Company Website:
http://www.dgse.com
DALLAS -- (Business Wire)
DGSE Companies, Inc. (NYSE MKT: DGSE) (“DGSE” or the “Company”), a
leading wholesaler and retailer
of jewelry,
diamonds,
fine
watches, and precious metal bullion
and rare
coin products, today announced its financial results for the three
and nine months ended September 30, 2015.
Third Quarter 2015 Business and Financial Highlights
-
DGSE reported a net loss of $469,000 for the quarter, which included a
$14,000 gain from discontinued operations, and a loss of $483,000 from
continuing operations.
-
Selling, general and administrative expenses (“SG&A”) were negatively
impacted by an additional accrual of $360,000 related to a potential
Texas sales tax assessment.
-
Revenues from continuing operations were $16.5 million compared to
$17.0 million, a 3% decline compared to the same period in 2014. DGSE
saw declines in its jewelry and scrap businesses, while its bullion
sales saw an increase as compared to the prior year quarter.
-
Gross profit from continuing operations decreased $748,000, or 24%,
based on lower sales. Gross profit as a percent of revenue decreased
to 14.4% for the three months ended September 30, 2015 compared to
18.4% for the same period in the prior year.
-
Overall, SG&A was down $241,000 in the quarter, to $2.7 million
compared to $2.9 million during the third quarter of 2014. This
reduction was achieved primarily through continued efforts to reduce
expenses at all levels, including store-level operating expenses,
corporate overhead and advertising expense, and was partial offset by
sales tax accrual.
-
Loss from continuing operations, net of taxes, was approximately
$483,000, or $0.04 per share, compared to income from continuing
operations, net of taxes, of approximately $13,000, or $0.00 per
share, in the third quarter of 2014.
-
Net loss, inclusive of discontinued operations, was approximately
$469,000, or $0.04 per share, compared to a net income, inclusive of
discontinued operations, of approximately $180,000, or $0.01 per
share, in the third quarter of 2014.
-
During the quarter, DGSE closed one store in the Charleston market,
and recognized certain costs related to this closure in the third
quarter.
-
In September 2015, the Company appointed Matthew M. Peakes as Chief
Executive Officer and Chairman of the Board of Directors (the “Board”).
-
In October 2015, the Company elected two independent Directors to the
Board and promoted Nabil J. Lopez to Chief Financial Officer,
Secretary and a member of the Board.
Third Quarter 2015 Results
For the quarter ended September 30, 2015, revenues from continuing
operations were $16.5 million, a 3% decrease compared to $17.0 million
in the quarter ended September 30, 2014. Bullion sales were up compared
to the prior year quarter. Jewelry and scrap sales were down
approximately 30% and 51%, respectively, compared to the prior year
quarter.
Gross profit from continuing operations in the quarter decreased by
$748,000, or 24%, to $2.4 million as compared to $3.1 million during the
third quarter of 2014. Gross profit as a percent of revenue decreased to
14.4% for the three months ended September 30, 2015 compared to 18.4%
for the same period in the prior year.
SG&A expenses decreased by $241,000, or 8%, to $2.7 million, as compared
to $2.9 million during the same period in 2014. The overall decrease in
SG&A was achieved primarily through continued efforts to reduce expenses
at all levels, including store-level operating expenses, corporate
overhead, and advertising expense, and was partial offset by an accrual
of $360,000 related to a potential Texas sales tax assessment based on a
preliminary assessment by the Company.
Loss from continuing operations for the third quarter, net of taxes, was
$483,000 or $0.04 per share compared to income from continuing
operations of $13,000, or $0.00 per share, in the third quarter of 2014.
Income from discontinued operations for the three months ended
September 30, 2015 was $14,000, related to the Southern Bullion Coin &
Jewelry (“Southern Bullion”) locations closed in 2014, compared to
income of $167,000 for these locations in the same quarter of 2014. The
current quarter income relates to adjustments in accrued expenses
related to the wind down of all Southern Bullion operations. The Company
believes it has recognized all material expenses related to the closure
of Southern Bullion operations.
Net loss for the third quarter was $469,000, or $0.04 per share,
compared to a net income of $180,000, or $0.01 per share, in the third
quarter of 2014.
Year-to-Date 2015 Results
For the nine months ended September 30, 2015, revenues from continuing
operations were $44.3 million, a 16% decrease compared to $52.6 million
in the nine months ended September 30, 2014. Bullion sales have
increased compared to the prior year period. Scrap sales continued to
trend downward, consistent with the industry, and the jewelry, watch and
diamond lines saw slight decreases compared to the prior year period.
Gross profit from continuing operations in the first nine months of 2015
decreased by $2.1 million, or 22%, to $7.3 million as compared to
$9.4 million during the first nine months of 2014. Gross margin as a
percentage of revenue was 16.4% for the nine months ended September 30,
2015, which was down from 17.8% in the same period in the prior year.
SG&A expenses decreased by $1.5 million, or 16%, to $8.1 million, as
compared to $9.6 million during the same period in 2014. These expenses
were primarily comprised of accelerated lease expense and fees related
to early lease terminations. The overall decrease in SG&A was achieved
primarily through continued efforts to reduce expenses at all levels,
including store-level operating expenses, corporate overhead, and
advertising expense. The decrease was achieved despite recognizing a
$360,000 accrual related to a potential Texas sales tax assessment based
on a preliminary assessment by the Company.
Loss from continuing operations for the first nine months of 2015, net
of taxes, was $1.4 million, or $0.11 per share compared to a loss from
continuing operations of $811,000, or $0.06 per share, in the first nine
months of 2014.
Income from discontinued operations for the nine months ended September
30, 2015 was $58,000, related to the Southern Bullion locations closed
in 2014, compared to a net loss of $4.0 million for these locations in
the same nine months of 2014. The current period income relates to
adjustments in accrued expenses related to the wind down of all Southern
Bullion operations. The Company believes it has recognized all material
expenses related to the closure of Southern Bullion operations.
Net loss for the first nine months of 2015 was $1.4 million, or $0.11
per share, compared to a net loss of $4.8 million, or $0.39 per share,
in the first nine months of 2014.
Balance Sheet Summary
As of September 30, 2015, DGSE had cash and cash equivalents of $1.3
million compared to $2.2 million at December 31, 2014. Stockholders’
equity decreased 22% to $4.8 million at September 30, 2015 compared to
$6.1 million at December 31, 2014. As of September 30, 2015 and
December 31, 2014, the outstanding balance on the Company’s credit
facility with NTR Metals, LLC was $2.3 million.
Conference Call
DGSE’s management will conduct a live teleconference to discuss its
financial results:
Date: |
|
November 12, 2015
|
Time: | |
4:30 p.m. ET/3:30 p.m. CT
|
Dial-in: | |
1-877-407-9039 if calling from the United States, or 1-201-689-8470
if dialing internationally.
|
Replay: | |
A replay will be available until midnight on November 19, 2015,
which may be accessed by dialing 1-877-870-5176 within the United
States and 1-858-384-5517 if dialing internationally. Please use
passcode 13624412 to access the replay.
|
Webcast: | |
The call will be webcast and will be available by visiting http://public.viavid.com/index.php?id=117145.
|
| |
|
About DGSE Companies
DGSE Companies, Inc. wholesales and retails jewelry, diamonds, fine
watches, and precious metal bullion and rare coin products through its
Charleston Gold & Diamond Exchange, Chicago Gold & Diamond Exchange
(formerly Bullion Express), and Dallas Gold & Silver Exchange
operations. DGSE also owns Fairchild International, Inc., one of the
largest vintage watch wholesalers in the country. In addition to its
retail facilities in Illinois, South Carolina, and Texas, the Company
operates websites which can be accessed at www.dgse.com,
and www.cgdeinc.com.
Real-time price quotations and real-time order execution in precious
metals are provided on another DGSE website at www.USBullionExchange.com.
Wholesale customers can access the full vintage watch inventory through
the restricted site at www.FairchildWatches.com.
The Company is headquartered in Dallas, Texas and its common stock
trades on the NYSE MKT 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.
|
|
DGSE COMPANIES, INC. AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
|
|
|
| September 30, |
|
| December 31, |
| | |
| 2015 |
| | |
| 2014 |
|
| | | (Unaudited) | | | |
ASSETS | | | | | | |
Current Assets:
| | | | | | |
Cash and cash equivalents
| | |
$
|
1,342,152
| | | |
$
|
2,184,435
| |
Trade receivables, net of allowances
| | | |
167,074
| | | | |
904,076
| |
Inventories
| | | |
10,678,270
| | | | |
11,144,157
| |
Prepaid expenses
| | | |
171,730
| | | | |
104,513
| |
Assets related to discontinued operations
| | |
|
-
|
| | |
|
49,729
|
|
| | | | | |
|
Total current assets
| | | |
12,359,226
| | | | |
14,386,910
| |
| | | | | |
|
Property and equipment, net
| | | |
4,308,762
| | | | |
4,365,767
| |
Intangible assets, net
| | | |
17,230
| | | | |
27,568
| |
Other assets
| | | |
125,646
| | | | |
128,356
| |
| | |
| | |
|
Total assets
| | |
$
|
16,810,864
|
| | |
$
|
18,908,601
|
|
| | | | | |
|
LIABILITIES | | | | | | |
Current Liabilities:
| | | | | | |
Current maturities of long-term debt
| | |
$
|
1,623,098
| | | |
$
|
131,003
| |
Current maturities of capital leases
| | | |
11,942
| | | | |
11,529
| |
Accounts payable-trade
| | | |
4,237,211
| | | | |
5,831,736
| |
Accrued expenses
| | | |
1,196,205
| | | | |
1,541,552
| |
Customer deposits and other liabilities
| | | |
2,443,596
| | | | |
1,082,778
| |
Liabilities related to discontinued operations
| | |
|
212,485
|
| | |
|
303,564
|
|
| | | | | |
|
Total current liabilities
| | | |
9,724,537
| | | | |
8,902,162
| |
| | | | | |
|
Line of credit, related party
| | | |
2,303,359
| | | | |
2,303,359
| |
Long-term debt, less current maturities
| | |
|
16,729
|
| | |
|
1,616,237
|
|
| | | | | |
|
Total liabilities
| | | |
12,044,625
| | | | |
12,821,758
| |
| | | | | |
|
Commitments and contingencies
| | | | | | |
| | | | | |
|
STOCKHOLDERS' EQUITY | | | | | | |
Common stock, $0.01 par value; 30,000,000 shares authorized;
| | | | | | |
12,296,446 and 12,238,846 shares issued and outstanding
| | | |
122,964
| | | | |
122,388
| |
Additional paid-in capital
| | | |
34,267,577
| | | | |
34,231,271
| |
Accumulated deficit
| | |
|
(29,624,302
|
)
| | |
|
(28,266,816
|
)
|
Total stockholders' equity
| | | |
4,766,239
| | | | |
6,086,843
| |
| | |
| | |
|
Total liabilities and stockholders' equity
| | |
$
|
16,810,864
|
| | |
$
|
18,908,601
|
|
|
|
DGSE COMPANIES, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(UNAUDITED) |
|
|
|
| For the Three Months Ended September 30, |
|
| For the Nine Months Ended September 30, |
| | |
| 2015 |
|
|
|
| 2014 |
| | |
| 2015 |
|
|
|
| 2014 |
|
| | | | | | | | | | | |
|
Revenue:
| | | | | | | | | | | | |
Sales
| | |
$
|
16,523,826
| | | |
$
|
17,040,249
| | | |
$
|
44,341,612
| | | |
$
|
52,622,968
| |
Cost of goods sold
| | |
|
14,137,085
|
| | |
|
13,905,844
|
| | |
|
37,052,512
|
| | |
|
43,267,708
|
|
Gross margin
| | | |
2,386,741
| | | | |
3,134,405
| | | | |
7,289,100
| | | | |
9,355,260
| |
| | | | | | | | | | | |
|
Expenses:
| | | | | | | | | | | | |
Selling, general and administrative expenses
| | | |
2,689,569
| | | | |
2,930,475
| | | | |
8,108,750
| | | | |
9,634,616
| |
Depreciation and amortization
| | |
|
80,499
|
| | |
|
105,971
|
| | |
|
302,831
|
| | |
|
287,786
|
|
| | |
|
2,770,068
|
| | |
|
3,036,446
|
| | |
|
8,411,581
|
| | |
|
9,922,402
|
|
| | | | | | | | | | | |
|
Operating (loss) income
| | |
|
(383,327
|
)
| | |
|
97,959
|
| | |
|
(1,122,481
|
)
| | |
|
(567,142
|
)
|
| | | | | | | | | | | |
|
Other expense (income):
| | | | | | | | | | | | |
Other (income) expense, net
| | | |
(3,766
|
)
| | | |
12,982
| | | | |
(7,469
|
)
| | | |
(44,679
|
)
|
Interest expense
| | |
|
84,826
|
| | |
|
89,240
|
| | |
|
257,487
|
| | |
|
258,383
|
|
| | |
|
81,060
|
| | |
|
102,222
|
| | |
|
250,018
|
| | |
|
213,704
|
|
| | | | | | | | | | | |
|
Loss from continuing operations before income taxes
| | | |
(464,387
|
)
| | | |
(4,263
|
)
| | | |
(1,372,499
|
)
| | | |
(780,846
|
)
|
| | | | | | | | | | | |
|
Income tax expense (benefit)
| | |
|
18,159
|
| | |
|
(17,094
|
)
| | |
|
43,082
|
| | |
|
29,976
|
|
| | | | | | | | | | | |
|
(Loss) income from continuing operations
| | | |
(482,546
|
)
| | | |
12,831
| | | | |
(1,415,581
|
)
| | | |
(810,822
|
)
|
| | | | | | | | | | | |
|
Discontinued operations:
| | | | | | | | | | | | |
Income (loss) from discontinued operations, net of taxes
| | |
|
13,848
|
| | |
|
166,757
|
| | |
|
58,095
|
| | |
|
(3,984,808
|
)
|
| | | | | | | | | | | |
|
Net (loss) income
| | |
$
|
(468,698
|
)
| | |
$
|
179,588
|
| | |
$
|
(1,357,486
|
)
| | |
$
|
(4,795,630
|
)
|
| | | | | | | | | | | |
|
Basic net loss per common share:
| | | | | | | | | | | | |
(Loss) income from continuing operations
| | |
$
|
(0.04
|
)
| | |
$
|
0.00
| | | |
$
|
(0.11
|
)
| | |
$
|
(0.06
|
)
|
(Loss) income from discontinued operations
| | |
|
-
|
| | |
|
0.01
|
| | |
|
-
|
| | |
|
(0.33
|
)
|
Net (loss) income per share
| | |
$
|
(0.04
|
)
| | |
$
|
0.01
|
| | |
$
|
(0.11
|
)
| | |
$
|
(0.39
|
)
|
| | | | | | | | | | | |
|
Diluted net loss per common share:
| | | | | | | | | | | | |
(Loss) income from continuing operations
| | |
$
|
(0.04
|
)
| | |
$
|
0.00
| | | |
$
|
(0.11
|
)
| | |
$
|
(0.06
|
)
|
(Loss) income from discontinued operations
| | |
|
-
|
| | |
|
0.01
|
| | |
|
-
|
| | |
|
(0.33
|
)
|
Net (loss) income per share
| | |
$
|
(0.04
|
)
| | |
$
|
0.01
|
| | |
$
|
(0.11
|
)
| | |
$
|
(0.39
|
)
|
| | | | | | | | | | | |
|
Weighted-average number of common shares
| | | | | | | | | | | | |
Basic
| | | |
12,296,446
| | | | |
12,223,584
| | | | |
12,268,475
| | | | |
12,209,416
| |
Diluted
| | | |
12,296,446
| | | | |
12,271,362
| | | | |
12,268,475
| | | | |
12,209,416
| |
View source version on businesswire.com: http://www.businesswire.com/news/home/20151112006228/en/
Contacts:
DGSE Companies, Inc.
Matthew M. Peakes, 972-587-4021
Chairman
and Chief Executive Officer
investorrelations@dgse.com
Source: DGSE Companies, Inc.
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