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DGSE Reports Restated Financials For Fiscal 2010, Consolidated Financials For Fiscal 2011, And Financial Results For First And Second Quarter 2012

(2) Inappropriate set-up and implementation of DGSE’s AccountMate Enterprise Resource Planning system; and

(3) Adjustments and other journal entries made to the general ledger by prior management which lacked adequate support.

DGSE has removed and replaced all individuals who served in executive positions prior to December 20, 2011, including the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Controller, and the Vice President of Finance.

In addition to management changes, DGSE has made a number of other changes to internal processes, procedures and controls to ensure that accounting irregularities do not occur in the future. These changes are detailed in the in the Company’s Form 10-K filed today with the SEC.

All changes impacting periods prior to fiscal 2010 have been presented as adjustments to 2009 year-end retained earnings. The total of all adjustments related to 2009 and prior years, resulted in a $24.2 million reduction of retained earnings as of December 31, 2009. A thorough discussion of the adjustments and corrections behind this reduction in retained earnings is included in the Company’s restated Form 10-K filed today with the SEC.

As more fully described in the Form 10-K filing, the restatement of fiscal 2010 resulted in an improvement of $5.9 million in earnings before income taxes for the year 2010, compared to previously reported results.

2011 Full Year Results

Operationally, the Company had a strong fiscal year ended December 31, 2011. Revenues increased by $67.1 million, or 81 percent, in fiscal 2011, to $150.0 million, compared to $82.5 million in 2010. This increase was primarily the result of the acquisition of Southern Bullion Trading, LLC (“SBT “) in September of 2011 and a $33.4 million, or 78 percent, increase in bullion sales.

Cost of goods sold as a percentage of sales increased slightly to 85.7 percent in fiscal 2011 from 85 percent in fiscal 2010. Accordingly, gross margins decreased slightly to 14.3 percent in 2011 from 15 percent in 2010. This slight decrease was due to an increase in bullion sales, which have a lower margin than jewelry and rare coin revenues.

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