SG&A expenses increased by $3.5 million to $5.6 million, an increase of 175 percent, compared to $2 million during the same period in 2011, primarily due to $2 million related to the addition of the SBT stores. The opening of four new non-SBT stores added $645,000, due to increased advertising costs, salaries, payroll taxes, building rent and other costs. In addition, the Company incurred $365,000 in professional fees associated with the restatement of our financial statements, and the related SEC investigation.
In March 2012, current management decided to discontinue the operations of the Company’s Superior Galleries subsidiary due to the lack of profitability and our belief that it was unlikely that profitability would be reached in the foreseeable future. The Company officially discontinued operations in June of 2012 but recognized losses in the first and second quarter of 2012 as discontinued operations. In the first quarter of 2012, the discontinued operations of Superior generated a net loss of $461,000.
Prior to the charge to discontinued operations, the Company had income from continuing operations of $959,000 for the first quarter of 2012. Net income after discontinued operations for the quarter was $497,000.
Second Quarter 2012 ResultsFor the three months ended June 30, 2012, sales decreased by $2.1 million, or 7 percent, to $28.6 million, as compared to $30.6 million during the same period in 2011. The decrease was primarily due to a decrease in sales of bullion, jewelry and rare coins. These decreases were partially offset by the acquisition of SBT in September 2011 which added revenues of $6.6 million for the quarter, and were not present in the same period in 2011. Revenue from discontinued operations for Superior was excluded in the amount of $1.1 million and $2.6 million for the periods ended June 30, 2012 and 2011, respectively.