UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of Report (Date
of earliest event reported):
May 14, 2014 (May
14, 2014)
DGSE
COMPANIES, INC.
(Exact
name of registrant as specified in its charter)
Nevada
|
1-11048
|
88-0097334
|
(State or Other
Jurisdiction of
Incorporation)
|
(Commission
File Number)
|
(IRS Employer
Identification No.)
|
15850 Dallas Parkway, Suite 140
Dallas, Texas 75248
(Address
of Principal Executive Offices) (Zip Code)
(972) 587-4049
(Registrant’s
telephone number, including area code)
(Former Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions (see General Instruction A.2.
below):
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On May 14, 2014, DGSE Companies, Inc. (the “Registrant”)
issued a press release disclosing their financial results for the fiscal
quarter ended March 31, 2014 (the “Press Release”). The
Press Release is attached hereto as Exhibit 99.1.
Item 7.01 Regulation FD Disclosure
The Registrant will hold a telephone conference regarding the Press
Release on May 14, 2014 at 3:30 p.m. Central Daylight Time (4:30 p.m.
Eastern Daylight Time) to discuss the Registrant’s financial results for
the fiscal quarter ended March 31, 2014. To participate in the
teleconference, please dial +888-846-5003 for U.S. callers and
+480-629-9856 for international callers and reference the “DGSE
conference call” when prompted. A replay will be available after
completion of the call through May 21, 2014. To access the replay,
please dial +877-870-5176 (U.S. callers) or +858-384-5517 (international
callers) and reference passcode 4682366. The webcast and archived
replay can also be accessed on the Company’s website at http://public.viavid.com/index.php?id=109109.
Item 9.01 Financial Statements and Exhibits
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) Exhibits.
The following exhibit is filed as part of this report:
Exhibit
Number Description
of Exhibit
99.1 Press Release, dated May 14, 2014.
SIGNATURES
Pursuant to
the requirements of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
|
|
|
DGSE COMPANIES, INC.
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
May 14, 2014
|
By:
|
/s/ JAMES D. CLEM
|
|
|
|
|
James D. Clem
|
|
|
|
|
Chief Executive Officer
|
|
EXHIBIT INDEX
Exhibit
|
|
Number
|
Description of Exhibit
|
|
|
99.1
|
Press Release, dated May 14, 2014
|
Exhibit 99.1
DGSE
Companies, Inc. Reports First Quarter Results
Portfolio
Rationalization Expected to Enable Continuing Operations to Return to
Profitability
DALLAS--(BUSINESS WIRE)--May 14, 2014--DGSE Companies, Inc. (NYSE MKT:
DGSE), 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 quarter ended March 31, 2014.
First Quarter 2014 Business and Financial Highlights
-
Dusty Clem was promoted to Chairman and Chief Executive Officer of
DGSE Companies, Inc. replacing James Vierling who resigned as CEO of
DGSE to accept a position with Elemetal, LLC, DGSE’s largest
shareholder.
-
The company closed six locations in its Southern Bullion Coin and
Jewelry division (“Southern Bullion”). Subsequent to the end of the
quarter, all remaining Southern Bullion locations were closed for a
total of 23 store closings since February 2014; DGSE expects to record
$3.7 million in non-recurring charges in 2014 as part of discontinued
operations.
-
Revenues were $19.9 million compared to $29.2 million, a 32% decline
compared to the year-ago period. Significant decreases in both bullion
and scrap sales were a result of the drop in gold prices.
-
Gross profit was $4.4 million, or 22.3% of revenue, compared to $5.3
million, or 18.1% of revenue in the same period last year. The 4.2%
improvement was driven by an increase in high-margin jewelry sales, as
well as improved margins on bullion and scrap sales.
-
Selling, general and administrative expenses (“SG&A”) were essentially
flat at $4.7 million during both the first quarter of 2014 and 2013.
-
Net loss, inclusive of the non-recurring expenses, was approximately
$523,000 or $0.04 per share, compared to net income of approximately
$300,000, or $0.02 per share, in the first quarter of 2013.
-
The company successfully executed a one-year extension of the loan
agreement with NTR Metals, LLC (“NTR”), extending the maturity date to
August 1, 2015. All other terms of the agreement remain the same.
Dusty Clem, Chairman of the Board and Chief Executive Officer, stated,
“In light of existing market realities, we took decisive action during
the quarter to mitigate our losses in order to return the company’s
continuing operations to profitability. Collectively, the 23 Southern
Bullion locations we closed this year contributed approximately $1.9
million to our net losses for 2013. These closures allow us to return
all of our attention to the 12 locations that can support the full
exchange model which DGSE has successfully operated for decades. Moving
forward, we continue to focus on building a more robust e-commerce
platform and bolstering revenues in the higher-margin segments of our
business, including our high-end jewelry, diamonds and watches.”
First Quarter 2014 Results
For the quarter ended March 31, 2014, revenues were $19.9 million, a 32%
decrease compared to $29.2 million in the quarter ended March 31, 2013,
due primarily to significant decreases in both bullion and scrap sales
as a result of declining gold prices, which were on average 11% lower
(as measured by London PM Fix) than in the same period last year.
Gross profit in the quarter was $4.4 million, or 22.3% of revenue,
compared to $5.3 million, or 18.1% of revenue, in the prior year
quarter. The increase in gross margin as a percentage of sales was the
result of an increase in high-margin jewelry sales, as well as higher
margins realized on bullion and scrap, despite their decrease in sales.
SG&A expenses decreased by approximately $17,000, or 0.4%, in the first
quarter, to $4.7 million compared to $4.7 million for the first quarter
of 2013. In addition, the company incurred approximately $75,000 and
$102,000 during the three months ended March 31, 2014 and 2013,
respectively, in professional fees and costs associated with the 2012
restatement of the company’s financial statements, the 2010 sales tax
audit, and related legal matters.
Net loss for the first quarter was $523,000 or $0.04 per share,
inclusive of the non-recurring expenses, compared to net income of
$300,000, or $0.02 per share, in the year-ago quarter.
“Through our actions in the first part of 2014, we have laid a
foundation for consistent profitability going forward by eliminating
ongoing losses and lowering our overall cost structure,” added Brett
Burford, DGSE’s Chief Financial Officer. “We are optimistic about moving
forward with fewer distractions, and the ability to focus our efforts on
a proven business model which has worked well, in good markets and bad,
for years.”
Balance Sheet Summary
At March 31, 2014, DGSE Companies had cash and cash equivalents of $2.8
million compared to $3.2 million at December 31, 2013. Stockholders’
equity decreased 4.4% to $10 million at March 31, 2014 compared to $10.4
million at December 31, 2013. As of March 31, 2014, the outstanding
balance on the company’s credit facility with NTR was $2.3 million
compared to $2.4 million at December 31, 2013. On February 25, 2014, the
company and NTR entered into a one-year extension of the loan agreement,
extending the maturity date to August 1, 2015. All other terms of the
agreement remain the same.
Conference Call
DGSE Companies management will conduct a live teleconference to discuss
its financial results:
Date:
|
|
|
|
May 14, 2014
|
Time:
|
|
|
|
4:30 p.m. ET/3:30 p.m. CT
|
Dial-in:
|
|
|
|
1-888-846-5003 if calling from the United States, or 1-480-629-9856
if dialing internationally.
|
Replay:
|
|
|
|
A replay will be available until May 21, 2014, 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
4682366 to access the replay.
|
Webcast:
|
|
|
|
The call will be webcast and will be available by visiting http://public.viavid.com/index.php?id=109109
|
|
|
|
|
|
About DGSE Companies
DGSE Companies, Inc. wholesales and retails jewelry, diamonds, fine
watches, and precious metal bullion and rare coin products through its
Bullion Express, Charleston Gold & Diamond Exchange, 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 internet websites which can be accessed at www.bullionexpress.com,
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
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2014
|
|
|
2013
|
|
|
|
(Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
2,784,944
|
|
|
|
$
|
3,214,770
|
|
Trade receivables, net of allowances
|
|
|
|
285,137
|
|
|
|
|
269,616
|
|
Inventories
|
|
|
|
12,222,439
|
|
|
|
|
12,921,857
|
|
Prepaid expenses
|
|
|
|
279,884
|
|
|
|
|
236,649
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
|
15,572,404
|
|
|
|
|
16,642,892
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
|
5,051,582
|
|
|
|
|
5,074,860
|
|
Intangible assets, net
|
|
|
|
2,881,986
|
|
|
|
|
2,942,314
|
|
Other assets
|
|
|
|
183,071
|
|
|
|
|
244,065
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
$
|
23,689,043
|
|
|
|
$
|
24,904,131
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
Accounts payable-trade
|
|
|
$
|
5,933,462
|
|
|
|
$
|
5,666,059
|
|
Accrued expenses
|
|
|
|
1,696,873
|
|
|
|
|
2,137,361
|
|
Customer deposits and other liabilities
|
|
|
|
1,934,949
|
|
|
|
|
2,401,574
|
|
Current maturities of long-term debt
|
|
|
|
124,600
|
|
|
|
|
122,536
|
|
Current maturities of capital leases
|
|
|
|
11,209
|
|
|
|
|
11,091
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
9,701,093
|
|
|
|
|
10,338,621
|
|
|
|
|
|
|
|
|
Line of credit, related party
|
|
|
|
2,303,359
|
|
|
|
|
2,383,359
|
|
Long-term debt, less current maturities
|
|
|
|
1,723,045
|
|
|
|
|
1,757,827
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
|
13,727,497
|
|
|
|
|
14,479,807
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Common stock, $0.01 par value; 30,000,000 shares authorized;
12,203,584 and 12,175,584 shares issued and outstanding
|
|
|
|
122,035
|
|
|
|
|
121,755
|
|
Additional paid-in capital
|
|
|
|
34,105,574
|
|
|
|
|
34,045,654
|
|
Accumulated deficit
|
|
|
|
(24,266,063
|
)
|
|
|
|
(23,743,085
|
)
|
Total stockholders' equity
|
|
|
|
9,961,546
|
|
|
|
|
10,424,324
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
|
$
|
23,689,043
|
|
|
|
$
|
24,904,131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DGSE COMPANIES, INC. AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(UNAUDITED)
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
Sales
|
|
|
$
|
19,896,146
|
|
|
|
|
$
|
29,249,573
|
|
Cost of goods sold
|
|
|
|
15,462,402
|
|
|
|
|
|
23,946,749
|
|
Gross margin
|
|
|
|
4,433,744
|
|
|
|
|
|
5,302,824
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
4,657,542
|
|
|
|
|
|
4,675,006
|
|
Depreciation and amortization
|
|
|
|
190,923
|
|
|
|
|
|
192,884
|
|
|
|
|
|
4,848,465
|
|
|
|
|
|
4,867,890
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
|
|
|
(414,721
|
)
|
|
|
|
|
434,934
|
|
|
|
|
|
|
|
|
|
Other expense (income):
|
|
|
|
|
|
|
|
Other income, net
|
|
|
|
(31,261
|
)
|
|
|
|
|
(12,147
|
)
|
Interest expense
|
|
|
|
84,562
|
|
|
|
|
|
51,704
|
|
|
|
|
|
53,301
|
|
|
|
|
|
39,557
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing operations before income taxes
|
|
|
|
(468,022
|
)
|
|
|
|
|
395,377
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
17,316
|
|
|
|
|
|
57,600
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing operations
|
|
|
|
(485,338
|
)
|
|
|
|
|
337,777
|
|
|
|
|
|
|
|
|
|
Discontinued operations:
|
|
|
|
|
|
|
|
Loss from discontinued operations, net of taxes of $0
|
|
|
|
(37,640
|
)
|
|
|
|
|
(37,365
|
)
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
|
$
|
(522,978
|
)
|
|
|
|
$
|
300,412
|
|
|
|
|
|
|
|
|
|
Basic net (loss) income per common share:
|
|
|
|
|
|
|
|
(Loss) income from continuing operations
|
|
|
$
|
(0.04
|
)
|
|
|
|
$
|
0.02
|
|
Loss from discontinued operations
|
|
|
|
(0.00
|
)
|
|
|
|
|
(0.00
|
)
|
Net (loss) income per share
|
|
|
$
|
(0.04
|
)
|
|
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
Diluted net (loss) income per common share:
|
|
|
|
|
|
|
|
(Loss) income from continuing operations
|
|
|
$
|
(0.04
|
)
|
|
|
|
$
|
0.02
|
|
Loss from discontinued operations
|
|
|
|
(0.00
|
)
|
|
|
|
|
(0.00
|
)
|
Net (loss) income per share
|
|
|
$
|
(0.04
|
)
|
|
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common shares
|
|
|
|
|
|
|
|
Basic
|
|
|
|
12,193,940
|
|
|
|
|
|
12,175,584
|
|
Diluted
|
|
|
|
12,193,940
|
|
|
|
|
|
12,313,048
|
|
CONTACT:
DGSE Companies, Inc.
Dusty Clem, 972-587-4021
Chairman,
President and CEO
investorrelations@dgse.com
or
Hayden IR
Brett
Maas, 646-536-7331
Managing Partner
brett@haydenir.com
DGSE Companies (AMEX:DGSE)
Historical Stock Chart
From Jun 2024 to Jul 2024
DGSE Companies (AMEX:DGSE)
Historical Stock Chart
From Jul 2023 to Jul 2024