SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 30, 2005
-------------
( ) Transition Report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the transition period from to
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Commission File Number 1-11048
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DGSE Companies, Inc.
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(Name of small business issuer)
Nevada 88-0097334
- ---------------------------- -------------------------------
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or organization) Number)
2817 Forest Lane, Dallas, Texas 75234
- ---------------------------------------- ----------------
(Address of principal executive offices) (Zip Code)
(Issuer's telephone number, including area code) (972) 484-3662
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at August 15, 2005
- ---------------------------- ----------------------------------
Common Stock, $.01 per value 4,913,290
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
(Unaudited)
ASSETS June 30, December 31,
2005 2004
------------ ------------
CURRENT ASSETS
Cash and cash equivalents $ 152,466 314,897
Trade receivables 842,820 907,238
Inventories 7,156,305 6,791,383
Prepaid expenses 293,026 161,985
------------ ------------
Total current assets 8,444,617 8,175,503
MARKETABLE SECURITIES - AVAILABLE FOR SALE 77,062 77,062
PROPERTY AND EQUIPMENT - AT COST, NET 961,767 885,301
DEFERRED INCOME TAXES 15,944 15,994
GOODWILL 837,117 837,117
OTHER ASSETS 299,893 290,722
------------ ------------
Total Assets $ 10,636,400 $ 10,281,699
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 2,381,457 548,093
Current maturities of long-term debt 371,623 76,172
Accounts payable - trade 255,685 590,412
Accrued expenses 93,155 513,775
Customer deposits 130,727 67,173
Federal income taxes payable 189,638 146,210
------------ ------------
Total current liabilities 3,422,285 1,941,835
Long-term debt, less current maturities 1,393,635 2,749,278
------------ ------------
Total liabilities 4,815,920 4,691,113
SHAREHOLDERS' EQUITY
Common stock, $.01 par value; authorized 10,000,000
shares; issued and outstanding 4,913,290 shares at
The end of each period 49,133 49,133
Additional paid-in capital 5,708,760 5,708,760
Accumulated other comprehensive (loss) (122,582) (122,582)
Retained earnings (deficit) 185,169 (44,725)
------------ ------------
Total shareholders' equity 5,820,480 5,590,586
------------ ------------
$ 10,636,400 $ 10,281,699
============ ============
The accompanying notes are an integral part of these consolidated financial
statements
DGSE Companies, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended
(Unaudited)
June 30, 2005 June 30, 2004
------------- -------------
Revenue
Sales $ 6,708,363 $ 6,170,192
Pawn services charges 92,047 47,084
------------- -------------
6,800,410 6,217,276
Costs and expenses
Cost of goods sold 5,453,742 4,988,111
Selling, general and administrative expenses 1,105,367 896,500
Depreciation and amortization 49,068 37,112
------------- -------------
6,608,177 5,921,723
Operating income 192,233 295,553
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Other income (expense)
Interest expense (72,039) (73,005)
------------- -------------
Total other income (expense) (72,039) (73,005)
Income (loss) before income taxes 120,194 222,548
Income tax expense 40,866 75,666
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Net income (loss) from continuing operations 79,328 146,882
Loss from discontinued operations, net of income taxes -- (46,106)
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Net income (loss) $ 79,328 $ 100,776
============= =============
Earnings per common share
Basic and diluted
From continuing operations $ .02 $ .03
From discontinued operations -- (.01)
------------- -------------
$ .02 $ .02
============= =============
Weighted average number of common shares:
Basic 4,913,290 4,913,290
Diluted 5,069,489 5,161,616
The accompanying notes are an integral part of these consolidated financial
statements
DGSE Companies, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
Six months ended
(Unaudited)
June 30, 2005 June 30, 2004
------------- -------------
Revenue
Sales $ 13,346,277 $ 12,921,644
Pawn services charges 171,945 94,714
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13,518,222 13,016,358
Costs and expenses
Cost of goods sold 10,770,615 10,441,033
Selling, general and administrative expenses 2,164,251 1,805,482
Depreciation and amortization 91,871 72,397
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13,026,737 12,318,912
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Operating income 491,485 697,446
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Other income (expense)
Interest expense (143,163) (145,058)
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Total other income (expense) (143,163) (145,058)
Income before income taxes 348,322 552,388
Income tax expense 118,429 187,812
------------- -------------
Net income from continuing operations 229,893 364,576
Loss from discontinued operations, net of income taxes -- (78,101)
------------- -------------
Net income $ 229,893 $ 286,475
============= =============
Earnings per common share
Basic and diluted
From continuing operations $ .05 $ .07
From discontinued operations -- (.01)
------------- -------------
$ .05 $ .06
Weighted average number of common shares:
Basic 4,913,290 4,913,290
Diluted 5,069,489 5,161,616
The accompanying notes are an integral part of these consolidated financial
statements
DGSE COMPANIES, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30,
2005 2004
----------- -----------
Cash Flows From Operations
Reconciliation of income to net cash
used in operating activities
Net income $ 229,893 $ 286,475
Depreciation and amortization 91,871 72,397
(Increase) decrease in operating assets and liabilities
Trade receivables 89,714 122,053
Inventories (364,922) (308,780)
Prepaid expenses and other current assets (131,041) (29,772)
Accounts payable and accrued expenses (755,347) (936,918)
Change in customer deposits 63,554 (71,983)
Federal income taxes payable 43,428 (152,423)
Other assets (9,171) (263)
----------- -----------
Total net cash used in operating activities (742,021) (1,019,214)
Cash flows from investing activities
Pawn loans made (329,428) (297,901)
Pawn loans repaid 223,053 244,266
Recovery of pawn loan principal through
Sale of forfeited collateral 111,522 35,166
Pay day loans made (51,580) --
Pay day loans repaid 21,138 --
Purchase of property and equipment (168,287) (81,519)
----------- -----------
Net cash (used) provided by investing activities (193,582) (99,988)
Cash flows from financing activities
Proceeds from notes issued 3,181,365 825,000
Payments on notes payable (2,408,193) (121,934)
----------- -----------
Net cash provided by financing activities 773,172 703,066
----------- -----------
Net decrease in cash and cash equivalents (162,431) (416,136)
Cash and cash equivalents at beginning of year 314,897 735,293
----------- -----------
Cash and cash equivalents at end of period $ 152,466 $ 319,157
=========== ===========
Supplemental disclosures:
Interest paid for the six months ended June 30, 2005 and 2004 was $ 143,163 and
$ 145,058, respectively. Income taxes paid for the six months ended June 30,
2005 and 2004 was $75,000 and $300,000, respectively. Pawn loans forfeited and
transferred to inventory amounted to $ 184,381 and $ 41,388, respectively, for
the six months ended June 30, 2005 and 2004.
The accompanying notes are an integral part of these consolidated financial
statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------
(1) Basis of Presentation:
The accompanying unaudited condensed consolidated financial statements of DGSE
Companies, Inc. and Subsidiaries include the financial statements of DGSE
Companies, Inc. and its wholly-owned subsidiaries, DGSE Corporation, National
Jewelry Exchange, Inc., Charleston Gold and Diamond Exchange, Inc. and American
Pay Day Centers, Inc. In July 2004 the Company sold the goodwill and trade name
of Silverman Consultants, Inc. and discontinued the operations of this
subsidiary. As a result, operating results for this subsidiary have been
reclassified to discontinued operations for all periods presented. In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
The Company's operating results for the periods ended June 30, 2005, are not
necessarily indicative of the results that may be expected for the year ended
December 31, 2005. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's annual report on Form
10-K for the year ended December 31, 2004. Certain reclassifications were made
to the prior year's consolidated financial statements to conform to the current
year presentation.
Pawn loans receivable in the amount of $ 132,811 and $ 107,562 as of June 30,
2005 and 2004, respectively, are included in the Consolidated Balance Sheets
caption trade receivables. The related pawn service charges receivable in the
amount of $ 74,299 and $ 49,119 as of June 30, 2005 and 2004, respectively, are
also included in the Consolidated Balance Sheets caption trade receivables. Pay
day loans receivable in the amount of $ 28,142 as of June 30, 2005 are also
included in the Consolidated Balance Sheets caption trade receivables. There
were no pay day loans receivable as of June 30, 2004.
The 10-K for the year ended December 31, 2004 and the 10-Q for the period ended
March 31, 2005 will be amended to include additional disclosures.
(2) - Earnings per share
A reconciliation of the income and shares of the basic earnings per common
share and diluted earnings per common share for the periods ended June 30,
2005, and 2004 is as follows:
2005 2005
Six months Three months
---------- ------------
Per-Share Per-Share
Income Shares Amount Income Shares Amount
--------- --------- --------- --------- --------- ---------
Basic earnings per common share
Income from operations allocable
to common shareholders $ 229,893 4,913,290 $ .05 $ 79,328 4,913,290 $ .02
Effect of dilutive securities
Stock options -- 156,199 -- -- 156,199 --
--------- --------- --------- --------- --------- ---------
Diluted earnings per common share
Income from operations available
to common shareholders plus
assumed conversions $ 229,893 5,069,489 $ .05 $ 79,328 5,069,489 $ .02
========= ========= ========= ========= ========= =========
2005 2005
Six months Three months
---------- ------------
Per-Share Per-Share
Income Shares Amount Income Shares Amount
--------- --------- --------- --------- --------- ---------
Basic earnings per common share
Income from operations allocable
to common shareholders $ 286,475 4,913,290 $ .06 $ 100,776 4,913,290 $ .02
Effect of dilutive securities
Stock options -- 248,326 -- -- 248,326 --
--------- --------- --------- --------- --------- ---------
Diluted earnings per common share
Income from operations available
to common shareholders plus
assumed conversions $ 286,475 5,161,616 $ .06 $ 100,776 5,161,616 $ .02
========= ========= ========= ========= ========= =========
(3) - Business segment information
Management identifies reportable segments by product or service offered.
Each segment is managed separately. Corporate and other includes certain
general and administrative expenses not allocated to segments and pawn
operations. The Company's operations by segment for the six months ended
June 30 were as follows:
(Amounts in thousands)
Retail Wholesale Rare Discontinued Corporate
Jewelry Jewelry Bullion Coins Operations and Other Consolidated
------------ ------------ ------------ ------------ ------------ ------------ ------------
Revenues
2005 $ 6,428 $ 1,947 $ 3,572 $ 1,163 -- $ 408 $ 13,518
2004 6,178 1,871 4,193 570 -- 204 13,016
Net income
(loss)
2005 160 98 15 88 (131) 230
2004 203 96 42 27 (78) (4) 286
Identifiable
Assets
2005 7,781 1,735 165 174 5 776 10,636
2004 7,739 1,715 119 149 415 783 10,920
Capital
Expenditures
2005 151 -- -- -- -- 17 168
2004 81 -- -- -- -- -- 81
Depreciation and
Amortization
2005 56 11 -- -- -- 25 92
2004 56 11 -- -- -- 5 72
The Company's operations by segment for the three months ended June 30 were as
follows:
(Amounts in thousands)
Retail Wholesale Rare Discontinued Corporate
Jewelry Jewelry Bullion Coins Operations and Other Consolidated
------------ ------------ ------------ ------------ ------------ ------------ ------------
Revenues
2005 $ 3,408 $ 1,007 $ 1,579 $ 614 -- $ 192 $ 6,800
2004 3,069 977 1,796 274 -- 101 6,217
Net income
(loss)
2005 74 43 4 41 -- (83) 79
2004 99 49 (1) 11 (46) (12) 100
Identifiable
Assets
2005 7,781 1,735 165 174 5 776 10,636
2004 7,739 1,715 119 149 415 783 10,920
Capital
Expenditures
2005 144 -- -- -- -- 7 151
2004 8 -- -- -- -- -- 8
Depreciation and
Amortization
2005 28 6 -- -- -- 15 49
2004 28 6 -- -- -- 3 37
(4) Other Comprehensive income:
Other comprehensive income is as follows: Tax
Before Tax (Expense) Net-of-Tax
Amount Benefit Amount
---------- ---------- ----------
Other comprehensive income at
December 31, 2003 $ -- $ -- $ --
Unrealized holding gains arising during the
Three months ended March 31, 2004 106,373 (36,167) 70,206
---------- ---------- ----------
Other comprehensive income at
March 31, 2004 106,373 (36,167) 70,206
Unrealized holding losses during the
Three months ended June 30, 2004 (86,020) 29,247 (56,773)
---------- ---------- ----------
Other comprehensive income at
June 30, 2004 $ 20,353 $ (6,920) $ 13,433
========== ========== ==========
Other comprehensive income loss at
December 31, 2004, March 31,2005
And June 30, 2005 $ (150,784) $ 28,202 $ (122,582)
========== ========== ==========
(5) Stock-based Compensation:
The Company accounts for stock-based compensation to employees using the
intrinsic value method. Accordingly, compensation cost for stock options to
employees is measured as the excess, if any , of the quoted market price of the
Company's common stock at the date of the grant over the amount an employee must
pay to acquire the stock.
The following table illustrates the effect on net income and earnings per share
if the Company had applied the fair value recognition provisions of FASB
Statement No. 123, Accounting for Stock-Based Compensation, to stock-based
employee compensation.
Six Months Ended June 30,
-------------------------
2005 2004
----------- -----------
Net income as reported $ 229,893 $ 286,475
Deduct: Total stock-based employee compensation
Expense determined under fair value based method
For all awards, net of related tax effects -- --
----------- -----------
Pro forma net income $ 229,893 $ 286,475
=========== ===========
Earnings per share:
Basic - as reported $.05 $.06
Basic - pro forma $.05 $.06
Diluted - as reported $.05 $.06
Diluted pro forma $.05 $.06
Three Months Ended June 30,
---------------------------
2005 2004
----------- ------------
Net income as reported $ 79,328 $ 100,776
Deduct: Total stock-based employee compensation
Expense determined under fair value based method -
For all awards, net of related tax effects -- --
----------- = ------------
Pro forma net income $ 79,328 $ 100,776
=========== ============
Earnings per share:
Basic - as reported $.02 $.02
Basic - pro forma $.02 $.02
Diluted - as reported $.02 $.02
Diluted pro forma $.02 $.02
The fair value of these options was estimated at the date of grant using the
Black-Scholes option-pricing model with the following weighted average
assumptions used for grants after 1998, expected volatility of 70% to 96%,
risk-free rate of 3.9% to 6.6%, no dividend yield and expected life of 5 to 8
years.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results of Operations
- ---------------------
Six months ended June 30, 2005 vs 2004:
Sales increased by $ 424,633 (3.3%) in 2005. This increase was primarily the
result of a $250,000 (4.0%) increase in retail jewelry sales, a $ 76,000 (4.1%)
increase in wholesale jewelry sales and a $ 583,000 (104.0%) increase in the
sale of rare coin products. These increases were the result of increased
concentration in the local markets through increased advertising. Bullion sales
decreased $ 621,000 (14.8%) due to reduced volatility in the bullion market.
Pawn service fees increased by $77,231 in 2005 due to an increase in pawn loans
outstanding during the year. Cost of goods as a percentage of sales was stable
during the periods at 80.7% in 2005 and 80.8% in 2004.
Selling, general and administrative expenses increased by $358,769 or 19.9%.
This increase was primarily due to an increase in staff and payroll related cost
($167,000), higher advertising cost ($43,000) and $ 73,000 in cost related to
the new pay day loan stores. The increase in staff was necessary to maintain a
high level of customer service as sales increase and the opening of three pay
day loan stores. The increase in advertising was necessary in order to attract
new customers in our local markets. Depreciation and amortization increased by
$20,000 during 2005 due to capital assets acquired for the pay day loan stores.
Historically, changes in the market prices of precious metals have had a
significant impact on both revenues and cost of sales in the rare coin and
precious metals segments in which the Company operates. It is expected that due
to the commodity nature of these products, future price changes for precious
metals will continue to be indicative of the Company's performance in these
business segments. Changes in sales and cost of sales in the retail and
wholesale jewelry segments are primarily influenced by the national economic
environment. It is expected that this trend will continue in the future due to
the nature of these product.
Income taxes are provided at the corporate rate of 34% for both 2005 and 2004.
Loss from discontinued operations during 2004 in the amount of $ 78,101 net of
income taxes is the operating results of Silverman Consultants, Inc. which was
sold during 2004.
Three months ended June 30, 2005 vs 2004:
- -----------------------------------------
Sales increased by $ 535,171 (8.7%) in 2005. This increase was primarily the
result of a $339,000 (11.0%) increase in retail jewelry sales, a $ 30,000 (3.1%)
increase in wholesale jewelry sales and a $ 340,000 (124.1%) increase in the
sale of rare coin products. These increases were the result of increased
concentration in the local markets through increased advertising. Bullion sales
decreased $ 217,000 (12.8%) due to reduced volatility in the bullion market.
Pawn service fees increased by $44,963 in 2005 due to an increase in pawn loans
outstanding during the year. Cost of goods as a percentage of sales was stable
during the periods at 81.6% in 2005 and 80.8% in 2004.
Selling, general and administrative expenses increased by $208,867 or 23.3%.
This increase was primarily due to an increase in staff and payroll related cost
($54,000), higher advertising cost ($22,000) and $ 49,000 in cost related to the
new pay day loan stores. The increase in staff was necessary to maintain a high
level of customer service as sales increase and the opening of three pay day
loan stores. The increase in advertising was necessary in order to attract new
customers in our local markets. Depreciation and amortization increased by
$12,000 during 2005 due to capital assets acquired for the pay day loan stores.
Historically, changes in the market prices of precious metals have had a
significant impact on both revenues and cost of sales in the rare coin and
precious metals segments in which the Company operates. It is expected that due
to the commodity nature of these products, future price changes for precious
metals will continue to be indicative of the Company's performance in these
business segments. Changes in sales and cost of sales in the retail and
wholesale jewelry segments are primarily influenced by the national economic
environment. It is expected that this trend will continue in the future due to
the nature of these product.
Income taxes are provided at the corporate rate of 34% for both 2005 and 2004.
Loss from discontinued operations during 2004 in the amount of $ 46,106 net of
income taxes is the operating results of Silverman Consultants, Inc. which was
sold during 2004.
Liquidity and Capital Resources
The Company's short-term debt, including current maturities of long-term debt
totaled $ 624,265 as of December 31, 2004. During March 2005 the Company
re-financed its outstanding bank debt. This new credit facility in the amount of
$3,500,000 extended the maturity of its bank debt to March 31, 2006 and provided
the Company with an additional $700,000 of unused liquidity.
Management of the Company expects capital expenditures to total approximately
$100,000 during the next twelve months. It is anticipated that these
expenditures will be funded from working capital and its new credit facility. As
of June 30, 2004 there were no commitments outstanding for capital expenditures.
The Company incurred $ 105,215 of prepaid construction costs in the six months
ended June 30, 2005 related to its new facility in Charleston, South Carolina.
In the event of significant growth in retail and or wholesale jewelry sales, the
demand for additional working capital will expand due to a related need to stock
additional jewelry inventory and increases in wholesale accounts receivable.
Historically, vendors have offered the Company extended payment terms to finance
the need for jewelry inventory growth and management of the Company believes
that they will continue to do so in the future. Any significant increase in
wholesale accounts receivable will be financed under the Company's bank credit
facility.
The ability of the Company to finance its operations and working capital needs
are dependent upon management's ability to negotiate extended terms or refinance
its debt. The Company has historically renewed, extended or replaced short-term
debt as it matures and management believes that it will be able to continue to
do so in the near future.
From time to time, management has adjusted the Company's inventory levels to
meet seasonal demand or in order to meet working capital requirements.
Management is of the opinion that if additional working capital is required,
additional loans can be obtained from individuals or from commercial banks. If
necessary, inventory levels may be adjusted or a portion of the Company's
investments in marketable securities may be liquidated in order to meet
unforeseen working capital requirements.
Contractual Cash Obligations Payments due by year end
- ---------------------------- --------------------------------------------------------------
Total 2005 2006 2007 2008 2009 Thereafter
---------- ---------- ---------- ---------- ---------- ---------- ----------
Notes payable $2,381,457 $ 266,758 $2,114,699 -- -- -- --
Long-term debt and capital leases 1,765,258 219,444 383,623 $ 365,623 $ 133,956 $ 369,728 $ 292,884
Federal income taxes 189,638 189,638 -- -- -- -- --
Operating leases 516,002 127,944 118,447 108,018 88,394 73,199 --
---------- ---------- ---------- ---------- ---------- ---------- ----------
$4,852,355 $ 803,784 $2,616,769 $ 473,641 $ 222,350 $ 442,927 $ 292,884
========== ========== ========== ========== ========== ========== ==========
In addition, the Company estimates that it will pay approximately $ 275,000 in
interest during the next twelve months.
This report contains forward-looking statements which reflect the view of
Company's management with respect to future events. Although management believes
that the expectations reflected in such forward-looking statements are
reasonable, it can give no assurance that such expectations will prove to have
been correct. Important factors that could cause actual results to differ
materially from such expectations are a down turn in the current strong retail
climate and the potential for fluctuations in precious metals prices. The
forward-looking statements contained herein reflect the current views of the
Company's management and the Company assumes no obligation to update the
forward-looking statements or to update the reasons actual results could differ
from those contemplated by such forward-looking statements.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.
The following discussion about the Company's market risk disclosures involves
forward-looking statements. Actual results could differ materially from those
projected in the forward-looking statements. The Company is exposed to market
risk related to changes in interest rates and gold values. The Company also is
exposed to regulatory risk in relation to its payday loans. The Company does not
use derivative financial instruments.
The Company's earnings and financial position may be affected by changes in gold
values and the resulting impact on pawn lending and jewelry sales. The proceeds
of scrap sales and the Company's ability to liquidate excess jewelry inventory
at an acceptable margin are dependent upon gold values. The impact on the
Company's financial position and results of operations of a hypothetical change
in gold values cannot be reasonably estimated.
ITEM 4. Controls and Procedures
Under the supervision and with the participation of the Company's management,
including its Chief Executive Officer and Chief Financial Officer, the Company
has evaluated the effectiveness of its disclosure controls and procedures, as of
the end of the period covered by this report. Based on that evaluation, the
Chief Executive Officer and Chief Financial Officer have concluded that these
disclosure controls and procedures are effective in enabling the Company to
record, process, summarize and report information required to be included in its
periodic SEC filings within the required time period. There has been no change
in the Company's internal control over financial reporting that occurred during
the Company's most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the Company's internal control over
financial reporting.
Item 6. Exhibits and Reports on Form 8-K.
Exhibits:
31.1 Certificate of L.S. Smith pursuant to Section 3026 of the
Sarbanes-Oxley Act of 2002, Chief Executive Officer.
32.2 Certificate of John Benson pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, Chief Financial Officer .
32.2 Certificate of L.S. Smith pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, Chief Executive Officer.
32.2 Certificate of John Benson pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, Chief Financial Officer.
Reports on Form 8-K:
None
SIGNATURES
In accordance with Section 13 and 15(d) of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
DGSE Companies, Inc.
By: /s/ L. S. Smith Dated: August 15, 2005
-------------------------
L. S. Smith
Chairman of the Board,
Chief Executive Officer and
Secretary
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the Registrant and in the capacities and
on the date indicated.
By: /s/ L. S. Smith Dated: August 15, 2005
-------------------------
L. S. Smith
Chairman of the Board,
Chief Executive Officer and
Secretary
By: /s/ W. H. Oyster Dated: August 15, 2005
-------------------------
W. H. Oyster
Director, President and
Chief Operating Officer
By: /s/ John Benson Dated: August 15, 2005
-------------------------
John Benson
Chief Financial Officer
(Principal Accounting Officer)