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DGSE Companies, Inc. Reports Fourth Quarter And 2012 Full Year Results

Stocks in this article: DGSE

DGSE Companies, Inc. (NYSE MKT: DGSE) (the “Company”) announced today the filing of its Consolidated Financial Statements for the quarter and year ended December 31, 2012.

James Vierling, Chief Executive Officer and Chairman of the Board stated, “2012 was an important year for DGSE Companies, Inc., where we executed on several key initiatives to regain integrity in our financial disclosures and refocus our efforts on our operational objectives and growth opportunities. We are pleased to announce that income from continuing operations, net of one-time expenses, in the fourth quarter of 2012 was $763,716. This means that in the second half of the year our income from continuing operations, net of one-time expenses, exceeded $1.7 million. During 2012, particular emphasis was placed on improving our financial controls, processes and procedures and I am extremely pleased with the work our new CFO, Brett Burford, and his team have done. We are now confident in our ability to accurately and credibly report our financial condition to current and prospective shareholders.”

Vierling continued, “With most of the distractions and expenses of last year behind us, our expectation is that profitability in 2013 will be significantly improved versus 2012.”

Income from continuing operations, net of one-time expenses, is considered a Non-GAAP Measure, and is reconciled to income from continuing operations in the accompanying table.

2012 Summary

  • Income from continuing operations in second half of year, net of one-time expenses exceeded $1.7 million
  • Restructured entire senior management and accounting group
  • Completed major restatement of the Company’s historical financials
  • Significantly improved the Company’s financial controls, processes and procedures
  • Engaged new independent auditors
  • Regained active trading status with the NYSE MKT exchange
  • Integrated the Southern Bullion Trading (“SBT”) entity into the Company
  • Restructured and increased the Company’s credit line
  • Opened 8 new retail locations while closing 3 historically underperforming locations
  • Converted SBT locations from focusing only on scrap buying activity, to focusing on buying and selling of all DGSE product lines
  • Introduced DGSE manufactured jewelry line, enabling us to better utilize the Company’s diamond inventory while increasing margins on jewelry sales
  • Continued to strengthen the relationship with majority shareholder NTR, now part of Elemetal, LLC

Year End 2012 Results

Revenues decreased by $11,282,376 or 8% in Fiscal 2012, to $127,876,610, compared to $139,158,986 in the prior year. This decrease was primarily the result of an industry-wide reduction in bullion demand, which significantly affected our bullion sales, driving a $7,913,158 or 11% decrease in bullion sales. This decrease was partially offset by additional sales related to the acquisition of SBT stores, which occurred in September of 2011.

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