CORRESP 1 filename1.txt GREG MANNING AUCTIONS, INC. -------------------------------------------------------------------------------- Larry Crawford 775 Passaic Avenue Chief Financial Officer West Caldwell, New Jersey 07006 Executive Vice President Phone 800-221-0243 - 973-882-0004 lcrawford@gregmanning.com Fax 973-882-2981 www.gregmanning.com February 14, 2005 VIA EDGAR --------- Division of Corporation Finance Securities and Exchange Commission Washington, D.C. 20549 Attention: Donna DiSilvio, Senior Staff Accountant Monica Brame, Staff Accountant Re: Greg Manning Auctions, Inc. 10-K for the year ended June 30, 2004 File No. 1-11988 ------------------------------------- Ladies and Gentlemen: Greg Manning Auctions, Inc. (the "Company" or "GMAI") is providing its responses to the additional comment from the staff of the Division of Corporation Finance (the "Staff") of the Securities and Exchange Commission (the "SEC"), by letter dated February 1, 2005. Form 10-K filed September 10, 2004 ---------------------------------- Notes to Consolidated Financial Statements, page 37 --------------------------------------------------- (1) Description of Business and Summary of Significant Accounting Policies -------------------------------------------------------------------------- Inventories, page 39 1. Please confirm our understanding of your response to comment 1 that items are subject to a write-down using either one of two methods applied consistently. Your understanding is correct: We utilize either one of the two methods on a consistent basis. Trusted By Serious Collectors ....Worldwide NASDAQ symbol: GMAI 2. How often are strategic marketing plans giving rise to exceptions with the aging methodology? In this regard, please clarify for us and in future filings disclose the method used to write-down inventory subject to a marketing strategy to sell goods over time. As we have disclosed, the classification of inventory as "long-term" is made whenever there is a strategic marketing plan in place to sell the inventory over a period of time, greater than one year. These plans are put into place generally as an effort to avoid "flooding the marketplace" and potentially depressing the selling price. We monitor this inventory on a continual basis and if factors change, we write down the inventory to its estimate of net realizable value. Over the past five years we have identified four unique collections in which we have employed a strategic marketing plan to sell this inventory. One of these collections was sold over a two- to three -year time period at our expected gross margin without any write-downs of inventory. The second collection was written down to net realizable value as result of changes in market conditions, and was subsequently sold. The remaining two collections are currently classified as long-term inventory and are being monitored quarterly. _ _ _ The Company acknowledges that: o the Company is responsible for the adequacy and accuracy of the disclosure in the filing; o staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and o the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States/ Should you have any questions in regard to this response, please call me at 973-882-0004. Very truly yours, /s/ Larry L. Crawford -------------------------- Larry L. Crawford cc: Mr. Greg Manning