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RAPAPORT... DGSE Companies reported that revenue fell 7 percent year on year to $30.5 million and profit plunged 40 percent to $300,412 for the first quarter that ended on March 31. While the company experienced revenue increases for its bullion segment and the wholesale watch division, these gains were offset by decreases in sales for jewelry, and scrap and rare coin segments.
Gross profit margin dropped to 18.4 percent from 20.5 percent one year ago, due primarily to a change in the product mix, with more revenue derived from lower-margin bullion sales and less from higher-margin jewelry and scrap sales.
James Vierling, DGSE's CEO, said, “In the first quarter of 2013, we were finally able to fully focus on operations and we are on track to successfully execute our strategic initiatives with a new senior management team. These efforts included the relocation of our corporate headquarters, a move designed to increase our efficiency, leverage our infrastructure more effectively and place us in closer proximity to our strategic partner, Elemetal. Going forward, we are squarely focused on a strategy to expand our presence in existing markets, helping us better manage advertising spend and administrative expenses, with the goal of delivering long-term growth and profitability.”
Going forward, DGSE maintained its positive outlook for 2013, with expansion plans on target to open between eight and 12 new stores and to complete the reorganization of its accounting department, back office and management functionality to support future growth to 150 to 200 stores.
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