Investor Relations

Irvine, CA, November 10, 2010 – Spectrum Group International, Inc. (SPGZ.PK) today announced financial results for its fiscal quarter ended September 30, 2010. 

First Quarter Highlights:

• Total revenue increased to $1.5 billion, up from $976.4 million in 2009.

• Trading segment’s revenue increased to $1.45 billion, up from $928.9 million in 2009 as a result of higher precious metal prices.

• Collectibles segment revenue decreased to $45.4 million, down from $47.6 million in 2009, resulting primarily from a reduction in revenues from its Philatelic operations as part of the Company’s planned consolidation of those operations.

• Gross profit decreased to $9.0 million, down from $10.8 million in 2009, caused primarily by a shift in product mix from silver to gold, in the Trading segment, which produces relatively lower margins and the decrease in the Collectibles Philatelic business from the planned consolidation.  

• Operating expenses decreased to $10.7 million, down from $12.2 million in 2009, as a result of our continued efforts to control costs and to look for opportunities to improve efficiencies in the operations across the organization.    

• Net loss for the quarter increased to $4.0 million, compared with $0.3 million net income in 2009, driven by a combination of lower gross profit and increased unrealized loss on foreign exchange, to $2.8 million in 2010 from $1.0 million in 2009, due to the effect of the decrease in the U.S. dollar to Euro foreign exchange rates.

For three months ended September 30, 2010 and 2009, revenue was $1.5 billion and $976.4 million, respectively.  Revenue from the Trading segment was $1.45 billion and $928.9 million for the three months ended September 30, 2010 and 2009, respectively, an increase resulting from higher gold prices and increased demand for gold products.  The Collectibles segment revenue decreased to $45.4 million in the quarter ended September 30, 2010, from $47.6 million in the prior period, primarily as a result of fewer auctions in the first quarter of fiscal 2011 as well as the impact of the planned consolidation of the Philatelic operations; this decrease was offset by $0.6 million in revenue contributed by the Company’s new Wine business.

The Company’s gross profit decreased to $9.0 million for the three months ended September 30, 2010, from $10.8 million for the three months ended September 30, 2009, of which $0.7 million was attributable to the Trading segment and $1.1 million was attributable to the Collectibles segment.  The primary reason for the decline in the Trading segment’s gross profit from $4.3 million in 2009 to $3.7 million in 2010 was a decrease in the sales ratio of silver products to gold products, which produce lower margins than silver, as well as a less volatile precious metals market during the quarter, which caused a contraction in metal premiums.  The Collectibles segment’s decrease in gross profit from $6.5 million for the three months ended September 30, 2009 to $5.4 million was primarily attributable to the $4.3 million decline in our Philatelic sales.

As the Company’s gross profit declined, we realized a reduction of $1.5 million in operating expenses during the quarter compared to the same quarter last year.  Driving this reduction was a $0.6 million and $0.8 million decrease in general and administration expenses and salaries and wages, respectively.  This was the result of the Company’s proactive effort to control cost and the planned consolidation of our Collectibles business.   

For the three months ended September 30, 2010, the Company’s operating loss increased by $0.3 million to $1.7 million from $1.4 million in the prior period, resulting from a reduction in operating income from both the Trading and Collectibles segments.

The Company’s pre-tax loss for three months ended September 30, 2010 was $3.6 million, as compared to $0.9 million in the same period 2009.  Factors contributing to this pre-tax loss were lower gross profits Company-wide and a weakening of the U.S. Dollar against the Euro which resulted in a $2.8 million unrealized foreign currency loss or a $1.8 million increase from the same period last year.  This non-cash unrealized foreign currency loss directly relates to the translation of intercompany loans between Spectrum Group International, Inc and its wholly owned international subsidiaries from Euros to USD in the consolidated financial statements. 

More information regarding the Company’s financial results for the three months ended September 30, 2010 is set forth in the Company’s Report on Form 10-Q, as filed with the Securities and Exchange Commission on November 10, 2010.

About Spectrum Group International, Inc.

Spectrum Group International, Inc. (together with its subsidiaries, “we,” the “Company” or “SGI”) is a global trading and collectibles network. We are a trader of precious metals and an auctioneer of coins, stamps, wine, and antique arms, armor and historical memorabilia, serving both collectors and dealers. We are also a merchant/dealer of certain collectibles. Our collectibles offerings span the price spectrums from modest to ultra-high end. Furthermore, we offer loans to coin dealers, collectors and investors back by their precious metals, rare coin and other collectibles as collateral.

Our Trading business is conducted through A-Mark Precious Metals, Inc. (“A-Mark”) and its subsidiaries. A-Mark is a full-service precious metal trading company, and an official distributor for many government mints throughout the world. A-Mark products include gold, silver, platinum and palladium for storage and delivery in the form of coins, bars, wafers and grain, and our services include financing, leasing, consignment, hedging and various customized financial programs. A-Mark’s subsidiary, Collateral Finance Corporation, which is the official Numismatic Lender of the American Numismatic Association, provides financing on a wide array of bullion and numismatic products.

Our Collectibles business operates as an integrated network of leading companies concentrating on numismatic (coins) and philatelic (stamps) materials, rare and fine vintage wine, and antique arms, armor and historical memorabilia (militaria). We have offices and auction houses in North America, Europe and Asia. In addition to traditional live auctions, we also conduct Internet and telephone auctions.

Our Collectibles companies in the philatelic field are auction houses H.R. Harmer Nutmeg Auctions, Inc. of Irvine, California, Corinphila Auktionen of Zurich, Switzerland, Heinrich Köhler Auktionshaus of Wiesbaden, Germany, Corinphila Veilingen B.V., Amstelveen, Netherlands, and John Bull Stamp Auctions, Ltd of Hong Kong. Spectrum Group’s Collectibles companies in the numismatics field include Bowers and Merena Auctions (rare coin and currency auction house), Ponterio & Associates (world and ancient coins and currency auction house), Teletrade (online coin auctions) and Spectrum Numismatics International (wholesale rare coin dealer), all based in Irvine, California. Spectrum Wine Auctions is engaged in the sale by auction of rare and fine vintage wine. Spectrum Group also owns Greg Martin Auctions, which conducts auction sales of antique arms, armor and militaria.

SAFE HARBOR STATEMENT

Statements in this press release that relate to future plans, objectives, expectations, performance, events and the like are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. Future events, risks and uncertainties, individually or in the aggregate, could cause actual results to differ materially from those expressed or implied in these statements. Factors that could cause actual results to differ are identified in our public filings with the Securities and Exchange Commission (SEC), and include the fact that we have disclosed that you should not rely upon our previously published financial statements and the fact that we have not filed all of our reports required by the Securities Exchange Act of 1934.  More information about factors that could affect our business and financial results included in our public filings with the SEC, which are available on the SEC’s website located at www.sec.gov. 

The words "should," "believe," "estimate," "expect," "intend," "anticipate," "foresee," "plan" and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates on which they were made. Additionally, any statements related to future improved performance and estimates of revenues and earnings per share are forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements.

Contact:

Spectrum Group International, Inc.

Paul Soth

Chief Financial Officer

psoth@spectrumgi.com

949-955-1250

SPECTRUM GROUP INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

(1)    The Condensed Consolidated Balance Sheet as of June 30, 2010 has been derived from the audited consolidated financial statements included in the Company’s 2010 Annual Report on Form 10-K

SPECTRUM GROUP INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

SPECTRUM GROUP INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)