~were ~~for~~used ~~bankruptcy~~to ~~protection~~satisfy ~~on October 31, 2011. At~~ the ~~time~~existing ~~MFGI~~outstanding ~~filed~~loan ~~for~~totaling ~~bankruptcy, A-Mark had~~ $2012.38 million inwith ~~funds~~the ~~held~~borrower ~~at MFGI~~ of ~~which $14~~CFC.6 ~~million,~~The orreceivables ~~72%,~~were oforiginated ~~A Mark's MFGI Equity was returned to A-Mark in December 2011 pursuant to a bulk transfer approved~~ by the ~~Bankruptcy~~borrower ~~Court. A-Mark~~and ~~has~~this ~~filed~~transaction aresulted ~~claim~~ in the ~~bankruptcy~~assignment ~~proceedings~~of ~~for~~those ~~the~~receivables ~~remaining~~to $5CFC.7 ~~million.~~This Inpremium ~~July~~will ~~2012,~~be ~~A-Mark~~amortized ~~received~~ratably anas ~~additional~~loans ~~distribution~~pay ~~of $1~~off.6 ~~million~~The ~~from~~loans ~~the~~are ~~trustee~~due ~~for~~on ~~the~~demand ~~liquidation~~with ~~of MFGI, bringing~~ the ~~remaining~~option ~~balance~~ to ~~$4.1~~extend ~~million.~~maturities ~~On December 31, 2012, A-Mark sold its claim to this balance~~ for ~~$3.8~~180 ~~million~~days. AtNo ~~the~~loans ~~time~~were repaid as of ~~the~~September ~~sale~~30, ~~the~~2013 ~~Company~~and ~~had a reserve of $1.0 million~~ for ~~this potential loss. The receipt of proceeds from~~ the ~~sale~~three ofmonths ~~the~~ended ~~receivable~~September of30, ~~$3.8~~2013 ~~million~~no ~~resulted~~amortization inwas ~~a positive impact to the provision for bad debts of $0~~recorded.~~7 million.~~

Due from brokers principally consists of the margin requirements held at brokers related to open futures contracts.

The Company's derivative liabilities (see Note 11) represent the net fair value of the difference between market value and trade value at trade date for open metals purchases and sales contracts, as adjusted on a daily basis for changes in market values of the underlying metals, until settled. The Company's derivative assets represent the net fair value of open metals forwards and futures contracts. The metals forwards and futures contracts are settled at the contract settlement date.

Accounts receivable and consignor advances from the Company's Collectibles segment consist of the following as of ~~March~~September 3130, 2013 and June 30, ~~2012~~2013:

in thousands	~~March~~September 3130, 2013			June 30, ~~2012 (1)~~2013
Auction and trade	$	1315,~~239~~509		$	2010,~~138~~827
Secured loan	1,~~006~~258			—1,258
Derivative assets — future contracts	91—			98569
Due from brokers	152			368
Subtotal	16,767			12,654
Subtotal	14,488			20,604
Less: allowance for doubtful accounts	(299		)	(307		)
Less: allowance for doubtful accounts	(201		)	(176		)
Accounts receivable and consignor advances, net — collectibles operations	$	16,468		$	12,347
Accounts receivable and consignor advances, net — collectibles operations	$	14,287		$	20,428

The 13Company frequently extends trade credit in connection with its auction sales. The Company evaluates each customer's creditworthiness on a case-by-case basis. Typically, the customers that receive trade credit are established collectors and professional dealers that have regularly purchased property at the Company's auctions or whose reputation within the industry is known and respected by the Company. The Company makes judgments as to the ability to collect outstanding auction and consignor advances receivables and provides allowances for the portion of receivables when collection becomes doubtful. Provisions are made based upon a specific review of all significant outstanding invoices. The Company continuously monitors payments from its customers and records allowances for doubtful accounts for estimated losses in the period they become probable. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on the information available, the Company believes its allowance for doubtful accounts as of September 30, 2013 and June 30, 2013 is adequate.

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~~____________________~~Activity in the allowance for doubtful accounts for the Trading and Collectible segments for the three months ended September 30, 2013 and year ended June 30, 2013 are as follows:

(1) Adjusted to reflect discontinued operations



in thousands	September 30, 2013			June 30, 2013

Beginning balance	$	411		$	1,294
Provision for losses	—			(396		)
Charge-offs to reserve	(82		)	(488		)
Foreign currency exchange rate changes	—			1
Ending balance	$	329		$	411

~~Secured~~Net ~~loan~~charge-offs ~~represent~~for ~~a short term loan made to a business partner of~~ the ~~Company~~three onmonths ~~January~~ended 29September 30, 2013. ~~The~~and ~~loan~~2012 ~~matures~~totaled ~~January 29~~$82,000 ~~2014~~ and ~~is fully secured by assets located at the customer's place of business. As of March 31~~$19, ~~2013~~000, ~~the loan has an interest rate of 7~~respectively.~~5%.~~

The Company frequently extends trade credit in connection with its auction sales. The Company evaluates each customer's creditworthiness on a case-by-case basis. Generally, the customers that receive trade credit are established collectors and professional dealers that have regularly purchased property at the Company's auctions or whose reputation within the industry is known and respected by the Company. The Company makes judgments as to the ability to collect outstanding auction and consignor advances receivables and provides allowances for the portion of receivables when collection becomes doubtful. Provisions are made based upon a specific review of all significant outstanding invoices. The Company continuously monitors payments from its customers and maintains allowances for doubtful accounts for estimated losses in the period they become probable. After all attempts to collect a receivable have failed, the receivable is charged off against the allowance. Based on the information available, the Company believes its allowance for doubtful accounts as of March 31, 2013 and June 30, 2012 is appropriate. However, actual charge-offs could exceed the recorded allowance.

Activity in the total allowance for doubtful accounts for the Trading and Collectible segments for the nine months ended March 31, 2013 and year ended June 30, 2012 are as follows:

in thousands	March 31, 2013			June 30, 2012 (1)
Beginning balance	$	1,294		$	241
Provision for losses	(608		)	1,171
Charge-offs to reserve	(383		)	(110		)
Foreign currency exchange rate changes	2			(8		)
Ending balance	$	305		$	1,294

____________________

(1) Adjusted to reflect discontinued operations

Credit Quality of Financing Receivables and Allowance for Credit Losses

The Company adopted the accounting guidance on disclosures about the credit quality of financing receivables and the allowance for credit losses during the year ended June 30, 2012. This guidance requires information to be disclosed at disaggregated levels, defined as portfolio segments and classes.

The Company applies a systematic methodology to determine the allowance for credit losses for finance receivables. Based upon the Company's analysis of credit losses and risk factors, secured commercial loans are its sole portfolio segment. This is due to the fact that all loans are very similar in terms of secured material, method of initial and ongoing collateral value determination and assessment of loan to value determination. Typically, the Company's finance receivables within its portfolio have similar credit risk profiles and methods for assessing and monitoring credit risk.

The Company further evaluated its portfolio segments by the class of finance receivables, which is defined as a level of information in which the finance receivables have the same initial measurement attribute and a similar method for assessing and monitoring credit risk. As a result, the Company determined that the secured commercial loans portfolio segment has two classes of receivables, those secured by bullion and those secured by collectibles.

The Company's classes, which align with management reporting, are as follows:

in thousands	~~March~~September 3130, 2013				June 30, ~~2012~~2013
Bullion	$	2519,~~582~~887	6458.81	%	$	1221,~~991~~993	3361.18	%
Collectibles	1314,~~918~~321		3541.29		2613,~~210~~592		6638.92
Total secured loans	$	3934,~~500~~208	100.0	%	$	3935,~~201~~585	100.0	%

Impaired loans

A loan is considered impaired if it is probable, based on current information and events, that the Company will be unable to collect all amounts due according to the contractual terms of the loan. Customer loans are reviewed for impairment and include loans that are past due, non-performing or in bankruptcy. Recognition of income is suspended and the loan is placed on non-accrual status when management determines that collection of future income is not probable. Accrual is resumed, and previously suspended income is recognized, when the loan becomes contractually current and/or collection doubts are removed. Cash receipts on impaired loans are recorded first against the receivable and then to any unrecognized income.

All loans are contractually subject to margin call. As a result, loans typically do not become impaired due to the fact the Company has the ability to require margin calls which are due upon receipt. Per the terms of the loan agreement, the Company has the right to rapidly liquidate the loan collateral in the event of a default. The material is highly liquid and easily sold to pay off the loan. Such circumstances would result in a short term impairment that would typically result in full repayment of the loan and fees due to the Company.

There 14were no impaired loans as of September 30, 2013 and one impaired loan of $70,000 as of June 30, 2013.

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term impairment that would typically result in full repayment of the loan and fees due to the Company. There were no impaired loans as of March 31, 2013 and June 30, 2012.

Credit quality of loans

All interest is due and payable within 30 days. A loan is considered past due if interest is not paid in 30 days or collateral calls are not met timely. Loans ~~Customers~~ are ~~generally~~considered ~~put~~non ~~into~~performing when customers are in default for any interest past due over 30 days and for unsatisfied collateral calls. ~~Due~~When tothis ~~the~~occurs ~~accelerated liquidation terms of~~ the ~~Company's~~ loan ~~portfolio~~collateral ~~all~~is ~~past~~typically ~~due loans are generally~~ liquidated within 90 days ~~of default~~.

Non-performing loans have the highest probability for credit loss. The allowance for credit losses attributable to non-performing loans is based on the most probable source of repayment, which is normally the liquidation of collateral. In determining collateral value, wethe ~~estimate~~Company estimates the current market value of the collateral and ~~consider~~considers credit enhancements such as additional collateral and third-party guarantees. Due to the accelerated liquidation terms of the Company's loan portfolio all past due loans are liquidated within 90 days of default.

~~There~~ ~~were no non-performing loans as of March 31, 2013 and June 30, 2012.~~17

~~Further~~Table ~~information about the Company credit quality indicator includes differentiating by categories~~ of ~~current loan-to-value ratios. The Company disaggregates its secured loans as follows:~~Contents

in thousands	March 31, 2013				June 30, 2012
Loan-to-value of 75% or more	$	411	1.0	%	$	9,914	25.3	%
Loan-to-value of less than 75%	39,089		99.0		29,287		74.7
Total	$	39,500	100.0	%	$	39,201	100.0	%

Further information about the Company's credit quality indicators includes differentiating by categories of current loan-to-value ratios. The Company disaggregates its secured loans as follows:

No loans have a loan-to-value in excess of 100% at March 31, 2013 and June 30, 2012.



in thousands	September 30, 2013				June 30, 2013

Loan-to-value of 75% or more	$	3,354	9.8	%	$	3,764	10.6	%
Loan-to-value of less than 75%	30,854		90.2		31,821		89.4
Total	$	34,208	100.0	%	$	35,585	100.0	%

No loans have a loan-to-value in excess of 100% at September 30, 2013 and June 30, 2013.


6.	INVENTORIES

The Trading segment's inventories primarily include bullion and bullion coins and are stated at published market values plus purchase premiums paid on acquisition of the metal. The amount of premium included in the inventories as of ~~March~~September 3130, 2013 and June 30, ~~2012~~2013 was $14.78 million and $1.8 million, respectively. AsThe Company also protects substantially all of ~~March 31,~~its ~~2013~~physical ~~and~~inventories ~~June~~from market risk through commodity hedge transactions (Note 11). For the three months ended September 30, 2013 and 2012, the unrealized gains (losses) resulting from the difference between market value and cost of physical inventories were $32.86 million and $(211.1)8 million, respectively. These unrealized gains (losses) are included ~~within~~in ~~the~~ cost of precious ~~products~~metals sold in the accompanying condensed consolidated statements of operations. Such gains (losses) are generally offset by the results of hedging transactions, which have been reflected as a net gain (loss) on derivative instruments, which is a component of cost of precious metals sold in the condensed consolidated statements of operations.

The Trading segment's inventories include amounts borrowed from various suppliers under ongoing agreements ofto ~~$36.5~~purchase ~~million~~precious ~~and~~metals ~~$27~~on an unallocated basis.1 ~~million~~Unallocated asor ofpool ~~March 31,~~metal ~~2013~~represents ~~and~~an ~~June 30~~unsegregated inventory position that is due on demand, ~~2012~~in a specified physical form, ~~respectively~~based on the total ounces of metal held in the position. Amounts under these arrangements require delivery either in the form of precious metals or cash. A corresponding obligation related to metals borrowed is reflected on the condensed consolidated balance sheets for $13.3 million and $20.1 million as of September 30, 2013 and June 30, 2013, respectively. The Trading Segment also protects substantially all of its physical inventories from market risk through commodity hedge transactions ~~(See Note 11)~~.

The Trading segment's inventories also include amounts for obligation under a product financing arrangement. ~~totaling~~The Company entered into an agreement for the sale of gold and silver at a fixed price to a third party. This inventory is restricted under this agreement and the Company is allowed to repurchase the inventory at an agreed-upon price based on the spot price on the repurchase date. The third party charges monthly interest as a percentage of the market value of the outstanding obligation; such monthly charges are classified in interest expense. These transactions do not qualify as sales and therefore have been accounted for as financing arrangements and reflected in the condensed consolidated balance sheet under obligation under product financing arrangement. The obligation is stated at the amount required to repurchase the outstanding inventory. Both the product financing obligation and the underlying inventory (which is entirely restricted) are carried at fair value, with changes in fair value included as a component of cost of precious metals sold. Such obligation totaled $945.85 million and $1538.6 million as of ~~March~~September 3130, 2013 and June 30, ~~2012~~2013 respectively (See Note 10).

The Trading segment periodically loans metals to customers on a short-term consignment basis, charging interest fees based on the value of the metal loaned. Inventories loaned under consignment arrangements to customers as of ~~March~~September 3130, 2013 and June 30, ~~2012~~2013 totaled $63.54 million and $212.96 million, respectively. Such inventory is removed at the time the customer elects to price and purchase the metals, and the Company records a corresponding sale and receivable. Substantially all inventory loaned under consignment arrangements is secured by letters of credit issued by major financial institutions for the benefit of the Company or under an all-risk insurance policy with the Company as the loss-payee.

~~Inventories~~The asCollectibles segment's inventories are stated at the lower of ~~March 31~~cost or management's estimate of net realizable value, ~~2013~~and are accounted for under the specific identification method in which the value is calculated based on a detailed physical count of the inventory and ~~June 30~~the cost on the purchase date. In instances where bulk purchases are made, ~~2012~~the ~~consisted~~cost allocation is based on the relative market values of the ~~following:~~respective goods. The Company reviews the age and turnover of its inventory quarterly to determine whether any inventory has declined in value, and incur a charge to operations for such declines. The Company records write-downs based on two methodologies; specific write-downs on certain items based on declines in the marketplace, and estimated write-downs based on inventory aging depending on the category and type of inventory (where such percentages are supported by historical experience). If actual market conditions are less favorable than those projected by the Company and its estimates prove to be inaccurate, additional write-downs or adjustments may be required.

in thousands	March 31, 2013			June 30, 2012 (1)
Trading segment inventory	$	113,860		$	136,533
Less: reserve for loss	—			—
Trading, net	$	113,860		$	136,533
Collectibles segment inventory	$	19,790		$	22,033
Less: reserve for loss	(503		)	(717		)
Collectibles, net	$	19,287		$	21,316
Total inventory, gross	$	133,650		$	158,566
Less: reserve for loss	(503		)	(717		)
Net inventory	$	133,147		$	157,849

~~____________________~~ 18

(1) Adjusted to reflect discontinued operations

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~~Activity~~Inventories inas ~~the~~of ~~reserve for inventory loss for the nine months ended March~~September 3130, 2013 and ~~year ended~~ June 30, ~~2012~~2013 ~~are~~consisted asof ~~follows~~the following:

	Nine Months Ended			Year Ended
in thousands	September 30, 2013			June 30, 2013
in thousands	March 31, 2013			June 30, 2012 (1)
Trading	$	175,367		$	162,378
Beginning balance	$	717		$	706
Collectibles	20,366			25,875
Provision for loss	19			517
Net inventory	$	195,733		$	188,253
Charge-offs to reserve	(233		)	(506		)
Foreign currency exchange rate changes	—			—
Ending balance	$	503		$	717

____________________

(1) Adjusted to reflect discontinued operations

7. GOODWILL AND OTHER PURCHASED INTANGIBLE ASSETS

Goodwill

The ~~changes in the~~ carrying values of goodwill by business segment ~~for~~as ~~the~~of September 30, ~~nine~~2013 ~~months~~and ~~ended March~~June 3130, 2013 are described below:

in thousands	Trading		Collectibles			Total
Balance as of June 30, 2012 (1)
Balance as of June 30, 2013
Goodwill	~~4,884~~$	4,884	~~6,144~~$	5,363		~~11,028~~$	10,247
Accumulated impairment losses	—		(45,~~263~~363		)	(45,~~263~~363		)
	4,884		~~1,881~~—			64,~~765~~884
Adjustment to goodwill due to foreign currency exchange rate changes	—		242			242
Balance as of September 30, 2013
Disposals related to sale of stamps division	—		(1,021		)	(1,021		)
Goodwill	4,884		5,363			10,247
Goodwill impairment	—		—			—
Accumulated impairment losses	—		(5,363		)	(5,363		)
Balance as of March 31, 2013
	$	4,884	$	—		$	4,884
Goodwill	4,884		5,365			10,249
Accumulated impairment losses	—		(4,263		)	(4,263		)
	$	4,884	$	1,102		$	5,986

~~____________________~~Cumulative goodwill impairment totaled $5.4 million as of September 30, 2013 and June 30, 2013. There were no impairment charges to the Company's goodwill and purchased intangibles during the three months ended September 30, 2013 or September 30, 2012. In the fourth quarter of fiscal 2013, the Company had recorded the impairment charges primarily due to the operating loss incurred in SBN and management's evaluation of economic conditions and projected future performance in the business.

~~(1)~~Other ~~Adjusted~~Purchased toIntangibles, ~~reflect discontinued operations~~Net

~~Cumulative~~The ~~goodwill~~carrying ~~impairment~~value ~~totaled~~of ~~$4.3~~other ~~million~~purchased intangibles as of ~~March~~September 3130, 2013 and June 30, ~~2012,~~2013 ~~respectively.~~is ~~Please~~as ~~see~~described ~~note~~ below regarding increases in goodwill related to the acquisition of Stack's, LLC (“Stack's”). Changes in goodwill were related to acquisitions and foreign currency translation adjustments within the European operations. :



		September 30, 2013										June 30, 2013

in thousands	Estimated Useful Lives (Years)	Gross Carrying Amount		Accumulated Amortization			Accumulated Impairment			Net Book Value		Gross Carrying Amount		Accumulated Amortization			Accumulated Impairment			Net Book Value
Trademarks	Indefinite	$	3,479	$	—		$	(798	)	$	2,681	$	3,479	$	—		$	(798	)	$	2,681
Customer lists	5 - 15	9,057		(5,201		)	(419		)	3,437		9,057		(5,019		)	(419		)	3,619
Non-compete and other	0 - 4	2,270		(2,254		)	—			16		2,270		(2,253		)	—			17
Purchased intangibles subject to amortization		11,327		(7,455		)	(419		)	3,453		11,327		(7,272		)	(419		)	3,636
		$	14,806	$	(7,455	)	$	(1,217	)	$	6,134	$	14,806	$	(7,272	)	$	(1,217	)	$	6,317

The Company's other purchased intangible assets are subject to amortization except for trademarks, which have an indefinite life. Amortization expense related to the Company's intangible assets for the three months ended September 30, 2013 and 2012 was $0.2 million and $0.2 million, respectively. On November 23, 2010, Bowers and Merena Auctions, LLC (“B&M”) purchased certain assets of Summit Rare Coins for $0.3 million which was reflected as an increase to customer lists.

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Other Purchased Intangible Assets

The carrying value of other purchased intangibles as of March 31, 2013 and June 30, 2012 is as described below:

		March 31, 2013										June 30, 2012 (1)
in thousands	Estimated Useful Lives (Years)	Gross Carrying Amount		Accumulated Amortization			Accumulated Impairment			Net Book Value		Gross Carrying Amount		Accumulated Amortization			Accumulated Impairment			Net Book Value
Trademarks	Indefinite	$	3,479	$	—		$	(798	)	$	2,681	$	3,479	$	—		$	(798	)	$	2,681
Customer lists	5 - 15	9,057		(4,816		)	(419		)	3,822		9,057		(4,190		)	(419		)	4,448
Non-compete and other	4	2,270		(2,251		)	—			19		2,270		(2,242		)	—			28
Purchased intangibles subject to amortization		11,327		(7,067		)	(419		)	3,841		11,327		(6,432		)	(419		)	4,476
		$	14,806	$	(7,067	)	$	(1,217	)	$	6,522	$	14,806	$	(6,432	)	$	(1,217	)	$	7,157

____________________

(1) Adjusted to reflect discontinued operations

The Company's other purchased intangible assets are subject to amortization except for trademarks, which have an indefinite life. Amortization expense related to the Company's intangible assets for the three and nine months ended March 31, 2013 and 2012 was $0.2 million and $0.6 million and $0.2 million and $0.6 million, respectively.

On January 3, 2011, B&M formed Stack's-Bowers Numismatics, LLC (“LLC”), a Delaware limited liability company with Stack's, a Delaware limited liability company (See Note 13).

Estimated amortization expense on an annual basis for the succeeding five years is as follows (in thousands):

Year ending June 30,
2013 (remaining 3 months)	$	205
2014 (remaining 9 months)	$	683
2014	683
2015	567
2016	518
2017	~~479~~477
Thereafter	1,389
2018	450
Total	$	3,841
Thereafter	758
Total	$	3,453


8.	ACCOUNTS PAYABLE AND CONSIGNOR PAYABLES

Accounts payable and consignor payables ~~consists~~consist of the following:

in thousands	~~March~~September 3130, 2013		June 30, ~~2012 (1)~~2013
Trade payable to customers and consignor payables	$	1235,~~431~~018	$	128,~~855~~094
Advances from customers	2623,~~387~~916		2131,~~368~~026
Net liability on margin accounts	14,482		14,842
Liability on deferred revenue	9,269		14,985
Other accounts payable	323		464
Net liability on margin accounts	8,162		6,636
Derivative liabilities — open purchases and sales commitments	8,966		45,932
Due to brokers	5,010		4,985
Derivative liabilities — forward contracts	—		326
Derivative liabilities — open purchases and sales commitments	283		30,113
	$	6281,~~589~~658	$	95,~~787~~839

____________________

(1) Adjusted to reflect discontinued operations

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9.	INCOME TAXES

The Company uses an estimated annual effective tax rate, which is based on expected annual income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which the Company operates, to determine its quarterly provision for income taxes. Certain significant or unusual items are separately recognized in the quarter in ~~the~~ which they occur and can be a source of variability in the effective tax rates from quarter to quarter.

Income tax provision/(benefit) on continuing operations for the three ~~and nine~~ months ended ~~March~~September 3130, 2013 and 2012 consists of the following:

Three Months Ended

~~Nine Months Ended~~

March 31, 2013

March 31, 2012

March 31, 2013

March 31, 2012

September 30, 2013

September 30, 2012

U.S.

~~436~~$

570

~~(837~~

104

~~718~~

~~1,676~~

Foreign

89130

~~126~~

(120

~~977~~)

~~456~~

Provision for income taxes (income tax benefit) — continuing operations

~~525~~$

700

~~(711~~

(16

~~1,695~~)

~~2,132~~

The effective tax rate for the three ~~and nine~~ months ended ~~March~~September 3130, 2013 and 2012 is as follows:

Three Months Ended

~~Nine Months Ended~~

March 31, 2013

March 31, 2012

March 31, 2013

March 31, 2012

September 30, 2013

September 30, 2012

Effective tax rate

3343.3534

752.4840

~~118.5~~

~~44.54~~

The effective tax rate varies significantly from the federal statutory rate due to permanent adjustments for nondeductible items, state taxes and foreign tax rate differentials. In addition, during the nine months ended March 31, 2013, the Company recorded discreet adjustments to tax expense as a result of a change in tax law that impacted the valuation of state deferred tax assets and the accrual of an uncertain tax position related to foreign and state income taxes.

In assessing the realizability of deferred tax assets, ~~management~~the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. During the ~~quarter~~three months ended ~~March~~September 3130, 2013, ~~management concluded that, with~~ the exception of foreign tax credits which require foreign source income to be reported in the U.S., certain state net operating loss carryforwards, and capital loss carryforward, it was more likely than not that the Company would be able to realize the benefit of the U.S. federal and state deferred tax assets in the future. We based this conclusion on historical and projected operating performance, as well as our expectation that our operations will generate sufficient taxable income in future periods to realize the tax benefits associated with the deferred tax assets. The valuation allowance increased by $6.1 million during the nine months ended March 31, 2013 due to Management's assessment of its ability to utilize certain state net operating losses and federal carryforwards. We will continue to assess the need for a valuation allowance on the deferred tax asset by evaluating both positive and negative evidence that may exist. Any adjustment to the net deferred tax asset valuation allowance would be recorded in the income statement for the period that the adjustment is determined to be required. The valuation allowance against deferred tax assets was $14.9 million and $8.8 million as of March 31, 2013 and June 30, 2012 respectively.

~~The~~ Company was notified by the New York State Department of Taxation and Finance of their intent to audit the tax years ended June 30, 2008 through 2012. The Company is unable to predict the outcome at this time. 20

The Company is currently under examination by the Internal Revenue Service (IRS) for the years ended June 30, 2004 through 2010. With few exceptions, either examinations have been completed by tax authorities or the statute of limitations have expired for U.S. federal, state and local income tax returns filed by the Company for the years through 2003. The Company's Spanish operations are also currently under examination. For our remaining foreign operations, either examinations have been completed by the tax authorities or the statute of limitations has expired for tax returns filed by the Company for the years through 2002.

As of March 31, 2013, the Company had $27.7 million of unrecognized tax benefits and $1.7 million relating to interest and penalties. Of the total unrecognized tax benefits, $27.7 million would reduce our effective tax rate, if recognized. Our continuing practice is to recognize interest and penalties related to income tax matters in income tax expense. The Company accrued additional interest and penalties of $0.1 million and $0.3 million during the three and nine months ended March 31, 2013 and $0.1 million and $0.3 million during the three and nine months ended March 31, 2012. Final determination of a significant portion of the Company's global unrecognized tax benefits that will be effectively settled remains subject to ongoing examination by various taxing authorities, including the IRS. The Company is actively pursuing strategies to favorably settle or resolve these liabilities for unrecognized tax benefits. If the Company is successful in mitigating these liabilities, in whole or in part, the impact will be recorded as an adjustment to income tax expense in the period of settlement. The Company expects to resolve this issue within the next six to twelve months; however the Company is unable to predict the outcome at this time.

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concluded that, with the exception of foreign tax credits which require foreign source income to be reported in the U.S., certain state net operating loss carryforwards, and capital loss carryforward, it was more likely than not that the Company would be able to realize the benefit of the U.S. federal and state deferred tax assets in the future. The Company based this conclusion on historical and projected operating performance, as well as its expectation that its operations will generate sufficient taxable income in future periods to realize the tax benefits associated with the deferred tax assets. There was no change to the valuation allowance recorded during the three months ended September 30, 2013.

The Company will continue to assess the need for a valuation allowance on the deferred tax asset by evaluating both positive and negative evidence that may exist. Any adjustment to the net deferred tax asset valuation allowance would be recorded in the income statement for the period that the adjustment is determined to be required. The valuation allowance against deferred tax assets was $8.9 million as of September 30, 2013 and June 30, 2013 respectively.

The non-current income tax receivable as of June 30, 2013 represents a $1.2 million carry-back claim for the 2007 taxable year, a $1.5 million carry-back claim for the 2008 taxable year, alternative minimum tax liability of $0.2 million related to the 2010 taxable year, and a balance due of $0.7 million related to the 2011 taxable year. The Company intends to effect the filing of such claims upon completion of the Internal Revenue Service (IRS) examination (discussed below).

As of September 30, 2013, the Company had $27.7 million of unrecognized tax benefits and $2.1 million relating to interest and penalties. Of the total unrecognized tax benefits, $27.7 million would reduce the Company's effective tax rate, if recognized. The Company's continuing practice is to recognize interest and penalties related to income tax matters in income tax expense. The Company accrued additional interest and penalties of $0.04 million during the three months ended September 30, 2013 and $0.1 million during the three months ended September 30, 2012.

Final determination of a significant portion of the Company's global unrecognized tax benefits that will be effectively settled remains subject to ongoing examination by various taxing authorities, including the Internal Revenue Service ("IRS"). The Company is actively pursuing strategies to favorably settle or resolve these liabilities for unrecognized tax benefits. If the Company is successful in mitigating these liabilities, in whole or in part, the impact will be recorded as an adjustment to income tax expense in the period of settlement. The Company is currently under examination by the IRS for the years ended June 30, 2004 through 2010 and by other taxing jurisdictions on certain tax matters, including challenges to certain positions the Company has taken. With few exceptions, examinations have either been completed by the tax authorities or the statute of limitations have expired for U.S. federal, state and local income tax returns filed by the Company for the years through 2003. The Company's Spanish operations are currently under examination as discussed below. For the Company's remaining foreign operations, examinations have either been completed by the tax authorities or the statute of limitations has expired for tax returns filed by the Company for the years through 2003. As of June 30, 2013 the Company anticipates closing the IRS examination within the next 12 months. Closing the IRS examination would materially impact the amount of unrecognized tax benefits. However, the Company is not able to predict the outcome of the IRS examination at this time.

IRS and New York State Tax Audits

Audits of SGI's tax returns for fiscal 2004 through fiscal 2010 are currently under exam with the IRS. These audits are ongoing and the outcome cannot be determined at this time. Therefore, no accrual has been made with respect to this potential liability. In March 2008, the New York State Department of Taxation and Finance began an audit of the Company's tax returns for fiscal 2005, 2006 and 2007. These audits were concluded on June 2, 2011 and the New York State Department of Taxation and Finance accepted the return(s) as filed. The Company has been notified by the New York State Department of Taxation of their intent to audit the Company's tax returns for fiscal 2010 and 2011. The Company is unable to determine the outcome at this time.

Tax Investigation in Spain

On November 17, 2005, the Spanish tax authorities commenced a tax examination of the Company's subsidiary, Central de Compras Collectionables, S.L.U. ("CdC"). This examination, which now covers all periods from fiscal 2003 through fiscal 2006, is ongoing and the outcome cannot be determined at this time. Therefore, no accrual has been made with respect to this potential liability.

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10.	FINANCING AGREEMENTS

The Company has the following amounts outstanding under financing agreements as of ~~March~~September 3130, 2013 and June 30, ~~2012~~2013:

in thousands	~~March~~September 3130, 2013		June 30, ~~2012~~2013
Liability on borrowed metals	$	3613,~~514~~308	$	2720,~~076~~117
Obligation under product financing agreement	$	945,~~821~~456	$	1538,~~576~~554
Lines of credit:
Trading credit facility	$	7799,~~500~~700	$	9195,000
Collectibles credit facility	~~1,000~~—		—5,000
LLC credit facility	61		1,669
SBN credit facility	133		857
Total lines of credit	$	7899,~~561~~833	$	92100,~~669~~857
Debt obligations:
Note payable for acquired assets, plus accrued interest	$	205	$	330
Note payable for building, plus accrued interest	$	6,229	$	6,263
Note payable for building, plus accrued interest	6,298		6,398
Note payable for repurchase of minority interest	2,675		2,675
Total debt obligations	$	6,503	$	6,728
Earn-out related to Stack's LLC minority interest repurchase	1,063		1,063
Other liabilities	765		836
Total debt obligations	$	10,732	$	10,837

Liability on Borrowed Metals

A-Mark borrows metals from several of its suppliers under short-term agreements bearing interest at a designated rate. Amounts under these agreements are due at maturity and require repayment either in the form of borrowed metals or cash. A-Mark's inventories included borrowed metals with market values totaling $3613.53 million and $2720.1 million as of ~~March~~September 3130, 2013 and June 30, ~~2012~~2013, respectively. Certain of these metals are secured by letters of credit issued under A-Mark's borrowing facility, which totaled $90.0 million and $79.0 million as of ~~March~~September 3130, 2013 and June 30, ~~2012~~2013, respectively.

Obligation Under Product Financing ~~Agreement~~Arrangement

A-Mark entered into an agreement with a third party for the sale of gold and silver, at the option of the third party, at a fixed price. Such agreement allows the Company to repurchase this inventory at an agreed-upon price based on the spot price on the repurchase date. The third party charges a monthly fee as percentage of the market value of the outstanding obligation. These transactions do not qualify as sales and therefore have been accounted for as financing arrangements and reflected in the condensed consolidated balance sheet within ~~obligation~~"Obligation ~~under~~Under ~~product~~Product ~~financing~~Financing ~~arrangement~~Arrangement". The obligation is stated at the amount required to repurchase the outstanding inventory. Both the product financing obligation and the underlying inventory (which is entirely restricted) are carried at fair value, with changes in fair value recorded as a component of cost of precious metals sold in the condensed consolidated statements of operations. Such obligation totaled $945.85 million and $1538.6 million as of ~~March~~September 3130, 2013 and June 30, ~~2012~~2013, respectively.

Lines of Credit

Trading Credit Facility

A-Mark has a borrowing facility (“Trading Credit Facility”) with a group of financial institutions under an inter-creditor agreement, which provides for lines of credit including a sub-facility for letters of credit up to the maximum of the credit facility. As of ~~March~~September 3130, 2013, the maximum of the Trading Credit Facility was $170.0 million. A-Mark routinely uses the Trading Credit Facility to purchase metals from its suppliers and for operating cash flow purposes. Amounts under the Trading Credit Facility bear interest based on London Interbank Offered Rate (“LIBOR”) plus a margin. The one-month LIBOR rate was approximately 0.2018% and 0.2419% as of ~~March~~September 3130, 2013 and June 30, ~~2012~~2013, respectively. Borrowings are due on demand and totaled $7799.57 million and $9195.0 million for lines of credit and $90.0 million and $79.0 million for letters of credit at ~~March~~September 3130, 2013 and at June 30, ~~2012~~2013, respectively. Amounts borrowed under the Trading Credit Facility are secured by A-Mark’s receivables and inventories. The amounts available under the Trading Credit Facility are formula based and totaled $8370.53 million and $6566.0 million at ~~March~~September 3130, 2013 and June 30, ~~2012~~2013, respectively. The Trading Credit Facility also limits A-Mark's ability to pay dividends to SGI. The Trading Credit Facility is cancelable by written notice from the financial institutions.

A-Mark’s Trading Credit Facility has certain restrictive financial covenants which require it and SGI to maintain a minimum tangible net worth, as defined, of $25.0 million and $50.0 million, respectively. A-Mark’s and SGI’s tangible net worth as of ~~March~~September 3130, 2013 was $3842.90 million and $6266.61 million, respectively. The Company's ability to pay dividends, if it were to elect to do so, could be limited as a result of these restrictions.

Interest expense related to A-Mark’s borrowing arrangements totaled $01.80 million and $20.69 million for the three ~~and nine~~ months ended ~~March~~September 3130, 2013 and ~~$1.2 million and $3.3 million for the three and nine months ended March 31,~~ 2012, respectively.

1922

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Collectibles Credit Facility

In May 2010, the Company and its wholly-owned numismatic subsidiaries, Spectrum Numismatics International, Inc. (“SNI”), B&M, and Teletrade, Inc. (“Teletrade”), entered into a borrowing facility with a lender, providing for a line of credit (the “Collectibles Credit Facility”)~~. As~~ ofup ~~March 31,~~to ~~2013,~~a ~~the~~ maximum of ~~the Collectibles Credit Facility was~~ $5.0 million. Amounts outstanding under the Collectibles Credit Facility are secured by the assets of SNI, and B&M ~~and Teletrade~~, and are further guaranteed by the Company. The Company's obligations under the guaranty are secured by the pledge of SNI shares owned by it. The Collectibles Credit Facility is due on demand, and interest on the outstanding amounts accrued at the lender's base rate of 4.75%, which is subject to change~~, plus a margin~~. As of ~~March~~September 3130, 2013 and June 30, ~~2012~~2013 borrowings are due on demand and totaled $10.0 million and $5.0 million, respectively.

Separately, A-Mark, the Company's precious metals trading subsidiary, has a line of credit with this lender totaling $20.0 million, which is a component of A-Mark's Trading Credit Facility. Total borrowing capacity between SNI and A-Mark cannot exceed $23.0 million with respect to this lender. As of ~~March~~September 3130, 2013, the total amount borrowed with this lender was $2118.0 million, which consisted of $2018.0 million by A-Mark and $10.0 million by SNI. Amounts available for borrowing under this Collectible Credit Facility as of ~~March~~September 3130, 2013 ~~were~~and ~~$2.0 million. As of~~ June 30, ~~2012~~2013 ~~the~~were ~~total amount borrowed with this lender was~~ $185.0 million, ~~which consisted of $0 by SNI~~ and $180.0 million, ~~by A-Mark~~respectively.

Interest expense related to SNI's borrowing arrangements totaled $644,000 and $7435,000 for the three ~~and nine~~ months ended ~~March~~September 3130, 2013, ~~respectively,~~ and ~~$69,000 and $207,000 for the three and nine months ended March 31,~~ 2012, respectively.

~~LLC~~SBN Credit Facility

~~LLC~~SBN has a Revolving Credit Facility with its related party effective on January 1, 2011 and amended on April 28, 2011. This Revolving Credit Facility entitled ~~LLC~~SBN to draw upon it to cover certain costs, as defined. Under the terms of the agreement, this Revolving Credit Facility bears an interest rate of prime plus a stated rate and the agreement expires December 31, 2015. The maximum that can be drawn against the Revolving Credit Facility is $2.0 million. The proceeds can only be used to cover certain costs, as defined, and must be repaid within forty five days following the auction close. As of ~~March~~September 3130, 2013 and June 30, ~~2012~~2013, ~~LLC~~SBN had borrowed $0.1 million and $10.79 million, and incurred interest expense of $~~4,000~~0 and $3018,000 for the three ~~and nine~~ months ended ~~March~~September 3130, 2013, ~~respectively,~~ and ~~$7,000 and $32,000 for the three and nine months ended March 31,~~ 2012~~, respectively~~.

Other Debt Obligations

Note Payable for Acquired Assets

On November 23, 2010, B&M purchased certain assets of Summit Rare Coins for $~~300,000~~0.3 million which was reflected as an increase to customer lists (Note 7) with a corresponding increase to note payable of $~~300,000~~0.3 million. The ~~loan~~note bears interest at the rate of 6.0% per annum. The ~~loan~~note previously matured on March 31, 2013. The note was extended and now matures on March 31, 2014, at which time the then outstanding principal balance of the ~~loan~~note and accrued interest are due and payable in full. As of ~~March~~September 3130, 2013 and June 30, ~~2012~~2013 the outstanding principal balance was $~~159,500~~0.1 million and $~~300~~0.1 million,~~000,~~ and interest expense was $54,000 and $155,000 for the three ~~and nine~~ months ended ~~March~~September 3130, 2013, ~~respectively,~~ and ~~$5,000 and $14,000 for the three and nine months ended March 31,~~ 2012, respectively.

Note Payable for Repurchase of Minority Interest

On April 30, 2013, the Company, through its subsidiaries B&M and SBN, purchased the remaining 49% non-controlling interest in SBN/dba Stack's Bowers Galleries. As a result of this transaction, which was effective as of April 1, 2013, SBN/dba Stack's Bowers Galleries is now wholly owned by the Company. The purchase price consisted of $2.3 million in cash and $2.7 million evidenced by promissory note, bearing interest at 5.5% per annum and maturing on April 1, 2015. The Company is a primary obligor on the note, which is interest-only until maturity. In addition, the Company agreed to pay the seller, Stack's, LLC, an earn-out based on the performance of Stack's Bowers Galleries for its fiscal years ending June 30, 2014, 2015 and 2016 (see Note 15). Per the earn-out agreement, the Company is to pay Stacks, LLC. 40% of the pre-tax net profit of SBN in excess of $2.2 million for each of the fiscal years. As of September 30, 2013 and June 30, 2013, the outstanding principal balance of the note was $2.7 million, respectively. For the three months ended September 30, 2013 and 2012 interest expense was $0.04 million and $0.0 million, respectively. The Company also recorded a liability of $1.1 million as of June 30, 2013 in connection with the earn-out. The Company evaluated the earn-out as of September 30, 2013 and no changes were necessary.

Note Payable for Building

On April 21, 2011, the Company, through its wholly-owned subsidiary, 1063 McGaw, LLC, purchased a two-story 54,239 square foot office building located in Irvine, California, to serve as its new corporate headquarters. The purchase price for the building was $7.~~250~~3 million and was partly financed by the assumption of an existing loan with an outstanding principal balance of $6.~~524~~5 million. The loan bears interest at the rate of 5.50% per annum and is payable in equal monthly installments of principal and interest in the amount of $40,540. The loan matures on May 11, 2015, at which time the then outstanding principal balance of the loan is due and payable in full. As of ~~March~~September 3130, 2013 and June 30, ~~2012~~2013, the outstanding principal balance with accrued interest was $6.3 2 million and $6.4 3 million, respectfully, and interest expense was $8788,000 and $~~265~~89,000 for the three ~~and nine~~ months ended ~~March~~September 3130, 2013, ~~respectively,~~ and ~~$89,000 and $271,000 for the three and nine months ended March 31,~~ 2012, ~~respectively~~respectfully.

~~The~~ ~~following table represents future obligations pertaining to the principal payments on the McGaw note:~~ 23

Years ended June 30,	Amount
in thousands
2013 (remaining 3 months)	$	34
2014	142
2015	6,102
Total	$	6,278

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The following table represents future obligations pertaining to the principal payments on the McGaw note:



Years ended June 30,	Amount

in thousands
2014 (remaining nine months)	$	108
2015	6,102
Total	$	6,210


11.	DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

The Company manages the value of certain specific assets and liabilities of its trading business, including trading inventories (see Note 6), by employing a variety of strategies. These strategies include the management of exposure to changes in the market values of the Company's trading inventories through the purchase and sale of a variety of derivative products such as metals forwards and futures.

The Company's trading inventories and purchase and sale transactions consist primarily of precious metal bearing products. The value of these assets and liabilities are linked to the prevailing price of the underlying precious metals. The Company's precious metals inventories are subject to market value changes, created by changes in the underlying commodity markets. Inventories purchased or borrowed by the Company are subject to price changes. Inventories borrowed are considered natural hedges, since changes in value of the metal held are offset by the obligation to return the metal to the supplier.

Open purchase and sale commitments are subject to changes in value between the date the purchase or sale price is fixed (the “"trade date”") and the date the metal is received or delivered (the “"settlement date”"). The Company seeks to minimize the effect of price changes of the underlying commodity through the use of forward and futures contracts.

The Company's policy is to substantially hedge its inventory position, net of open purchase and sales commitments that is subject to price risk. The Company regularly enters into metals commodity forward and futures contracts with major financial institutions to hedge price changes that would cause changes in the value of its physical metals positions and purchase commitments and sale commitments. The Company has access to all of the precious metals markets, allowing it to place hedges. However, the Company also maintains relationships with major market makers in every major precious metals dealing center.

Due to the nature of the Company's global hedging strategy, the Company is not using hedge accounting as defined under ASC 815, Derivatives and Hedging. Gains or losses resulting from the Company's futures and forward contracts are reported as unrealized gains or losses on commodity contracts with the related unrealized amounts due from or to counterparties reflected as a derivative asset or liability (see Notes 5 and 8). Gains or losses resulting from the termination of hedge contracts are reported as realized gains or losses on commodity contracts. Realized and unrealized net gains (losses) on derivative instruments in the condensed consolidated statements of operations for the three ~~and nine~~ months ended ~~March~~September 3130, 2013 and 2012 were $(2317.36) million and $~~(31~~20.4)2 million, respectively, and ~~for~~recorded ~~the~~to ~~three~~cost ~~and~~of ~~nine~~goods ~~months ended March 31, 2012 were $31~~sold.~~5 million and $41.4 million, respectively.~~

The Company’s management sets credit and position risk limits. These limits include gross position limits for counterparties engaged in purchase and sales transactions with the Company. They also include collateral limits for different types of purchase and sale transactions that counterparties may engage in from time to time.

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A summary of the market values of the Company’s physical inventory positions, purchase and sale commitments, and its outstanding forward and futures contracts is as follows at September 30, 2013 and at June 30, 2013:

in thousands	~~March~~September 3130, 2013			June 30, ~~2012~~2013
Trading Inventory, net	$	~~113~~175,~~860~~367		$	~~136~~162,~~533~~378
Less unhedgable inventory:
Premium on metals position	(14,~~717~~824		)	(1,~~824~~787		)
Subtotal	~~112~~170,~~143~~543			~~134~~160,~~709~~591
Commitments at market:
Open inventory purchase commitments	~~465~~352,~~018~~850			~~392~~461,~~307~~883
Open inventory sale commitments	(~~234~~133,~~354~~218		)	(~~140~~272,~~823~~044		)
Margin sale commitments	(4415,~~386~~163		)	(3913,~~716~~651		)
Unhedgable premiums on open commitment positions	679			458
In-transit inventory no longer subject to market risk	(9,872		)	(24,221		)
Inventory borrowed from suppliers	(36,514		)	(27,076		)
Unhedgable premiums on open commitment positions	2,459			2,107
Product financing obligation	(9,821		)	(15,576		)
Inventory borrowed from suppliers	(13,308		)	(20,117		)
Advances on industrial metals	1,490			757
Product financing obligation	(45,456		)	(38,554		)
Inventory subject to price risk	254,255			305,040
Advances on industrial metals	(1,225		)	33
Inventory subject to price risk	307,610			256,027
Inventory subject to derivative financial instruments:
Precious metals forward contracts at market values	87162,~~925~~843			5984,~~659~~999
Precious metals futures contracts at market values	~~167~~147,~~268~~022			~~244~~171,~~954~~272
Total market value of derivative financial instruments	~~255~~309,~~193~~865			~~304~~256,~~613~~271
Net inventory subject to price risk	$	(~~938~~2,255	)	$	~~427~~(244	)

in thousands	~~March~~September 3130, 2013			June 30, ~~2012~~2013
Effects of open related party transactions between A-Mark and affiliates:
Net inventory subject to price risk, Company consolidated basis	$	(~~938~~2,255	)	$	~~427~~(244	)
Open inventory sale commitments with affiliates	~~(192~~1,459		)	(~~574~~1,402		)
Open inventory purchase commitments with affiliates	~~1,068~~(97		)	~~254~~1,282
Net inventory subject to price risk, A-Mark stand-alone basis	$	(62893	)	$	~~107~~(364	)

The unhedgable premium on open commitment positions is equal to total premium less hedgable premium, where the premium value is based upon a percentage of the underlying bullion value. At ~~March~~September 3130, 2013, total premium on open commitment positions was $02.75 million, of which $0zero ~~million~~ was deemed hedgable. At June 30, ~~2012~~2013, total premium on open commitment positions was $02.51 million, of which $0zero was deemed hedgable.

At ~~March~~September 3130, 2013 and June 30, ~~2012~~2013, the Company had the following outstanding commitments:

in thousands	~~March~~September 3130, 2013			June 30, ~~2012~~2013
Purchase commitments	$	~~465~~352,~~018~~850		$	~~392~~461,~~307~~883
Sale commitments	(~~234~~133,~~354~~218		)	(~~140~~272,~~823~~044		)
Margin sale commitments	(44,386		)	(39,716		)
Open forward contracts	162,843			84,999
Open forward contracts	87,925			59,659
Open futures contracts	147,022			171,272
Open futures contracts	167,268			244,954

The Company uses forward contracts and futures contracts to protect its inventories from market exposure.

~~The~~At ~~contract~~September 30, ~~amounts~~2013 ofand ~~these~~June 30, ~~forward~~2013, ~~and~~the ~~futures~~Company ~~contracts~~had ~~and~~outstanding ~~the~~purchase ~~open~~commitments ~~purchase~~of ~~and~~$352.9 ~~sale~~million ~~orders~~and ~~are~~$461.9 ~~not~~million, ~~reflected~~respectively, inand ~~the~~outstanding ~~accompanying condensed~~sale ~~consolidated~~commitments ~~balance~~of ~~sheets~~$(133.2) ~~The~~million ~~difference~~and ~~between~~$(272.0) ~~the~~million, ~~market~~respectively, ~~price~~arising ofin the ~~underlying~~normal ~~metal~~course orof ~~contract~~business; ~~and~~purchase ~~the~~commitments ~~trade~~related ~~amount~~to isopen ~~recorded~~forward atcontracts ~~fair~~totaling ~~value~~$162.8 ~~The~~million ~~Company’s open purchase~~ and ~~sales~~$85.0 ~~commitments~~million, ~~generally~~respectively; ~~settle~~and ~~within~~purchase ~~2 business days,~~ and ~~for~~sale ~~those~~ commitments ~~that~~related doto ~~not~~open ~~have~~futures ~~stated~~contracts ~~settlement~~totaling ~~dates,~~$147.0 ~~the~~million ~~Company~~and ~~has~~$171.3 ~~the~~million, ~~right~~respectively. toThe ~~settle~~Company ~~the~~uses ~~positions~~forward ~~upon~~contracts ~~demand. Futures~~ and ~~forwards~~futures contracts ~~open~~to atprotect ~~March 31,~~its ~~2013~~inventories ~~are~~from ~~scheduled~~market ~~to settle within 30 days~~exposure.

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The Company is exposed to the risk of failure of the counterparties to its derivative contracts. Significant judgment is applied by the Company when evaluating the fair value implications. The Company regularly reviews the creditworthiness of its major counterparties and monitors its exposure to concentrations. At ~~March~~September 3130, 2013, the ~~Company~~net ~~believes~~inventory ~~its~~subject to price risk of ~~counterparty~~A-Mark ~~default~~on ~~is mitigated as~~ a ~~result of such evaluation and the short~~stand-~~term~~alone ~~duration~~basis oftotaled ~~these~~$(0.9) ~~arrangements~~million.

The difference between the market price of the underlying metal or contract and the trade amount is recorded at fair value. The Company’s open purchase and sales commitments typically settle within 2 business days, and for those commitments that do not have stated settlement dates, the Company has the right to settle the positions upon demand. Futures and forwards contracts open at September 30, 2013 are scheduled to settle within 30 days.

The Company is exposed to the risk of failure of the counterparties to its derivative contracts. Significant judgment is applied by the Company when evaluating the fair value implications. The Company regularly reviews the creditworthiness of its major counterparties and monitors its exposure to concentrations. At September 30, 2013, the Company believes its risk of counterparty default is mitigated as a result of such evaluation and the short-term duration of these arrangements.

12. RELATED PARTY TRANSACTIONS

Royalties to Former Owner

As part of the A-Mark sale agreement dated July 15, 2005, the former owner is paid royalties ~~annually~~ for his portion of income earned on a specific type of transaction. The Trading segment ~~accrued~~accrual for royalties was $~~258~~359,000 and $~~504~~312,000 ~~in royalty expenses~~ as of ~~March~~September 3130, 2013 and June 30, ~~2012~~2013, respectively.

Transactions with Directors and Officers

From time to time certain of the Company's officers and directors may purchase from or consign collectibles to the Company. Each purchase and consignment is made under substantially the same conditions that are applicable to third parties. ~~The~~During ~~Company's officers and directors purchased from~~ the ~~Company $65,000 and $149,000 during the~~ three ~~and nine~~ months ended ~~March~~September 3130, 2013, ~~respectively,~~ and $02012, ~~and~~the ~~$1.1~~Company's ~~million~~officers ~~during~~and ~~the~~directors ~~three~~purchased from and ~~nine~~sold ~~months~~to ~~ended~~the ~~March 31,~~Company ~~2012,~~bullion ~~respectively,~~ and ~~did~~numismatic ~~not~~products ~~consign~~totaling ~~any~~$2.4 ~~collectibles~~million ~~during~~and ~~these~~$29,000 ~~periods~~respectively.

Transactions with Other Related Parties

During the three and nine months ended March 31, 2013, the Company purchased $29,000 and $2.5 million in collectibles from business partners of the Company's Chief Executive Officer. The Company has sold most of these collectibles at a profit of $0.2 million. During the three and nine months ended March 31, 2013, the Company sold $135,000 and $203,000 in collectibles to business partners of the Company's Chief Executive Officer.

Securities Purchase Agreement

On September 25, 2012, the Company purchased from Afinsa and Auctentia a total of 15,609,796 shares of common stock, as a result of which the combined holdings of Afinsa and Auctentia was reduced from 57% to 9.9% of the Company's common stock outstanding. In addition, the Company purchased from Auctentia 20% of the shares of the Company's subsidiary Spectrum PMI, Inc., which is the holding company for the Company's A-Mark Precious Metals, Inc. trading subsidiary. As a result, Spectrum PMI is now wholly owned by the Company. The purchase of the securities was pursuant to a Securities Purchase Agreement, dated March 5, 2012, as amended, among the Company, Afinsa and Auctentia, and the aggregate purchase price, including interest and other charges, was $51.1718 million. The purchase price was funded through the proceeds of a rights offering and private placement of shares of common stock, which also closed on September 25, 2012, as well as the Company's cash on hand, resulting in a net impact to working capital of $25.6 million in cash and cash equivalents. The Company sold 12,004,387 shares in the rights offering at a price of $1.90 per share, for aggregate proceeds of $22.831 million, and 1,426,315 shares in the private placement at a price of $1.90 per share, for aggregate proceeds of $2.7170 million. In connection with the purchase of the securities from Afinsa and Auctentia, and in accordance with the terms of the Securities Purchase Agreement, George Lumby, a representative of Afinsa, resigned from the Company's board of directors. Antonio Arenas, Afinsa's other representative on the board, resigned his position as executive chairman, but remains a director of the Company. As provided in the Securities Purchase Agreement, Mr. Arenas will resign from the board when Afinsa and Auctentia collectively cease to hold at least 5% of the Company's common stock. The Company agreed in the Securities Purchase Agreement ~~agreed~~ to use its reasonable commercial efforts to assist Afinsa and Auctentia to sell their remaining shares of common stock in an orderly manner that will be non-disruptive to the public market for the common stock and that is intended to facilitate a sale at prices acceptable to Afinsa and Auctentia.

As of ~~March~~September 3130, 2013, there are outstanding 30~~,555,138~~.8 million shares of common stock, of which 3~~,032,270~~.0 million shares are owned by Afinsa and Auctentia. Accordingly, Afinsa and Auctentia may be deemed to no longer control the Company.

Other Transactions with Afinsa

On June 27, 2011, the Company and Afinsa entered into a consignment agreement to auction philatelic materials owned by Afinsa. Under the terms of the consignment agreement, Heinrich Köhler Auktionshaus GmbH and Heinrick Köhler Briefmarkenhandel acted as the auctioneer for the sale of the philatelic materials owned by Afinsa. ~~Heinrich~~During ~~Köhler Auktionshaus GmbH and Heinrich Köhler Briefmarkenhandel earned related auction commissions of $0 and $57,000 during~~ the three ~~and nine~~ months ended ~~March~~September 3130, 2013, and 2012 respectively, ~~and~~Heinrich ~~$108,000~~Köhler Auktionshaus GmbH and ~~$124,000~~Heinrich ~~during~~Köhler ~~the~~Briefmarkenhandel ~~three~~earned zero and ~~nine~~$57,000 ~~months~~in ~~ended~~related ~~March 31,~~auction ~~2012~~commissions.

Related Party Credit Facility

Stack's-Bowers Numismatics, LLC has a maximum $2.0 million Revolving Credit Facility with its related party (Note 10).


13.	NON-CONTROLLING INTERESTS

Non-controlling interests include Auctentia’s 20% share in the net assets and income of A-Mark through September 25, 2012, and the outside partners' interests in the net assets and income of the joint ventures described below.

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LLC

On January 3, 2011, B&M, a wholly owned subsidiary of SGI, formed LLC with Stack's for the purpose of selling retail coins, paper money and other numismatic collectibles. B&M contributed substantially all of its operating assets (excluding inventory, accounts receivable and other specified assets) plus cash in the amount of $3,760,000 to the LLC in exchange for a 51% membership interest in the LLC, and Stack's contributed substantially all of its operating assets (excluding inventory, accounts receivable and other specified assets) to the LLC plus $490,000 in cash in exchange for a 49% membership interest in the LLC and cash in the amount of $3,250,000. LLC assumed the operations of both B&M and Stack's. SGI accounted for this transaction as an acquisition of Stack's assets and consolidates the operations of the LLC for financial reporting purposes.

Calzona

On January 12, 2012, SNI formed Calzona with an outside partner for the purpose of selling precious metals and coins via the ~~Internet~~internet. SNI and the outside partner each contributed $150,000 to Calzona in exchange for a 35% and 65% interest, respectively. The outside partner's interest is redeemable after five years at fair value and accordingly is classified as temporary equity in the condensed consolidated balance sheets. The Company has included in the condensed consolidated financial statements the financial position and results of operations of Calzona, a VIE, since SNI is the primary beneficiary. The Company recognizes the changes in the redemption value immediately as they occur and adjusts the carrying amount of the instrument to equal the redemption value at the end of each reporting period. Under this method, this is viewed at the ~~end of the reporting period as if it were also the redemption date for the security.~~

~~The~~ ~~Company's condensed consolidated balance sheets include the following non-controlling interests as of March 31, 2013 and June 30, 2012:~~26

in thousands	March 31, 2013		June 30, 2012
Auctentia 20% interest in Spectrum PMI through September 25, 2012 - (Spectrum PMI owned 100% of A-Mark Precious Metals)	$	—	$	10,935
LLC 49% interest	1,966		2,461
Non controlling interest presented as a component of stockholders' equity	1,966		13,396
Calzona redeemable 65% interest presented as temporary equity	14		124
	$	1,980	$	13,520

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~~The~~end ~~Company's~~of ~~condensed~~the ~~consolidated~~reporting ~~statements~~period ofas ~~operations~~if ~~for~~it were also the ~~three~~redemption ~~and~~date ~~nine~~for ~~months~~the ~~ended~~security. As ~~March~~of September 3130, 2013 and ~~2012~~June 30, ~~includes~~2013, the ~~following~~Company's ~~non-controlling~~condensed consolidated balances sheets include Calzona's redeemable 65% interest inpresented ~~net~~as ~~income~~temporary ~~(loss):~~equity of $119,000 and $160,000 respectively.

	Three Months Ended						Nine Months Ended
in thousands	March 31, 2013			March 31, 2012			March 31, 2013			March 31, 2012
Auctentia 20% interest in Spectrum PMI through September 25, 2012 - (Spectrum PMI owns 100% of A-Mark Precious Metals)	$	—		$	466		$	337		$	1,606
LLC 49% interest	391			(300		)	(495		)	(420		)
Calzona redeemable 65% interest	(44		)	(28		)	(110		)	(28		)
	$	347		$	138		$	(268	)	$	1,158

Calzona's redeemable 65% interest is as follows:




in thousands	September 30, 2013			June 30, 2013

Beginning balance	$	160		$	124
Non-controlling interest in net income (loss) of Calzona	(41		)	36
Ending balance	$	119		$	160

The Company's condensed consolidated statements of operations for the three months ended September 30, 2013 and 2012 includes the following non-controlling interest in net income:



	Three Months Ended
in thousands	September 30, 2013			September 30, 2012

Auctentia 20% interest in Spectrum PMI through September 25, 2012 - (Spectrum PMI owned 100% of A-Mark Precious Metals)	$	—		$	337
SBN 49% interest	—			(184		)
Calzona redeemable 65% interest	(41		)	(69		)
	$	(41	)	$	84

14. COMMITMENTS AND CONTINGENCIES

Refer to Note 15 toof the ~~notes~~Notes to Consolidated Financial Statements in the ~~2012~~2013 Annual Report for information relating to minimum rental payments under operating and capital leases, consulting and employment contracts, and other commitments.

Certain legal proceedings in which the Company is involved are discussed in Note 15 toof the notes to the Consolidated Financial Statements in its ~~2012~~2013 Annual Report. There have been no material changes in those legal matters and the Company does not have any related legal reserves.


15.	STOCKHOLDERS’ EQUITY

Repurchase of Common Shares

On February 8, 2013, the Company's board of directors approved a stock repurchase plan which authorizes the repurchase of up to $5 million of the Company's common stock. The authorization remains open through August 8, 2014. Purchases may be made from time to time by the Company in the open market at prevailing market prices or in privately negotiated transactions. As of March 31, 2013, 123,100 shares of common stock at an average weighted price per share of $2.01 had been repurchased by the Company under the plan.

of 24the Company's common stock. The authorization remains open through August 8, 2014. Purchases may be made from time to time by the

~~Table~~Company in the open market at prevailing market prices or in privately negotiated transactions. As of ~~Contents~~ September 30, 2013, 123,100 shares of

common stock at a weighted average price per share of $2.01 had been repurchased by the Company under the plan.

Stock Option Plans

1997 Stock Incentive Plan

In 1997, the Company’s ~~Board~~board of ~~Directors~~directors adopted and the Company's shareholders' approved the 1997 Stock Incentive Plan, as amended (the “1997 Plan”). Under the 1997 Plan, SGI has granted options and other equity awards as a means of attracting and retaining officers, employees, non-employee directors and consultants, to provide incentives to such persons, and to align the interests of such persons with the interests of stockholders by providing compensation based on the value of SGI's stock. Awards under the 1997 Plan may be granted in the form of non-qualified stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units, dividend equivalent rights and other stock-based awards (which may include outright grants of shares). The 1997 Plan ~~was~~currently is administered by the Board of Directors, which may in its discretion select officers and other employees, directors (including non-employee directors) and consultants to SGI and its subsidiaries to receive grants of awards.

Under the 1997 Plan, the exercise price of options and base price of SARs may be set inat the discretion of the Board ~~of Directors~~, and stock options and SARs may have any term. The majority of the stock options granted through June 30, 2008 under the 1997 Plan have been granted with an exercise price equal to market value on the date of grant. The 1997 Plan limits the number of stock options and SARs that may be granted to any one employee to 550,000 in any year. The 1997 Plan will terminate when no shares remain available for issuance and no awards remain outstanding. At ~~March~~September 3130, 2013, there were 0no shares remaining available for future awards under the 1997 Plan~~. On~~, and on December 13, 2012, the 2012 Stock Award and Incentive Plan (the “2012 Plan”), which was previously approved by the Board of Directors, was approved by the Company's shareholders. The 2012 Plan replaces the 1997 Plan for new grants, but any outstanding awards under the 1997 Plan continue in accordance with the 1997 Plan terms.

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2012 Stock Award and Incentive Plan

In 2012, the Company’s Board of Directors adopted and the Company's shareholders approved the 2012 Plan. Under the 2012 Plan, SGI may grant options and other equity awards as a means of attracting and retaining officers, employees, non-employee directors and consultants, to provide incentives to such persons, and to align the interests of such persons with the interests of stockholders by providing compensation based on the value of SGI's stock. Awards under the 2012 Plan may be granted in the form of incentive or non-qualified stock options, SARs, restricted stock, restricted stock units, dividend equivalent rights and other stock-based awards (which may include outright grants of shares). The 2012 Plan currently is administered by the Compensation Committee of the Board of Directors, which may in its discretion select officers and other employees, directors (including non-employee directors) and consultants to SGI and its subsidiaries to receive grants of awards.

Under the 2012 Plan, the exercise price of options and base price of SARs may be set inat the discretion of the Board, but generally may not be less than the fair market value of the shares on the date of grant, and the maximum term of stock options and SARs is ten years. The 2012 Plan limits the number of share-denominated awards that may be granted to any one employee to 750,000 in any year. The 2012 Plan will terminate when no shares remain available for issuance and no awards remain outstanding. At ~~March~~September 3130, 2013, there were 21,~~140~~192,~~000~~500 shares remaining available for future awards under the 2012 Plan.

~~Non-Plan~~Employee Stock ~~Awards~~Options. During the three months ended September 30, 2013 and 2012, the Company recorded expense of $52,000 and $0 in the condensed consolidated statements of operations related to the vesting of issued employee stock options. The Company estimates the fair value of its options on the date of grant using the Black-Scholes option-pricing model, which takes into account assumptions such as dividend yield, the risk-free interest rate, the expected stock price volatility and the expected life of the options.

~~Occasionally,~~No ~~the Company, at the discretion of the Board of Directors, may grant~~ stock ~~awards~~options ~~outside~~vested ofduring ~~existing stock option plans. On October 25, 2012,~~ the ~~Board~~three ofmonths ~~Directors~~ended ~~approved~~September ~~a stock option grant to Jeffrey Benjamin~~30, ~~the~~2013. ~~non-executive~~Also ~~Chairman~~during of the ~~Board~~three ofmonths ~~Directors~~ended ~~(the~~September ~~“Chairman”)~~30, to2013 ~~purchase~~and ~~500~~2012,~~000~~ ~~shares~~no ~~of the Company's common~~ stock~~. The~~ ~~stock~~ options ~~have~~were ~~an exercise price of $2~~granted.~~00,~~ the closing price of the Company's common stock on October 25, 2012, expire in ten years, and 20% of the options vest on each of the first five anniversaries of the grant date. Vesting would accelerate in the event of death, disability, or change in control, or if the Chairman ceased to serve on the Board at a time he remained willing to do so.

~~Employee Stock Options.~~ The ~~Company~~following ~~recorded~~table ~~expense~~summarizes ~~of $593,000 and $622,000 during~~ the ~~three~~stock ~~and~~option ~~nine~~activity ~~months~~for ~~ended March 31, 2013, respectively and $24,000 and $73,000 during~~ the three ~~and nine~~ months ended ~~March~~September 3130, ~~2012, in the condensed consolidated statements of operations related to the vesting of previously issued employee stock options.~~2013:

The following table summarizes the stock option activity for the nine months ended March 31, 2013:



	Options			Weighted Average Exercise Price		Intrinsic Value (in thousands)		Weighted Average per share Grant Date Fair Value
Outstanding at June 30, 2013	1,278,750			$	3.95	$	—	$	1.75
Exercised	(12,000		)	2.80		—		0.44
Cancellations, expirations and forfeitures	(134,000		)	2.81		—		0.63
Outstanding at September 30, 2013	1,132,750			4.10		$	—	1.90
Shares exercisable at September 30, 2013	$	602,750		5.93		$	—	2.07

	Options		Weighted Average Exercise Price		Intrinsic Value (in thousands)		Weighted Average per share Grant Date Fair Value
Outstanding at June 30, 2012	640,750		$	5.41	$	—	$	1.60
Granted through stock option plan	—		—		—		—
Other stock option grants	860,000		2.36		—		1.73
Exercised	(50,000	)	2.00		—		0.74
Cancellations, expirations and forfeitures	(170,500	)	2.00		—		1.37
Outstanding at March 31, 2013	1,280,250		3.95		$	95	1.75
Shares exercisable at March 31, 2013	720,250		5.45		$	—	1.79

Following is a summary of the status of stock options outstanding at September 30, 2013:



Options Outstanding								Options Exercisable
Exercise Price Ranges				Number of Shares Outstanding	Weighted Average Remaining Contractual Life (Years)	Weighted Average Exercise Price		Number of Shares Exercisable	Weighted Average Exercise Price
From		To		Number of Shares Outstanding	Weighted Average Remaining Contractual Life (Years)	Weighted Average Exercise Price		Number of Shares Exercisable	Weighted Average Exercise Price
$	0.01	$	4.99	960,000	9.04	$	2.37	430,000	$	2.82
5.00		9.99		7,750	0.10	8.97		7,750	8.97
10.00		14.99		165,000	0.51	13.90		165,000	13.90
				1,132,750	7.74	$	4.10	602,750	5.93

Restricted Stock Units. The Company has issued restricted stock to certain members of management, key employees, and directors. During the three months ended September 30, 2013 and 2012, the Company granted 200,000 and 79,168 restricted shares at a weighted average issuance price of $2.25 and $1.64, respectively. Such shares generally vest after 2 years from the date of grant. Total compensation expense recorded for restricted shares for the three months ended September 30, 2013 and 2012 was $92,000 and $72,000, respectively. The remaining compensation expense that will be recorded under restricted stock grants totals $839,000, which will be recorded over a weighted average period of approximately 2.25 years.

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~~Following~~The isfollowing atable ~~summary~~summarizes of the ~~status~~restricted of stock ~~options~~activity ~~outstanding~~for atthe ~~March~~three months ended September 3130, 2013:

Options Outstanding								Options Exercisable
	Shares	Weighted Average Share Price at Grant Date
Exercise Price Ranges				Number of Shares Outstanding	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number of Shares Exercisable	Weighted Average Exercise Price
Outstanding at June 30, 2013	362,500	$	2.36
From		To
Shares granted	200,000	2.25
$	1.00	$	5.00	1,107,500	8.32	$	2.43	547,500	$	2.86
Outstanding at September 30, 2013	562,500	2.32
5.01		10.00		7,750	0.60	8.97		7,750	8.97
Vested but unissued at September 30, 2013	2,500	1.68
10.01		15.00		165,000	1.01	13.90		165,000	13.90
				1,280,250	7.33	3.95		720,250	5.45

~~Restricted~~No ~~Stock~~tax ~~Units.~~benefit ~~The~~was ~~Company~~recognized ~~has~~in ~~issued~~the ~~restricted~~condensed ~~stock~~consolidated tostatements ~~certain members~~ of ~~management,~~operations ~~key~~related ~~employees,~~to ~~and~~share-based ~~directors.~~compensation ~~During~~for the ~~nine~~three months ended ~~March~~September 3130, 2013 and 2012~~, the Company granted 333,001 and 53,148 restricted shares at a weighted average issuance price of $2~~.02 No ~~and~~share-based ~~$2.86, respectively. Such shares generally vest within a year from the date of grant. Total~~ compensation ~~expense recorded for restricted shares~~ was ~~$118,000~~capitalized ~~and $280,000~~ for the three ~~and nine~~ months ended ~~March~~September 3130, 2013 and ~~$95,000 and $357,000 for the three and nine months ended March 31,~~ 2012~~, respectively~~. As of March 31, 2013, the remaining compensation expense that will be recorded under restricted stock grants totals $656,000, which will be recorded over a weighted average period of approximately 2.37 years.

~~The~~Stock ~~following~~Appreciation ~~table summarizes the restricted stock activity for the nine months ended March 31, 2013:~~Rights

	Shares		Weighted Average Share Price at Grant Date
Outstanding at June 30, 2012	470,648		$	2.16
Shares granted	333,001		2.02
Shares issued	(88,148	)	2.50
Shares forfeited	—		—
Outstanding at March 31, 2013	715,501		2.05
Vested but unissued at March 31, 2013	2,500		1.68

The Company, from time to time, enters into separate share-based payment arrangements with certain key employees and executive officers. The number of shares to be received under these awards ultimately depends on the appreciation in the Company’s common stock over a specified period of time, generally three years. At the end of the stated appreciation period, the number of shares of common stock issued will be equal in value to the appreciation in the shares of the Company’s common stock, as measured from the stocks closing price on the date of grant to the average price in the last month of the third year of vesting. As of September 30, 2013 and June 30, 2013, there were 37,500 stock appreciation rights outstanding with an exercise price of $12.06. At September 30, 2013 and June 30, 2013, there was no intrinsic value associated with these arrangements. The Company recorded the awards as a component of equity using the Black-Scholes valuation model. These awards are amortized on a straight-line basis over the vesting period. For the three months ended September 30, 2013 and 2012, the Company recognized no pre-tax compensation expense related to these grants. There is no remaining compensation expense that will be recorded for these awards.

No tax benefit was recognized in the condensed consolidated statements of operations related to share-based compensation for the three and nine months ended March 31, 2013 and 2012.

Stock Appreciation Rights. The Company, from time to time, enters into separate share-based payment arrangements with certain key employees and executive officers. The number of shares to be received under these awards ultimately depends on the appreciation in the Company’s common stock over a specified period of time, generally three years. At the end of the stated appreciation period, the number of shares of common stock issued will be equal in value to the appreciation in the shares of the Company’s common stock, as measured from the stocks closing price on the date of grant to the average price in the last month of the third year of vesting. As of March 31, 2013 and as of June 30, 2012, there were approximately 37,500 and 37,500 stock appreciation rights outstanding with an exercise price of $12.06. At March 31, 2013 and at June 30, 2012, there was no intrinsic value associated with these arrangements. The Company recorded the awards as a component of equity using the Black-Scholes valuation model. These awards are amortized on a straight-line basis over the vesting period. For the three and nine months ended March 31, 2013 and 2012, the Company recognized no pre-tax compensation expense related to these grants, based on a weighted average risk free rate of 4.06%, a volatility factor of 253% and a weighted average expected life of seven years. There is no remaining compensation expense that will be recorded for these awards.

Certain Anti-Takeover Provisions

The Company’s Certificate of Incorporation and by-laws contain certain anti-takeover provisions that could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from attempting to acquire, control of the Company without negotiating with its Board of Directors. Such provisions could limit the price that certain investors might be willing to pay in the future for the Company’s securities. Certain of such provisions provide for a Board of Directors with staggered terms, allow the Company to issue preferred stock with rights senior to those of the common stock, or impose various procedural and other requirements which could make it more difficult for stockholders to effect certain corporate actions.

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16.	SEGMENT AND GEOGRAPHIC INFORMATION

The Company's operations are organized under two business segments - Trading and Collectibles (Note 1).

	Three Months Ended						~~Nine Months Ended~~
in thousands	~~March~~September 3130, 2013			~~March~~September 3130, 2012 ~~(1)~~			~~March 31, 2013~~			~~March 31, 2012 (1)~~
Revenue:
Trading	$	1,~~825~~492,~~450~~113		$	1,~~816~~613,~~231~~615		$	~~5,127,690~~		$	~~6,097,344~~
Collectibles:
Numismatics	4342,~~758~~289			4350,~~734~~586			~~141,350~~			~~146,912~~
Philatelic	—			9			—			(10		)
Wine	398			666
Wine	386			1,298			1,710			3,888
Total Collectibles	42,687			51,252
Total Collectibles	44,144			45,041			143,060			150,790
Total revenue	$	1,534,800		$	1,664,867
Total revenue	$	1,869,594		$	1,861,272		$	5,270,750		$	6,248,134
in thousands	Three Months Ended
in thousands	Three Months Ended						Nine Months Ended
Revenue by geographic region (as determined by location of subsidiaries):	September 30, 2013			September 30, 2012
Revenue by geographic region (as determined by location of subsidiaries):	March 31, 2013			March 31, 2012 (1)			March 31, 2013			March 31, 2012 (1)
United States	$	1,457,308		$	1,553,668
United States	$	1,785,654		$	1,806,772		$	5,002,356		$	6,010,192
Europe	77,492			111,199
Europe	83,940			54,500			268,394			237,942
Total revenue	$	1,534,800		$	1,664,867
Total revenue	$	1,869,594		$	1,861,272		$	5,270,750		$	6,248,134
in thousands	Three Months Ended						Nine Months Ended
Operating income (loss):	March 31, 2013			March 31, 2012 (1)			March 31, 2013			March 31, 2012 (1)
Trading	$	3,855		$	1,655		$	9,641		$	6,808
Collectibles	166			(1,688		)	(1,545		)	(3,633		)
Corporate expenses	(3,531		)	(1,966		)	(8,729		)	(7,439		)
Total operating income (loss)	$	490		$	(1,999	)	$	(633	)	$	(4,264	)
in thousands	Three Months Ended						Nine Months Ended
Depreciation and amortization:	March 31, 2013			March 31, 2012 (1)			March 31, 2013			March 31, 2012 (1)
Trading	$	210		$	187		$	607		$	541
Collectibles	263			238			760			657
Corporate	97			65			276			116
Total depreciation and amortization	$	570		$	490		$	1,643		$	1,314

~~(1)~~ ~~Adjusted to reflect discontinued operations~~29

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in thousands	~~March 31, 2013~~	Three Months Ended			~~June 30, 2012 (1)~~
Inventories by segment/geographic region:
Revenue by geographic region - Trading:		September 30, 2013				September 30, 2012
Trading:
United States		$	1,296,534			$	1,438,375
United States	$	113,860			$	136,533
Europe		70,304				52,994
Total Trading	113,860				136,533
Asia Pacific		47,327				22,514
Collectibles:
Africa		—				3
United States	19,287				21,316
North America, excluding United States		76,766				99,484
Total Collectibles	19,287				21,316
Australia		1,150				245
Total inventories	$	133,147			$	157,849
South America		32				—
Total revenue - Trading		$	1,492,113			$	1,613,615
in thousands		Three Months Ended
Consolidated income (loss) of continuing operations before taxes:		September 30, 2013				September 30, 2012
Trading		$	3,867			$	3,265
Collectibles		401				(724		)
Corporate expenses		(2,653		)		(3,208		)
Total income (loss) of continuing operations before taxes		$	1,615			$	(667	)
in thousands		Three Months Ended
Depreciation and amortization:		September 30, 2013				September 30, 2012
Trading		$	220			$	197
Collectibles		234				226
Corporate		103				82
Total depreciation and amortization		$	557			$	505

in thousands	~~March~~September 3130, 2013			June 30, ~~2012 (1)~~2013
Total assets by segment/geographic region:
Inventories by segment/geographic region:
Trading:
United States	$	~~200~~159,~~931~~983		$	~~255~~148,~~578~~336
Europe	47,~~579~~852			29,~~263~~504
Total Trading	205,510			257,841
North America, excluding United States	7,478			4,423
Asia	54			115
Total Trading	175,367			162,378
Collectibles:
United States	8920,~~439~~366			~~100~~25,~~404~~875
Europe	153			6,781
Total Collectibles	20,366			25,875
Asia	—			706
Total inventories	$	195,733		$	188,253
Total Collectibles	89,592			107,891
Corporate and other	(137		)	12,776
Discontinued operations:
Europe	—			8,096
Asia	—			1,292
Total assets	$	294,965		$	387,896

in thousands	March 31, 2013		June 30, 2012 (1)
Total long term assets by segment/geographic region:
Trading:
United States	$	9,381	$	9,534
Europe	94		102
Total Trading	9,475		9,636
Collectibles:
United States	6,348		6,818
Europe	22		27
Total Collectibles	6,370		6,845
Corporate and other	14,460		14,487
Europe	—		918
Asia	—		198
Total long term assets	$	30,305	$	32,084

____________________

(1) Adjusted to reflect discontinued operations

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17. FAIR VALUE MEASUREMENTS



in thousands	September 30, 2013		June 30, 2013
Total assets by segment/geographic region:
Trading:
United States	$	231,941	$	264,043
Europe	1,448		2,473
Total Trading	233,389		266,516
Collectibles:
United States	93,966		86,460
Europe	226		275
Total Collectibles	94,192		86,735
Corporate and other	29,875		18,124
Total assets	$	357,456	$	371,375

The following tables present information about the Company's assets and liabilities measured at fair value on a recurring basis as of March 31, 2013 and June 30, 2012, aggregated by the level in the fair value hierarchy within which the measurements fall:



in thousands	September 30, 2013		June 30, 2013
Total long term assets by segment/geographic region:
Trading:
United States	$	9,165	$	9,201
Europe	102		90
Total Trading	9,267		9,291
Collectibles:
United States	4,752		4,983
Europe	11		22
Total Collectibles	4,763		5,005
Corporate and other	14,838		17,194
Total long term assets	$	28,868	$	31,490

~~Assets~~17. ~~and~~ACCUMULATED ~~Liabilities~~OTHER ~~Measured~~COMPREHENSIVE ~~at Fair Value on a Recurring Basis~~INCOME

	March 31, 2013
	Quoted Price in
	Active Markets			Significant Other			Significant
	for Identical			Observable			Unobservable
	Instruments			Inputs			Inputs
in thousands	(Level 1)			(Level 2)			(Level 3)		Total Balance
Assets:
Commodities	$	113,860		$	—		$	—	$	113,860
Derivative assets — open purchases and sale commitments				1,205
Derivative assets — futures contracts	—			8,675			—		8,675
Derivative assets — forward contracts	—			10			—		10
Total assets valued at fair value:	$	113,860		$	9,890		$	—	$	122,545
Liabilities:
Liability on borrowed metals	$	(36,514	)	$	—		$	—	$	(36,514	)
Obligation under product financing arrangement	(9,821		)	—			—		(9,821		)
Liability on margin accounts	(14,482		)	—			—		(14,482		)
Derivative liabilities — open sales and purchase commitments	—			(8,966		)	—		(8,966		)
Total liabilities valued at fair value	$	(60,817	)	$	(8,966	)	$	—	$	(69,783	)

The components of accumulated comprehensive income consist primarily of foreign currency translation gain (loss), net of tax. During 2013, the component of accumulated comprehensive income associated with the sale of the Company's European Stamps division of $1.02 million was removed from its consolidated equity. The foreign currency translation gain relates to the Company's investment in its European and Asian subsidiaries and fluctuations in exchange rates between their local currencies and the U.S. dollar (Note 2).

	June 30, 2012
	Quoted Price in
	Active Markets			Significant Other			Significant
	for Identical			Observable			Unobservable
	Instruments			Inputs			Inputs
in thousands	(Level 1)			(Level 2)			(Level 3)		Total Balance
Assets:
Commodities	$	136,533		$	—		$	—	$	136,533
Derivative assets — future contracts	—			3,473			—		3,473
Total assets valued at fair value:	$	136,533		$	3,473		$	—	$	140,006
Liabilities:
Liability on borrowed metals	$	(27,076	)	$	—		$	—	$	(27,076	)
Obligation under product financing arrangement	(15,576		)	—			—		(15,576		)
Liability on margin accounts	(14,842		)	—			—		(14,842		)
Derivative liabilities — open sales and purchase commitments	—			(45,932		)	—		(45,932		)
Derivative liabilities — forward contracts	—			(326		)	—		(326		)
Total liabilities valued at fair value:	$	(57,494	)	$	(46,258	)	$	—	$	(103,752	)

As of September 30, 2013 and June 30, 2013, the components of accumulated other comprehensive income are as follows:

There were no transfers in or out of Level 3 during the three and nine months ended March 31, 2013 and 2012.



in thousands	September 30, 2013		June 30, 2013

Foreign currency translation gain, net of tax	$	6,605	$	7,628
Sale of stamps division - European operations	—		(1,023		)
Accumulated other comprehensive income	$	6,605	$	6,605

2931

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~~The~~18. ~~following~~FAIR isVALUE ~~a description of the valuation methodologies used for instruments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy:~~MEASUREMENTS

Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants in the principal or most advantageous market on the measurement date. The Company carries a portion of its assets and liabilities at fair value in accordance with the Fair Value Measurements and Disclosures Topic 820 of the ASC. The majority of such assets and liabilities are carried at fair value on a recurring basis. In addition, certain assets are carried at fair value on a nonrecurring basis, including goodwill and purchased intangible assets accounted for at fair value that are only subject to fair value adjustments under certain circumstances.

Fair value measurements are classified within one of three levels in a valuation hierarchy based upon the observability of significant inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:

• Level 1 inputs are quoted prices (unadjusted) for identical assets or liabilities in active markets at the measurement date.

• Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in active markets; 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 are unobservable inputs for the asset or liability for which there is limited or no market activity at the measurement date. For instruments classified within level 3 of the hierarchy, judgments are more significant. Such judgments include determining the appropriate model to use and an assessment of all relevant empirical data in deriving valuation inputs including but not limited to projected future cash flows, discount rates, royalty rates, interest rates, customer attrition rates and foreign exchange rates.

The following tables present information about the Company's assets and liabilities measured at fair value on a recurring basis as of September 30, 2013 and June 30, 2013, aggregated by the level in the fair value hierarchy within which the measurements fall:

Assets and Liabilities Measured at Fair Value on a Recurring Basis



	September 30, 2013
	Quoted Price in
	Active Markets			Significant Other		Significant
	for Identical			Observable		Unobservable
	Instruments			Inputs		Inputs
in thousands	(Level 1)			(Level 2)		(Level 3)		Total Balance
Assets:
Commodities	$	175,367		$	—	$	—	$	175,367
Derivative assets — futures contracts	4,496			—		—		4,496
Derivative assets — forward contracts	2,030			—		—		2,030
Total assets valued at fair value:	$	181,893		$	—	$	—	$	181,893
Liabilities:
Liability on borrowed metals	$	(13,308	)	$	—	$	—	$	(13,308	)
Obligation under product financing arrangement	(45,456		)	—		—		(45,456		)
Liability on margin accounts	(8,162		)	—		—		(8,162		)
Derivative liabilities — open sales and purchase commitments	(283		)	—		—		(283		)
Total liabilities valued at fair value	$	(67,209	)	$	—	$	—	$	(67,209	)

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	June 30, 2013
	Quoted Price in
	Active Markets			Significant Other		Significant
	for Identical			Observable		Unobservable
	Instruments			Inputs		Inputs
in thousands	(Level 1)			(Level 2)		(Level 3)		Total Balance
Assets:
Commodities	$	162,378		$	—	$	—	$	162,378
Derivative assets — futures contracts	15,536			—		—		15,536
Derivative assets — forward contracts	471			—		—		471
Total assets valued at fair value:	$	178,385		$	—	$	—	$	178,385
Liabilities:
Liability on borrowed metals	$	(20,117	)	$	—	$	—	$	(20,117	)
Obligation under product financing arrangement	(38,554		)	—		—		(38,554		)
Liability on margin accounts	(6,636		)	—		—		(6,636		)
Derivative liabilities — open sales and purchase commitments	(30,113		)	—		—		(30,113		)
Total liabilities valued at fair value	$	(95,420	)	$	—	$	—	$	(95,420	)

There were no transfers in or out of Level 3 during the three months ended September 30, 2013 and 2012. The following is a description of the valuation methodologies used for instruments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy:

Commodities

Commodities consisting of the precious metals component of the Company's inventories are carried at fair value. The fair value for commodities inventory is determined primarily using quoted market pricing and data derived from the markets on which the underlying commodities are traded. Precious metals commodities are classified in Level 1 of the valuation hierarchy.

Derivatives

Futures contracts, forward contracts and open purchase and sales commitments are valued at their intrinsic values, based on the difference between the quoted market price and the contractual price, and are included within Level 21 of the valuation hierarchy.

Margin and Borrowed Metals Liabilities

Margin and borrowed metals liabilities consist of the Company's commodity obligations to margin customers and suppliers, respectively.

Margin liabilities and borrowed metals liabilities are carried at fair value, which is determined primarily using quoted market pricing and data derived from the markets on which the underlying commodities are traded. Margin and borrowed metals liabilities are classified in Level 1 of the valuation hierarchy.

Obligation Under Product Financing

Obligation under product financing is represented by the amount required to repurchase outstanding inventory under an agreement with a third party for the sale of gold and silver (Note 10). This obligation is carried at fair value, which is determined primarily using quoted market pricing and data derived from the markets on which the underlying gold and silver are traded. The obligation is classified in Level 1 of the valuation hierarchy.

Assets Measured at Fair Value on a Non-Recurring Basis

The Company's goodwill and other purchased intangible assets ~~may~~are be measured at fair value on a non-recurring basis. These assets are measured at cost but are written down to fair value if they are impaired. As of ~~March 31~~September 30, 2013, there were no indications present that the Company's goodwill ~~and~~or other purchased intangibles were ~~not~~ impaired, and therefore were not measured at fair value. There were no gains or losses recognized in earnings associated with the above purchased intangibles during the three ~~and nine~~ months ended ~~March 31~~September 30, 2013 and 2012.

Fair Value of Financial Instruments

The Company estimates the fair value of financial instruments that are not required to be carried in the condensed consolidated balance sheets at fair value on either a recurring or non-recurring basis as follows:

	March 31, 2013				June 30, 2012
(in thousands)	Carrying amount		Fair value		Carrying amount		Fair value		Level in fair value hierarchy
Cash and cash equivalents	$	28,083	$	28,083	$	25,305	$	25,305	1
Restricted cash	597		597		550		550		1
Receivables and secured loans	86,009		86,009		127,995		127,995		2
Accounts receivable and consignor advances	14,287		14,287		20,428		20,428		2
Accounts payable and consignor payables	62,589		62,589		95,787		95,787		2
Lines of credit	78,561		78,561		92,669		92,669		2
Notes payable	6,503		6,658		6,728		6,728		2

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	September 30, 2013				June 30, 2013
(in thousands)	Carrying amount		Fair value		Carrying amount		Fair value		Level in fair value hierarchy

Cash and cash equivalents	$	43,529	$	43,529	$	23,643	$	23,643	1
Restricted cash	606		606		602		602		1
Receivables and secured loans	63,345		63,345		109,696		109,696		2
Accounts receivable and consignor advances	16,468		16,468		12,347		12,347		2
Accounts payable and consignor payables	81,658		81,658		95,839		95,839		2
Lines of credit	99,833		99,833		100,857		100,857		2
Notes payable	10,865		10,865		10,837		10,837		2

The carrying amounts of cash and cash equivalents, restricted cash, receivables and secured loans, accounts receivable and consignor advances, and accounts payable and consignor payables approximated fair value due to their short-term nature. The carrying amounts of lines of credit and notes payable approximate fair value based on the borrowing rates currently available to the Company for bank loans with similar terms and average maturities.

1819. ~~SUBSEQUENT~~ ~~EVENTS~~EARNINGS PER SHARE

OnBasic ~~April~~earnings ~~30,~~per ~~2013,~~share is computed by dividing income available to common shareholders by the ~~Company,~~weighted ~~through~~average ~~its~~number ~~subsidiaries~~of ~~Bowers~~common &shares ~~Merena~~outstanding ~~Auctions~~for ~~LLC~~the ~~and~~period. ~~Stack's-Bowers~~Diluted ~~Numismatics,~~earnings ~~LLC~~per ~~(“SBN”)~~share utilizing the treasury stock method, ~~purchased~~adjusts the ~~remaining~~weighted ~~49%~~average ~~non-controlling~~number ~~interest~~of incommon ~~SBN/dba~~shares ~~Stack's~~for ~~Bowers~~common ~~Galleries.~~stock Asissuable aupon ~~result~~exercise of ~~this~~stock ~~transaction,~~options ~~which~~and ~~was~~other ~~effective~~commitments asto ofissue ~~April~~common 1,stock ~~2013~~in periods in which they have a dilutive effect, ~~SBN/dba~~and ~~Stack~~when the stock award's ~~Bowers~~exercise ~~Galleries~~price is ~~now~~lower ~~wholly~~than ~~owned by~~ the Company.'s ~~The~~average ~~purchase~~share price ~~consisted~~for ofthe $2period.25 For ~~million~~the inthree ~~cash~~months ~~and~~ended ~~$2.65~~September 30, ~~million~~2013, ~~evidenced~~diluted byearnings ~~promissory~~per ~~note~~share include the impact of 82,086 ~~bearing~~dilutive ~~interest~~shares atof ~~5.5%~~unvested ~~per~~restricted ~~annum~~stock units and ~~maturing~~500,874 ondilutive ~~April~~shares 1of un-exercised, ~~2015~~in-the-money stock options. For ~~The~~the ~~Company~~three ismonths aended ~~primary~~September 30, ~~obligor~~2012, onbasic ~~the~~and ~~note,~~diluted ~~which~~loss isper ~~interest-only~~share ~~until~~were ~~maturity.~~the Insame ~~addition,~~because the ~~Company~~inclusion ~~agreed~~of to1,139,918 ~~pay~~potential ~~the~~common ~~seller~~shares, ~~Stack's~~related to 640,750 ~~LLC~~outstanding stock options, an461,668 ~~earn-out~~restricted ~~based~~stock onunits, ~~the~~and ~~performance~~37,500 ofstock ~~Stack's~~appreciation ~~Bowers~~rights ~~Galleries~~("SARS"), ~~for~~in ~~its~~the ~~fiscal~~computation ~~years~~of ~~ending~~net ~~June~~loss ~~30,~~per ~~2014,~~share ~~2015~~would ~~and~~have ~~2016~~been anti-dilutive.

A reconciliation of shares used in calculating basic and diluted earnings per common shares follows. In computing diluted earnings per share for the three months ended September 30, 2013, the Company excluded options to purchase 815,000 shares of common stock, 200,000 shares of unvested restricted stock, and 37,500 SARS where exercise prices were in excess of the quoted market price of the Company's common stock because inclusion would be anti-dilutive. There is no dilutive effect of stock appreciation rights as such obligations are not settled and were out of the money at for the three months ended September 30, 2013 and 2012.

A reconciliation of basic and diluted shares is as follows:



	Three Months Ended
in thousands	September 30, 2013	September 30, 2012

Basic weighted average shares outstanding (1)	30,918	32,783
Effect of common stock equivalents — stock options and stock issuable under employee compensation plans	583	—
Diluted weighted average shares outstanding	31,501	32,783


(1)	Basic weighted average shares outstanding include the effect of vested but unissued restricted stock grants (see note 15).

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Statement Pursuant to the Private Securities Litigation Reform Act of 1995

This Quarterly Report on Form 10-Q ("Form 10-Q") contains statements that are considered forward-looking statements. Forward-looking statements give the Company's current expectations and forecasts of future events. All statements other than statements of current or historical fact contained in this ~~annual~~quarterly report, including statements regarding the Company's future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “plan,” and similar expressions, as they relate to the Company, are intended to identify forward-looking statements. These statements are based on the Company's current plans, and the Company's actual future activities and results of operations may be materially different from those set forth in the forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. Any or all of the forward-looking statements in this ~~annual~~quarterly report may turn out to be inaccurate. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. The forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and assumptions. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events occurring after the date hereof. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained in this ~~annual~~Form ~~report~~10-Q.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes that appear elsewhere in this ~~Quarterly Report on~~ Form 10-Q. In addition to historical condensed consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Form 10-Q.

INTRODUCTION

Management's discussion and analysis of financial condition and results of operations is provided as a supplement to the accompanying condensed consolidated financial statements and related notes to help provide an understanding of our financial condition, the changes in our financial condition and the results of operations. Our discussion is organized as follows:


•	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 condensed consolidated statements of operations by comparing the results for the three ~~and nine~~ months ended ~~March~~September 3130, 2013 and 2012.

• 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~~September 3130, 2013. 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 2 to the Consolidated Financial Statements in the ~~2012~~2013 Annual Report on Form 10-K.

• Recent accounting pronouncements. This section discusses new accounting pronouncements, dates of implementation and their impact on our accompanying condensed consolidated financial statements, if any.

OVERVIEW

Business

We conduct our operations in two reportable segments: Trading and Collectibles.

For the three months ended September 30, 2013, our Trading and Collectibles segments represented $1.49 billion, or 97.2%, and $42.7 million, or 2.8%, of our total revenues of $1.53 billion, and achieved $3.3 million and $0.4 million, respectively, in operating income, contributing to total operating income of $1.1 million after corporate expenses of $2.6 million. For the three months ended September 30, 2012, our Trading and Collectibles segments represented $1.61 billion, or 96.9%, and $51.3 million, or 3.1%, of our total revenues of $1.66 billion, and achieved $2.2 million and $(0.8) million, respectively, in operating income (loss), contributing to total operating loss of $(1.2) million.

Trading

Our Trading segment operates in the United States and Europe through our wholly owned subsidiary A-Mark, a distributor and service provider to consumers, wholesalers, retailers and dealers of precious metals throughout the world operating from facilities located in Santa Monica, California and Vienna, Austria. A-Mark is a wholly owned subsidiary of Spectrum PMI, Inc. At June 30, 2012, we owned 80% of A-Mark through our 80% ownership interest in Spectrum PMI. The remaining 20% of Spectrum PMI was owned by Auctentia. On September 25, 2012, we purchased from Afinsa and Auctentia a total of 15,609,796 shares of common stock, as a result of which the combined holdings of Afinsa and Auctentia were reduced from 57% to 9.9% of our common stock outstanding. In addition, we purchased from Auctentia 20% of the shares of our subsidiary Spectrum PMI, Inc., which is the holding company for our A-Mark Precious Metals, Inc. trading subsidiary. As a result, Spectrum PMI is now wholly owned by us.

CFC, a licensed California finance lender and a wholly owned subsidiary of A-Mark, offers loans on precious metals, rare coins and other collectibles to coin dealers, collectors and investors.

3135

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Collectibles

Our Collectibles segment is a global integrated network of companies with operations in North America, Europe and Asia. Our Collectibles business is focused on numismatic (coins) and rare and fine vintage wine. We primarily sell these materials, both owned and consigned, through our auction subsidiaries and through wholesale merchant/dealer relationships. Until the first quarter of fiscal 2013, when we sold our stamp operations, we were also an auctioneer and merchant/dealer of philatelic (stamps) materials.

For the three months ended March 31, 2013, our Trading and Collectibles segments represented $1.83 billion, or 97.6%, and $44.1 million, or 2.4%, of our total revenues of $1.87 billion, and achieved $3.9 million and $0.2 million, respectively, in operating income, contributing to total operating income of $0.5 million after corporate expenses of $3.5 million. For the three months ended March 31, 2012, our Trading and Collectibles segments represented $1.82 billion, or 97.6%, and $45.0 million, or 2.4%, of our total revenues of $1.86 billion, and achieved $1.7 million and $(1.7) million, respectively, in operating income (loss), contributing to total operating loss of $(2.0) million.

For the nine months ended March 31, 2013, our Trading and Collectibles segments represented $5.13 billion, or 97.3%, and $143.1 million, or 2.7%, of our total revenues of $5.27 billion, and achieved $9.6 million and $(1.5) million, respectively, in operating income (loss), contributing to total operating loss of $(0.6) million after corporate expenses of $8.7 million. For the nine months ended March 31, 2012, our Trading and Collectibles segments represented $6.10 billion, or 97.6%, and $150.8 million, or 2.4%, of our total revenues of $6.25 billion, and achieved $6.8 million and $(3.6) million, respectively, in operating income (loss), contributing to total operating loss of $(4.3) million.

RESULTS OF OPERATIONS

Overview of Results of Operations for the Three ~~and Nine~~ Months Ended ~~March~~September 3130, 2013 and 2012

Condensed Consolidated Results of Operations

The operating results of our business for the three months ended ~~March~~September 3130, 2013 and 2012 are as follows:

				% of					% of		Increase			% of Increase
	2013					2012					$			%
in thousands	~~2013~~$			% of revenue		~~2012~~$			% of revenue		Increase/(decrease)			Increase/(decrease)
Revenue	$	1,~~869~~534,~~594~~800		100.0	%	$	1,~~861~~664,~~272~~867		100.0	%	$	8(130,~~322~~067	)	0(7.48	)%
Gross profit	13,~~579~~329			0.79	%	1110,~~084~~180			0.6	%	23,~~495~~149			2230.59	%
General and administrative expenses	45,~~995~~397			0.34	%	5,~~546~~128			0.3	%	~~(551~~269		)	(95.92	)%
M.F. Global, Inc. loss provision	—			—		—			—		—			—
Salaries and wages	6,269			0.4	%	5,784			0.3	%	485			8.4	%
Salaries and wages	7,524			0.4		7,047			0.4		477			6.8
Depreciation and amortization	557			—	%	505			—	%	52			10.3	%
Depreciation and amortization	570			—		490			—		80			16.3
Operating income (loss)	1,106			0.1	%	(1,237		)	(0.1	)%	2,343			189.4	%
Operating income (loss)	490			—		(1,999		)	(0.1	)	2,489			124.5
Interest income	1,634			0.1	%	2,188			0.1	%	(554		)	(25.3	)%
Interest income	1,785			0.1		3,205			0.2		(1,420		)	(44.3	)
Interest expense	(1,199		)	(0.1	)%	(1,082		)	(0.1	)%	117			10.8	%
Interest expense	(672		)	—		(1,326		)	(0.1	)	(654		)	(49.3	)
Other income (expense), net	49			—	%	139			—	%	(90		)	(64.7	)%
Other income (expense), net	25			—		47			—		(22		)	(46.8	)
Unrealized gain (loss) on foreign exchange	25			—	%	(675		)	—	%	700			NM
Unrealized gain (loss) on foreign exchange	(54		)	—		(869		)	—		815			93.8
Income (loss) from continuing operations before provision for income taxes	1,615			0.1	%	(667		)	—	%	2,282			NM
Income (loss) from continuing operations before provision for income taxes	1,574			0.1		(942		)	(0.1	)	2,516			267.1
Provision for income taxes (income tax benefit)	700			—	%	(16		)	—	%	716			NM
Provision for income taxes (income tax benefit)	525			—		(711		)	—		1,236			173.8
Income (loss) from continuing operations	915			0.1	%	(651		)	—	%	1,566			NM
Income (loss) from continuing operations	1,049			0.1		(231		)	—		1,280			554.1
Income (loss) from discontinued operations, net of tax, attributable to Spectrum Group International, Inc.	—			—	%	(787		)	—	%	787			NM
Income (loss) from discontinued operations, net of tax, attributable to Spectrum Group International, Inc.	50			—		(252		)	—		302			119.8
Net income (loss)	915			0.1	%	(1,438		)	(0.1	)%	2,353			NM
Net income (loss)	1,099			0.1		(483		)	—		1,582			327.5
Less: net loss (income) attributable to the non-controlling interests	41			—	%	(84		)	—	%	125			NM
Less: net income attributable to the non-controlling interests	(347		)	—		(138		)	—		(209		)	151.4
Net income (loss) attributable to Spectrum Group International, Inc.	$	956		0.1	%	$	(1,522	)	(0.1	)%	$	2,478		NM
Net income (loss) attributable to Spectrum Group International, Inc.	$	752		—	%	$	(621	)	—	%	$	1,373		221.1	%

NM 32= Not Meaningful

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										Increase/				% of Increase/
	Three Months Ended September 30,							Increase/				% of Increase/
	2013				2012					(decrease)				(decrease)
Basic and diluted income (loss) per share attributable to Spectrum Group International, Inc.:	2013		2012					(decrease)				(decrease)
Basic and diluted income (loss) per share attributable to Spectrum Group International, Inc.:
Basic - continuing operations	$	0.03	$	(0.02	)			$	0.05			250.0	%
Basic - continuing operations	$	0.02			$	(0.01	)			$	0.03			(300.0	)%
Basic - discontinued operations	$	—	$	(0.03	)			$	0.03			100.0	%
Basic - discontinued operations	$	—			$	(0.01	)			$	0.01			NM
Diluted - continuing operations	$	0.03	$	(0.02	)			$	0.05			250.0	%
Diluted - continuing operations	$	0.02			$	(0.01	)			$	0.03			(300.0	)%
Diluted - discontinuing operations	$	—	$	(0.03	)			$	0.03			100.0	%
Diluted - discontinuing operations	$	—			$	(0.01	)			$	0.01			NM
Basic - net income (loss)	$	0.03	$	(0.05	)			$	0.08			160.0	%
Basic - net income (loss)	$	0.02			$	(0.02	)			$	0.04			(200.0	)%
Diluted - net income (loss)	$	0.03	$	(0.05	)			$	0.08			160.0	%
Diluted - net income (loss)	$	0.02			$	(0.02	)			$	0.04			(200.0	)%
Weighted average shares outstanding (in thousands):
Weighted average shares outstanding
Basic	30,918		32,783
Basic	30,640				32,723
Diluted	31,501		32,783
Diluted	30,895				32,723
NM - not meaningful

The operating results of our business for the nine months ended March 31, 2013 and 2012 are as follows:

				% of					% of		Increase			% of Increase
in thousands	2013			revenue		2012			revenue		(decrease)			(decrease)
Revenue	$	5,270,750		100.0	%	$	6,248,134		100.0	%	$	(977,384	)	(15.6	)%
Gross profit	35,218			0.7		39,054			0.6		(3,836		)	(9.8	)
General and administrative expenses	15,228			0.3		18,249			0.3		(3,021		)	(16.6	)
M.F. Global loss provision	(711		)	—		2,094			—		(2,805		)	(134.0	)
Salaries and wages	19,691			0.4		21,661			0.3		(1,970		)	(9.1	)
Depreciation and amortization	1,643			—		1,314			—		329			25.0
Operating loss	(633		)	—		(4,264		)	(0.1	)	3,631			85.2
Interest income	6,437			0.1		10,115			0.2		(3,678		)	(36.4	)
Interest expense	(3,085		)	(0.1	)	(3,889		)	(0.1	)	(804		)	(20.7	)
Other income (expense), net	247			—		455			—		(208		)	(45.7	)
Unrealized gain (loss) on foreign exchange	(1,536		)	—		2,370			—		(3,906		)	(164.8	)
Income (loss) from continuing operations before provision for income taxes	1,430			—		4,787			0.1		(3,357		)	(70.1	)
Provision for income taxes	1,695			—		2,132			—		(437		)	(20.5	)
Income (loss) from continuing operations	(265		)	—		2,655			—		(2,920		)	(110.0	)
Income (loss) from discontinued operations, net of tax, attributable to Spectrum Group International, Inc.	(613		)	—		60			—		(673		)	(1,121.7	)
Net income (loss)	(878		)	—		2,715			—		(3,593		)	(132.3	)
Less: net (income) loss attributable to the non-controlling interests	268			—		(1,158		)	—		(1,426		)	(123.1	)
Net income (loss) attributable to Spectrum Group International, Inc.	$	(610	)	—	%	$	1,557		—	%	$	(2,167	)	(139.2	)%

Table of Contents

						Increase/			% of Increase/
	2013			2012		(decrease)			(decrease)
Basic and diluted income (loss) per share attributable to Spectrum Group International, Inc.:
Basic - continuing operations	$	—		$	0.05	$	(0.05	)	(100.0	)%
Basic - discontinued operations	$	(0.02	)	$	—	$	(0.02	)	NM
Diluted - continuing operations	$	—		$	0.05	$	(0.05	)	(100.0	)%
Diluted - discontinuing operations	$	(0.02	)	$	—	$	(0.02	)	NM
Basic - net income (loss)	$	(0.02	)	$	0.05	$	(0.07	)	(140.0	)%
Diluted - net income (loss)	$	(0.02	)	$	0.05	$	(0.07	)	(140.0	)%
Weighted average shares outstanding
Basic	31,356			32,659
Diluted	31,356			32,902
NM - not meaningful

Revenues and Gross Profit

Revenues for the three months ended ~~March~~September 3130, 2013 ~~increased~~decreased $8130.31 million, or 07.48%, to $1.8753 billion from $1.8666 billion in 2012. ~~Revenues for the nine months ended March 31, 2013 decreased $977.4 million, or 15.6%, to $5.27 billion from $6.25 billion in 2012.~~ Our Trading segment revenues ~~increased~~decreased $9121.25 million, or 07.5%, for the three months ended ~~March~~September 3130, 2013 ~~and decreased $969~~.~~7 million, or 15.9% for the nine months ended March 31, 2013.~~ Our Collectibles segment revenues decreased $08.96 million, or 216.07%, for the three months ended ~~March~~September 3130, 2013 ~~and decreased $7~~.~~7 million, or 5.1%, for the nine months ended March 31, 2013.~~ For further information regarding our revenues please refer to the discussions regarding our Trading and Collectible segments below.

Our gross profit for the three months ended ~~March~~September 3130, 2013 increased $23.51 million, or 2230.59%, to $13.63 million, or a gross profit margin of

0.79%, from $1110.12 million, or a gross profit margin of 0.6% in 2012. We experienced aan increase in gross profit of $2.20 million, or 3938.19%, to

$7.72 million, or a gross profit margin of 0.45%, in our Trading segment, while our Collectibles segment gross profit increased by $01.31 million,

or 522.87%, to $56.82 million, or a gross profit margin of 1314.24%, for the three months ended ~~March~~September 3130, 2013. Our gross profit for the nine months ended March 31, 2013 decreased $3.8 million to $35.2 million, or a gross profit margin of 0.7%, from $39.1 million, or a gross profit margin of 0.6% in 2012. The decrease was attributable to both Trading and Collectibles segments. For a further discussion regarding gross profit and gross profit margins please refer to the discussions regarding our Trading and Collectibles segments, below.

Operating Expenses

General and administrative expenses ~~decreased~~increased $0.63 million, or 95.92%, to $5.04 million in the three months ended ~~March~~September 3130, 2013 from $5.51 million in 2012. ~~For~~The ~~the~~increase ~~nine~~is ~~months~~primarily ~~ended~~attributable ~~March 31,~~to ~~2013,~~additional ~~general~~professional fees and ~~administrative~~outside consultant expenses ~~decreased~~incurred ~~$3.0~~in ~~million,~~connection orwith ~~16.6%,~~our toproposed ~~$15.2~~spin-off ~~million~~transaction, ~~from~~as ~~$18.2~~disclosed ~~million~~ in ~~2012. These~~Note ~~decreases~~21 ~~are~~of ~~primarily attributable to an effort to reduce costs in~~ our ~~Collectibles~~Annual ~~segment,~~Report ~~including spending~~ on ~~outside~~Form ~~consultants~~10-K ~~and travel,~~ as ~~well~~of asJune ~~decreased~~30, ~~general~~2013 ~~and~~filed ~~administrative~~with ~~costs~~the ~~in our Trading segment~~SEC.

Salaries and wages increased $0.5 million, or 6.8.4%, to $76.53 million in the three months ended ~~March~~September 3130, 2013 from $75.08 million in 2012. ~~For the nine months ended March 31, 2013, salaries and wages decreased $2.0 million, or 9.1%, to $19.7 million from $21.7 million in 2012.~~ The ~~decrease~~increase in salaries and wages ~~for~~was ~~the nine month period were~~ primarily the result of ahigher ~~decline~~levels ~~in bonuses for the first quarter~~ of ~~fiscal~~discretionary ~~2013~~based ~~versus~~compensation ~~the~~expense ~~first~~and ~~quarter~~new ofhiring ~~fiscal 2012 as a result of lower than expected performance~~ in ~~our~~both ~~Trading and Collectibles~~ segments, ascompared ~~well~~to ~~as decreased headcount and severance payments. This was offset by increase in salaries during~~ the ~~current~~prior ~~three~~year ~~months as a result of the Company extending the contracts of key executive management~~quarter.

Depreciation and amortization expense increased $0.1 million, or 1610.3%, to $0.6 million for the three months ended ~~March~~September 3130, 2013 from $0.5 million in 2012. ~~For~~ ~~the nine months ended March 31, 2013, depreciation and amortization expense increased $0.3 million, or 25.0%, to $1.6 million from $1.3 million in 2012.~~ The ~~increases~~increase ~~are~~is primarily a result of purchases of ~~property~~new computers and equipment ~~for~~related to our ~~corporate~~trading ~~headquarters~~segment IT infrastructure.

Interest Income

Interest income decreased $10.46 million, or 4425.3%, to $1.86 million for the three months ended ~~March~~September 3130, 2013 from $32.2 million in 2012. ~~For~~ ~~the nine months ended March 31, 2013, interest income decreased $3.7 million, or 36.4%, to $6.4 million from $10.1 million in 2012.~~ The ~~decreases~~decrease ~~were~~was primarily due to decreases in our Trading segment's financing and liquidity service business.

Interest Expense

Interest expense for the three months ended ~~March~~September 3130, 2013 ~~decreased~~increased $0.651 million, or 4910.38% to $01.72 million from $1.31 million in 2012. The increase was related primarily to usage of our Trading segment's line of credit (the “Trading Facility”) as well as our Collectibles line of credit (the “Collectibles Facility”) and promissory note related to our minority interest repurchase of Stacks, LLC. Both our Trading and Collectibles segment utilize their lines of credit extensively for working capital requirements. For the ~~nine~~three months ended ~~March~~September 3130, 2013, ~~interest~~our ~~expense~~consolidated ~~decreased~~average debt balance was approximately $0117.81 million, orexcluding 20the debt on the mortgage on the McGaw building totaling $6.7%2 million and the note payable to Summit Coins of $30.1 million, ~~from~~compared to $3101.95 million in the three months ended September 30, 2012~~. The~~, ~~decreases~~excluding the same items.

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were related primarily to usage of our Trading segment's line of credit (the “Trading Facility”) as well as our Collectibles line of credit (the “Collectibles Facility”). Both our Trading and Collectibles segment utilize their lines of credit extensively for working capital requirements. For the nine months ended March 31, 2013, our consolidated average debt balance was approximately $100.8 million, excluding the debt on the mortgage on the McGaw building totaling $6.3 million and the note payable to Summit Coins of $0.2 million, compared to $132.9 million in the nine months ended March 31, 2012, excluding the same items.

Net Other Income (Expenses)

Net other income (expenses) for the three months ended ~~March~~September 3130, 2013 decreased by $2290,000 ~~thousand~~ to $2549,000 ~~thousand~~ income from $~~47 thousand income in 2012. For the nine months ended March 31~~139,000 ~~2013, net other~~ income ~~(expenses) decreased by $208 thousand to $247 thousand income from $455 thousand income~~ in 2012. ~~The decreases were due to various miscellaneous items.~~

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Provision for Income Taxes (Income Tax Benefit)

Our provision for income taxes (income tax benefit) on continuing operations was approximately $0.57 million and $(0.702) million for the three months ended ~~March~~September 3130, 2013 and 2012. Our effective tax rate was approximately 3343.43% and 752.54% for the three months ended ~~March~~September 3130, 2013 and 2012, respectively. ~~Our~~ ~~provision~~The ~~for~~primary ~~income~~difference ~~taxes~~in onthe ~~continuing~~effective ~~operations was~~tax ~~approximately~~rate ~~$1.7~~from ~~million~~September ~~and~~30, ~~$2.1~~2012 ~~million~~to ~~for~~September ~~the~~30, ~~nine~~2013 ~~months~~is ~~ended~~the ~~March 31,~~result ~~2013~~of ~~and~~withholding ~~2012,~~tax ~~respectively.~~on ~~Our~~the ~~effective~~dividend ~~tax~~from ~~rate~~a ~~was 118.5%~~foreign ~~and~~subsidiary ~~44.5%~~which, ~~for~~relative to the ~~nine~~first ~~months~~quarter ~~ended~~pre-tax ~~March 31~~book loss, ~~2013~~reduces ~~and~~the ~~2012,~~rate ~~respectively~~of the total tax benefit recognized. ~~The~~ ~~Company's~~Our effective tax rate differs from the federal statutory rate due to permanent adjustments for nondeductible items, state taxes and foreign tax rate differentials. In addition, during the nine months ended March 31, 2012, the Company recorded discreet adjustments to tax expense as a result of a change in tax law that impacted the valuation of state deferred tax assets and the accrual of an uncertain tax position related to foreign and state income taxes.

Our projected annual effective tax rate for the fiscal year ending June 30, ~~2013~~2014 is 4340.34% compared to an actual rate of 4834.01% for the fiscal year ended June 30, ~~2012~~2013. The primary difference in the projected annual effective tax rate from June 30, 2014 to actual rate at June 30, 2013 is the result of the write off of the deferred tax liability related to foreign currency translation differences during the year ended June 30, 2013. This write off had a beneficial rate impact on the June 30, 2013 tax year that is not expected to recur in the year ending June 30, 2014.

Our effective rate could be adversely affected by the relative proportions of revenue and income before taxes in the various domestic and international jurisdictions in which we operate. We are also subject to changing tax laws, regulations and interpretations in multiple jurisdictions in which we operate. Some of ~~the~~our ~~Company's~~ net operating loss carry-forwards are set to expire beginning June 30, 2014, which may impact the Company's effective tax rate in future periods. Our effective rate can also be influenced by the tax effects of purchase accounting for acquisitions and non-recurring charges, which may cause fluctuations between reporting periods.

Income (Loss) from Discontinued Operations

In January 2011, the Company closed a transaction to sell certain assets of its wholly owned subsidiary Greg Martin Auctions, Inc. (“GMA”). On September 13, 2012, the Company completed the sale of its Stamps division. The results of operations of GMA and the Stamps division are presented as discontinued operations for all periods presented in the condensed consolidated financial statements. See Note 3 of the accompanying notes to condensed consolidated financial statements. Income (loss) from discontinued operations increased $0.3 million to $50,000 in the three months ended March 31, 2013 from $(0.3) million loss in 2012. For the nine months ended March 31, 2013, income (loss) from discontinued operations decreased $0.7 million to a loss of $(0.6) million from $0.1 million income in 2012. The Stamps division did not hold any auctions from July 1, 2012 through September 13, 2012, resulting in a decrease in revenue of $7.9 million to $0.2 million for the nine months ended March 31, 2013 from $8.1 million in 2012.

Non-controlling Interests

Net ~~loss~~income attributable to non-controlling interests ~~increased~~decreased $~~0.2 million~~125,000, or ~~151~~148.48%, to ~~$(0.3)~~a ~~million~~ loss of $41,000 for the three months ended ~~March~~September 3130, 2013 ~~from~~compared ~~$(0.1)~~to ~~million~~income ~~loss~~of $84,000 in 2012. The ~~increase~~decrease was primarily due to our ~~first~~prior ~~quarter~~three ~~2013~~months ended September 30, 2012 repurchase of Auctentia's 20% interest in Spectrum PMI, which owned 100% of our A-Mark subsidiary. For the ~~nine~~three months ended ~~March 31~~September 30, 2013, ~~net income/loss attributable to~~ non-controlling interests ~~decreased~~only ~~$1.4~~consisted ~~million,~~of ~~or 123.1%~~Calzona, towhich ~~$0.3~~incurred ~~million loss from $1.2 million income in 2012. The change was primarily due to~~ a ~~decrease in~~ net ~~income (~~loss) ~~of Stacks-Bowers Numismatics, LLC and our A-Mark subsidiary, as well as the impact of the repurchase of the non-controlling interest in Auctentia~~ during the ~~first quarter of 2013~~period.

Net Income (Loss) Attributable to SGI

Net income (loss) attributable to SGI ~~decreased~~increased $12.45 million, or ~~221~~162.18%, to $01.80 million in the three months ended ~~March~~September 3130, 2013 from ~~$(0.6)~~a ~~million~~loss inof ~~2012. For the nine months ended March 31, 2013, net income attributable to SGI decreased~~ $~~2.2 million, or 139.2%, to $~~(01.65) million ~~from $1.6 million~~ in 2012. The ~~decrease~~increase is due primarily to ~~net~~positive ~~losses~~operating income in both our ~~Collectibles~~Trading ~~segment~~and asCollectibles ~~well~~segments asof a$3.7 ~~decrease~~million inand ~~net~~$0.4 ~~income~~million, ~~in our Trading segment~~respectively.

Earnings (Loss) per Share

Basic earnings (loss) per share from continuing operations increased $0.0305 to $0.0203 for the three months ended ~~March~~September 3130, 2013, from $(0.0102) in 2012, ~~while~~and diluted earnings per share from continuing operations increased $0.0305 to $0.0203 from $(0.0102) in 2012. For the nine months ended March 31, 2013, basic earnings per share from continuing operations decreased $0.05 to $0.00 from $0.05, while diluted earnings per share from continuing operations decreased $0.05 to $0.00 from $0.05 in 2012. The change in both basic and diluted earnings per share was primarily due to ~~changes~~the increase in our net income ~~(loss)~~from the factors mentioned above.

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Trading Operations

The operating results of our Trading segment for the three months ended ~~March~~September 3130, 2013 and 2012 are as follows:

			% of				% of		$			%
	2013				2012				$			%
In thousands	~~2013~~$		% of revenue		~~2012~~$		% of revenue		Increase/(decrease)			Increase/(decrease)
Trading revenues	$	1,~~825~~492,~~450~~113	100.0	%	$	1,~~816~~613,~~231~~615	100.0	%	$	9(121,~~219~~502	)	0(7.5	)%
Gross profit	7,~~743~~173		0.45		5,~~567~~164		0.3		2,~~176~~009			3938.19
General and administrative expenses	~~801~~1,167		—0.1		~~1,117~~799		~~0.1~~—		~~(316~~368		)	~~(28~~46.31	)
M.F. Global, Inc. loss provision	—		—		—		—		—			—
Salaries and wages	2,462		0.2		2,001		0.1		461			23.0
Salaries and wages	2,877		0.2		2,608		0.1		269			10.3
Depreciation and amortization	221		—		197		—		24			12.2
Depreciation and amortization	210		—		187		—		23			12.3
Operating income	$	3,323	0.2	%	$	2,167	0.1	%	$	1,156		53.3	%
Operating income	$	3,855	0.2	%	$	1,655	0.1	%	$	2,200		132.9	%

The operating results of our Trading segment for the nine months ended March 31, 2013 and 2012 are as follows:

				% of				% of		$			%
In thousands	2013			revenue		2012		revenue		Increase/(decrease)			Increase/(decrease)
Trading revenues	$	5,127,690		100.0	%	$	6,097,344	100.0	%	$	(969,654	)	(15.9	)%
Gross profit	19,419			0.4		21,251		0.3		(1,832		)	(8.6	)
General and administrative expenses	2,548			—		3,646		0.1		(1,098		)	(30.1	)
M.F. Global, Inc. loss provision	(711		)	—		2,094		—		(2,805		)	(134.0	)
Salaries and wages	7,334			0.1		8,162		0.1		(828		)	(10.1	)
Depreciation and amortization	607			—		541		—		66			12.2
Operating income	$	9,641		0.2	%	$	6,808	0.1	%	$	2,833		41.6	%

Trading Revenues

Our Trading segment revenues ~~increased~~decreased $9121.25 million, or 07.5%, to $1.8349 billion for the three months ended ~~March~~September 3130, 2013 from $1.8261 billion in 2012. ~~For~~ ~~the nine months ended March 31, 2013, our Trading segment revenues decreased $969.7 million, or 15.9%, to $5.13 billion from $6.10 billion in 2012.~~ Our trading business has experienced adecreases ~~slight decrease~~ in commodity prices and ounces sold for ~~silver~~gold ~~offset~~and bysilver ~~an increase of ounces sold for gold~~ during the three ~~and and the nine~~ months ended ~~March 31~~September 30, 2013 compared to 2012.

Gross Profit

Gross profit in our Trading segment for the three months ended ~~March~~September 3130, 2013 increased by $2.20 million, or 3938.19%, to $7.72 million from $5.62 million in 2012. The increase is due to ~~greater~~a ~~volatility~~more infavorable ~~the~~impact ~~commodity~~in ~~market impacting the~~ spreads ofin ~~silver and gold products during the period. For the nine months ended March 31,~~ 2013, ~~gross~~versus ~~profit~~2012 incaused ~~our Trading segment decreased~~ by ~~$1.8~~greater ~~million, or 8.6%, to $19.4 million from $21.3 million in 2012. The decrease is due to less~~ volatility in the ~~spreads~~commodity markets of silver and gold products during the period.

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General and Administrative Expenses

General and administrative expenses in our Trading segment ~~decreased~~increased $0.34 million, or 2846.31%, to $01.82 million in the three months ended ~~March~~September 3130, 2013 from $10.18 million in 2012. ~~For~~The ~~the~~increase ~~nine~~is ~~months~~primarily ~~ended~~due ~~March 31,~~to ~~2013,~~professional ~~general~~ and ~~administrative~~consulting ~~expenses~~fees inincurred ~~our~~during ~~Trading~~the ~~segment~~period ~~decreased~~related ~~$1.1 million, or 30.1%,~~ to ~~$2.5 million from $3.6 million in 2012. The decreases are not attributable to any one factor, but, in general, as we experience a slight contraction in~~ our ~~lending~~anticipated ~~and~~spin-off ~~overseas businesses, we see similar decreases in general and administration expenses for marketing, travel, and other administration expenses not directly associated with the cost~~ of ~~running~~ the ~~business~~segment orfrom ~~attributable to cost of goods sold~~SGI.

M.F. Global, Inc. Loss Provision

During the second quarter of fiscal 2012, we recorded a $2.1 million reserve for a potential shortfall in our commodities accounts with M.F. Global, Inc. The account was settled in the second quarter of fiscal 2013, which resulted in a net gain of $0.7 million. Refer to note 5 to the accompanying condensed consolidated financial statements for further information.

Salaries and Wages

Salaries and wages in our Trading segment increased $0.35 million, or 1023.30%, to $2.95 million for the three months ended ~~March~~September 3130, 2013, from $2.60 million in 2012. ~~Salaries~~The ~~and~~increase ~~wages~~ in ~~our~~salaries ~~Trading~~and ~~segment~~wages ~~decreased~~was ~~$0.8~~primarily ~~million, or 10.1%, to $7.3 million for~~ the ~~nine~~result ~~months~~of ~~ended~~higher ~~March 31, 2013, from $8.2 million in 2012. The decrease is due to lower~~ levels of ~~contractual~~discretionary ~~performance-~~based compensation expense ~~when~~and new hiring compared to the ~~same~~prior ~~period last~~ year quarter.

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Depreciation and Amortization

Depreciation and amortization in our Trading segment for the three ~~and nine~~ months ended ~~March~~September 3130, 2013 was comparable to the ~~similar~~same ~~periods~~period ofin 2012.

Collectibles Operations

The revenues in our operations by collectible type for the three months ended ~~March~~September 3130, 2013 and 2012 are as follows:

	2013				2012				$			%
in thousands	$		% of revenue		$		% of revenue		Increase/(decrease)			Increase/(decrease)
Collectibles revenues	$	4442,~~144~~687	100.0	%	$	4551,~~041~~252	100.0	%	$	(~~897~~8,565	)	(216.07	)%
Revenues by Collectible Type:
Numismatics	$	4342,~~758~~289	99.1	%	$	4350,~~734~~586	9798.17	%	$	24(8,297	)	0(16.14	)%
Philatelic	—		—	%	9		—	%	(9		)	(100.0	)%
Wine	398		0.9		666		1.3		(268		)	(40.2	)
Wine	386		0.9		1,298		2.9		(912		)	(70.3	)
	$	42,687	100.0	%	$	51,252	100.0	%	$	(8,565	)	(16.7	)%
	$	44,144	100.0	%	$	45,041	100.0	%	$	(897	)	(2.0	)%

The revenues in our operations by collectible type for the nine months ended March 31, 2013 and 2012 are as follows:

	2013				2012					$			%
in thousands	$		% of revenue		$			% of revenue		Increase/(decrease)			Increase/(decrease)
Collectibles revenues	$	143,060	100.0	%	$	150,790		100.0	%	$	(7,730	)	(5.1	)%
Revenues by Collectible Type:
Numismatics	$	141,350	98.8	%	$	146,912		97.4	%	$	(5,562	)	(3.8	)%
Philatelic	—		—	%	(10		)	—	%	10			100.0	%
Wine	1,710		1.2		3,888			2.6		(2,178		)	(56.0	)
	$	143,060	100.0	%	$	150,790		100.0	%	$	(7,730	)	(5.1	)%

Collectibles Revenue

Our Collectible segment revenues decreased by $08.96 million, or 216.07%, to $4442.17 million in the three months ended ~~March~~September 3130, 2013 from $4551.03 million in 2012. This decrease is due primarily to ~~the~~lower ~~Company~~numismatic ~~shifting~~demand ~~its~~this ~~March~~period ~~live~~compared ~~wine~~to ~~auction~~the toprior ~~May~~period. Numismatic sales ~~increased~~decreased $08.023 million, or 016.14% to $4342.83 million for the three months ended ~~March~~September 3130, 2013 from $4350.76 million in 2012. ~~For the nine months ended March 31, 2013, our Collectible segment revenues decreased by $7.7 million, or 5.1%, to $143.1 million from $150.8 million in 2012.~~ Our numismatic business experienced weaker sales in the ~~first~~three ~~quarter~~months ofended ~~fiscal~~September 30, 2013 compared to ~~the first quarter of fiscal~~ 2012, ~~despite~~which ~~improvement in the second quarter. This~~ was due in part to lower ~~international~~overall hammer prices at auction impacting our commissions. Additionally, our wine revenues decreased by $0.93 million ~~and~~or ~~decreased by $2~~(40.2)% ~~million~~ for the three ~~and~~months ~~nine~~ended ~~month periods~~September 30, ~~respectively~~2013 compared to 2012.

~~For~~The ~~the~~operating ~~three~~results ~~and~~of ~~nine months ended March 31, 2012,~~ our ~~auction~~Collectibles ~~revenues~~segment ~~and~~for ~~gross margin were positively impacted by approximately $2.9 million due to a change in when we recognize revenue. For~~ the three ~~and nine~~ months ended ~~March~~September 3130, ~~2012,~~2013 ~~our wholesale revenues~~ and ~~gross~~2012 ~~margin~~are ~~were~~as positively impacted by approximately $404,000 due to a change in when we recognize revenue. Additionally, our net income and diluted earnings per share were positively impacted by $1.7 million and $0.05 per share in the three and nine months ended March 31, 2012, respectively.follows:

The operating results of our Collectibles segment for the three months ended March 31, 2013 and 2012 are as follows:



	2013				2012					$			%
in thousands	$		% of revenue		$			% of revenue		Increase/(decrease)			Increase/(decrease)
Collectibles revenue	$	42,687	100.0	%	$	51,252		100.0	%	$	(8,565	)	(16.7	)%
Gross profit	6,155		14.4		5,016			9.8		1,139			22.7
General and administrative expenses	2,703		6.3		2,775			5.4		(72		)	(2.6	)
Salaries and wages	2,836		6.6		2,787			5.4		49			1.8
Depreciation and amortization	234		0.5		226			0.4		8			3.5
Operating income	$	382	0.9	%	$	(772	)	(1.5	)%	$	1,154		149.5	%

			% of					% of		$			%
in thousands	2013		revenue		2012			revenue		Increase/(decrease)			Increase/(decrease)
Collectibles revenue	$	44,144	100.0	%	$	45,041		100.0	%	$	(897	)	(2.0	)%
Gross profit	5,836		13.2		5,517			12.2		319			5.8
General and administrative expenses	2,541		5.8		3,414			7.6		(873		)	(25.6	)
Salaries and wages	2,866		6.5		3,553			7.9		(687		)	(19.3	)
Depreciation and amortization	263		0.6		238			0.5		25			10.5
Operating loss	$	166	0.4	%	$	(1,688	)	(3.7	)%	$	1,854		109.8	%

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The operating results of our Collectibles segment for the nine months ended March 31, 2013 and 2012 are as follows:

				% of					% of		$			%
in thousands	2013			revenue		2012			revenue		Increase/(decrease)			Increase/(decrease)
Collectibles revenue	$	143,060		100.0	%	$	150,790		100.0	%	$	(7,730	)	(5.1	)%
Gross profit	15,799			11.0		17,803			11.8		(2,004		)	(11.3	)
General and administrative expenses	7,934			5.5		10,753			7.1		(2,819		)	(26.2	)
Salaries and wages	8,650			6.0		10,026			6.6		(1,376		)	(13.7	)
Depreciation and amortization	760			0.5		657			0.4		103			15.7
Operating loss	$	(1,545	)	(1.1	)%	$	(3,633	)	(2.4	)%	$	2,088		57.5	%

Gross Profit

Gross profit in our Collectibles segment for the three months ended ~~March~~September 3130, 2013 increased $01.31 million, or 522.87% to $56.82 million from $5.50 million in 2012. The increase is due primarily to sales of a ~~higher~~larger percentage of higher margin numismatic materials in the third quarter of fiscal 2013 as compared to the third quarter of fiscal 2012. For the nine months ended March 31, 2013, gross profit in our Collectibles segment decreased $2.0 million, or 11.3% to $15.8 million from $17.8 million in 2012. The main drivers of the decrease for the nine month period were sales of a higher percentage of certain lower margin numismatic materials in the first quarter of fiscal 2013 as compared to ~~the first quarter of fiscal~~ 2012. ~~We experienced a hedge gains (losses) of $0.3 million and $(0.5) million for the three and nine months ended March 31, 2013 compared to a hedge losses of $(0.5) million and $(0.05) million in 2012.~~

General and Administrative Expense

General and administrative expenses in our Collectibles segment decreased $0.91 million, or 252.6%, to $2.57 million for the three months ended ~~March~~September 3130, 2013 from $~~3.4 million in 2012. For the nine months ended March 31, 2013, general and administrative expenses in our Collectibles segment decreased $~~2.8 million, ~~or 26.2%, to $7.9 million from $10.8 million~~ in 2012. The ~~decreases~~decrease ~~are~~is mainly attributable to an effort to reduce general and administrative expenses, particularly on outside consultants and travel.

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Salaries and Wages

Salaries and wages in our Collectibles segment ~~decreased~~increased $~~(0.7) million~~49,000, or 191.38%, to $2.98 million for the three months ended ~~March~~September 3130, 2013 from $32.68 million in 2012. The ~~primary~~increase ~~reason for the decrease was an decrease~~ in ~~commissions of $0.8 million due to lower activity with the numismatics business. For the nine months ended March 31, 2013,~~ salaries and wages ~~in our Collectibles segment decreased $1.4 million, or 13.7%, to $8.7 million from $10.0 million in 2012. The decrease~~ was ~~due~~primarily tothe aresult ~~reduction~~of inhigher ~~headcount,~~levels asof ~~well~~discretionary asbased acompensation ~~decline~~expense ~~in bonuses~~ and ~~commissions~~new ofhiring ~~due~~compared to ~~lower than expected performance in~~ the ~~first~~prior ~~quarter~~year ~~of fiscal 2013 versus the first~~ quarter ~~of fiscal 2012~~.

Depreciation and Amortization

Depreciation and amortization in our Collectibles segment was comparable for the three ~~and nine~~ months ended ~~March~~September 3130, 2013 and 2012.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

The following ~~details~~summarizes cash flow components for the ~~nine~~three months ended ~~March~~September 3130, 2013 and 2012:

in thousands	2013			2012
Cash provided by operating activities — continuing operations	$	4415,~~658~~087		$	~~(20~~2,~~324~~286	)
Cash provided by (used in) operating activities — discontinued operations	(1,163		)	(4,316		)
Cash used in operating activities — discontinued operations	—			(1,353		)
Cash provided by operating activities	$	4315,~~495~~087		$	~~(24,640~~933	)
Cash provided by (used in) investing activities — continuing operations	$	~~5,787~~(861	)	$	(12,935	)
Cash used in investing activities — discontinued operations	~~(22~~—		)	(3822		)
Cash provided by (used in) investing activities	~~5,765~~$	(861	)	~~(1,973~~$	2,913	)
Cash used in financing activities — continuing operations	$	(46,292	)	$	33,892
Cash provided by (used in) financing activities — continuing operations	$	5,660		$	(13,644	)
Cash provided by (used in) financing activities — discontinued operations	$—	—		$—	—
Cash used in financing activities	$	(46,292	)	$	33,892
Cash provided by (used in) financing activities	$	5,660		$	(13,644	)

Our principal capital requirements have been to fund (i) working capital, (ii) acquisitions and (iii) capital expenditures. Our working capital requirements fluctuate with market conditions, the availability of numismatic materials and the timing of our auctions.

Operating activities from continuing operations provided $4415.71 million in cash for the ~~nine~~three months ended ~~March~~September 3130, 2013 and ~~used~~provided $202.3 million in cash for the ~~nine~~three months ended ~~March~~September 3130, 2012, respectively. Primary ~~uses~~sources of cash in our operating cash flows from continuing operations for the three months ended September 30, 2013 include the impact of $46.4 million related to changes in receivables and secured loans in our Trading operations. This was partially offset by a use of cash for the three months ended September 30, 2013 of $15.3 million, $7.5 million, $6.8 million, and $4.1 million related to accounts payable, consignor payables, accrued expenses and other liabilities, inventory, liabilities on borrowed metals, accounts receivable and consignor advances. Primary sources of cash in operating cash flows from continuing operations for the three months ended September 30, 2012 include $50.9 million related to changes in accounts payable, consignor payables, accrued expenses and other liabilities partially offset by the impact of $18.3 million and $26.7 million related to changes in receivables and secured loans in our Trading operations and inventory. Discontinued operations, from our Stamps division, used cash of $1.4 million for the three months ended September 30, 2012. The Stamps division was sold during the first quarter of fiscal 2013.

Our 38investing activities from continuing operations used cash in the three months ended September 30, 2013 of $0.9 million and provided cash of $2.9 million in the three months ended September 30, 2012. A primary use of cash in the three months ended September 30, 2013 was capital expenditures for property and equipment of $0.9 million. Cash flows provided by investing activities of $2.9 million million during the three months ended September 30, 2012 was primarily attributable to the divestiture of our Stamps division.

Our financing activities from continuing operations provided $5.7 million for the three months ended September 30, 2013 and used $13.6 million for the three months ended September 30, 2012. We repaid $1.0 million under lines of credit for the three months ended September 30, 2013 compared to net borrowings of $27.9 million in the three months ended September 30, 2012. Additionally, during the three months ended September 30, 2013, we borrowed $6.9 million via our obligation under product financing arrangement in our Trading operations. During the three months ended September 30, 2012, we also issued common stock for $25.2 million, repurchased and retired common stock from Afinsa and Auctentia for $51.2 million, and repaid $6.9 million of our obligation under product financing arrangement in our Trading operations.

Liability on Borrowed Metals

We borrow precious metals from its suppliers under short-term arrangements which bear interest at a designated rate. Amounts under these arrangements are due at maturity and require repayment either in the form of precious metals or cash. Our inventories included borrowed metals with market values totaling $13.3 million and $20.1 million at September 30, 2013 and at June 30, 2013, respectively.

Obligation Under Product Financing Agreement

A-Mark entered into an agreement for the sale of gold and silver at a fixed price to a third party. This inventory is restricted under this agreement and we are allowed to repurchase this inventory at an agreed-upon price based on the spot price on the repurchase date. The third party charges monthly interest as a percentage of the market value of the outstanding obligation; such monthly charges are classified in interest expense. These transactions do not qualify as sales and therefore have been accounted for as financing arrangements and reflected in the consolidated balance

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~~for~~sheet ~~the~~within ~~nine months ended March 31, 2013 include~~ the ~~impact~~obligation ofunder ~~$42.7~~product ~~million,~~financing ~~$24~~arrangement.1 ~~million,~~The ~~$9.4~~obligation ~~million,~~is ~~$1.1~~stated ~~million,~~at ~~and~~the ~~$(33.7)~~amount ~~million~~required ~~related~~ to ~~changes~~repurchase inthe ~~receivables~~outstanding ~~and secured loans in our Trading operations,~~ inventory,. ~~liabilities~~Both onthe ~~borrowed~~obligation ~~metals,~~under ~~accounts~~product ~~receivable~~financing ~~and~~arrangement ~~consignor advances in our Collectibles segment~~ and ~~accounts~~the ~~payable,~~underlying ~~consignor~~inventory ~~payables,~~(which ~~accrued~~is ~~expenses~~entirely ~~and~~restricted) ~~other~~are ~~liabilities. Primary~~carried ~~sources~~at offair ~~cash in operating cash flows from continuing operations for the nine months ended March 31~~value, ~~2012 include $29.3 million, $2.2 million, $14.8 million and $1.2 million associated~~ with changes in ~~accounts~~fair ~~payable,~~value ~~consignor~~included ~~payables,~~as ~~accrued~~component ~~expenses~~of ~~and~~cost ~~other~~of ~~liabilities,~~precious ~~inventory, liabilities on borrowed~~ metals, ~~and accounts receivable and consignor advances from our Collectibles operations, respectively~~sold. ~~These~~ Such ~~sources~~obligation oftotaled ~~cash were partially offset by the impact of~~ $1145.5 million ~~related to changes in receivables~~ and ~~secured loans from our Trading operations. Discontinued operations, primarily our Stamps division, used cash of~~ $138.2 6 million ~~for~~as ~~the~~of ~~nine months ended March~~September 3130, 2013, and ~~used cash of $4~~June 30,~~316,000~~ ~~for the nine months ended March 31~~2013, ~~2012~~respectively. ~~The Stamps division was sold during the first quarter of fiscal 2013.~~

~~Our~~Lines ~~investing activities from continuing operations provided cash in the nine months ended March 31, 2013~~ of $5.8 million and used cash of $1.9 million in the nine months ended March 31, 2012. A primary source of cash in the nine months ended March 31, 2013 was the net proceeds of $7.8 million from the sale of our Stamps division, which was partially offset by capital expenditures for property and equipment of $1.9 million. Our investing activities from continuing operations in the nine months ended March 31, 2012 used cash of $1.9 million, which was primarily as a result of $2.6 million in capital expenditures. Cash flows used in investing activities related to discontinued operations, primarily our Stamps division, was $22,000 during the nine months ended March 31, 2013 compared to $38,000 during the nine months ended March 31, 2012.Credit

~~Our~~A-Mark's ~~financing~~Trading ~~activities~~Credit ~~from~~Facility ~~continuing~~is ~~operations~~with ~~used~~a ~~$46.3~~group ~~million~~of financial institutions under an inter-creditor agreement, which provides for lines of credit including a sub-facility for letters of credit up to the ~~nine~~maximum ~~months~~of ~~ended~~the ~~March~~credit facility. As of September 3130, 2013, ~~and~~the ~~provided~~maximum of the Trading Credit Facility was $33170.90 million. A-Mark ~~for~~routinely uses the ~~nine~~Trading ~~months~~Credit ~~ended~~Facility ~~March 31,~~to ~~2012. We~~purchase ~~borrowed~~metals ~~$14~~from its suppliers and for operating cash flow purposes.1 ~~million~~Amounts under ~~lines~~the ofTrading ~~credit~~Credit ~~for~~Facility ~~the~~bear ~~nine~~interest ~~months~~based ~~ended~~on ~~March 31,~~London ~~2013~~Interbank ~~compared~~Offered toRate ~~net~~(“LIBOR”) ~~repayments~~plus ofa ~~$15~~margin.5 ~~million~~The inOne ~~the~~Month ~~nine~~LIBOR ~~months~~rate ~~ended~~was ~~March 31,~~approximately ~~2012~~0. ~~During~~18% ~~the~~and ~~nine~~0.19% ~~months~~as ~~ended~~of ~~March~~September 3130, 2013 and June 30, we2013, ~~also~~respectively. ~~issued~~Borrowings ~~common~~are ~~stock~~due ~~for~~on demand and totaled $2599.27 million and $95.0 million for lines of credit at September 30, ~~repurchased~~2013 and ~~retired~~at ~~common~~June 30, ~~stock~~2013, ~~from~~respectively. Amounts ~~Afinsa~~borrowed under the Trading Credit Facility are secured by A-Mark’s receivables and ~~Auctentia~~inventories. ~~for~~The amounts available under the Trading Credit Facility are formula based and totaled $5170.23 million, and ~~repaid~~ $566.80 million ofat ~~our~~September 30, ~~obligation~~2013 ~~under~~and ~~product~~June 30, ~~financing~~2013, ~~arrangement~~respectively. The inTrading ~~our~~Credit Facility also limits A-Mark's ability to pay dividends to SGI. The Trading ~~operations~~Credit Facility is cancelable by written notice from the financial institutions.

A-Mark’s ~~borrows~~Trading ~~metals~~Credit ~~from~~Facility ~~several~~has ofcertain ~~its~~restrictive ~~suppliers~~financial ~~under~~covenants ~~short-term~~which ~~agreements~~require ~~bearing~~it ~~interest~~and atSGI ato ~~designated~~maintain ~~rate.~~a ~~Amounts~~minimum ~~under~~tangible ~~these~~net ~~agreements~~worth, ~~are~~as ~~due~~defined, atof ~~maturity~~$25.0 million and ~~require~~$50.0 ~~repayment~~million, ~~either in the form of borrowed metals or cash~~respectively. A-Mark'’s ~~inventories~~and ~~included~~SGI’s ~~borrowed~~tangible ~~metals~~net ~~with~~worth ~~market~~at ~~values~~September 30, ~~totaling~~2013 were $3642.5 0 million and $2766.1 ~~million~~ ~~at March 31~~million, ~~2013 and at June 30, 2012,~~ respectively. ~~Certain~~Our ofability ~~these~~to ~~metals~~pay ~~are~~dividends, ~~secured~~if byit ~~letters~~were ofto ~~credit~~elect ~~issued~~to ~~under~~do ~~the~~so, ~~Trading~~could ~~Credit~~be ~~Facility~~limited ~~which~~as ~~totaled~~a ~~$9.0 million~~result ~~and~~of ~~$7.0~~these ~~million at March 31, 2013 and at June 30, 2012, respectively~~restrictions.

~~A-Mark~~We ~~entered~~and ~~into~~our anwholly-owned ~~agreement~~numismatic ~~with~~subsidiaries, aSNI, ~~third~~B&M, ~~party~~and ~~for~~Stack's-Bowers ~~the sale of precious metals~~Numismatics, atLLC ~~the~~(collectively ~~option of the third party~~"SBN"), athave a ~~fixed~~borrowing ~~price.~~facility ~~Such~~with ~~agreement~~a ~~allows~~lender, usproviding tofor ~~repurchase~~a ~~this inventory at an agreed~~line-~~upon~~of-credit ~~price based on~~ (the ~~spot~~“Collectibles ~~price~~Credit onFacility”) ~~the~~up ~~repurchase~~to ~~date. The third party charges~~ a ~~monthly~~maximum ~~fee as percentage~~ of ~~the~~$5.0 ~~market~~million. Amounts ~~value~~outstanding ofunder the ~~outstanding~~Collectibles ~~obligation.~~Credit ~~These~~Facility ~~transactions~~are dosecured ~~not~~by ~~qualify~~the asassets ~~sales~~of SBN, and ~~therefore~~are ~~have~~further ~~been~~guaranteed ~~accounted~~by ~~for~~us. Our asobligations ~~financing~~under ~~arrangements~~the ~~and~~guaranty ~~reflected~~are insecured by the ~~consolidated~~pledge ~~balance~~of ~~sheet~~SNI ~~within~~shares ~~obligation~~owned ~~under~~by ~~product financing arrangement~~it. The ~~obligation~~Collectibles isCredit ~~stated~~Facility atis ~~the~~due ~~amount~~on ~~required~~demand, toand ~~repurchase~~interest on the outstanding ~~inventory~~amounts ~~with~~accrued ~~adjustments~~at ~~included~~the aslender's ~~components~~base ofrate, ~~cost~~which ofis ~~precious~~subject ~~metals~~to ~~sold. Such obligation totaled $9.8 million and $15.6 million as of March 31~~change), ~~2013~~plus ~~and~~a ~~June 30, 2012, respectively~~margin.

Separately, A-Mark has a ~~borrowing~~line ~~facility~~of ~~(“Trading~~credit ~~Credit Facility”)~~ with athis ~~group~~lender oftotaling ~~financial~~$20.0 ~~institutions under an inter-creditor agreement~~million, which ~~provides~~is ~~for~~a ~~lines~~component of ~~credit~~A-Mark's ~~including~~Trading aCredit ~~sub-facility~~Facility. Total ~~for~~borrowing ~~letters~~capacity ofbetween ~~credit~~SNI upand toA-Mark ~~the~~cannot ~~maximum~~exceed of$23.0 ~~the~~million ~~credit~~with ~~facility~~respect to this lender. As of ~~March~~September 3130, 2013, the ~~maximum~~total ofamount ~~the~~borrowed ~~Trading~~with ~~Credit~~this ~~Facility~~lender was $~~170~~18.0 million~~. A-Mark~~, ~~routinely~~which ~~uses~~consisted ~~the~~of ~~Trading~~$18.0 ~~Credit~~million ~~Facility~~by toA-Mark ~~purchase~~and ~~metals~~$0.0 ~~from~~million ~~its~~by ~~suppliers~~SNI. Amounts ~~and~~available for ~~operating~~borrowing ~~cash flow purposes. Amounts~~ under ~~the~~this ~~Trading~~Collectible Credit Facility ~~bear interest based on London Interbank Offered Rate (“LIBOR”) plus a margin. The One Month LIBOR rate was approximately 0.20% and 0.24%~~ as of ~~March~~September 3130, 2013 ~~and~~were ~~June 30, 2012, respectively. Borrowings are due on demand and totaled~~ $~~77.~~5 ~~million and $91~~.0 million ~~for lines of credit and $9~~.~~0 million~~ As ~~and $7.0 million for letters~~ of ~~credit at March 31, 2013 and at~~ June 30, ~~2012~~2013, ~~respectively. Amounts borrowed under~~ the ~~Trading~~total ~~Credit~~amount ~~Facility~~borrowed ~~are~~was ~~secured by A-Mark’s receivables and inventories. The amounts available under the Trading Credit Facility are formula based and totaled~~ $8323.5 0 million, ~~and~~ $655.0 million atby ~~March 31,~~SNI ~~2013~~ and ~~June 30, 2012, respectively~~$18. ~~The~~0 ~~Trading~~million ~~Credit~~by ~~Facility also limits~~ A-Mark~~'s ability to pay dividends to SGI~~. ~~The Trading Credit Facility is cancelable by written notice from the financial institutions.~~

A-Mark’s Trading Credit Facility has certain restrictive financial covenants which require it and SGI to maintain a minimum tangible net worth, as defined, of $25.0 million and $50.0 million, respectively. A-Mark’s and SGI’s tangible net worth at March 31, 2013 were $38.9 million and $62.6 million, respectively. Our ability to pay dividends, if it were to elect to do so, could be limited as a result of these restrictions.

We and our wholly-owned numismatic subsidiaries, SNI, B&M, and Teletrade, have a borrowing facility with a lender, providing for a line-of-credit (the “Collectibles Credit Facility”) up to a maximum of $5.0 million. Amounts outstanding under the Collectibles Credit Facility are secured by the assets of SNI, B&M and Teletrade, and are further guaranteed by us. Our obligations under the guaranty are secured by the pledge of SNI shares owned by it. The Collectibles Credit Facility is due on demand, and interest on the outstanding amounts accrued at the lender's base rate, which is subject to change), plus a margin.

Separately, A-Mark has a line of credit with this lender totaling $20.0 million, which is a component of A-Mark's Trading Credit Facility. Total borrowing capacity between SNI and A-Mark cannot exceed $23.0 million with respect to this lender. As of March 31, 2013, the total amount borrowed with this lender was $21.0 million, which consisted of $20.0 million by A-Mark and $1.0 million by SNI. Amounts available for borrowing under this Collectible Credit Facility as of March 31, 2013 were $2.0 million. As of June 30, 2012, the total amount borrowed was $18.0 million, $0.0 million by SNI and $18.0 million by A-Mark.

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Contractual Obligations, Contingent Liabilities, and Commitments

We manage the value of certain specific assets and liabilities of our trading business, including trading inventories (see Note 1110 in the accompanying condensed consolidated financial statements), by employing a variety of strategies. These strategies include the management of exposure to changes in the market values of our trading inventories through the purchase and sale of a variety of derivative products such as metals ~~forwards~~forward and futures contracts.

Our trading inventories and purchase and sale transactions consist primarily of precious metal bearing products. The value of these assets and liabilities are linked to the prevailing price of the underlying precious metals. Our precious metals inventories are subject to market value changes, created by changes in the underlying commodity markets. Inventories purchased or borrowed by us are subject to price changes. Inventories borrowed are considered natural hedges, since changes in value of the metal held are offset by the obligation to return the metal to the supplier.

Open purchase and sale commitments are subject to changes in value between the date the purchase or sale price is fixed (the trade date) and the date the metal is received or delivered (the settlement date). We seek to minimize the effect of price changes of the underlying commodity through the use of forward and futures contracts.

Our policy is to substantially hedge our inventory position, net of open purchase and sales commitments, that is subject to price risk. We regularly enter into metals commodity forward and futures contracts with major financial institutions to hedge price changes that would cause changes in the value of its physical metals positions and purchase commitments and sale commitments. We have access to all of the precious metals markets, allowing us to place hedges. However, we also maintain relationships with major market makers in every major precious metals dealing center.

We set credit and position risk limits. These limits include gross position limits for counterparties engaged in purchase and sales transactions with us. They also include collateral limits for different types of purchase and sale transactions that counter parties may engage in from time to time.

Due to the nature of our global hedging strategy, we are not using hedge accounting as defined under ASC 815, Derivatives and Hedging. Gains or losses resulting from our futures and forward contracts are reported as unrealized gains or losses on commodity contracts with the related unrealized amounts due from or to counterparties reflected as a derivative asset or liability (see Notes 5, 87 and 1110 to the accompanying condensed consolidated financial statements). Gains or losses resulting from the termination of hedge contracts are reported as realized gains or losses on commodity contracts. Realized and unrealized net gains (losses) on derivative instruments in the condensed consolidated statements of operations for the three ~~and nine~~ months ended ~~March~~September 3130, 2013 ~~were $23.3 million~~ and ~~$(31.4) million, respectively, and for the three and nine months ended March 31,~~ 2012 were $31(17.56) million and $4120.42 million, respectively.

At ~~March 31, 2013 and June 30, 2012, we had the following outstanding purchase and sale commitments:~~41

(in thousands)	March 31, 2013			June 30, 2012
Purchase commitments	$	465,018		$	392,307
Sales commitments	(234,354		)	(140,823		)
Margin sale commitments	(44,386		)	(39,716		)
Open forward contracts	87,925			59,659
Open futures contracts	167,268			244,954

The contract amounts of these forward and futures contracts and the open purchase and sale orders are not reflected in the accompanying condensed consolidated balance sheets. The difference between the market price of the underlying metal or contract and the trade amount is recorded at fair value. Our open purchase and sales commitments generally settle within 2 business days, and for those commitments that do not have stated settlement dates, we have the right to settle the positions upon demand. Futures and forwards contracts open at March 31, 2013 are scheduled to settle within 30 days.

We are exposed to the risk of failure of the counter parties to our derivative contracts. Significant judgment is applied by us when evaluating the fair value implications. We regularly review the creditworthiness of our major counterparties and monitor our exposure to concentrations. At March 31, 2013, we believe our risk of counterparty default is mitigated based on our evaluation, the strong financial condition of our counterparties, and the short-term duration of these arrangements.

* * *

We believe that our current cash and cash equivalents, short-term investments, Trading and Collectibles Credit Facilities, and cash we anticipate to generate from operating activities will provide us with sufficient liquidity to satisfy our working capital needs, capital expenditures, investment requirements and commitments through at least the next twelve months. On September 25, 2012, upon the consummation of the Securities Purchase Agreement, rights offering and private placement, the net impact to working capital was a use of $25.6 million in cash and cash equivalents. Certain of our foreign subsidiaries have nominal statutory restricted capital requirements. Our liquidity could be impacted by the potential adverse outcomes, if any, relating to its open contingent matters, including an ongoing Internal Revenue Service examination, a foreign tax inspection, and certain litigation as described in Item 3, Legal Proceedings of the 2012 Annual Report.

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At September 30, 2013 and June 30, 2013, we had the following outstanding purchase and sale commitments:



(in thousands)	September 30, 2013			June 30, 2013

Purchase commitments	$	352,850		$	461,883
Sales commitments	(133,218		)	(272,044		)
Margin sale commitments	(15,163		)	(13,651		)
Open forward contracts	162,843			84,999
Open futures contracts	147,022			171,272

The contract amounts of these forward and futures contracts and the open purchase and sale orders are not reflected in the accompanying condensed consolidated balance sheets. The difference between the market price of the underlying metal or contract and the trade amount is recorded at fair value. Our open purchase and sales commitments generally settle within 2 business days, and for those commitments that do not have stated settlement dates, we have the right to settle the positions upon demand. Futures and forwards contracts open at September 30, 2013 are scheduled to settle within 30 days.

We are exposed to the risk of failure of the counter parties to our derivative contracts. Significant judgment is applied by us when evaluating the fair value implications. We regularly review the creditworthiness of our major counterparties and monitor our exposure to concentrations. At September 30, 2013, we believe our risk of counterparty default is mitigated based on our evaluation, the strong financial condition of our counterparties, and the short-term duration of these arrangements.

* * *

CRITICAL ACCOUNTING ESTIMATES

During the quarter ended ~~March~~September 3130, 2013, there were no changes in the critical accounting policies or estimates that were described in Item 7 of our ~~2012~~2013 Annual Report. Readers of this report are urged to read that section of the ~~2012~~2013 Annual Report for a more complete understanding of our critical accounting policies and estimates.

RECENT ACCOUNTING PRONOUNCEMENTS

In July 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASC") No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This ASU requires an entity to present an unrecognized tax benefit as a reduction of a deferred tax asset for a net operating loss (NOL) carryforward, or similar tax loss or tax credit carryforward, rather than as a liability when (1) the uncertain tax position would reduce the NOL or other carryforward under the tax law of the applicable jurisdiction and (2) the entity intends to use the deferred tax asset for that purpose. The ASU does not require new recurring disclosures. It is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013 and December 15, 2014, for public and nonpublic entities, respectively. Early adoption and retrospective application are permitted. The adoption of the accounting principles in this update is not anticipated to have a material impact on our consolidated financial position or results of operations.

In July 2012, the FASB issued ASU No. 2012-02, Intangibles - Goodwill and Other, Testing Indefinite-Lived Intangible Assets for Impairment. This ASU allows an entity to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test for indefinite-lived intangible assets. An organization that elects to perform a qualitative assessment no longer is required to perform the quantitative impairment test for an indefinite-lived intangible asset unless it is more likely than not that the asset is impaired. The ASU, which applies to all entities, is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. We adopted this guidance in the first quarter of fiscal year 2013, as allowed by the early adoption provisions within the guidance. The adoption of the accounting principles in this update did not have a material impact on the Company's consolidated financial position or results of operations.

interim periods beginning on or after January 1, 2013. We adopted this guidance in the third quarter of fiscal year 2013. The adoption of the accounting principles in this update did not have a material impact on our consolidated financial position or results of operations.

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deferred such changes in ASU No. 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05, which was issued in December 2011. The adoption of the accounting principles in these updates did not have a material impact on the our consolidated financial position or results of operations. The FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to address concerns raised in the initial issuance of ASU 2011-05, Comprehensive Income, for which the Board deferred the effective date of certain provisions relating to the presentation of reclassification adjustments in the income statement. With the issuance of ASU 2013-02 entities are now required to disclose:


•	For items reclassified out of accumulated other comprehensive income (AOCI) and into net income in their entirety, the effect of the reclassification on each affected net income line item; and


•	for AOCI reclassification items that are not reclassified in their entirety into net income, a cross reference to other required U.S. GAAP disclosures.

This information may be provided either in the notes or parenthetically on the face of the statement that reports net income as long as all the information is disclosed in a single location. However, an entity is prohibited from providing this information parenthetically on the face of the statement that reports net income if it has items that are not reclassified in their entirety into net income. For public entities, the guidance is effective for annual reporting periods beginning after December 15, 2012 and interim periods within those years. We adopted this guidance in the first quarter of fiscal year 2014. The adoption of the accounting principles in this update did not have a material impact on our consolidated financial position or results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable for smaller reporting companies

4143

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ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We have established disclosure controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and is accumulated and communicated to management, including the principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

Our principal executive officer and principal financial officer, with the assistance of other members of our management, have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this quarterly report. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of that date, our disclosure controls and procedures were not effective.

Our principal executive officer and principal financial officer have also concluded that there was no change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended ~~March~~September 3130, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. WeThe ~~are~~Company ~~performing~~operated ~~ongoing~~with ~~evaluations~~inadequate and ~~enhancements~~insufficient accounting and finance resources to ~~our~~ensure timely and reliable financial reporting. As a result of this material weakness, the Company's management has concluded that, as of September 30, 2013, its internal ~~controls~~control ~~system~~over financial reporting was not effective. To remediate this material weakness, during fiscal 2014, we intend to:


•	Determine the appropriate complement of corporate accounting and finance personnel required to ensure timely and reliable financial reporting, and;


•	Hire the requisite additional personnel and/or contractors with public company accounting and reporting experience, and;


•	Organize and design our internal review and evaluation process to include more formal management oversight of the methods and review procedures utilized and the conclusions reached, including for purposes of evaluating and ensuring the sufficiency of accounting resources.

We can give no assurance that the measures we take will remediate the material weakness that we identified or that any additional material weaknesses will not arise in the future. We will continue to monitor the effectiveness of these and other processes, procedures and controls and will make any further changes management determines appropriate.

The existence of one or more other material weaknesses or significant deficiencies could result in errors in our financial statements, and substantial costs and resources may be required to rectify any internal control deficiencies. If we cannot produce reliable financial reports, investors could lose confidence in our reported financial information, the market price of our stock could decline significantly, we may be unable to obtain additional financing to operate and expand our business, and our business and financial condition could be adversely affected.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Certain legal proceedings in which we are involved are discussed in Part I, Item 3 of our ~~2012~~2013 Annual Report on Form 10-K, and in Note 15 to the Notes to Consolidated Financial Statements in our ~~2012~~2013 Annual Report, which are incorporated into this filing by reference. There have been no material developments in those legal proceedings since the date of our ~~2012~~2013 Annual Report.

ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors disclosed in Part I, Item 1A, of our ~~2012~~2013 Annual Report, which are incorporated by reference into this filing.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unregistered Sales of Equity Securities

During the quarter ended ~~March~~September 3130, 2013, the Company did not issue any unregistered common shares.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

A stock repurchase plan was approved by the Board of Directors on February 8, 2013, and provided for repurchases of up to $5 million. The following table describes purchases by the Company of shares of its common stock which settled during each period set forth in the table. Purchases in column (c) were made pursuant to the Company's stock repurchase plan. ~~approved~~The byapproximate ~~the~~dollar ~~Board~~value of ~~Directors~~remaining onshares ~~February~~that 8,may ~~2013,~~be ~~and~~purchased ~~provided~~under ~~for~~the ~~repurchases~~stock ofrepurchase upplan toof $54,606,940 ~~million . The authorization~~ remains open through August 8, 2014.

Issuers Purchases of Equity Securities

	(a)	(b)	(c)	(cd)	~~(d)~~
Period	Total Number of Shares Purchased	Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	~~Total~~Approximate ~~Number~~Dollar Value of Shares ~~Purchased~~that asmay ~~Part~~Yet ofbe ~~Publicly~~Purchased ~~Announced~~Under the Plans or Programs	~~Approximate Dollar Value of Shares that may Yet be Purchased Under the Plans or Programs~~
January 1 to January 31, 2013	—	$	—	—	$	—
July 1 to July 31, 2013	—	$—	—	$4,753,080
February 1 to February 28, 2013	—	$	—	—	$	5,000,000
August 1 to August 31, 2013	—	$—	—	$4,753,080
March 1 to March 31, 2013	123,100	$	2.01	—	$	4,753,080
September 1 to September 30, 2013	73,070	$2.00	—	$4,606,940
Total	~~123~~73,~~100~~070	$2.00	~~2.01~~—	—

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS



Regulation S-K Exhibit Table Item No.	Description of Exhibit
31.1	Certification by the Chief Executive Officer Under Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification by the Chief Financial Officer Under Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification by Chief Executive Officer Under Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification by Chief Financial Officer Under Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Calculation 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

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:	~~May~~November 14, 2013	SPECTRUM GROUP INTERNATIONAL, INC.
		By:	/s/ Gregory N. Roberts
			Name:	Gregory N. Roberts
			Title:	President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

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Table of Contents

Signatures	Title(s)	Date
/s/ Gregory N. Roberts	President, Chief Executive Officer and Director	~~May~~November 14, 2013
Gregory N. Roberts	(Principal Executive Officer)
/s/ Paul Soth	Chief Financial Officer and Executive Vice President	~~May~~November 14, 2013
Paul Soth	(Principal Financial Officer)

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