Greg Manning Auctions Reports Third Quarter Results; Net Income Increases 26%

Business Wire, May 13, 2005

WEST CALDWELL, N.J. -- Greg Manning Auctions, Inc. (Nasdaq: GMAI) today announced financial results for the fiscal 2005 third quarter ended March 31, 2005.

Net income in the third quarter rose 26% to $8.2 million, or $0.29 per diluted share, from $6.5 million, or $0.23 per diluted share, in the same period last year. Aggregate sales, which include inventory sales plus consignment sales, totaled $74.7 million in the third quarter versus $82.0 million in the fiscal third quarter of 2004. Revenue, which includes inventory sales plus commission income, was $55.7 million compared to $64.5 million in the third quarter last year.

Pretax profit for the fiscal 2005 third quarter increased 49% to $13.2 million from $8.8 million in the same period a year ago. Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) climbed 48% to $13.7 million, or $0.48 per diluted share, compared to $9.2 million, or $0.32 per diluted share, in the fiscal 2004 third quarter.

Greg Manning, First Vice Chairman, CEO and President, stated, "Third quarter results reflect improved profitability from our direct supply agreement with Afinsa Bienes Tangibles, S.A. Gross profit in the third quarter grew to $21.7 million, or 39% of revenue, compared to $17.0 million, or 26% of revenue, last year. Revenue was down from a year ago due to lower inventory sales under our exclusive supply contract with Afinsa which we forecast will be made up in the current fourth quarter. As a result, we anticipate significantly stronger revenue in the fourth quarter than previously forecasted internally."

In the third quarter, Greg Manning Auctions realized approximately $74.7 million in aggregate sales through its coin and stamp companies in North America, Europe and Asia versus $82.0 million last year. The Company's exclusive supply agreement with Afinsa contributed approximately $26 million in non-auction sales in the third quarter compared to $34.9 million in direct sales in the year-earlier period.

For the nine months ended March 31, 2005, net income climbed 61% to $21 million from $13 million in the corresponding period a year earlier. Earnings per share on a fully diluted basis climbed 40% to $0.73 from $0.52 in the nine months ended March 31, 2004. Aggregate sales increased 15% to $210.7 million from $182.9 million in the previous nine-month period and revenue totaled $162.7 million compared to $152.2 million, an increase of 7%.

Pretax profit for the nine months ended March 31, 2005 was $34.7 million compared to $18.3 million in the year-earlier period, an increase of 90%. EBITDA increased to $36.3 million, or $1.27 per diluted share, compared to $19.4 million, or $0.78 per diluted share.

Larry Crawford, Chief Financial Officer, said, "As of March 31, the Company reported cash and cash equivalents of $29.8 million. Cash flow used in operations in the third quarter was approximately $2.1 million due primarily to a growth in inventories of approximately $3.4 million and a reduction of payables of approximately $5.5 million. We anticipate inventory levels dropping $7-9 million in the fourth quarter.

For the nine months, cash flow from operations totaled $13.2 million and we remain on pace to achieve record operating cash for the fiscal year ending June 30, 2005. Our non-Afinsa core auction businesses continued to show strong growth with aggregate sales of consigned and owned inventory at auction for the nine month period ended March 31, 2005 increasing 38% to $69 million from $50 million in the same period last year. We will continue to seek strategic acquisitions that increase operating leverage in our core numismatic and philatelic businesses and add value to our expanding global platform."

Manning concluded, "We anticipate a particularly strong finish to fiscal 2005. In the current fourth quarter, we expect solid contributions from our leading subsidiaries including Bowers & Merena, Ivy & Manning, Nutmeg Stamp Sales, John Bull Auctions in Hong Kong as well as Kohler Auctions in Germany and Corinphila in Switzerland. Demand remains robust in the global, multi-billion dollar coin and stamp collectible markets and we are uniquely positioned to capitalize on these positive trends as a result of our market expertise and worldwide reach. We are excited by our future prospects and anticipate a record performance for the fiscal year ending June 30."

The company will host a conference call today, May 13, 2005 at 10:00 a.m. ET to discuss financial results, business developments and outlook. The conference call will be broadcast over the Internet as a "live" listen-only webcast. To listen, please go to www.gregmanning.com approximately 20 minutes before the conference call is scheduled to begin to register, as well as to download and install any necessary audio software.

About Greg Manning Auctions, Inc.

Greg Manning Auctions, Inc. is a global collectibles merchant and auction house network, with operations in North America, Europe and Asia and on the Internet. This network was created in September 2003 when GMAI and Auctentia, S.L. effectively integrated their auction businesses, creating a GMAI-AUCTENTIA global collectibles auction network.