Operating Performance Up Sharply From the Year Ago Period, Positive Outlook for Continued Momentum into Year End and Beyond
DALLAS--(BUSINESS WIRE)-- DGSE Companies, Inc. (NYSE Amex: DGSE), which buys and sells jewelry, fine watches, diamonds, rare coins and precious metals products via traditional and internet channels reported that revenue for the three months ended September 30, 2011 was $47,528,000 a 162% increase from the revenue reported for the three months ended September 30, 2010 of approximately $ 18,108,000.
Net income for the three months ended September 30, 2011 was $139,210 or $.01 per common share on both a basic and diluted basis as compared to net income of $138,509 or $.01per common share on both a basic and diluted basis for the three months ended September 30, 2010. Net income for the third quarter of 2011 was impacted by approximately $116,000 of one times costs related to the acquisition of Southern Bullion Trading, LLC. In addition, DGSE has taken a $1.7 million one time charge to earnings during the third quarter in order to establish a reserve that relates to a proposed settlement in a legal proceeding the Company has become involved with as the result of its acquisition of Superior Galleries in 2007. Though DGSE believes the suit is without merit, the Company has proposed a $1.7 million settlement in order to avoid a protracted legal proceeding.
Without these one time charges, net income for the three months ended September 30, 2011 was $1,244,513, or $.11 per common share on a basic basis and $.10 on a diluted basis.
“I am pleased to announce our third consecutive quarter of very strong operating performance,” stated William Oyster, President and CEO of DGSE. “This performance was driven by continuing growth from our core business channels, contributions from our first two Bullion Express stores and contribution from our Southern Bullion Trading, LLC. acquisition that closed just 2 weeks prior to quarter end. With a rapidly expanding presence in targeted markets across the Country as the result of recent initiatives, and a continuing climate of strong consumer and investor interest in all areas of the precious metals markets, we are ideally positioned to continue our positive growth trends in the current quarter, traditionally our strongest quarter of the year, and into 2012.” Of special significance since our last financial release:
In order to incentivize the performance of the management of SBT, DGSE granted up to 500,000 non-qualified stock options to the management of SBT if the net operating income of SBT (as calculated in accordance with GAAP) exceeds $2,500,000 in the 12 month following closing. Operating results to date have been consistent with expectations. The fourth quarter of 2011 will represent the first full quarter of consolidated financial results.
Mr. Oyster concluded, “We have initiated a number of strategic growth initiatives that set the stage for our positive momentum and growth trends to continue well into the future, and plan to be opportunistic with respect to new initiatives as they present themselves. In closing, on behalf of myself and the entire management team and staff at DGSE, I would like to acknowledge the years of dedicated service and the numerous contributions of our former Chairman and CEO, Dr. Len Smith. I look forward as the Company’s new CEO and Chairman to continuing a strong working relationship with Len in his new role as we continue to execute our growth oriented business plan.”
DGSE Companies, Inc. wholesales retails and auctions jewelry, diamonds, fine watches, and precious metal bullion and rare coin products to domestic and international customers through its Dallas Gold and Silver Exchange, Charleston Gold and Diamond Exchange, Superior Gold & Diamond Exchange operations as well as through the internet. DGSE also owns Fairchild International, Inc., one of the largest vintage watch wholesalers in the country. In addition to its retail facilities in Dallas and Euless, Texas, Charleston, South Carolina and Woodland Hills, California, the Company operates internet websites which can be accessed at www.dgse.com and through Superior Gold & Diamond Exchange website at www.sgde.com and Charleston Gold & Diamond Exchange at www.cgdeinc.com. Real-time price quotations and real-time order execution in precious metals are provided on another DGSE web site at www.USBullionExchange.com. Wholesale customers can access our full vintage watch inventory through the restricted site at www.FairchildWatches.com. DGSE also purchases precious metals, rare coins, watches, diamonds and jewelry through www.AmericanGoldandSilverExchange.com, and over 900 supporting websites. DGSE also operates an independent website at www.dgsetreausurehunt.com that allows consumers to purchase one of a kind items collected throughout its system. DGSE BullionExpress are specialty precious metals stores currently located in Dallas, Texas and Woodland Hills, California.
The Company is headquartered in Dallas, Texas and its common stock trades on NYSE Amex Exchange under the symbol “DGSE”.
This press release includes statements which may constitute 'forward-looking" statements, usually containing the words "believe", "estimate", 'project", "expect" or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company's products and services in the marketplace, competitive factors, dependence upon third-party vendors, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release. In addition to the results presented in accordance with Generally Accepted Accounting Principles throughout this press release, DGSE has presented non-GAAP financial measures such as EBITDA. The Company believes that these non-GAAP measures, viewed in addition to and not in lieu of the Company's reported GAAP results, provide useful information to investors because they are an integral part of the Company's internal evaluation of operating performance. In addition, they are measures that DGSE uses to evaluate management's effectiveness. DGSE’s non-GAAP financial measures may not be comparable to similarly titled measures presented by other companies.
DGSE Companies, Inc.
William H. Oyster, 972-484-3662
Chairman and CEO