For the nine months, the Company recognized losses from the discontinued operations of Superior Galleries of $768,000. As of the third quarter of 2012 the Company believes that it has recognized all material losses related to the discontinued operations of Superior Galleries.
As noted earlier, in 2011 the Company had a loss on settlement of debt with a related party of $1.7 million which decreased to $0 in the current year. The prior year loss was incurred in connection with the issuance of 400,000 shares of our common stock to NTR, our majority stockholder, in exchange for $2,000,000 in debt forgiveness.
Prior to the charge to discontinued operations, the Company had a loss from continuing operations of $1.7 million for the nine months ended September 30, 2012. Net loss after discontinued operations for the period was $2.4 million.
Excluding discontinued operations and one-time expenses associated with the restatement of our financial statements the Company would have generated a profit of $1.1 million for the three quarters ended September 30, 2012.
“While the overall market for precious metals has been much softer in 2012 compared to the record setting 2011, where gold hit an all-time high, DGSE was able to largely mitigate the impact of revenue losses through significant margin improvements and the addition of SBT’s stores, which have added over $22 million in revenue in the first three quarters of 2012,” stated Mr. Vierling. “Although the Company’s continuing operations lost $1.7 million year to date, we have incurred $2.7 million in one-time costs associated with the restatement of our financial statements. Excluding these one-time expenses and the Company’s discontinued operations, the Company would have earned over $1 million year to date.”
“The restatement effort has been a significant drag on both the Company’s expenses and new management’s attention this year. With the restatement behind us, DGSE is highly focused on opening new stores, growing its existing business and reducing costs wherever possible,” stated Mr. Vierling. “We also look forward to the resumption of trading for our stock. While we have greatly appreciated the expression of support from many of our key stockholders, especially our majority stockholder NTR, we know that the trading halt has been difficult and frustrating. We are absolutely committed to ensuring transparency and liquidity for our shareholders in the future,” concluded Mr. Vierling.