Net income in the quarter ending December 31, 2012 was $135,004 compared to net income of $1,464,307 in the quarter ending December 31, 2011, a reduction of $1,329,303. The net loss includes $0 and $283,789 in the fourth quarters of 2012 and 2011 respectively related to the discontinued operations of our Superior Galleries subsidiary.
Outlook for 2013
Mr. Vierling commented, “With the significant one-time expenses and management distractions associated with the restatement behind us, the Company expects 2013 to show a net profit while funding expansion out of internal cash flow. We have already signed leases and have begun construction on new branches in Texas, South Carolina and Georgia and are excited to provide significant shareholder value in the coming year and beyond.”
- Expansion plans and updates
- 8-12 organic store openings funded through internal cash flow in existing markets
- Three leases have been executed in Dallas, Atlanta and Charleston markets. Estimated openings in Second Quarter 2013.
- Evaluation of immediately accretive acquisition opportunities
- Complete the reorganization of accounting, back office and management functionality to support future growth, capable of supporting 150 to 200 stores in the future.
- Continue to leverage strategic relationship with Elemetal
- Expanded offering of Elemetal bullion products in all DGSE locations
- Consolidation of SBT and DGSE corporate functions at Elemetal headquarters in Dallas
- Continue to explore additional strategic business opportunities
- Utilization of deferred tax asset related to net operating losses (currently fully reserved on balance sheet at $9 million)
Mr. Vierling concluded, “Since 2011, through self-funded organic store openings and through the acquisition of SBT, we have grown from 4 stores in 3 states, to 34 stores in 8 states. Remarkably, we did this without increasing our debt. We believe that over the next several years, through additional self-funded growth, the acquisition of accretive businesses using our stock as currency, and by leveraging our strategic relationships, we have the potential to expand to 150-200 locations nationwide with revenues exceeding $500 million. We understand that 2012 was a difficult year for our shareholders, and we would like to thank them for supporting this new management team, and ensure them that our focus in 2013 is on creating shareholder value through profitable expansion.”