Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 25, 2015 | Jun. 30, 2014 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Entity Registrant Name | DGSE COMPANIES INC | ||
Entity Central Index Key | 701719 | ||
Current Fiscal Year End Date | -19 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 12,253,846 | ||
Entity Public Float | $7,355,657 | ||
Entity Current Reporting Status | Yes | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current Assets: | ||
Cash and cash equivalents | $2,184,435 | $2,637,726 |
Trade receivables, net of allowances | 904,076 | 162,670 |
Inventories | 11,144,157 | 9,992,156 |
Prepaid expenses | 104,513 | 138,600 |
Assets related to discontinued operations | 49,729 | 3,711,740 |
Total current assets | 14,386,910 | 16,642,892 |
Property and equipment, net | 4,365,767 | 4,588,695 |
Intangible assets, net | 27,568 | 41,353 |
Other assets | 128,356 | 189,426 |
Noncurrent assets related to discontinued operations | 3,441,765 | |
Total assets | 18,908,601 | 24,904,131 |
Current Liabilities: | ||
Current maturities of long-term debt | 131,003 | 122,536 |
Current maturities of capital leases | 11,529 | 11,091 |
Accounts payable-trade | 5,831,736 | 5,535,624 |
Accrued expenses | 1,541,552 | 1,729,528 |
Customer deposits and other liabilities | 1,082,778 | 2,349,943 |
Liabilities related to discontinued operations | 303,564 | 589,899 |
Total current liabilities | 8,902,162 | 10,338,621 |
Line of credit, related party | 2,303,359 | 2,383,359 |
Long-term debt, less current maturities | 1,616,237 | 1,757,827 |
Total liabilities | 12,821,758 | 14,479,807 |
Commitments and contingencies | ||
STOCKHOLDERS' EQUITY | ||
Common stock, $0.01 par value; 30,000,000 shares authorized; 12,238,846 and 12,175,584 shares issued and outstanding | 122,388 | 121,755 |
Additional paid-in capital | 34,231,271 | 34,045,654 |
Accumulated deficit | -28,266,816 | -23,743,085 |
Total stockholders' equity | 6,086,843 | 10,424,324 |
Total liabilities and stockholders' equity | $18,908,601 | $24,904,131 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
CONSOLIDATED BALANCE SHEETS [Abstract] | ||
Common stock, par value per share | $0.01 | $0.01 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 12,238,846 | 12,175,584 |
Common stock, shares outstanding | 12,238,846 | 12,175,584 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue: | ||
Sales | $70,742,755 | $87,095,935 |
Cost of goods sold | 58,091,288 | 72,888,844 |
Gross margin | 12,651,467 | 14,207,091 |
Expenses: | ||
Selling, general and administrative expenses | 12,670,968 | 14,363,216 |
Depreciation and amortization | 382,565 | 353,034 |
Total costs and expenses | 13,053,533 | 14,716,250 |
Operating loss | -402,066 | -509,159 |
Other expense (income) : | ||
Other (income) expense, net | -174,189 | -106,696 |
Interest expense | 341,382 | 261,185 |
Other expense (income) | 167,193 | 154,489 |
Loss from continuing operations before income taxes | -569,259 | -663,648 |
Income tax expense | 65,416 | 57,168 |
Loss from continuing operations | -634,675 | -720,816 |
Discontinued operations: | ||
Loss from discontinued operations, net of taxes | -3,889,056 | -1,938,373 |
Net loss | ($4,523,731) | ($2,659,189) |
Basic net loss per common share: | ||
Loss from continuing operations | ($0.05) | ($0.06) |
Loss from discontinued operations | ($0.32) | ($0.16) |
Net loss per share | ($0.37) | ($0.22) |
Diluted net loss per common share: | ||
Loss from continuing operations | ($0.05) | ($0.06) |
Loss from discontinued operations | ($0.32) | ($0.16) |
Net loss per share | ($0.37) | ($0.22) |
Weighted-average number of common shares | ||
Basic | 12,216,787 | 12,175,584 |
Diluted | 12,216,787 | 12,175,584 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] |
Balances at Dec. 31, 2012 | $13,083,513 | $121,755 | $34,045,654 | ($21,083,896) |
Balances, shares at Dec. 31, 2012 | 12,175,584 | |||
Net loss | -2,659,189 | -2,659,189 | ||
Balances at Dec. 31, 2013 | 10,424,324 | 121,755 | 34,045,654 | -23,743,085 |
Balances, shares at Dec. 31, 2013 | 12,175,584 | |||
Stock issued to officers and certain employees | 100,000 | 480 | 99,520 | |
Stock issued to officers and certain employees, shares | 48,000 | |||
Stock issued to officer | 86,250 | 750 | 85,500 | |
Stock issued to officer, shares | 75,000 | |||
Forfeiture of stock by former CEO | -597 | 597 | ||
Forfeiture of stock by former CEO, shares | -59,738 | |||
Net loss | -4,523,731 | -4,523,731 | ||
Balances at Dec. 31, 2014 | $6,086,843 | $122,388 | $34,231,271 | ($28,266,816) |
Balances, shares at Dec. 31, 2014 | 12,238,846 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Flows From Operating Activities: | ||
Net loss | ($4,523,731) | ($2,659,189) |
Loss from discontinued operations, net of taxes | -3,889,056 | -1,938,373 |
Loss from continuing operations, net of tax | -634,675 | -720,816 |
Adjustments to reconcile loss from continuing operations to net cash (used in) provided by operating activities of continuing operations: | ||
Depreciation and amortization | 382,565 | 353,034 |
Stock based compensation to employees, officers and directors | 148,500 | |
Changes in operating assets and liabilities: | ||
Trade receivables, net | -741,406 | 379,763 |
Inventories | 372,863 | -677,809 |
Prepaid expenses | 34,087 | 92,115 |
Other assets | 45,629 | -95,057 |
Accounts payable and accrued expenses | 78,674 | 2,987,425 |
Customer deposits and other liabilities | -1,267,165 | -267,649 |
Net cash (used in) provided by operating activities of continuing operations | -1,580,928 | 2,051,006 |
Cash Flows From Investing Activities: | ||
Purchases of property and equipment | -155,347 | -486,491 |
Net cash used in investing activities of continuing operations | -155,347 | -486,491 |
Cash Flows From Financing Activities: | ||
Repayment of debt | -122,536 | -146,949 |
Payments on capital lease obligations | -10,149 | -38,455 |
Repayment of line of credit with related party | -80,000 | -1,200,000 |
Net cash used in financing activities of continuing operations | -212,685 | -1,385,404 |
Cash Flows From Discontinued Operations: | ||
Net cash provided by (used in) operating activities of discontinued operations | 1,495,669 | -601,690 |
Net change in cash | -453,291 | -422,579 |
Cash, beginning of period | 2,637,726 | 3,060,305 |
Cash, end of period | 2,184,435 | 2,637,726 |
Supplemental Disclosures: | ||
Interest | 295,363 | 193,410 |
Income taxes | 102,189 | 119,962 |
Noncash item: | ||
Transfer of inventory from discontinued operations | 1,524,864 | |
Transfer of equipment from discontinued operations | 83,247 | |
Equipment purchased with capital lease | $58,563 |
Summary_of_Accounting_Policies
Summary of Accounting Policies and Nature of Operations | 12 Months Ended |
Dec. 31, 2014 | |
Summary of Accounting Policies and Nature of Operations [Abstract] | |
Summary of Accounting Policies and Nature of Operations | Note 1 – Summary of Accounting Policies and Nature of Operations |
A summary of the significant accounting policies applied in the preparation of the accompanying consolidated financial statements follows: | |
Principles of Consolidation and Nature of Operations | |
DGSE Companies, Inc., a Nevada corporation, and its subsidiaries (the “Company” or “DGSE”), buy and sell jewelry, diamonds, fine watches, rare coins and currency, precious metal bullion products, scrap gold, silver, platinum and palladium as well as collectibles and other valuables. DGSE operates at both the retail and wholesale level, throughout the United States through its facilities in Illinois, South Carolina, and Texas, and through its various internet sites. | |
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company and its subsidiaries. All material intercompany transactions and balances have been eliminated. | |
Cash and Cash Equivalents | |
The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. The carrying amount reported in the consolidated balance sheet approximates fair value. | |
Inventories | |
All inventory is valued at the lower of cost or market. The Company acquires a majority of its inventory from individual customers, including pre-owned jewelry, watches, bullion, rare coins and collectibles. The Company acquires these items based on its own internal estimate of the fair market value of the items at the time of purchase. The Company considers factors such as the current spot market price of precious metals and current market demand for the items being purchased. The Company supplements these purchases from individual customers with inventory purchased from wholesale vendors. These wholesale purchases can take the form of full asset purchases, or consigned inventory. Consigned inventory is accounted for on the Company's balance sheet with a fully offsetting contra account so that consigned inventory has a net zero balance. The majority of the Company's inventory has some component of its value that is based on the spot market price of precious metals. Because the overall market value for precious metals regularly fluctuates, these fluctuations could have either a positive or negative impact on the value of the Company's inventory and could positively or negatively impact the profitability of the Company. The Company regularly monitors these fluctuations to evaluate any necessary impairment to its inventory. | |
Property and Equipment | |
Property and equipment are stated at cost and are depreciated over their estimated useful lives, generally from five to ten years, on a straight-line basis. Equipment capitalized under capital leases are amortized over the lesser of the useful life or respective lease terms and the related amortization is included in depreciation and amortization expense. Leasehold improvements are amortized on a straight-line basis over the shorter of their useful life or the term of the lease. | |
Expenditures for maintenance and repairs are charged against income as incurred; betterments that increase the value or materially extend the life of the related assets are capitalized. When assets are sold or retired, the cost and accumulated depreciation are removed from the accounts and any gain or loss is recorded to current operating income. | |
Impairment of Long-Lived Assets and Amortized Intangible Assets | |
The Company performs impairment evaluations of its long-lived assets, including property, plant and equipment and intangible assets with finite lives whenever business conditions or events indicate that those assets may be impaired. When the estimated future undiscounted cash flows to be generated by the assets are less than the carrying value of the long-lived assets, the assets are written down to fair market value and a charge is recorded to current operations. Based on the Company's evaluations no impairment was required as of December 31, 2014 or 2013 for continuing operations. | |
In relation to the 2011 acquisition of Southern Bullion, the excess of purchase price over tangible assets acquired was calculated at approximately $3.4 million. Since the acquisition of Southern Bullion this excess value had been accounted for as an intangible asset with a 15-year life attributed to the “Southern Bullion Coin & Jewelry” trade name. With the closure of all Southern Bullion stores in the year ended December 31, 2014, the unamortized portion of this intangible asset, approximately $2.9 million, was written off as of the quarter ended June 30, 2014. The impact of this write off is captured in the Discontinued Operations section of our current statement of operations. | |
Financial Instruments | |
The carrying amounts reported in the consolidated balance sheets for cash equivalents, accounts receivable, short-term debt, accounts payable and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments. The line of credit, related party does not bear a market rate of interest. Management believes that, based on the Company's situation at the time the line was negotiated, it could not have obtained comparable financing, and as such cannot estimate the fair value of the line of credit, related party. The carrying amounts reported for the Company's long-term debt and capital lease approximate fair value because substantially all of the underlying instruments have variable interest rates which adjust frequently or the interest rates approximate current market rates. None of these instruments are held for trading purposes. | |
Advertising Costs | |
Advertising costs are expensed as incurred, and amounted to $2,276,603 and $2,071,577 for the year ended December 31, 2014 (“Fiscal 2014”) and December 31, 2013 (“Fiscal 2013”), respectively. The Company increased its advertising spending in Fiscal 2014 as it continued to focus its marketing efforts on growing its jewelry, watch and diamond businesses. | |
Accounts Receivable | |
The Company records trade receivables when revenue is recognized. When appropriate, the Company will record an allowance for doubtful accounts, which is primarily determined by review of specific trade receivables. Those accounts that are doubtful of collection are included in the allowance. These provisions are reviewed to determine the adequacy of the allowance for doubtful accounts. Trade receivables are charged off when there is certainty as to being uncollectible. Trade receivables are considered delinquent when payment has not been made within contract terms. As of December 31, 2014 and 2013, DGSE's allowance for doubtful accounts was $12,772 and $10,553, respectively. | |
Income Taxes | |
Income taxes are accounted for under the asset and liability method prescribed by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not such assets will be realized. | |
The Company accounts for its position in tax uncertainties in accordance with ASC 740, Income Taxes. The guidance establishes standards for accounting for uncertainty in income taxes. The guidance provides several clarifications related to uncertain tax positions. Most notably, a “more likely-than-not” standard for initial recognition of tax positions, a presumption of audit detection and a measurement of recognized tax benefits based on the largest amount that has a greater than 50 percent likelihood of realization. The guidance applies a two-step process to determine the amount of tax benefit to be recognized in the financial statements. First, the Company must determine whether any amount of the tax benefit may be recognized. Second, the Company determines how much of the tax benefit should be recognized (this would only apply to tax positions that qualify for recognition). The Company has not taken a tax position that, if challenged, would have a material effect on the financial statements or the effective tax rate during the years ended December 31, 2014 and 2013. | |
The Company's federal income tax returns for the years subsequent to December 31, 2010 remain subject to examination. The Company's income tax returns in major state income tax jurisdictions remain subject to examination for various periods subsequent to December 31, 2010. The Company currently believes that its significant filing positions are highly certain and that all of its other significant income tax filing positions and deductions would be sustained upon audit or the final resolution would not have a material effect on the consolidated financial statements. Therefore, the Company has not established any significant reserves for uncertain tax positions. The Company recognizes accrued interest and penalties resulting from audits by tax authorities in the provision for income taxes in the consolidated statements of operations. During 2014 and 2013, the Company did not incur any federal income tax interest or penalties. | |
Revenue Recognition | |
Revenue is generated from wholesale and retail sales of jewelry, rare coins, currency, collectibles, bullion and scrap. The recognition of revenue varies for wholesale and retail transactions and is, in large part, dependent on the type of payment arrangements made between the parties. The Company recognizes sales on a shipping point basis. | |
The Company sells jewelry, rare coins and currency to other wholesalers/dealers within its industry on credit, generally for terms of 14 to 60 days, but in no event greater than one year. The Company grants credit to new dealers based on extensive credit evaluations and for existing dealers based on established business relationships and payment histories. The Company generally does not obtain collateral with which to secure its accounts receivable when the sale is made to a dealer. | |
Revenues for monetary transactions (i.e., cash and receivables) with dealers are recognized when the merchandise is shipped to the related dealer. | |
The Company does not grant credit to retail customers, however it does offer a structured layaway plan. When a retail customer utilizes the Company's layaway plan, the Company generally collects a payment of 25% of the sales price, establishes a payment schedule for the remaining balance and holds the merchandise as collateral as security against the customer's receivable until all amounts due are paid in full. Revenue for layaway sales is recognized when the merchandise is paid for in full and delivered to the retail customer. | |
In limited circumstances, the Company exchanges merchandise for similar merchandise and/or monetary consideration with both dealers and retail customers, for which the Company recognizes revenue in accordance with ASC 845, Nonmonetary Transactions. When the Company exchanges merchandise for similar merchandise and there is no monetary component to the exchange, the Company does not recognize any revenue. Instead, the basis of the merchandise relinquished becomes the basis of the merchandise received, less any indicated impairment of value of the merchandise relinquished. When the Company exchanges merchandise for similar merchandise and there is a monetary component to the exchange, the Company recognizes revenue to the extent of the monetary assets received and determines the cost of sale based on the ratio of monetary assets received to monetary and non-monetary assets received multiplied by the cost of the assets surrendered. | |
The Company has a return policy (money-back guarantee). The policy covers retail transactions involving jewelry, graded rare coins and currency only. Customers may return jewelry, graded rare coins and currency purchased within 30 days of the receipt of the items for a full refund as long as the items are returned in exactly the same condition as they were delivered. In the case of jewelry, graded rare coins and currency sales on account, customers may cancel the sale within 30 days of making a commitment to purchase the items. The receipt of a deposit and a signed purchase order evidences the commitment. Any customer may return a jewelry item or graded rare coins and currency if they can demonstrate that the item is not authentic, or there was an error in the description of a graded coin or currency piece. Returns are accounted for as a reversal of the original transaction, with the effect of reducing revenues, and cost of sales, and returning the merchandise to inventory. DGSE has established an allowance for estimated returns related to Fiscal 2014 sales, which is based on the Company's review of historical returns experience, and reduces the Company's reported revenues and cost of sales accordingly. As of December 31, 2014 and 2013, DGSE's allowance for returns was $29,814 and $55,124, respectively. | |
Shipping and Handling Costs | |
Shipping and handling costs are included in selling general and administrative expenses, and amounted to $91,103 and $141,883, for 2014 and 2013, respectively. | |
Taxes Collected From Customers | |
The Company's policy is to present taxes collected from customers and remitted to governmental authorities on a net basis. The Company records the amounts collected as a current liability and relieves such liability upon remittance to the taxing authority without impacting revenues or expenses. | |
Earnings Per Share | |
Basic earnings per common share is computed by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into Common Stock. For the calculation of diluted earnings per share, the basic weighted average number of shares is increased by the dilutive effect of stock options and warrants outstanding determined using the treasury stock method. | |
Stock-Based Compensation | |
The Company accounts for stock-based compensation by measuring the cost of the employee services received in exchange for an award of equity instruments, including grants of stock options, based on the fair value of the award at the date of grant. In addition, to the extent that the Company receives an excess tax benefit upon exercise of an award, such benefit is reflected as cash flow from financing activities in the consolidated statement of cash flows. Stock-based compensation expense for Fiscal 2014 and Fiscal 2013 amounted to $148,500 and $0 respectively, and includes compensation expense for new stock-based awards granted during Fiscal 2014. | |
Use of Estimates | |
The preparation of financial statements in conformity with generally accepted accounting principles requires the use of certain estimates and assumptions by management in determining the reported amounts of assets and liabilities, disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including depreciation of property and equipment and amortization or impairment of intangible assets. The Company evaluates its estimates and assumptions on an ongoing basis and relies on historical experience and various other factors that it believes to be reasonable under the circumstances to determine such estimates. Because uncertainties with respect to estimates and assumptions are inherent in the preparation of financial statements, actual results could differ from these estimates. | |
New Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients; or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements and have not yet determined the method by which the Company will adopt the standard in 2017. |
Concentration_of_Credit_Risk
Concentration of Credit Risk | 12 Months Ended |
Dec. 31, 2014 | |
Concentration of Credit Risk [Abstract] | |
Concentration of Credit Risk | Note 2 – Concentration of Credit Risk |
The Company maintains cash balances in financial institutions in excess of federally insured limits. Other than Elemetal, LLC (“Elemetal”), the Company has no retail or wholesale customers that account for more than 10% of its revenues. In 2014, 23% of sales and 26% of purchases were transactions with Elemetal, and in 2013 these transactions represented 31% of sales and 37% of purchases. Elemetal accounted for 24% and 88% of the Company's accounts receivable, as of December 31, 2014 and 2013, respectively. |
Inventories
Inventories | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Inventories [Abstract] | |||||||||||||
Inventories | Note 3 – Inventories | ||||||||||||
A summary of inventories at December 31, 2014 and 2013 is as follows: | |||||||||||||
2014 | 2013 | ||||||||||||
Jewelry | $ | 9,755,580 | $ | 7,593,041 | |||||||||
Scrap gold | 536,181 | 514,622 | |||||||||||
Bullion | 493,368 | 933,988 | |||||||||||
Rare coins and Other | 359,028 | 950,505 | |||||||||||
$ | 11,144,157 | $ | 9,992,156 | ||||||||||
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property and Equipment [Abstract] | |||||||||
Property and Equipment | Note 4 – Property and Equipment | ||||||||
A summary of property and equipment at December 31, 2014 and 2013 is as follows: | |||||||||
2014 | 2013 | ||||||||
Building and improvements | $ | 3,212,199 | $ | 3,183,754 | |||||
Machinery and equipment | 1,800,626 | 1,693,666 | |||||||
Furniture and fixtures | 386,144 | 391,137 | |||||||
5,398,969 | 5,268,557 | ||||||||
Less: accumulated depreciation | (2,193,672 | ) | (1,840,332 | ) | |||||
3,205,297 | 3,428,225 | ||||||||
Land | 1,160,470 | 1,160,470 | |||||||
Total property and equipment | $ | 4,365,767 | $ | 4,588,695 | |||||
Depreciation expense was $353,340 and $324,958 for Fiscal 2014 and Fiscal 2013, respectively, excluding discontinued operations. |
LongTerm_Debt
Long-Term Debt | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||
Long-Term Debt [Abstract] | |||||||||||||||||||||||||||||
Long-Term Debt | Note 5 – Long-Term Debt | ||||||||||||||||||||||||||||
The following table details the Company's long-term debt: | |||||||||||||||||||||||||||||
Outstanding Balance | |||||||||||||||||||||||||||||
December 31, | December 31, | Current | |||||||||||||||||||||||||||
2014 | 2013 | Interest Rate | Maturity | ||||||||||||||||||||||||||
NTR line of credit (1) | $ | 2,303,359 | $ | 2,383,359 | 2.00% | 1-Aug-17 | |||||||||||||||||||||||
Mortgage payable | 1,720,525 | 1,843,061 | 6.70% | 1-Aug-16 | |||||||||||||||||||||||||
Capital lease (2) | 38,244 | 48,393 | Various | Various | |||||||||||||||||||||||||
Sub-Total | 4,062,128 | 4,274,813 | |||||||||||||||||||||||||||
Less: Current portion, capital lease | 11,529 | 11,091 | |||||||||||||||||||||||||||
Less: Current maturities | 131,003 | 122,536 | |||||||||||||||||||||||||||
Long-term debt | 3,919,596 | 4,141,186 | |||||||||||||||||||||||||||
Less: Line of credit (1) | 2,303,359 | 2,383,359 | |||||||||||||||||||||||||||
Long term debt, less current maturities | $ | 1,616,237 | $ | 1,757,827 | |||||||||||||||||||||||||
-1 | On July 19, 2012, DGSE entered into a loan agreement with NTR Metals, LLC (“NTR”), an affiliate of DGSE's largest stockholder Elemetal, LLC (“Elemetal”), pursuant to which NTR, agreed to provide the Company a guidance line of revolving credit in an amount up to $7,500,000 (the “Loan Agreement”). The Loan Agreement anticipated termination–at which point all amounts outstanding thereunder would be due and payable (such amounts, the “Obligations”)–upon the earlier of: (i) August 1, 2014; (ii) the date that is twelve months after the Company receives notice from NTR demanding the repayment of the Obligations; (iii) the date the Obligations are accelerated in accordance with the terms of the Loan Agreement; or (iv) the date on which the commitment terminates under the Loan Agreement. In connection with the Loan Agreement, the Company granted a security interest in the respective personal property of each of its subsidiaries. The loan carries an interest rate of two percent (2%) per annum for all funds borrowed pursuant to the Loan Agreement. Proceeds received by the Company pursuant to the terms of the Loan Agreement were used for repayment of all outstanding financial obligations incurred in connection with that certain Loan Agreement, dated as of December 22, 2005, between the Company and Texas Capital Bank, and additional proceeds have been used as working capital in the ordinary course of business. The Company incurred debt issuance costs associated with the Loan Agreement totaling $56,150. The debt issuance costs were included in other assets in the accompanying consolidated balance sheet and were amortized to interest expense on a straight-line basis over two years, and have been completely amortized as of the current year. On February 25, 2014, we entered into a one-year extension of the Loan Agreement with NTR, extending the termination date to August 1, 2015, and on February 4, 2015, we entered into an additional two-year extension, extending the termination date to August 1, 2017. No debt issuance costs were incurred in relation to these extensions. All other terms of the agreement remain the same. As of December 31, 2014, the outstanding balance of the NTR loan was $2,303,359. | ||||||||||||||||||||||||||||
-2 | On April 3, 2013, DGSE entered into a capital lease for $58,563 with Graybar Financial Services for phones at the new corporate headquarters. The non-cancelable lease agreement required an advanced payment of $2,304 and monthly payments of $1,077 for 60 months at an interest rate of 4.2% beginning in May 2013. At the end of the lease in May 2018, the equipment can be purchased for $1. | ||||||||||||||||||||||||||||
Maturities of DGSE's long-term obligations over the next five years are as follows: | |||||||||||||||||||||||||||||
Total | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | |||||||||||||||||||||||
Line of credit, related party | $ | 2,303,359 | $ | - | $ | - | $ | 2,303,359 | $ | - | $ | - | $ | - | |||||||||||||||
Long-term debt and capital lease | 1,758,769 | 142,532 | 1,601,591 | 12,590 | 2,056 | - | - | ||||||||||||||||||||||
Total | $ | 4,062,128 | $ | 142,532 | $ | 1,601,591 | $ | 2,315,949 | $ | 2,056 | $ | - | $ | - | |||||||||||||||
Basic_and_Diluted_Average_Shar
Basic and Diluted Average Shares | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Basic and Diluted Average Shares [Abstract] | |||||||||
Basic and Diluted Average Shares | Note 6 – Basic and Diluted Average Shares | ||||||||
A reconciliation of basic and diluted average common shares for the years ended December 31, 2014 and 2013 is as follows: | |||||||||
2014 | 2013 | ||||||||
Basic weighted average shares | 12,216,787 | 12,175,584 | |||||||
Effect of potential dilutive securities: | – | – | |||||||
Diluted weighted average shares | 12,216,787 | 12,175,584 | |||||||
For the years ended December 31, 2014 and 2013, approximately 5,030,000 and 5,347,500 common stock options, respectively, were not added to the diluted average shares because inclusion of such shares would be antidilutive. For the years ended December 31, 2014 and 2013, there were 87,600 and 0 unvested Restricted Stock Units (“RSUs”), respectively, not added to the diluted average shares because inclusion of such shares would be antidilutive. |
Common_Stock
Common Stock | 12 Months Ended |
Dec. 31, 2014 | |
Common Stock [Abstract] | |
Common Stock | Note 7 – Common Stock |
In January 2014, DGSE's Board of Directors (the “Board”) granted 112,000 RSUs to its officers and certain key employees. Each RSU is convertible into one share of Common Stock without additional payment pursuant to the terms of the Restricted Stock Unit Award Agreement, dated January 23, 2014, between the Company and each recipient (the "RSU Award Agreement"). One-fourth, or 28,000, of the RSUs vested and were exercisable as of the date of the grant, and were subsequently issued in January 2014. An additional one-fourth (calculated using the total number of RSUs at the time of grant) of the RSUs issued in January 2014 will vest and be exercisable on each subsequent anniversary of the date of grant until 100 percent of the RSUs have vested, subject to the recipient's continued status as an employee on each such date and other terms and conditions of set forth in the RSU Award Agreement. | |
On May 30, 2014 the Board issued 20,000 shares of DGSE common stock to James Vierling, DGSE's former Chief Executive Officer and Chairman, pursuant to a Separation and Release of Claims Agreement, dated April 17, 2014, between Mr. Vierling and the Company. | |
On December 10, 2014, the Board awarded DGSE's Chief Executive Officer, James D. Clem, 75,000 RSUs as consideration for services rendered to the Company, and to encourage the continuation of such service. 100% of these RSUs vested immediately, and pursuant to this vesting, 75,000 shares of DGSE common stock were issued to Mr. Clem on December 18, 2014. | |
On November 12, 2014 our former Chief Executive and Chairman, Dr. L.S. Smith, agreed to forfeit 59,738 shares of DGSE common stock which he had previously received as compensation during the period covered by the Accounting Irregularities. These shares were returned to the Company and subsequently cancelled. Dr. Smith agreed to this forfeiture as part of the resolution of an SEC administrative proceeding instituted against him, related to the Accounting Irregularities. |
Stock_Options_and_Restricted_S
Stock Options and Restricted Stock Units | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Stock Options and Restricted Stock Units [Abstract] | ||||||||||||||||||||||||
Stock Options and Restricted Stock Units | Note 8 – Stock Options and Restricted Stock Units | |||||||||||||||||||||||
On June 21, 2004, our shareholders approved the adoption of the 2004 Stock Option Plan (the “2004 Plan”), which reserved 1,700,000 shares of our Common Stock for issuance upon exercise of options to purchase our Common Stock. We granted options to purchase an aggregate of 1,459,634 shares of our Common Stock under the 2004 Plan to certain of our officers, directors, key employees and certain other individuals who provided us with goods and services. Each option vested on either January 1, 2004 or immediately upon issuance thereafter. The exercise price of each option issued pursuant to the 2004 Plan is equal to the market value of our Common Stock on the date of grant, as determined by the closing bid price for our Common Stock on the Exchange on the date of grant or, if no trading occurred on the date of grant, on the last day prior to the date of grant on which our securities were listed and traded on the Exchange. Of the options issued under the 2004 Plan, as of December 31, 2014, 845,634 have been exercised, 594,000 have expired, and 20,000 remain outstanding. We have determined to not make any further issuances pursuant to the 2004 Plan. | ||||||||||||||||||||||||
On June 27, 2006 our shareholders approved the adoption of the 2006 Equity Incentive Plan (the “2006 Plan”), which reserved 750,000 shares for issuance upon exercise of options to purchase our Common Stock or other stock awards. We subsequently granted options to purchase 150,000 shares of our Common Stock pursuant to the 2006 Plan, of which 100,000 have been exercised, 40,000 have expired, and 10,000 remain outstanding. | ||||||||||||||||||||||||
On October 25, 2011, the Company entered into a debt cancellation agreement with NTR, whereby NTR agreed to forgive $2,500,000 of payables owed to NTR by the Company. In consideration for this debt forgiveness, NTR was granted options to purchase 5,000,000 shares of the common stock of DGSE, par value $0.01 per share, at an exercise price of fifteen dollars ($15) per share (the “NTR Options”). These options were not issued pursuant to either of the shareholder-approved employee stock option plans. The NTR Options vested immediately upon grant, and expire on the fifth anniversary of the date of grant. | ||||||||||||||||||||||||
The following table summarizes the activity in common shares subject to options for the years ended December 31, 2014 and 2013: | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Weighted average | Weighted average | |||||||||||||||||||||||
Shares | exercise price | Shares | exercise price | |||||||||||||||||||||
Outstanding at beginning of year | 5,347,500 | $ | 14.2 | 5,372,500 | $ | 14.14 | ||||||||||||||||||
Granted | - | - | - | - | ||||||||||||||||||||
Exercised | - | - | - | - | ||||||||||||||||||||
Forfeited | (317,500 | ) | 2.5 | (25,000 | ) | 2.2 | ||||||||||||||||||
Outstanding at end of year | 5,030,000 | $ | 14.93 | 5,347,500 | $ | 14.2 | ||||||||||||||||||
Options exercisable at end of year | 5,030,000 | $ | 14.93 | 5,347,500 | $ | 14.2 | ||||||||||||||||||
Information about stock options outstanding at December 31, 2014 is summarized as follows: | ||||||||||||||||||||||||
Options Outstanding and Exercisable | ||||||||||||||||||||||||
Weighted average | Weighted | |||||||||||||||||||||||
remaining | average | |||||||||||||||||||||||
Number | contractual life | exercise | Aggregate | |||||||||||||||||||||
Exercise price | outstanding | (Years) | price | Intrinsic Value | ||||||||||||||||||||
$2.13 | 10,000 | NA(1) | 2.13 | $ | - | |||||||||||||||||||
$2.25 | 10,000 | NA(1) | 2.25 | - | ||||||||||||||||||||
$6.00 | 10,000 | 2.9 | 6 | - | ||||||||||||||||||||
$15.00 | 5,000,000 | 1.8 | 15 | - | ||||||||||||||||||||
5,030,000 | $ | - | ||||||||||||||||||||||
-1 | All Options currently issued pursuant to the Company's 2004 Employee Stock Option Plans have no expiration date. | |||||||||||||||||||||||
The aggregate intrinsic values in the above table were based on the closing price of our Common Stock of $1.22 as of December 31, 2014. | ||||||||||||||||||||||||
In January 2014 we granted 112,000 Restricted Stock Units (“RSUs”) to management and key employees, subject to the 2006 Plan. Under the terms of the RSU Award Agreements from January 2014, 25% of these RSUs vested immediately, with the remaining 75% to vest ratably over the next three years, pending each recipient's continued employment by DGSE. On September 24, 2014, the Board awarded the three independent directors a total of 42,600 RSUs as compensation for their Board service. 100% of these RSUs will vest as of the earlier of the one year anniversary of their award, or on the day prior to DGSE's 2015 Annual Meeting of Stockholders. On December 10, 2014, the Board awarded DGSE's Chief Executive Officer, James D. Clem, 75,000 RSUs as part of his compensation package. 100% of these RSUs vested immediately, and pursuant to this vesting, 75,000 shares of DGSE common stock were issued to Mr. Clem on December 18, 2014. | ||||||||||||||||||||||||
A summary of the status of our non-vested RSU grants issued under our 2006 Plan, and the changes during the year ended December 31, 2014, is presented below: | ||||||||||||||||||||||||
2014 | ||||||||||||||||||||||||
Number of RSUs | Weighted average grant-date fair value | |||||||||||||||||||||||
Nonvested at beginning of year | - | $ | - | |||||||||||||||||||||
Granted | 229,600 | 1.74 | ||||||||||||||||||||||
Vested | (103,000 | ) | 1.57 | |||||||||||||||||||||
Forfeited | (39,000 | ) | 2.12 | |||||||||||||||||||||
Nonvested at end of year | 87,600 | $ | 1.77 | |||||||||||||||||||||
As a result of these grants, as of December 31, 2014, there were 449,400 shares available for future grants under the 2006 Plan. | ||||||||||||||||||||||||
During 2014 and 2013, the Company recognized $148,500 and $0, respectively, of stock-based compensation expense attributable to employees and directors which was recorded in selling, general, and administrative expenses. At December 31, 2014, there is an estimated $72,773 in unearned stock-based compensation to be expensed through 2017 related to RSU's. |
Litigation
Litigation | 12 Months Ended |
Dec. 31, 2014 | |
Litigation [Abstract] | |
Litigation | Note 9 –Litigation |
On April 16, 2012, DGSE filed a Current Report on Form 8-K disclosing that our Board had determined the existence of the accounting irregularities beginning approximately during the second calendar quarter of 2007 and continuing in periods subsequent thereto (the “Accounting Irregularities”), which could affect financial information reported since that time. On April 16, 2012, we also announced that we had engaged forensic accountants to analyze the Accounting Irregularities, and that financial statements and information reported since the inception of the Accounting Irregularities, believed to begin in the second calendar quarter of 2007, should not be relied upon. We brought the Accounting Irregularities to the attention of the SEC in a letter dated April 16, 2012. On June 18, 2012, we received written notice that the SEC had initiated a private investigation into the Accounting Irregularities, to determine whether any persons or entities had engaged in any possible violations of the federal securities laws. | |
On June 2, 2014, the Company received notice of the entry of an agreed final judgment by the Honorable Judge Jane Boyle (the “Agreed Final Judgment”) in Civil Action No. 3:14-cv-01909-B, entitled Securities and Exchange Commission v. DGSE Companies Inc., et. al., filed on May 27, 2014 in Federal District Court for the Northern District of Texas (the “Civil Action”). The Company consented to the Agreed Final Judgment prior to the filing of the Civil Action by the SEC. The Agreed Final Judgment was entered in connection with the conclusion of the investigation against the Company by the SEC regarding the Accounting Irregularities. | |
In connection with the Agreed Final Judgment and as remedial measures in connection with the Accounting Irregularities, the Company has agreed to undertake certain corporate governance reforms, many of which are already completed or in process (the “Corporate Governance Reforms”). The Corporate Governance Reforms include the appointment of two new independent directors to the Board, establishing the position of a Lead Independent Director on the Board and establishing reasonable term limits for members of the Board, among other reforms. The Company has further agreed to engage a consultant satisfactory to the SEC to confirm implementation of the Corporate Governance Reforms. The Agreed Final Judgment did not require the payment of any civil damages by the Company in connection with the Accounting Irregularities. | |
Also in connection with the Accounting Irregularities, and the subsequent halt in trading of DGSE's Common Stock, the Company settled two lawsuits in Fiscal 2013. The first, Civil Action No. 3:12-cv-3664, was filed in the United States District Court for the Northern District of Texas, on September 7, 2012, entitled Grant Barfuss, on behalf of himself and all others similarly situated vs. DGSE Companies, Inc.; L.S. Smith, John Benson and William Oyster. This complaint alleged violations of the securities laws and sought unspecified damages. Plaintiffs alleged that certain public filings in 2010 and 2011 were false and misleading. The second suit, Case No. 3:12-cv-03850 in the United States District Court for the Northern District of Texas, was filed on September 21, 2012, by Jason Farmer and entitled Jason Farmer, Derivatively on Behalf of Nominal Defendant DGSE Companies, Inc., Plaintiff, v. William H. Oyster, James D. Clem, William Cordeiro, Craig Alan-Lee, David Rector, L.S. Smith, and John Benson, Defendants, and DGSE Companies, Inc., Nominal Defendant. This suit was filed against DGSE, as a nominal defendant, and against certain and former officers and directors. The plaintiff asserted that certain statements made in DGSE's proxy materials were false and misleading, that the defendants breached fiduciary duties owed to DGSE, for abuse of control, and sought unspecified compensatory and exemplary damages, along with certain corporate governance changes, for the benefit of DGSE. | |
The approved settlement resolved all issues which were pending before the United States District Court for the Northern District of Texas in both cases. The defendants agreed to pay $2 million to resolve all claims in both suits (including obligations to pay plaintiffs' attorneys' fees). The Company also incurred its own attorneys' fees and expenses associated with finalizing the settlement. A majority of the total settlement amount and related expenses were paid from insurance proceeds. | |
In Fiscal 2014, the Company settled a civil suit filed in the County Court for Dallas County, Texas, Cause No. CC-13-02999-C entitled Joseph C. Osterman, T.G. Herron, and, Jean K. Herron, Plaintiffs, vs. DGSE Companies, Inc. d/b/a Dallas Gold & Silver Exchange, Defendants. The complaint alleged amounts owed and due to the plaintiffs by DGSE in relation to a variety of promissory notes allegedly issued between 2001 and 2006 by DGSE. Pursuant to a confidential settlement agreement effective February 1, 2014, which admits no liability on the part of the defendant, the Company resolved all claims with plaintiff Osterman to the parties' mutual satisfaction. Pursuant to a settlement agreement effective October 22, 2014, which admits no liability on the part of DGSE, the Company resolved all claims with plaintiffs Herron to the parties' mutual satisfaction. The Company recognized $83,000 in Fiscal 2013 and $120,000 in Fiscal 2014 related to these settlements. | |
Beginning in 2010, the Comptroller of Public Accounts of the State of Texas (the “Texas Comptroller”) conducted a sales and use tax audit of our operations in Texas with respect to the period March 1, 2006 through November 30, 2009 and subsequently sent a Notification of Audit Results, by letter dated December 17, 2010, asserting that DGSE owed an amount of tax due, plus penalties and interest (the “2010 Sale Tax Audit”). The Company submitted a request for redetermination to the Texas Comptroller by letter dated January 13, 2011. By letter dated August 25, 2011, the Texas Comptroller stated that DGSE's request for a redetermination hearing had been granted. | |
On July 15, 2014, the Company received final notice from the Texas Comptroller of its consent to the negotiated payment agreement (the “Payment Agreement”) to pay amounts due by the Company under the Texas Comptroller's final decision in connection with the 2010 Sale Tax Audit (the “Decision”), as more fully discussed in the Company's Current Report on Form 8-K, as filed with the Securities and Exchange Commission on July 17, 2014. | |
The Decision dismissed our Petition for Redetermination and concluded the 2010 Sales Tax Audit based on an agreement between the Texas Comptroller and DGSE, whereby we have agreed to pay: (i) tax due of $800,397; (ii) a 10% penalty; and (iii) interest. The total amount due as of the date of the Payment Agreement was approximately $1.1 million. Pursuant to the terms of the Payment Agreement, we paid an initial payment of $325,000 in July 2014, and in August 2014 began making monthly payments of $47,000, which will continue for an 18-month period, until all agreed tax amounts, penalty and accrued interest due under the Decision are paid. Interest will continue to accrue on the outstanding tax due, until all amounts are paid. | |
In Fiscal 2014 we recognized an additional expense of $104,958, to bring the total accrual in this matter to the approximately $1.1 million due, which is expected to cover all tax, penalty and interest through the term of the Payment Agreement. As of December 31, 2014 our remaining obligation under the Payment Agreement is $569,958. | |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Taxes [Abstract] | |||||||||||||
Income Taxes | Note 10 – Income Taxes | ||||||||||||
The income tax provision reconciled to the tax computed at the statutory Federal rate follows: | |||||||||||||
2014 | 2013 | ||||||||||||
Tax Expense at Statutory Rate | $ | (211,318 | ) | $ | (225,640 | ) | |||||||
Valuation Allowance | 182,154 | 222,093 | |||||||||||
Non-Deductible Expenses and Other | 29,164 | 3,547 | |||||||||||
State Taxes, Net of Federal Benefit | 65,416 | 57,168 | |||||||||||
Income tax expense | $ | 65,416 | $ | 57,168 | |||||||||
Current | $ | 65,416 | $ | 57,168 | |||||||||
Deferred | - | - | |||||||||||
Total | $ | 65,416 | $ | 57,168 | |||||||||
Deferred income taxes are comprised of the following at December 31, 2014 and 2013: | |||||||||||||
2014 | 2013 | ||||||||||||
Deferred tax assets (liabilities): | |||||||||||||
Inventories | $ | 82,274 | $ | 160,145 | |||||||||
Stock options and other | 96,009 | 56,351 | |||||||||||
Alternative Minimum Tax credit carryforward | 24,674 | 24,674 | |||||||||||
Contingencies and accruals | 90,829 | 513,219 | |||||||||||
Property and equipment | (340,099 | ) | (489,389 | ) | |||||||||
Capital loss carryover | 25,420 | 25,420 | |||||||||||
Net operating loss carryforward | 10,499,884 | 9,279,196 | |||||||||||
Intangibles | 179 | (19,748 | ) | ||||||||||
Total deferred tax assets, net | 10,479,170 | 9,549,868 | |||||||||||
Valuation allowance | $ | (10,479,170 | ) | $ | (9,549,868 | ) | |||||||
As of December 31, 2014, the Company had approximately $2,085,618 of net operating loss carry-forwards, related to the Superior Galleries acquisition which may be available to reduce taxable income in future years, subject to the applicable Internal Revenue Code Section 382 limitations. As of December 31, 2014, the Company had approximately $33,648,584 of net operating loss carry-forwards related to Superior Galleries' post acquisition operating losses and other operating losses incurred by the Company's other operations. These carry-forwards will expire, starting in 2024 if not utilized. As of December 31, 2014 and 2013, the Company determined based on consideration of all available evidence, including but not limited to historical, current and future anticipated financial results as well as applicable IRS limitation and expiration dates related to the Company's net operating losses a full valuation allowance should be recorded for its net deferred tax assets. |
Operating_Leases
Operating Leases | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Operating Leases [Abstract] | |||||||||||||||||||||||||||||||||
Operating Leases | Note 11 – Operating Leases | ||||||||||||||||||||||||||||||||
The Company leases certain of its facilities under operating leases. The minimum rental commitments under non-cancellable operating leases as of December 31, 2014 are as follows: | |||||||||||||||||||||||||||||||||
Total | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | |||||||||||||||||||||||||||
Operating leases | $ | 2,118,944 | $ | 817,381 | $ | 633,574 | $ | 369,779 | $ | 186,743 | $ | 83,600 | $ | 27,867 | |||||||||||||||||||
On January 21, 2013, the Company signed a lease with 15850 Holdings, LLC (an affiliate of Elemetal), for 4500 square feet of office space in North Dallas, to be used as the Company's new corporate headquarters. The Company received free rent from April through December of 2013, and will pay $7,500 from January of 2014, through the termination of the current lease in December of 2015. | |||||||||||||||||||||||||||||||||
In November 2013 the Company signed an agreement to lease a portion of DGSE's Reeder Road facility to a third party, beginning in January 2014. Under the terms of the five-year agreement DGSE will receive $5,000 per month in base rent initially, increasing to $7,500 per month after 24 months. The lessee will also be required to pay additional rent based on revenue it generates using the facility. Under certain conditions DGSE has the right to terminate the agreement after 24 months. | |||||||||||||||||||||||||||||||||
Rent expense for Fiscal 2014 and Fiscal 2013 was $638,320 and $658,599, respectively, excluding amounts related to discontinued operations. | |||||||||||||||||||||||||||||||||
Discontinued_Operations
Discontinued Operations | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Discontinued Operations [Abstract] | |||||||||||||
Discontinued Operations | 12 – Discontinued Operations | ||||||||||||
In February 2014, the Company elected to discontinue the operations of six Southern Bullion locations and in April 2014 elected to discontinue the operations of the 17 remaining Southern Bullion locations, due to the lack of profitability and management's belief that it was unlikely that profitability would be reached in the foreseeable future. The significant change in the precious metals market in 2013, including a 30% decline in the spot price of gold since the acquisition of Southern Bullion in 2011, had a disproportionately negative impact on the customer traffic, transactional volume and profitability of the Southern Bullion operations. As a result, during 2013, the Southern Bullion operations generated a net loss of approximately $1.9 million. The operating results for all Southern Bullion operations have been reclassified as discontinued operations in the consolidated statements of operations for Fiscal 2013 and Fiscal 2014. | |||||||||||||
Discontinued operations for the years ended December 31, 2014 and 2013: | |||||||||||||
Year Ended | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Revenue: | |||||||||||||
Sales | $ | 5,367,867 | $ | 21,445,752 | |||||||||
Cost of goods sold | 3,643,142 | 15,891,252 | |||||||||||
Gross margin | 1,724,725 | 5,554,500 | |||||||||||
Expenses: | |||||||||||||
Selling, general and administrative expenses | 2,471,230 | 7,075,272 | |||||||||||
Depreciation and amortization | 3,259,552 | 376,924 | |||||||||||
Total expenses | 5,730,782 | 7,452,196 | |||||||||||
Operating loss | (4,006,057 | ) | (1,897,696 | ) | |||||||||
Other expense (income): | |||||||||||||
Other income, net | (19,475 | ) | (19,325 | ) | |||||||||
Interest (income) expense | 9,968 | 7,004 | |||||||||||
(9,507 | ) | (12,321 | ) | ||||||||||
Loss from discontinued operations before income taxes | (3,996,550 | ) | (1,885,375 | ) | |||||||||
Income tax (benefit) expense | (107,494 | ) | 52,998 | ||||||||||
Loss from discontinued operations after income taxes | $ | (3,889,056 | ) | $ | (1,938,373 | ) | |||||||
Discontinued operations for the year ended December 31, 2014, include store operations through April 17, 2014, ongoing expenses for key Southern Bullion personnel involved in winding down the business, and expenses related to cancellation of leases and other contracts. For the year ended December 31, 2014, discontinued operations also includes the write-off of the $2.9 million intangible asset attributed to the “Southern Bullion Coin & Jewelry” trade name, and the write-off of approximately $296,000 related to the net book value of fixed assets previously utilized in Southern Bullion operations. The Company does not anticipate that it will utilize the trade name in the foreseeable future. Discontinued operations for the year ended December 31, 2013, includes losses from store operations and corporate expenses dedicated to supporting Southern Bullion, all of which have now been eliminated. | |||||||||||||
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 13 – Related Party Transactions |
DGSE has a corporate policy governing the identification, review, consideration and approval or ratification of transactions with related persons, as that term is defined in the Instructions to Item 404(a) of Regulation S-K, promulgated under the Securities Act (“Related Party”). Under this policy, all Related Party transactions are identified and approved prior to consummation of the transaction to ensure they are consistent with DGSE's best interests and the best interests of its stockholders. Among other factors, DGSE's Board considers the size and duration of the transaction, the nature and interest of the of the Related Party in the transaction, whether the transaction may involve a conflict of interest and if the transaction is on terms that are at least as favorable to DGSE as would be available in a comparable transaction with an unaffiliated third party. DGSE's Board reviews all Related Party transactions at least annually to determine if it is in DGSE's best interests and the best interests of DGSE's stockholders to continue, modify, or terminate any of the Related Party transactions. DGSE's Related PersonTransaction Policy is available for review in its entirety under the “Investors” menu of the Company's corporate relations website at www.DGSECompanies.com. | |
NTR is an affiliate of DGSE's largest shareholder, Elemetal. In 2014, NTR was also DGSE's primary refiner and bullion trading partner. In 2014, 23% of sales and 26% of purchases were transactions with NTR, and in 2013 these transactions represented 31% of DGSE's sales and 37% of DGSE's purchases. As of December 31, 2014, the Company was obligated to pay $3,721,144 to NTR as a trade payable, and has a $34,343 receivable from NTR. | |
On July 19, 2012, the Company entered into the Loan Agreement with NTR, pursuant to which NTR agreed to provide the Company with a guidance line of revolving credit in an amount up to $7,500,000. The Loan Agreement provides that the Loan Agreement will terminate—and DGSE's Obligations will be due and payable– upon the earlier of (i) August 1, 2014, (ii) the date that is twelve months after DGSE receives notice from NTR demanding the repayment of the Obligations, (iii) the date the Obligations are accelerated in accordance with the terms of the Loan Agreement or (iv) the date on which the commitment terminates under the Loan Agreement. In connection with the Loan Agreement, DGSE granted a security interest in the respective personal property of each of its subsidiaries. The loan carries an interest rate of two percent (2%) per annum for all funds borrowed pursuant to the Loan Agreement. Proceeds received by DGSE pursuant to the terms of the Loan Agreement were used for repayment of all outstanding financial obligations incurred in connection with that certain Loan Agreement, dated as of December 22, 2005, between DGSE and Texas Capital Bank, N.A., and additional proceeds are expected were used as working capital in the ordinary course of business. On February 25, 2014 we entered into a one-year extension of the Loan Agreement with NTR, extending the termination date to August 1, 2015, and on February 4, 2015 we entered into an additional two-year extension, extending the termination date to August 1, 2017. All other terms of the agreement remain the same. As of December 31, 2014, the outstanding balance of the NTR loan was $2,303,359. | |
In April 2013 DGSE moved its principal corporate offices to office space at 15850 Dallas Parkway, Suite 140, Dallas, Texas. This property is owned by an affiliate of Elemetal and also serves as their headquarters. DGSE leases space in the building subject to a lease that will expire in December 2015. In Fiscal 2014 and Fiscal 2013 the Company recognized rent expense of $52,500 and $35,000, respectively, related to this lease. | |
Estate Gold and Silver, LLC, a Texas limited liability company (“Estate Gold”) was 25% owned by an entity owned by James Vierling, DGSE's former Chief Executive Officer and Chairman, and operated five stores in Oklahoma, primarily focused on buying gold, but also engaging in retail sales of jewelry and bullion. In July of 2013, Estate Gold ceased all operations. The Company previously had an agreement with Estate Gold to provide operations management services, consisting of: (i) the receipt, inventorying, and re-sale of Estate Gold purchases; (ii) the management of Estate Gold's payroll, insurance, accounts payable and receivable; (iii) the maintenance of and updates to Estate Gold's business software; maintenance of the Estate Gold website; and (iv) financial reporting of Estate Gold to its owners. The Company also periodically engaged in the purchase or sale of jewelry, bullion and diamonds with Estate Gold, from time to time in the normal course of business. During Fiscal 2013, the Company received $47,060 in fees for services, sold $63,817 in products, and purchased $69,286 in products in transactions with Estate Gold. During Fiscal 2014 there were no transactions with Estate Gold. | |
In the fourth quarter of Fiscal 2013 the Company established a wholly owned subsidiary named Carbon Fund One, LLC to act as the general partner (the “General Partner”) for Carbon Fund One, LP (the “Fund”), which was established at the same time. The Fund was an investment fund specializing in the buying and selling of gemstones. The General Partner receives a one percent ownership interest of the Fund, and is paid 2% carried interest on assets under management by the Fund, and 20% of net earnings before distributions to the limited partners. The Fund was intended to provide an investment vehicle for individuals interested in investment opportunities in diamonds and gemstones, and provide incremental value to the Company's shareholders by utilizing the Company's expertise, infrastructure, and retail and wholesale customer base, to generate additional profit through earnings from its role as General Partner. Ultimately DGSE's management made the decision to end its involvement in the Fund, and the General Partner has begun winding down the Fund's activities and liquidating all remaining inventory. The Fund transacted business with the Company from time to time, including buying gemstones from and selling gemstones to the Company. In Fiscal 2014 the Company made sales of $37,148 to the Fund, had purchases of $152,328 from the Fund, and owed the Fund $136,755 as of December 31, 2014 in trade payables. In Fiscal 2013 the Company made sales of $423,107 to the Fund, had purchases of $78,408 from the Fund, and did not owe the Fund anything as of December 31, 2013. Additionally, in 2014 the General Partner generated net income of $35,120 from its role with the Fund, while in Fiscal 2013, the General Partner lost $78,213, which was driven by expenses related to the startup of the Fund. |
Defined_Contribution_Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2014 | |
Defined Contribution Plan [Abstract] | |
Defined Contribution Plan | Note 14 – Defined Contribution Plan |
The Company sponsors a defined contribution 401(k) plan that is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”). The plan covers substantially all employees who have completed one month of service. Participates can contribute up to 15 percent of their annual salary subject to Internal Revenue Service limitations. The Company did not contribute to the plan during Fiscal 2014 and Fiscal 2013. | |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 15 – Subsequent Events |
Subsequent to the end of Fiscal 2014 DGSE made the decision to close two stores in the DFW market. As part of an initiative to move toward fewer, but larger retail locations, the Company closed underperforming stores in Euless, Texas and Fort Worth, Texas. These two stores generated a loss of over $200,000 on a combined basis in Fiscal 2014, and management intends to collapse the inventory and key personnel from these stores into its other stores in DFW. Both stores had remaining terms on their leases, and as a result the Company expects to recognize approximately $190,000 in accelerated lease expense and termination fees in the quarter ending March 31, 2015. This expense will be recognized on an accelerated basis, but management has negotiated termination agreements to allow the Company to pay these expenses over the remaining lives of the leases. | |
As part of this same initiative, the Company has now also signed a lease on a new, 4,400 square foot retail space in Euless, Texas, which will be used to consolidate several of our smaller stores. Following three months of free rent, the Company will pay monthly rent of $6,967 for 60 months, with an option to renew for an additional 60 months. The Company expects to open this new location in the summer of 2015, at which time it will relocate its existing Euless, Texas location and terminate that location's lease, with no termination expense. | |
On February 4, 2015, we entered into a two-year extension of our Loan Agreement with NTR, extending the termination date to August 1, 2017. All other terms of the agreement remain the same, including the interest rate of two percent (2%) per annum for all funds borrowed pursuant to the Loan Agreement. As of December 31, 2014, the outstanding balance of the NTR loan was $2,303,359. |
Summary_of_Accounting_Policies1
Summary of Accounting Policies and Nature of Operations (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Summary of Accounting Policies and Nature of Operations [Abstract] | |
Principles of Consolidation and Nature of Operations | Principles of Consolidation and Nature of Operations |
DGSE Companies, Inc., a Nevada corporation, and its subsidiaries (the “Company” or “DGSE”), buy and sell jewelry, diamonds, fine watches, rare coins and currency, precious metal bullion products, scrap gold, silver, platinum and palladium as well as collectibles and other valuables. DGSE operates at both the retail and wholesale level, throughout the United States through its facilities in Illinois, South Carolina, and Texas, and through its various internet sites. | |
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company and its subsidiaries. All material intercompany transactions and balances have been eliminated. | |
Cash and Cash Equivalents | Cash and Cash Equivalents |
The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. The carrying amount reported in the consolidated balance sheet approximates fair value. | |
Inventories | Inventories |
All inventory is valued at the lower of cost or market. The Company acquires a majority of its inventory from individual customers, including pre-owned jewelry, watches, bullion, rare coins and collectibles. The Company acquires these items based on its own internal estimate of the fair market value of the items at the time of purchase. The Company considers factors such as the current spot market price of precious metals and current market demand for the items being purchased. The Company supplements these purchases from individual customers with inventory purchased from wholesale vendors. These wholesale purchases can take the form of full asset purchases, or consigned inventory. Consigned inventory is accounted for on the Company's balance sheet with a fully offsetting contra account so that consigned inventory has a net zero balance. The majority of the Company's inventory has some component of its value that is based on the spot market price of precious metals. Because the overall market value for precious metals regularly fluctuates, these fluctuations could have either a positive or negative impact on the value of the Company's inventory and could positively or negatively impact the profitability of the Company. The Company regularly monitors these fluctuations to evaluate any necessary impairment to its inventory. | |
Property and Equipment | Property and Equipment |
Property and equipment are stated at cost and are depreciated over their estimated useful lives, generally from five to ten years, on a straight-line basis. Equipment capitalized under capital leases are amortized over the lesser of the useful life or respective lease terms and the related amortization is included in depreciation and amortization expense. Leasehold improvements are amortized on a straight-line basis over the shorter of their useful life or the term of the lease. | |
Expenditures for maintenance and repairs are charged against income as incurred; betterments that increase the value or materially extend the life of the related assets are capitalized. When assets are sold or retired, the cost and accumulated depreciation are removed from the accounts and any gain or loss is recorded to current operating income. | |
Impairment of Long-Lived Assets and Amortized Intangible Assets | Impairment of Long-Lived Assets and Amortized Intangible Assets |
The Company performs impairment evaluations of its long-lived assets, including property, plant and equipment and intangible assets with finite lives whenever business conditions or events indicate that those assets may be impaired. When the estimated future undiscounted cash flows to be generated by the assets are less than the carrying value of the long-lived assets, the assets are written down to fair market value and a charge is recorded to current operations. Based on the Company's evaluations no impairment was required as of December 31, 2014 or 2013 for continuing operations. | |
In relation to the 2011 acquisition of Southern Bullion, the excess of purchase price over tangible assets acquired was calculated at approximately $3.4 million. Since the acquisition of Southern Bullion this excess value had been accounted for as an intangible asset with a 15-year life attributed to the “Southern Bullion Coin & Jewelry” trade name. With the closure of all Southern Bullion stores in the year ended December 31, 2014, the unamortized portion of this intangible asset, approximately $2.9 million, was written off as of the quarter ended June 30, 2014. The impact of this write off is captured in the Discontinued Operations section of our current statement of operations. | |
Financial Instruments | Financial Instruments |
The carrying amounts reported in the consolidated balance sheets for cash equivalents, accounts receivable, short-term debt, accounts payable and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments. The line of credit, related party does not bear a market rate of interest. Management believes that, based on the Company's situation at the time the line was negotiated, it could not have obtained comparable financing, and as such cannot estimate the fair value of the line of credit, related party. The carrying amounts reported for the Company's long-term debt and capital lease approximate fair value because substantially all of the underlying instruments have variable interest rates which adjust frequently or the interest rates approximate current market rates. None of these instruments are held for trading purposes. | |
Advertising Costs | Advertising Costs |
Advertising costs are expensed as incurred, and amounted to $2,276,603 and $2,071,577 for the year ended December 31, 2014 (“Fiscal 2014”) and December 31, 2013 (“Fiscal 2013”), respectively. The Company increased its advertising spending in Fiscal 2014 as it continued to focus its marketing efforts on growing its jewelry, watch and diamond businesses. | |
Accounts Receivable | Accounts Receivable |
The Company records trade receivables when revenue is recognized. When appropriate, the Company will record an allowance for doubtful accounts, which is primarily determined by review of specific trade receivables. Those accounts that are doubtful of collection are included in the allowance. These provisions are reviewed to determine the adequacy of the allowance for doubtful accounts. Trade receivables are charged off when there is certainty as to being uncollectible. Trade receivables are considered delinquent when payment has not been made within contract terms. As of December 31, 2014 and 2013, DGSE's allowance for doubtful accounts was $12,772 and $10,553, respectively. | |
Income Taxes | Income Taxes |
Income taxes are accounted for under the asset and liability method prescribed by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not such assets will be realized. | |
The Company accounts for its position in tax uncertainties in accordance with ASC 740, Income Taxes. The guidance establishes standards for accounting for uncertainty in income taxes. The guidance provides several clarifications related to uncertain tax positions. Most notably, a “more likely-than-not” standard for initial recognition of tax positions, a presumption of audit detection and a measurement of recognized tax benefits based on the largest amount that has a greater than 50 percent likelihood of realization. The guidance applies a two-step process to determine the amount of tax benefit to be recognized in the financial statements. First, the Company must determine whether any amount of the tax benefit may be recognized. Second, the Company determines how much of the tax benefit should be recognized (this would only apply to tax positions that qualify for recognition). The Company has not taken a tax position that, if challenged, would have a material effect on the financial statements or the effective tax rate during the years ended December 31, 2014 and 2013. | |
The Company's federal income tax returns for the years subsequent to December 31, 2010 remain subject to examination. The Company's income tax returns in major state income tax jurisdictions remain subject to examination for various periods subsequent to December 31, 2010. The Company currently believes that its significant filing positions are highly certain and that all of its other significant income tax filing positions and deductions would be sustained upon audit or the final resolution would not have a material effect on the consolidated financial statements. Therefore, the Company has not established any significant reserves for uncertain tax positions. The Company recognizes accrued interest and penalties resulting from audits by tax authorities in the provision for income taxes in the consolidated statements of operations. During 2014 and 2013, the Company did not incur any federal income tax interest or penalties. | |
Revenue Recognition | Revenue Recognition |
Revenue is generated from wholesale and retail sales of jewelry, rare coins, currency, collectibles, bullion and scrap. The recognition of revenue varies for wholesale and retail transactions and is, in large part, dependent on the type of payment arrangements made between the parties. The Company recognizes sales on a shipping point basis. | |
The Company sells jewelry, rare coins and currency to other wholesalers/dealers within its industry on credit, generally for terms of 14 to 60 days, but in no event greater than one year. The Company grants credit to new dealers based on extensive credit evaluations and for existing dealers based on established business relationships and payment histories. The Company generally does not obtain collateral with which to secure its accounts receivable when the sale is made to a dealer. | |
Revenues for monetary transactions (i.e., cash and receivables) with dealers are recognized when the merchandise is shipped to the related dealer. | |
The Company does not grant credit to retail customers, however it does offer a structured layaway plan. When a retail customer utilizes the Company's layaway plan, the Company generally collects a payment of 25% of the sales price, establishes a payment schedule for the remaining balance and holds the merchandise as collateral as security against the customer's receivable until all amounts due are paid in full. Revenue for layaway sales is recognized when the merchandise is paid for in full and delivered to the retail customer. | |
In limited circumstances, the Company exchanges merchandise for similar merchandise and/or monetary consideration with both dealers and retail customers, for which the Company recognizes revenue in accordance with ASC 845, Nonmonetary Transactions. When the Company exchanges merchandise for similar merchandise and there is no monetary component to the exchange, the Company does not recognize any revenue. Instead, the basis of the merchandise relinquished becomes the basis of the merchandise received, less any indicated impairment of value of the merchandise relinquished. When the Company exchanges merchandise for similar merchandise and there is a monetary component to the exchange, the Company recognizes revenue to the extent of the monetary assets received and determines the cost of sale based on the ratio of monetary assets received to monetary and non-monetary assets received multiplied by the cost of the assets surrendered. | |
The Company has a return policy (money-back guarantee). The policy covers retail transactions involving jewelry, graded rare coins and currency only. Customers may return jewelry, graded rare coins and currency purchased within 30 days of the receipt of the items for a full refund as long as the items are returned in exactly the same condition as they were delivered. In the case of jewelry, graded rare coins and currency sales on account, customers may cancel the sale within 30 days of making a commitment to purchase the items. The receipt of a deposit and a signed purchase order evidences the commitment. Any customer may return a jewelry item or graded rare coins and currency if they can demonstrate that the item is not authentic, or there was an error in the description of a graded coin or currency piece. Returns are accounted for as a reversal of the original transaction, with the effect of reducing revenues, and cost of sales, and returning the merchandise to inventory. DGSE has established an allowance for estimated returns related to Fiscal 2014 sales, which is based on the Company's review of historical returns experience, and reduces the Company's reported revenues and cost of sales accordingly. As of December 31, 2014 and 2013, DGSE's allowance for returns was $29,814 and $55,124, respectively. | |
Shipping and Handling Costs | Shipping and Handling Costs |
Shipping and handling costs are included in selling general and administrative expenses, and amounted to $91,103 and $141,883, for 2014 and 2013, respectively. | |
Taxes Collected From Customers | |
Taxes Collected From Customers | |
The Company's policy is to present taxes collected from customers and remitted to governmental authorities on a net basis. The Company records the amounts collected as a current liability and relieves such liability upon remittance to the taxing authority without impacting revenues or expenses. | |
Earnings Per Share | Earnings Per Share |
Basic earnings per common share is computed by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into Common Stock. For the calculation of diluted earnings per share, the basic weighted average number of shares is increased by the dilutive effect of stock options and warrants outstanding determined using the treasury stock method. | |
Stock-Based Compensation | Stock-Based Compensation |
The Company accounts for stock-based compensation by measuring the cost of the employee services received in exchange for an award of equity instruments, including grants of stock options, based on the fair value of the award at the date of grant. In addition, to the extent that the Company receives an excess tax benefit upon exercise of an award, such benefit is reflected as cash flow from financing activities in the consolidated statement of cash flows. Stock-based compensation expense for Fiscal 2014 and Fiscal 2013 amounted to $148,500 and $0 respectively, and includes compensation expense for new stock-based awards granted during Fiscal 2014. | |
Use of Estimates | Use of Estimates |
The preparation of financial statements in conformity with generally accepted accounting principles requires the use of certain estimates and assumptions by management in determining the reported amounts of assets and liabilities, disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including depreciation of property and equipment and amortization or impairment of intangible assets. The Company evaluates its estimates and assumptions on an ongoing basis and relies on historical experience and various other factors that it believes to be reasonable under the circumstances to determine such estimates. Because uncertainties with respect to estimates and assumptions are inherent in the preparation of financial statements, actual results could differ from these estimates. | |
New Accounting Pronouncements | New Accounting Pronouncements |
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients; or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements and have not yet determined the method by which the Company will adopt the standard in 2017. |
Inventories_Tables
Inventories (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Inventories [Abstract] | |||||||||||||
Schedule of Inventories | A summary of inventories at December 31, 2014 and 2013 is as follows: | ||||||||||||
2014 | 2013 | ||||||||||||
Jewelry | $ | 9,755,580 | $ | 7,593,041 | |||||||||
Scrap gold | 536,181 | 514,622 | |||||||||||
Bullion | 493,368 | 933,988 | |||||||||||
Rare coins and Other | 359,028 | 950,505 | |||||||||||
$ | 11,144,157 | $ | 9,992,156 | ||||||||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property and Equipment [Abstract] | |||||||||
Schedule of Property and Equipment | A summary of property and equipment at December 31, 2014 and 2013 is as follows: | ||||||||
2014 | 2013 | ||||||||
Building and improvements | $ | 3,212,199 | $ | 3,183,754 | |||||
Machinery and equipment | 1,800,626 | 1,693,666 | |||||||
Furniture and fixtures | 386,144 | 391,137 | |||||||
5,398,969 | 5,268,557 | ||||||||
Less: accumulated depreciation | (2,193,672 | ) | (1,840,332 | ) | |||||
3,205,297 | 3,428,225 | ||||||||
Land | 1,160,470 | 1,160,470 | |||||||
Total property and equipment | $ | 4,365,767 | $ | 4,588,695 |
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||
Long-Term Debt [Abstract] | |||||||||||||||||||||||||||||
Long-Term Debt and Convertible Debt | The following table details the Company's long-term debt: | ||||||||||||||||||||||||||||
Outstanding Balance | |||||||||||||||||||||||||||||
December 31, | December 31, | Current | |||||||||||||||||||||||||||
2014 | 2013 | Interest Rate | Maturity | ||||||||||||||||||||||||||
NTR line of credit (1) | $ | 2,303,359 | $ | 2,383,359 | 2.00% | 1-Aug-17 | |||||||||||||||||||||||
Mortgage payable | 1,720,525 | 1,843,061 | 6.70% | 1-Aug-16 | |||||||||||||||||||||||||
Capital lease (2) | 38,244 | 48,393 | Various | Various | |||||||||||||||||||||||||
Sub-Total | 4,062,128 | 4,274,813 | |||||||||||||||||||||||||||
Less: Current portion, capital lease | 11,529 | 11,091 | |||||||||||||||||||||||||||
Less: Current maturities | 131,003 | 122,536 | |||||||||||||||||||||||||||
Long-term debt | 3,919,596 | 4,141,186 | |||||||||||||||||||||||||||
Less: Line of credit (1) | 2,303,359 | 2,383,359 | |||||||||||||||||||||||||||
Long term debt, less current maturities | $ | 1,616,237 | $ | 1,757,827 | |||||||||||||||||||||||||
-1 | On July 19, 2012, DGSE entered into a loan agreement with NTR Metals, LLC (“NTR”), an affiliate of DGSE's largest stockholder Elemetal, LLC (“Elemetal”), pursuant to which NTR, agreed to provide the Company a guidance line of revolving credit in an amount up to $7,500,000 (the “Loan Agreement”). The Loan Agreement anticipated termination–at which point all amounts outstanding thereunder would be due and payable (such amounts, the “Obligations”)–upon the earlier of: (i) August 1, 2014; (ii) the date that is twelve months after the Company receives notice from NTR demanding the repayment of the Obligations; (iii) the date the Obligations are accelerated in accordance with the terms of the Loan Agreement; or (iv) the date on which the commitment terminates under the Loan Agreement. In connection with the Loan Agreement, the Company granted a security interest in the respective personal property of each of its subsidiaries. The loan carries an interest rate of two percent (2%) per annum for all funds borrowed pursuant to the Loan Agreement. Proceeds received by the Company pursuant to the terms of the Loan Agreement were used for repayment of all outstanding financial obligations incurred in connection with that certain Loan Agreement, dated as of December 22, 2005, between the Company and Texas Capital Bank, and additional proceeds have been used as working capital in the ordinary course of business. The Company incurred debt issuance costs associated with the Loan Agreement totaling $56,150. The debt issuance costs were included in other assets in the accompanying consolidated balance sheet and were amortized to interest expense on a straight-line basis over two years, and have been completely amortized as of the current year. On February 25, 2014, we entered into a one-year extension of the Loan Agreement with NTR, extending the termination date to August 1, 2015, and on February 4, 2015, we entered into an additional two-year extension, extending the termination date to August 1, 2017. No debt issuance costs were incurred in relation to these extensions. All other terms of the agreement remain the same. As of December 31, 2014, the outstanding balance of the NTR loan was $2,303,359. | ||||||||||||||||||||||||||||
-2 | On April 3, 2013, DGSE entered into a capital lease for $58,563 with Graybar Financial Services for phones at the new corporate headquarters. The non-cancelable lease agreement required an advanced payment of $2,304 and monthly payments of $1,077 for 60 months at an interest rate of 4.2% beginning in May 2013. At the end of the lease in May 2018, the equipment can be purchased for $1. | ||||||||||||||||||||||||||||
Maturities of Long-Term Obligations | Maturities of DGSE's long-term obligations over the next five years are as follows: | ||||||||||||||||||||||||||||
Total | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | |||||||||||||||||||||||
Line of credit, related party | $ | 2,303,359 | $ | - | $ | - | $ | 2,303,359 | $ | - | $ | - | $ | - | |||||||||||||||
Long-term debt and capital lease | 1,758,769 | 142,532 | 1,601,591 | 12,590 | 2,056 | - | - | ||||||||||||||||||||||
Total | $ | 4,062,128 | $ | 142,532 | $ | 1,601,591 | $ | 2,315,949 | $ | 2,056 | $ | - | $ | - | |||||||||||||||
Basic_and_Diluted_Average_Shar1
Basic and Diluted Average Shares (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Basic and Diluted Average Shares [Abstract] | |||||||||
Schedule of the Reconciliation of Basic and Diluted Average Common Shares | A reconciliation of basic and diluted average common shares for the years ended December 31, 2014 and 2013 is as follows: | ||||||||
2014 | 2013 | ||||||||
Basic weighted average shares | 12,216,787 | 12,175,584 | |||||||
Effect of potential dilutive securities: | – | – | |||||||
Diluted weighted average shares | 12,216,787 | 12,175,584 |
Stock_Options_and_Restricted_S1
Stock Options and Restricted Stock Units (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Stock Options and Restricted Stock Units [Abstract] | ||||||||||||||||||||||||
Summary of Stock Option Activity | The following table summarizes the activity in common shares subject to options for the years ended December 31, 2014 and 2013: | |||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Weighted average | Weighted average | |||||||||||||||||||||||
Shares | exercise price | Shares | exercise price | |||||||||||||||||||||
Outstanding at beginning of year | 5,347,500 | $ | 14.2 | 5,372,500 | $ | 14.14 | ||||||||||||||||||
Granted | - | - | - | - | ||||||||||||||||||||
Exercised | - | - | - | - | ||||||||||||||||||||
Forfeited | (317,500 | ) | 2.5 | (25,000 | ) | 2.2 | ||||||||||||||||||
Outstanding at end of year | 5,030,000 | $ | 14.93 | 5,347,500 | $ | 14.2 | ||||||||||||||||||
Options exercisable at end of year | 5,030,000 | $ | 14.93 | 5,347,500 | $ | 14.2 | ||||||||||||||||||
Schedule of Information about Share Options Outstanding | Information about stock options outstanding at December 31, 2014 is summarized as follows: | |||||||||||||||||||||||
Options Outstanding and Exercisable | ||||||||||||||||||||||||
Weighted average | Weighted | |||||||||||||||||||||||
remaining | average | |||||||||||||||||||||||
Number | contractual life | exercise | Aggregate | |||||||||||||||||||||
Exercise price | outstanding | (Years) | price | Intrinsic Value | ||||||||||||||||||||
$2.13 | 10,000 | NA(1) | 2.13 | $ | - | |||||||||||||||||||
$2.25 | 10,000 | NA(1) | 2.25 | - | ||||||||||||||||||||
$6.00 | 10,000 | 2.9 | 6 | - | ||||||||||||||||||||
$15.00 | 5,000,000 | 1.8 | 15 | - | ||||||||||||||||||||
5,030,000 | $ | - | ||||||||||||||||||||||
-1 | All Options currently issued pursuant to the Company's 2004 Employee Stock Option Plans have no expiration date. | |||||||||||||||||||||||
Schedule of Non-vested RSU activity | A summary of the status of our non-vested RSU grants issued under our 2006 Plan, and the changes during the year ended December 31, 2014, is presented below: | |||||||||||||||||||||||
2014 | ||||||||||||||||||||||||
Number of RSUs | Weighted average grant-date fair value | |||||||||||||||||||||||
Nonvested at beginning of year | - | $ | - | |||||||||||||||||||||
Granted | 229,600 | 1.74 | ||||||||||||||||||||||
Vested | (103,000 | ) | 1.57 | |||||||||||||||||||||
Forfeited | (39,000 | ) | 2.12 | |||||||||||||||||||||
Nonvested at end of year | 87,600 | $ | 1.77 | |||||||||||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Taxes [Abstract] | |||||||||||||
Schedule of Income Tax Provision (Benefit) | The income tax provision reconciled to the tax computed at the statutory Federal rate follows: | ||||||||||||
2014 | 2013 | ||||||||||||
Tax Expense at Statutory Rate | $ | (211,318 | ) | $ | (225,640 | ) | |||||||
Valuation Allowance | 182,154 | 222,093 | |||||||||||
Non-Deductible Expenses and Other | 29,164 | 3,547 | |||||||||||
State Taxes, Net of Federal Benefit | 65,416 | 57,168 | |||||||||||
Income tax expense | $ | 65,416 | $ | 57,168 | |||||||||
Current | $ | 65,416 | $ | 57,168 | |||||||||
Deferred | - | - | |||||||||||
Total | $ | 65,416 | $ | 57,168 | |||||||||
Schedule of Deferred Tax Assets and Liabilities | Deferred income taxes are comprised of the following at December 31, 2014 and 2013: | ||||||||||||
2014 | 2013 | ||||||||||||
Deferred tax assets (liabilities): | |||||||||||||
Inventories | $ | 82,274 | $ | 160,145 | |||||||||
Stock options and other | 96,009 | 56,351 | |||||||||||
Alternative Minimum Tax credit carryforward | 24,674 | 24,674 | |||||||||||
Contingencies and accruals | 90,829 | 513,219 | |||||||||||
Property and equipment | (340,099 | ) | (489,389 | ) | |||||||||
Capital loss carryover | 25,420 | 25,420 | |||||||||||
Net operating loss carryforward | 10,499,884 | 9,279,196 | |||||||||||
Intangibles | 179 | (19,748 | ) | ||||||||||
Total deferred tax assets, net | 10,479,170 | 9,549,868 | |||||||||||
Valuation allowance | $ | (10,479,170 | ) | $ | (9,549,868 | ) |
Operating_Leases_Tables
Operating Leases (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Operating Leases [Abstract] | |||||||||||||||||||||||||||||||||
Future Minimum Lease Payments | The minimum rental commitments under non-cancellable operating leases as of December 31, 2014 are as follows: | ||||||||||||||||||||||||||||||||
Total | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | |||||||||||||||||||||||||||
Operating leases | $ | 2,118,944 | $ | 817,381 | $ | 633,574 | $ | 369,779 | $ | 186,743 | $ | 83,600 | $ | 27,867 | |||||||||||||||||||
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Discontinued Operations [Abstract] | |||||||||||||
Schedule of Discontinued Operations | Discontinued operations for the years ended December 31, 2014 and 2013: | ||||||||||||
Year Ended | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Revenue: | |||||||||||||
Sales | $ | 5,367,867 | $ | 21,445,752 | |||||||||
Cost of goods sold | 3,643,142 | 15,891,252 | |||||||||||
Gross margin | 1,724,725 | 5,554,500 | |||||||||||
Expenses: | |||||||||||||
Selling, general and administrative expenses | 2,471,230 | 7,075,272 | |||||||||||
Depreciation and amortization | 3,259,552 | 376,924 | |||||||||||
Total expenses | 5,730,782 | 7,452,196 | |||||||||||
Operating loss | (4,006,057 | ) | (1,897,696 | ) | |||||||||
Other expense (income): | |||||||||||||
Other income, net | (19,475 | ) | (19,325 | ) | |||||||||
Interest (income) expense | 9,968 | 7,004 | |||||||||||
(9,507 | ) | (12,321 | ) | ||||||||||
Loss from discontinued operations before income taxes | (3,996,550 | ) | (1,885,375 | ) | |||||||||
Income tax (benefit) expense | (107,494 | ) | 52,998 | ||||||||||
Loss from discontinued operations after income taxes | $ | (3,889,056 | ) | $ | (1,938,373 | ) |
Summary_of_Accounting_Policies2
Summary of Accounting Policies and Nature of Operations (Details) (USD $) | 12 Months Ended | 3 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Advertising costs | $2,276,603 | $2,071,577 | |
Allowance for doubtful accounts | 12,772 | 10,553 | |
Layaway plan, percent of sale price | 25.00% | ||
Sales returns and allowances | 29,814 | 55,124 | |
Shipping and handling costs | 91,103 | 141,883 | |
Stock-based compensation expense | 148,500 | ||
Southern Bullion Trading LLC [Member] | |||
Business Acquisition [Line Items] | |||
Intangible assets | 3,400,000 | ||
Southern Bullion Trading LLC [Member] | Trade Names [Member] | |||
Business Acquisition [Line Items] | |||
Life of intangible asset | 15 years | ||
Loss on writedown of operating assets | $2,900,000 | ||
Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful life | 5 years | ||
Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful life | 10 years |
Concentration_of_Credit_Risk_D
Concentration of Credit Risk (Details) (Elemetal [Member]) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Sales [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 23.00% | 31.00% |
Purchases [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 26.00% | 37.00% |
Accounts receivable [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 24.00% | 88.00% |
Inventories_Details
Inventories (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Inventories [Abstract] | ||
Jewelry | $9,755,580 | $7,593,041 |
Scrap gold | 536,181 | 514,622 |
Bullion | 493,368 | 933,988 |
Rare coins and Other | 359,028 | 950,505 |
Total | $11,144,157 | $9,992,156 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $5,398,969 | $5,268,557 |
Less: accumulated depreciation | -2,193,672 | -1,840,332 |
Property, plant and equipment excluding land | 3,205,297 | 3,428,225 |
Land | 1,160,470 | 1,160,470 |
Total property and equipment | 4,365,767 | 4,588,695 |
Depreciation expense | 353,340 | 324,958 |
Buildings and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,212,199 | 3,183,754 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,800,626 | 1,693,666 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $386,144 | $391,137 |
LongTerm_Debt_Schedule_of_Debt
Long-Term Debt (Schedule of Debt) (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | |||
Debt Instrument [Line Items] | ||||
Sub-Total | $4,062,128 | $4,274,813 | ||
Less: Current portion capital leases | 11,529 | 11,091 | ||
Less: Current maturities | 131,003 | 122,536 | ||
Long-term debt | 3,919,596 | 4,141,186 | ||
Less: Line of credit | 2,303,359 | [1] | 2,383,359 | [1] |
Long-term debt, less current maturities | 1,616,237 | 1,757,827 | ||
NTR line of credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Sub-Total | 2,303,359 | [1] | 2,383,359 | [1] |
Current Interest Rate | 2.00% | |||
Debt instrument, due date | 1-Aug-17 | |||
Mortgage payable [Member] | ||||
Debt Instrument [Line Items] | ||||
Sub-Total | 1,720,525 | 1,843,061 | ||
Current Interest Rate | 6.70% | |||
Debt instrument, due date | 1-Aug-16 | |||
Capital lease [Member] | ||||
Debt Instrument [Line Items] | ||||
Sub-Total | $38,244 | [2] | $48,393 | [2] |
[1] | On July 19, 2012, DGSE entered into a loan agreement with NTR Metals, LLC (bNTRb), an affiliate of DGSE's largest stockholder Elemetal, LLC (bElemetalb), pursuant to which NTR, agreed to provide the Company a guidance line of revolving credit in an amount up to $7,500,000 (the bLoan Agreementb). The Loan Agreement anticipated terminationbat which point all amounts outstanding thereunder would be due and payable (such amounts, the bObligationsb)bupon the earlier of: (i) August 1, 2014; (ii) the date that is twelve months after the Company receives notice from NTR demanding the repayment of the Obligations; (iii) the date the Obligations are accelerated in accordance with the terms of the Loan Agreement; or (iv) the date on which the commitment terminates under the Loan Agreement. In connection with the Loan Agreement, the Company granted a security interest in the respective personal property of each of its subsidiaries. The loan carries an interest rate of two percent (2%) per annum for all funds borrowed pursuant to the Loan Agreement. Proceeds received by the Company pursuant to the terms of the Loan Agreement were used for repayment of all outstanding financial obligations incurred in connection with that certain Loan Agreement, dated as of December 22, 2005, between the Company and Texas Capital Bank, and additional proceeds have been used as working capital in the ordinary course of business. The Company incurred debt issuance costs associated with the Loan Agreement totaling $56,150. The debt issuance costs were included in other assets in the accompanying consolidated balance sheet and were amortized to interest expense on a straight-line basis over two years, and have been completely amortized as of the current year. On February 25, 2014, we entered into a one-year extension of the Loan Agreement with NTR, extending the termination date to August 1, 2015, and on February 4, 2015, we entered into an additional two-year extension, extending the termination date to August 1, 2017. No debt issuance costs were incurred in relation to these extensions. All other terms of the agreement remain the same. As of December 31, 2014, the outstanding balance of the NTR loan was $2,303,359. | |||
[2] | On April 3, 2013, DGSE entered into a capital lease for $58,563 with Graybar Financial Services for phones at the new corporate headquarters. The non-cancelable lease agreement required an advanced payment of $2,304 and monthly payments of $1,077 for 60 months at an interest rate of 4.2% beginning in May 2013. At the end of the lease in May 2018, the equipment can be purchased for $1. |
LongTerm_Debt_Footnotes_Detail
Long-Term Debt (Footnotes) (Details) (USD $) | 1 Months Ended | 12 Months Ended | 0 Months Ended | |
Feb. 25, 2014 | Jul. 19, 2012 | Dec. 31, 2014 | Feb. 04, 2015 | |
NTR Loan Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Issuance date | 19-Jul-12 | |||
Credit facility amount, maximum | $7,500,000 | |||
Debt instrument, due date | 1-Aug-15 | 1-Aug-14 | ||
Interest rate, credit | 2.00% | |||
Debt issuance costs | 56,150 | |||
Period in which debt issuance costs are to be amortized | 2 years | |||
Outstanding balance of credit facility | 2,303,359 | |||
NTR Loan Agreement [Member] | Subsequent Event [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, due date | 1-Aug-17 | |||
Interest rate, credit | 2.00% | |||
Graybar Financial Services lease [Member] | ||||
Debt Instrument [Line Items] | ||||
Issuance date | 3-Apr-13 | |||
Debt instrument, face amount | 58,563 | |||
Advances on capital leases | 2,304 | |||
Monthly payments | 1,077 | |||
Debt instrument, term | 60 months | |||
Interest rate, debt | 4.20% | |||
Equipment purchase option, purchase price | $1 |
LongTerm_Debt_Maturities_of_Lo
Long-Term Debt (Maturities of Long-Term Obligations) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
Debt Instrument [Line Items] | ||||
Total | $4,062,128 | $4,274,813 | ||
2015 | 142,532 | |||
2016 | 1,601,591 | |||
2017 | 2,315,949 | |||
2018 | 2,056 | |||
2019 | ||||
Thereafter | ||||
Line of credit, related party [Member] | ||||
Debt Instrument [Line Items] | ||||
Total | 2,303,359 | [1] | 2,383,359 | [1] |
2015 | ||||
2016 | ||||
2017 | 2,303,359 | |||
2018 | ||||
2019 | ||||
Thereafter | ||||
Long-term debt and capital lease [Member] | ||||
Debt Instrument [Line Items] | ||||
Total | 1,758,769 | |||
2015 | 142,532 | |||
2016 | 1,601,591 | |||
2017 | 12,590 | |||
2018 | 2,056 | |||
2019 | ||||
Thereafter | ||||
[1] | On July 19, 2012, DGSE entered into a loan agreement with NTR Metals, LLC (bNTRb), an affiliate of DGSE's largest stockholder Elemetal, LLC (bElemetalb), pursuant to which NTR, agreed to provide the Company a guidance line of revolving credit in an amount up to $7,500,000 (the bLoan Agreementb). The Loan Agreement anticipated terminationbat which point all amounts outstanding thereunder would be due and payable (such amounts, the bObligationsb)bupon the earlier of: (i) August 1, 2014; (ii) the date that is twelve months after the Company receives notice from NTR demanding the repayment of the Obligations; (iii) the date the Obligations are accelerated in accordance with the terms of the Loan Agreement; or (iv) the date on which the commitment terminates under the Loan Agreement. In connection with the Loan Agreement, the Company granted a security interest in the respective personal property of each of its subsidiaries. The loan carries an interest rate of two percent (2%) per annum for all funds borrowed pursuant to the Loan Agreement. Proceeds received by the Company pursuant to the terms of the Loan Agreement were used for repayment of all outstanding financial obligations incurred in connection with that certain Loan Agreement, dated as of December 22, 2005, between the Company and Texas Capital Bank, and additional proceeds have been used as working capital in the ordinary course of business. The Company incurred debt issuance costs associated with the Loan Agreement totaling $56,150. The debt issuance costs were included in other assets in the accompanying consolidated balance sheet and were amortized to interest expense on a straight-line basis over two years, and have been completely amortized as of the current year. On February 25, 2014, we entered into a one-year extension of the Loan Agreement with NTR, extending the termination date to August 1, 2015, and on February 4, 2015, we entered into an additional two-year extension, extending the termination date to August 1, 2017. No debt issuance costs were incurred in relation to these extensions. All other terms of the agreement remain the same. As of December 31, 2014, the outstanding balance of the NTR loan was $2,303,359. |
Basic_and_Diluted_Average_Shar2
Basic and Diluted Average Shares (Narrative) (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from the denominator in the computation of earnings per share | 5,030,000 | 5,347,500 |
Unvested Restricted Stock Units ("RSUs") [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from the denominator in the computation of earnings per share | 87,600 | 0 |
Basic_and_Diluted_Average_Shar3
Basic and Diluted Average Shares (Reconciliation of Basic Earnings per Common Share and Diluted Earnings Per Common Share) (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Basic and Diluted Average Shares [Abstract] | ||
Basic weighted average shares | 12,216,787 | 12,175,584 |
Effect of potential dilutive securities: | ||
Diluted weighted average shares | 12,216,787 | 12,175,584 |
Common_Stock_Details
Common Stock (Details) | 12 Months Ended | 1 Months Ended | 0 Months Ended | |||
Dec. 31, 2014 | Jan. 31, 2014 | 30-May-14 | Dec. 10, 2014 | Dec. 18, 2014 | Nov. 12, 2014 | |
Restricted Stock Units (RSUs) [Member] | ||||||
Class of Stock [Line Items] | ||||||
Units granted | 229,600 | |||||
Units vested | 103,000 | |||||
Common Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Shares issued | 48,000 | |||||
Shares issued upon vesting of restricted stock | 75,000 | |||||
Officers and certain key employees [Member] | Restricted Stock Units (RSUs) [Member] | ||||||
Class of Stock [Line Items] | ||||||
Units granted | 112,000 | |||||
Units vested | 28,000 | |||||
James Vierling [Member] | Common Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Shares issued | 20,000 | |||||
James D. Clem [Member] | Restricted Stock Units (RSUs) [Member] | ||||||
Class of Stock [Line Items] | ||||||
Units granted | 75,000 | |||||
James D. Clem [Member] | Common Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Shares issued upon vesting of restricted stock | 75,000 | |||||
Dr. L.S. Smith [Member] | Common Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Shares forfeited | 59,738 |
Stock_Options_and_Restricted_S2
Stock Options and Restricted Stock Units (Narrative) (Details) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 126 Months Ended | 102 Months Ended | ||||||
Dec. 31, 2014 | Dec. 31, 2013 | Oct. 25, 2011 | Dec. 18, 2014 | Jan. 31, 2014 | Dec. 10, 2014 | Sep. 24, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2012 | Jun. 21, 2004 | Jun. 27, 2006 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Options granted | ||||||||||||
Common stock, par value per share | $0.01 | $0.01 | 0.01 | 0.01 | ||||||||
Exercise price | ||||||||||||
Options exercised | ||||||||||||
Options outstanding | 5,030,000 | 5,347,500 | 5,030,000 | 5,030,000 | 5,372,500 | |||||||
Stock-based compensation expense | $148,500 | $0 | ||||||||||
Closing price, share | $1.22 | 1.22 | 1.22 | |||||||||
Unearned stock-based compensation to be expensed in future periods related to unvested stock-based awards | 72,773 | 72,773 | 72,773 | |||||||||
Common Stock [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Shares issued upon vesting of restricted stock | 75,000 | |||||||||||
NTR [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Payables forgiven | $2,500,000 | |||||||||||
Options granted | 5,000,000 | |||||||||||
Common stock, par value per share | $0.01 | |||||||||||
Exercise price | $15 | |||||||||||
Chief Executive Officer [Member] | Common Stock [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Shares issued upon vesting of restricted stock | 75,000 | |||||||||||
RSUs [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Units granted | 229,600 | |||||||||||
RSUs [Member] | Management and Key Employees [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Units granted | 112,000 | |||||||||||
RSUs [Member] | Chief Executive Officer [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Units granted | 75,000 | |||||||||||
RSUs [Member] | Three Independent Directors [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Units granted | 42,600 | |||||||||||
2004 Stock Option Plan [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Shares reserved for issuance | 1,700,000 | |||||||||||
Options granted | 1,459,634 | |||||||||||
Options exercised | 845,634 | |||||||||||
Options expired | 594,000 | |||||||||||
Options outstanding | 20,000 | 20,000 | 20,000 | |||||||||
2006 Equity Inventive Plan [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Shares reserved for issuance | 750,000 | |||||||||||
Options granted | 150,000 | |||||||||||
Options exercised | 100,000 | |||||||||||
Options expired | 40,000 | |||||||||||
Options outstanding | 10,000 | 10,000 | 10,000 | |||||||||
2006 Equity Inventive Plan [Member] | RSUs [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Shares available for issuance | 449,400 | 449,400 | 449,400 |
Stock_Options_and_Restricted_S3
Stock Options and Restricted Stock Units (Activity in Common Shares Subject To Options) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Shares | ||
Outstanding at beginning of year | 5,347,500 | 5,372,500 |
Granted | ||
Exercised | ||
Forfeited | -317,500 | -25,000 |
Outstanding at end of year | 5,030,000 | 5,347,500 |
Options exercisable at end of year | 5,030,000 | 5,347,500 |
Weighted average exercise price | ||
Outstanding at beginning of year | $14.20 | $14.14 |
Granted | ||
Exercised | ||
Forfeited | $2.50 | $2.20 |
Outstanding at end of year | $14.93 | $14.20 |
Options exercisable at end of year | $14.93 | $14.20 |
Stock_Options_and_Restricted_S4
Stock Options and Restricted Stock Units (Information about Equity Incentive Plan - Options Outstanding by Exercise Range) (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Number outstanding | 5,030,000 | |||
Weighted average exercise price | $14.93 | $14.20 | $14.14 | |
$2.13 [Member] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Exercise price | $2.13 | |||
Number outstanding | 10,000 | |||
Weighted average remaining contractual life (years) | [1] | |||
Weighted average exercise price | $2.13 | |||
$2.25 [Member] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Exercise price | $2.25 | |||
Number outstanding | 10,000 | |||
Weighted average remaining contractual life (years) | [1] | |||
Weighted average exercise price | $2.25 | |||
Aggregate Intrinsic Value | ||||
$6.00 [Member] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Exercise price | $6 | |||
Number outstanding | 10,000 | |||
Weighted average remaining contractual life (years) | 2 years 10 months 24 days | |||
Weighted average exercise price | $6 | |||
Aggregate Intrinsic Value | ||||
$15.00 [Member] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Exercise price | $15 | |||
Number outstanding | 5,000,000 | |||
Weighted average remaining contractual life (years) | 1 year 9 months 18 days | |||
Weighted average exercise price | $15 | |||
Aggregate Intrinsic Value | ||||
[1] | All Options currently issued pursuant to the Company's 2004 Employee Stock Option Plans have no expiration date. |
Stock_Options_and_Restricted_S5
Stock Options and Restricted Stock Units (Information about Equity Incentive Plan - Options Exercisable by Exercise Range) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options exercisable | 5,030,000 | 5,347,500 | |
Aggregate intrinsic value | |||
$2.13 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Exercise price | $2.13 | ||
Options exercisable | 10,000 | ||
Weighted average remaining contractual life (years) | [1] | ||
Weighted average exercise price | $2.13 | ||
Aggregate intrinsic value | |||
$2.25 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Exercise price | $2.25 | ||
Options exercisable | 10,000 | ||
Weighted average remaining contractual life (years) | [1] | ||
Weighted average exercise price | $2.25 | ||
Aggregate intrinsic value | |||
$6.00 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Exercise price | $6 | ||
Options exercisable | 10,000 | ||
Weighted average remaining contractual life (years) | 2 years 10 months 24 days | ||
Weighted average exercise price | $6 | ||
Aggregate intrinsic value | |||
$15.00 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Exercise price | $15 | ||
Options exercisable | 5,000,000 | ||
Weighted average remaining contractual life (years) | 1 year 9 months 18 days | ||
Weighted average exercise price | $15 | ||
Aggregate intrinsic value | |||
[1] | All Options currently issued pursuant to the Company's 2004 Employee Stock Option Plans have no expiration date. |
Stock_Options_and_Restricted_S6
Stock Options and Restricted Stock Units (Schedule of Non-vested RSU Activity) (Details) (RSUs [Member], USD $) | 12 Months Ended |
Dec. 31, 2014 | |
RSUs [Member] | |
Number of RSUs | |
Nonvested at beginning of year | |
Granted | 229,600 |
Vested | -103,000 |
Forfeited | -39,000 |
Nonvested at end of year | 87,600 |
Weighted average grant-date fair value | |
Nonvested at beginning of year | |
Granted | $1.74 |
Vested | $1.57 |
Forfeited | $2.12 |
Nonvested at end of year | $1.77 |
Litigation_Details
Litigation (Details) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | Jul. 15, 2014 | 29-May-14 | |
Litigation [Abstract] | ||||
Litigation settlement amount | $2,000,000 | |||
Litigation expenses | 120,000 | 83,000 | ||
Payment Agreement in 2010 Sale Tax Audit [Member] | ||||
Loss Contingencies [Line Items] | ||||
Amount of tax due to be paid | 800,397 | 1,100,000 | ||
Percentage of penalty of due tax amount | 10.00% | |||
Initial of penalty of due tax amount | 325,000 | |||
Monthly payments of due tax | 47,000 | |||
Period in which tax due is to be paid | 18 months | |||
Amount reserved for litigation during period | 104,958 | |||
Accrual tax liability | $569,958 |
Income_Taxes_Narrative_Details
Income Taxes (Narrative) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carry forwards | $33,648,584 |
Operating loss carry forward, expiration date | 1-Jan-24 |
Superior [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carry forwards | $2,085,618 |
Income_Taxes_Income_Tax_Provis
Income Taxes (Income Tax Provision Reconciled to The Tax Computed at The Statutory Federal Rate) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes [Abstract] | ||
Tax Expense at Statutory Rate | ($211,318) | ($225,640) |
Valuation Allowance | 182,154 | 222,093 |
Non-Deductible Expenses and Other | 29,164 | 3,547 |
State Taxes, Net of Federal Benefit | 65,416 | 57,168 |
Current | 65,416 | 57,168 |
Deferred | ||
Total | $65,416 | $57,168 |
Income_Taxes_Deferred_Income_T
Income Taxes (Deferred Income Taxes) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred tax assets (liabilities): | ||
Inventories | $82,274 | $160,145 |
Stock options and other | 96,009 | 56,351 |
Alternative Minimum Tax credit carryforward | 24,674 | 24,674 |
Contingencies and accruals | 90,829 | 513,219 |
Property and equipment | -340,099 | -489,389 |
Capital loss carryover | 25,420 | 25,420 |
Net operating loss carryforward | 10,499,884 | 9,279,196 |
Intangibles | 179 | -19,748 |
Total deferred tax assets, net | 10,479,170 | 9,549,868 |
Valuation allowance | ($10,479,170) | ($9,549,868) |
Operating_Leases_Details
Operating Leases (Details) (USD $) | 12 Months Ended | 1 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Jan. 21, 2013 | Nov. 30, 2013 | |
sqft | ||||
Operating Leases [Abstract] | ||||
2015 | $817,381 | |||
2016 | 633,574 | |||
2017 | 369,779 | |||
2018 | 186,743 | |||
2019 | 83,600 | |||
Thereafter | 27,867 | |||
Total operating leases | 2,118,944 | |||
Rent expenses | 638,320 | 658,599 | ||
Office Space in North Dallas [Member] | ||||
Operating Leases [Abstract] | ||||
Rent expenses | 52,500 | 35,000 | ||
Property Subject to or Available for Operating Lease [Line Items] | ||||
Area of office space | 4,500 | |||
Rental payment from January 2014 to end of lease | 7,500 | |||
Reeder Road Facility [Member] | ||||
Property Subject to or Available for Operating Lease [Line Items] | ||||
Sublease, monthly rent for first two years | 5,000 | |||
Sublease, monthly rent after first two years | $7,500 |
Discontinued_Operations_Narrat
Discontinued Operations (Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net income (loss) | ($4,523,731) | ($2,659,189) |
Southern Bullion [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net income (loss) | -1,900,000 | |
Southern Bullion [Member] | Trade name [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Loss on writedown of operating assets | 2,900,000 | |
Southern Bullion [Member] | Fixed-assets [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Loss on writedown of operating assets | $296,000 |
Discontinued_Operations_Schedu
Discontinued Operations (Schedule of Discontinued Operations) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Selling, general and administrative expenses | $12,670,968 | $14,363,216 |
Other income, net | -174,189 | -106,696 |
Other income, net | 167,193 | 154,489 |
Loss from discontinued operations after income taxes | -3,889,056 | -1,938,373 |
Southern Bullion [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Sales | 5,367,867 | 21,445,752 |
Cost of goods sold | 3,643,142 | 15,891,252 |
Gross margin | 1,724,725 | 5,554,500 |
Selling, general and administrative expenses | 2,471,230 | 7,075,272 |
Depreciation and amortization | 3,259,552 | 376,924 |
Total expenses | 5,730,782 | 7,452,196 |
Operating loss | -4,006,057 | -1,897,696 |
Other income, net | -19,475 | -19,325 |
Interest (income) expense | 9,968 | 7,004 |
Other income, net | -9,507 | -12,321 |
Loss from discontinued operations before income taxes | -3,996,550 | -1,885,375 |
Income tax (benefit) expense | -107,494 | 52,998 |
Loss from discontinued operations after income taxes | ($3,889,056) | ($1,938,373) |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 12 Months Ended | 1 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Feb. 25, 2014 | Jul. 19, 2012 | |
Related Party Transaction [Line Items] | ||||
Accounts payable-trade | $5,831,736 | $5,535,624 | ||
Net income (loss) | -4,523,731 | -2,659,189 | ||
Rent expenses | 638,320 | 658,599 | ||
NTR Loan Agreement [Member] | ||||
Related Party Transaction [Line Items] | ||||
Credit facility amount, maximum | 7,500,000 | |||
Interest rate, credit | 2.00% | |||
Debt instrument, due date | 1-Aug-15 | 1-Aug-14 | ||
Outstanding balance of credit facility | 2,303,359 | |||
NTR [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to NTR | 3,721,144 | |||
Due from NTR | 34,343 | |||
NTR [Member] | Sales [Member] | ||||
Related Party Transaction [Line Items] | ||||
Concentration risk, percentage | 23.00% | 31.00% | ||
NTR [Member] | Purchases [Member] | ||||
Related Party Transaction [Line Items] | ||||
Concentration risk, percentage | 26.00% | 37.00% | ||
Estate Gold [Member] | ||||
Related Party Transaction [Line Items] | ||||
Percentage of ownership | 25.00% | |||
Proceeds from fees and services from related party | 47,060 | |||
Related party revenue | 63,817 | |||
Purchases from related party | 69,286 | |||
Carbon Fund One [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related party revenue | 37,148 | 423,107 | ||
Purchases from related party | 152,328 | 78,408 | ||
Accounts payable-trade | 136,755 | |||
Net income (loss) | 35,120 | -78,213 | ||
Corporate Office [Member] | ||||
Related Party Transaction [Line Items] | ||||
Rent expenses | $52,500 | $35,000 |
Defined_Contribution_Plan_Deta
Defined Contribution Plan (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Defined Contribution Plan [Abstract] | |
Percent of annual salary that can be contributed | 15.00% |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 12 Months Ended | 1 Months Ended | 0 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Feb. 25, 2014 | Jul. 19, 2012 | Feb. 04, 2015 | |
Subsequent Event [Line Items] | |||||
Net loss | ($4,523,731) | ($2,659,189) | |||
Two Stores in DFW Market [Member] | |||||
Subsequent Event [Line Items] | |||||
Net loss | -200,000 | ||||
NTR Loan Agreement [Member] | |||||
Subsequent Event [Line Items] | |||||
Maturity date | 1-Aug-15 | 1-Aug-14 | |||
Interest rate, credit | 2.00% | ||||
Outstanding balance of credit facility | 2,303,359 | ||||
Subsequent Event [Member] | Two Stores in DFW Market [Member] | |||||
Subsequent Event [Line Items] | |||||
Expected accelerated lease expense and termination fees | 190,000 | ||||
Accelerated lease expense, recognition end date | 31-Mar-15 | ||||
Subsequent Event [Member] | Retail Space in Euless Texas [Member] | |||||
Subsequent Event [Line Items] | |||||
Area of office space | 4,400 | ||||
Monthly rent | $6,967 | ||||
Lease term | 60 months | ||||
Term of lease renewal | 60 months | ||||
Subsequent Event [Member] | NTR Loan Agreement [Member] | |||||
Subsequent Event [Line Items] | |||||
Maturity date | 1-Aug-17 | ||||
Interest rate, credit | 2.00% |