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Dgse Companies, Inc. Reports Third Quarter 2015 Results

The following excerpt is from the company's SEC filing.

DALLAS--(BUSINESS WIRE)--November 12, 2015--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...


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