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, 2016.
First Quarter 2016 Summary
- Revenues from continuing operations
were $11.8 million compared to $12.9 million, an 8.5% decline
compared to the same period in 2015. The decrease in revenues as
compared to the prior year quarter is primarily associated with
lower bullion and scrap sales and the closing of two stores in
Texas during the first quarter of 2015.
- Gross profit from continuing operations
decreased by $184,000, or 7.9%, based on lower sales. Gross profit
as a percent of revenue increased to 18.3% of revenues in the
current quarter, compared to 18.1% in the same period last
year.
- Selling, general and administrative
(“SG&A”) expenses for continuing operations was
$2.6 million compared to $2.9 million in the same period last
year.
- Loss from continuing operations, net of
taxes, for the quarter was $690,000 compared to a loss from
continuing operations of $801,000 in the first quarter of
2015.
- Net loss, inclusive of discontinued
operations, was approximately $690,000 or $0.06 per share, compared
to a net loss of approximately $798,000, or $0.07 per share, in the
year-ago period.
Matthew Peakes, Chief Executive Officer and Chairman of the
Board, stated, “While we are far from pleased with the loss for
this quarter, we are encouraged by the increase in per store sales,
increase in margin and the reduction in expenses.”
First Quarter 2016 Results
For the quarter ended March 31, 2016, revenues from continuing
operations were $11.8 million, an 8.5% decrease compared to $12.9
million in the quarter ended March 31, 2015, due primarily to
continued weakness in the Company’s scrap business, which is
consistent with industry-wide trends, and lower bullion sales.
Additionally, the decrease in revenues as compared to the prior
year quarter is attributable to the closing of two stores in
Texas.
Gross profit from continuing operations for the first quarter of
2016 decreased slightly by $184,000, or 7.9%, to $2.1 million
compared to $2.3 million in the prior year quarter. Gross
margin as a percentage of revenue increased to 18.3% for the three
months ended March 31, 2016, compared to 18.1% for the same period
in the prior year.
SG&A expenses decreased by $0.3 million, or 9.1%, to $2.6
million, as compared to $2.9 million during the same period in
2015. The decrease in SG&A is due to our continued efforts to
reduce expenses at all levels, including store-level operating
expenses, corporate overhead and advertising expense.
Depreciation and amortization decreased by $41,000, or 29.1%, to
$100,000 compared to $141,000 for the same period in the prior
year. This decrease was due to one-time write off of assets
formerly utilized in two stores closed during first quarter of
2015.
Loss from continuing operations for the first quarter of 2016,
net of taxes, was $690,000 or $0.06 per share, compared to a loss
from continuing operations of $801,000, or $0.07 per share, in the
first quarter of 2015.
Net loss, inclusive of discontinued operations, was
approximately $690,000 or $0.06 per share, compared to a net loss
of approximately $798,000, or $0.07 per share, in the year-ago
period.
Balance Sheet Summary
At March 31, 2016, we had cash and cash equivalents of $1.5
million compared to $1.8 million at December 31, 2015.
Stockholders’ equity decreased by $674,000, or 17.4%, to
$3.2 million at March 31, 2016 compared to
$3.9 million at December 31, 2015. As of March 31, 2016
and December 31, 2015, the outstanding balance on the Company’s
credit facility with NTR Metals, Inc. remained the same at $2.3
million.
Conference Call
DGSE Companies management will conduct a live teleconference to
discuss its financial results:
Date: May 16, 2016
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 May 23, 2016, 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 13637136 to access the
replay.
Webcast:
The call will be webcast and will be
available by visiting
http://public.viavid.com/index.php?id=119574.
About DGSE Companies,
Inc.
DGSE Companies, Inc. wholesales and retails jewelry, diamonds,
fine watches, 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.cgdeinc.com and www.dgse.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, 2016
2015 (Unaudited) ASSETS Current
Assets: Cash and cash equivalents $ 1,521,998 $ 1,752,711 Trade
receivables, net of allowances 166,953 229,848 Inventories
10,250,004 9,565,506 Prepaid expenses 147,512
106,547 Total current assets 12,086,467 11,654,612
Property and equipment, net 4,199,776 4,281,388 Intangible
assets, net 10,338 13,784 Other assets 143,551 204,226
Total assets $ 16,440,132 $ 16,154,010
LIABILITIES Current Liabilities: Current maturities of
long-term debt $ 1,555,380 $ 1,589,522 Current maturities of
capital leases 12,207 12,069 Accounts payable-trade 5,765,738
5,689,056 Accrued expenses 896,431 1,174,458 Customer deposits and
other liabilities 2,508,508 1,309,648 Liabilities related to
discontinued operations 190,810 190,810
Total current liabilities 10,929,074 9,965,563 Line
of credit, related party 2,303,359 2,303,359 Long-term debt, less
current maturities 10,556 13,664
Total liabilities 13,242,989 12,282,586 Commitments and
contingencies
STOCKHOLDERS' EQUITY Common stock,
$0.01 par value; 30,000,000 shares authorized; 12,328,956 and
12,296,446 shares issued and outstanding 123,289 122,964 Additional
paid-in capital 34,283,302 34,267,577 Accumulated deficit
(31,209,448 ) (30,519,117 ) Total stockholders' equity
3,197,143 3,871,424 Total liabilities and
stockholders' equity $ 16,440,132 $ 16,154,010
DGSE COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited)
For the Three Months Ended March 31,
2016 2015 Revenue:
Sales $ 11,774,516 $ 12,875,149 Cost of goods sold 9,625,473
10,541,966 Gross margin 2,149,043 2,333,183
Expenses: Selling, general and administrative expenses
2,624,356 2,886,043 Depreciation and amortization 99,764
140,624 2,724,120
3,026,667 Operating loss (575,077 )
(693,484 ) Other expense (income): Other income, net (614 )
(3,033 ) Interest expense 95,207 83,768
94,593 80,735 Loss from
continuing operations before income taxes (669,670 ) (774,219 )
Income tax expense 20,564 26,844
Loss income from continuing operations (690,234 ) (801,063 )
Discontinued operations: (Loss) income from discontinued
operations, net of taxes (97 ) 2,564
Net loss $ (690,331 ) $ (798,499 ) Basic net loss per common
share: Loss from continuing operations $ (0.06 ) $ (0.07 ) (Loss)
income from discontinued operations - -
Net loss per share $ (0.06 ) $ (0.07 ) Diluted net loss per
common share: Loss from continuing operations $ (0.06 ) $ (0.07 )
(Loss) income from discontinued operations - -
Net loss income per share $ (0.06 ) $ (0.07 )
Weighted-average number of common shares Basic 12,297,501
12,245,679 Diluted 12,297,501 12,245,679
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version on businesswire.com: http://www.businesswire.com/news/home/20160516006324/en/
DGSE Companies, Inc.Matthew M. Peakes, CEO,
972-587-4021investorrelations@dgse.com
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