DGSE DGSE Companies Inc

DGSE Companies, Inc. (NYSE Amex: DGSE), which wholesales, retails and auctions fine watches, jewelry, diamonds and precious metal and rare coin products via traditional and Internet channels, today announced operating results for the quarter ended June, 2009.

Earnings

• Basic and diluted net income per share for the fiscal second quarter of 2009 was $.07 versus $.05 (after gain from discontinued operations of $.01) in the equivalent period in fiscal 2008. Net income from continuing operations was $659,908 in the quarter versus $367,017 in the equivalent 2008 quarter. Basic shares outstanding during the second quarter of 2009 were 9,833,635 versus 9,498,729 in the 2008 quarter. Fully diluted shares outstanding for the quarter were 9,833,635 versus 10,344,363 for the equivalent 2008 quarter.
• Basic and diluted net income per share for the six months ending June 30, 2009 was $.09 (after loss from discontinued operations of $.04) versus $.09 in the equivalent period in fiscal 2008. Net income from continuing operations was $1,260,644 for the six-months versus $937,734 in the equivalent 2008 period. Basic shares outstanding during the period of 2009 were 9,833,635 versus 9,498,729 in the 2008 period. Fully diluted shares outstanding for the period were 9,833,635 versus 10,344,363 for the equivalent 2008 quarter
• Total Revenues for the Fiscal Second Quarter of 2009 were $21,633,859. Revenues for the equivalent quarter of 2008 were $25,145,908. Revenues for the six-months were $46,973,641 versus $56,757,456 in the equivalent 2008 period.

Performance Metrics & Liquidity

• EBITDA (earnings before interest, taxes, depreciation and amortization) was $1,143,749 in the Second Quarter of 2009 ($.12 per basic share) versus $606,592 ($.06 per basic share) in the equivalent period of 2008.
• EBITDA (earnings before interest, taxes, depreciation and amortization) for the six-months was $1,996,065 versus $1,772,485 in the equivalent 2008 period.
• Shareholders’ equity at the end of the Second quarter of 2009 was $13,519,693 or $1.37 per basic share.

“The retail environment remains challenging and we continue to focus on those areas over which we have some degree of control,” noted William H. Oyster, President and Chief Operating Officer of DGSE Companies, Inc. Mr. Oyster continued, “We are focused on containing costs, enhancing margins and cash generation. This approach will allow the company to exploit opportunities in the marketplace as the market recovers.”

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 Galleries 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 live Internet auctions which can be accessed at www.dgse.com and through Superior Galleries' website at www.sgbh.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, www.SuperiorEstateBuyers.com and over 900 supporting websites. Through www.SuperiorPreciousMetals.com, we provide precious metals and rare coin investing and trading opportunities all across the United States. The Company also makes collateralized consumer loans at two Dallas locations.

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.

SUMMARY OF OPERATIONS

THREE MONTHS ENDED MARCH 31,     2009     2008 Revenue $ 21,633,859 $ 25,145,908 Income from continuing operations $ 659,908 $ 367,017 Net income $ 689,504 $ 489,924 Earnings per common share $ .07 $ .05