Company Reports Second Consecutive Quarter of Significantly Higher Revenue and Net Income

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 June 30, 2011 was approximately $33.2 million, a 60% increase from the revenue reported for the three months ended June 30, 2010 of approximately $ 20.7 million.

Net income for the three months ended June 30, 2011 was $568,099 or $.06 per basic common share as compared to net income of $5,644,677 for the three months ended June 30, 2010. Net income for the 2010 period included $8,629,129 in other income related to the conversion and elimination of all debt related to the Company’s 2007 acquisition of Superior Galleries, Inc. Excluding this onetime gain, DGSE’s net loss for the three months ended June 30, 2010 was ($3,509,721) or (.36) per basic common share.

“I am very pleased to report one of the strongest operating quarters in DGSE’s history,” stated William Oyster, President and COO of DGSE. “This strong performance was driven primarily from our core business channels with minor contributions from our first two Bullion Express locations commencing late in the quarter. Revenue and income contributions from Bullion Express locations will become a meaningful component of operating results during the balance of this year and beyond as new locations open, and existing locations become more established in their respective markets.

“Of special significance during the second quarter was our execution of a letter of intent to acquire Southern Bullion Trading (SBT) LLC (which is owned, in part, by our refining partner). SBT, is one of the largest chains in the Southeast with over twenty locations in TN, AL, GA, NC and SC that buy and sell bullion, coins, paper money, pre-owned watches, diamonds and all forms of gold and silver. The closing of this transaction is subject to the execution of definitive agreements, completion of due diligence and other matters and is proceeding as planned. The transaction is expected to close shortly. SBT will be very complimentary to DGSE’s existing businesses and is expected to be accretive to DGSE’s operating results.

“The strong momentum we have demonstrated during the first half of the year across all of our business segments has continued into the current quarter. Our retail channels continue to improve, consumer and investor interest in all aspects of our precious metals related businesses is strong, and we continue to focus on growth oriented initiatives such as SBT and Bullion Express. We are very optimistic about the outlook for continued growth during the second half of 2011 and beyond.”

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.dgsetreasurehunt.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.

Contacts:

DGSE Companies, Inc.
William Oyster, 972-484-3662
President and Chief Operating Officer
or
Feagans Consulting, Inc.
Neal Feagans, 303-449-1184
Investor Relations

Source: DGSE Companies, Inc.