Gold prices hurt DGSE in Q1

Dallas – DGSE Companies Inc. swung to a net loss of $523,000 from a net profit of $300,000 in first quarter 2014. The retailer cited significant decreases in both bullion and scrap sales resulting from a drop in gold prices as affecting its performance, which included a 32% drop in revenue to $19.9 million from $29.2 million.

DSGE has closed 23 stores since February 2014 and expects $3.7 million in non-recurring charges in 2014 as part of discontinued operations.

“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,” said Dusty Clem, chairman, president and CEO of DSGE. “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.”

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