DGSE Companies, Inc. Announces Revenues Increased 222 Percent to a Record $32,727,542 for the First Three Months of Fiscal 2008; Net Income Increased 162 Percent for Three Months to a Record $477,255

2008-05-13 19:14:59 -

- DGSE Companies, Inc. (AMEX: DGC), 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 March 31, 2008.

Earnings

-- Basic and diluted net income per share for the fiscal first quarter was $.05 versus $.04 in the equivalent period in fiscal 2007. Net Income increased to $477,255 from $182,415 for the equivalent 2007 quarter representing an increase of 162 percent. Basic shares outstanding during the first quarter of 2008 were 9,498,729 versus 4,913,290 in the 2007 quarter. Fully diluted shares outstanding for the first quarter were 10,344,363 versus 5,020,436 for the equivalent 2007 quarter; the increase in shares outstanding resulted from the May 2007 acquisition of Superior Galleries, Inc.

Revenues

-- Total Revenues for the Fiscal First Quarter of 2008 were $32,727,542. Revenues for the equivalent quarter of 2007 were $10,174,269. This represents a 222 percent increase.

Performance Metrics & Liquidity

-- EBITDA (earnings before interest, taxes, depreciation and amortization) was $1,025,714 in first quarter of 2008 ($.11 per basic share) versus $453,617 ($.09 per basic share) in the equivalent period of 2007.

-- Shareholders' equity at the end of the first quarter of 2008 was $20,801,316 or $2.19 per basic share versus $6,857,385 or $1.40 per share at the end of the first quarter 2007.

Significant Events and Milestones during Period

-- During the Quarter new activities including Superior Precious Metals, AmericanGoldandSilverExchange.com, and Superior Estate Buyers, Inc. became fully operational resulting in expenses of approximately $400,000 that did not exist in the first quarter of 2007. These new operations, while still in the earliest phase of their activities, have begun to contribute to our growth. Superior Precious Metals, our retail precious metals marketing operation, began an aggressive advertising program during the quarter and is enjoying significant revenues with attractive gross margins. AmericanGoldandSilverExchange.com, our direct to consumer jewelry and scrap precious metals buying operation, expanded its advertising into new geographical markets and has already processed thousands of new customer orders. Superior Estate Buyers, our outside buying organization, held six successful events during the period in local communities and has scheduled at least 18 more for the current calendar year. All of these activities commenced operations late in fiscal 2007.

-- Our Euless/Fort Worth operation (acquired as Euless Gold & Silver Exchange in the first half of 2007) produced over $4,000,000 in revenues in the first quarter--more than in any single year in its 20 year history

-- Pawn loan balances increased 130 percent at March 31, 2008 to $258,242 from $112,260 during the same period in 2007. We now have two large locations in Dallas, Texas that are enjoying robust loan growth and product sales.

-- During the first quarter of 2008 DGSE operations purchased over $17,000,000 in scrap jewelry, rare coins and bullion products directly from consumers versus approximately $4,800,000 in the equivalent period in 2007.

"The fiscal first quarter of 2008 highlights the momentum DGSE has generated across all of our operations," noted William H. Oyster, President and Chief Operating Officer of DGSE Companies, Inc. Mr. Oyster continued, "During the quarter we continued to invest substantial resources in the consolidation of Superior Galleries and in a host of new initiatives which, over time, will provide meaningful contributions to our operations. The launch late last year of www.Americangoldandsilverexchange.com and over 900 supporting websites has exceeded our expectations and we have already handled thousands of direct customer requests from limited geographical exposure. As we move through the year we intend to expand this channel materially. Superior Estate Buyers was also launched late last year and conducted six successful on the road buying activities. Plans for 2008 include, at least, 24 buying venues. In response to robust demand in our precious metals segment, we also launched Superior Precious Metals, Inc. to enhance our precious metals activities and the business has already produced significant revenues. We will, shortly, launch a new web based initiative to further exploit our position as a leading precious metals, rare coin and jewelry buyer. During the current month Superior Galleries will conduct its largest rare coin auction since our acquisition one year ago. In June of 2008, we will conduct our Second Jewelry auction including the signature offerings (subject to prior sale) of a 40 carat certified yellow diamond valued at over $1,000,000, a 20.59 carat certified diamond valued over $250,000 and a 13.72 carat certified diamond valued over $200,000 We expect the balance of 2008 to see expansion of our revenues and earnings in all segments accompanied by further growth in our higher margin business components."

DGSE Companies, Inc. wholesales retails and auctions jewelry, diamonds, fine watches, and precious metal bullion and rare coins products to domestic and international customers through its Dallas Gold and Silver Exchange, Charleston Gold and Diamond Exchange, Superior Galleries and National Jewelry Exchange subsidiaries and 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 Beverly 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 and over 900 supporting websites. The Company also makes collateralized consumer loans at its two Dallas locations.

The Company is headquartered in Dallas, Texas and its common stock trades on The American Stock Exchange under the symbol "DGC."

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. -0- DGSE COMPANIES, INC. SUMMARY OF OPERATIONS THREE MONTHS ENDED MARCH 2008 2007 REVENUE $32,727,542$ 10,174,269 NET INCOME $ 477,255$ 182,415 EARNINGS PER SHARE: BASIC AND DILUTED $.05 $.04

DGSE Companies, Inc., Dallas
William H. Oyster, 800-527-5307