August 14, 2008

DGSE Companies, Inc. Announces Revenues Increased 161 Percent to a Record $59,102,788 for the First Six Months of Fiscal 2008; Net Income Increased 96 Percent for Six Months to a Record $967,179

DGSE Companies, Inc. (AMEX: DGC), which wholesales, retails and auctions fine watches, jewelry, diamonds and precious metal and rare coin products via traditional and Internet channels, today announced operating results for the quarter ended June 30, 2008.


-- Basic and diluted net income per share for the fiscal second quarter was $.05 versus $.04 in the equivalent period in fiscal 2007. Net Income increased to $489,924 from $277,833 for the equivalent 2007 quarter, representing an increase of 76 percent. Basic shares outstanding during the second quarter of 2008 were 9,666,182 versus 5,320,964 in the 2007 quarter. Fully diluted shares outstanding for the second quarter were 10,344,363 versus 6,731,618 for the equivalent 2007 quarter; the increase in shares outstanding resulted from the May 2007 acquisition of Superior Galleries, Inc.

-- Basic and diluted net income per share for the six months was $.10 versus $.09 in the equivalent period in fiscal 2007. Net Income increased to $967,179 from $460,248 for the equivalent 2007 six months, representing an increase of 110 percent.

-- Total Revenues for the Fiscal Second Quarter of 2008 were $26,375,246. Revenues for the equivalent quarter of 2007 were $12,513,302. This represents a 111 percent increase.

-- Total Revenues for the first six months of 2008 were $59,102,788. Revenues for the equivalent quarter of 2007 were $22,687,570. This represents a 161 percent increase.

Performance Metrics & Liquidity

-- EBITDA (earnings before interest, taxes, depreciation and amortization) was $855,590 in second quarter of 2008 ($.09 per basic share) versus $ 638,077 ($.12 per basic share) in the equivalent period of 2007.

-- Shareholders' equity at the end of the second quarter of 2008 was $21,152,686 or $2.16 per basic share.

Significant Events and Milestones during Period

-- During the Quarter increased its momentum and processed thousands of new requests for mailing packs for unwanted valuables. Response rates have exceeded expectations on all metrics. During the third quarter AGSE will add Federal Express and free insurance as options for customers, and it is management's expectation that these new features will materially increase response rates;

-- Superior Estate Buyers continued to expand its activities, visiting seven cities during the second quarter;

-- Superior Precious Metals enjoyed outstanding productivity during the first six months of the year with almost $4,000,000 in new customer revenue during the period;

-- Our Euless/Fort Worth operation (acquired as Euless Gold & Silver Exchange in the first half of 2007) produced over $7,000,000 in revenues in the six-month period -- over twice the largest single year revenue in its 20 year history;

-- Pawn loan service fees increased 113 percent during the second quarter and 133.5 percent for the six months as compared to the equivalent periods in 2007;

-- During the first six months of 2008 DGSE operations purchased over $27,000,000 in scrap jewelry, rare coins and bullion products directly from consumers versus approximately $9,500,000 in the equivalent period in 2007.

-- Every operating business segment was profitable for the six-month period;

-- The DGSE Treasure Hunt was launched as a component of the website. The Treasure Hunt is a unique venue where customers can purchase jewelry and other items of value at extraordinary values that flow from DGSE's buying activities. Items that DGSE would normally melt at refineries are imaged, described and offered in real time as they are purchased at slight premiums from their precious metals values. Sell through and margins have been very attractive, and the activity will be expanded materially in the coming quarters including the launch of a free standing website;

-- During the second quarter DGSE embarked on an ambitious program to remodel all of its internet activities across eight primary websites and over 900 landing sites. The plan includes creating a portal to all of the activities of the company with materially broadened functionality and efficiency. At the conclusion of the process each segment will have its own website that is seamlessly integrated with each other website. Customers will be able to, through a single front door, purchase any item in auctions or store format, participate in an expanded "Treasure Hunt," sell valuables, learn more about each company and DGSE, and access extensive research and other content regarding our product lines. The objective is to make DGSE's internet activities increasingly attractive to consumers as a one-stop location for all of their precious metals, rare coins and jewelry needs.

-- During the second quarter of 2008 Superior Galleries conducted its second successful Jewelry and Timepiece Auction. This new activity enjoyed twice the volume of Superior's first auction in December of 2007. Superior currently conducts 7 Rare Coin Auctions and 2 Jewelry and Timepiece Auctions per year. During the second quarter Superior began holding regular internet only auctions through its website. Over the course of the next year this activity will be expanded materially with the objective of holding internet only auctions on a weekly basis.

"During the first six months of 2008, we continued to expand the footprint of all of our operations," noted William H. Oyster, President and Chief Operating Officer of DGSE Companies, Inc. Mr. Oyster continued, "During the quarter we continued to invest substantial resources in the future of DGSE. Internet initiatives like the Treasure Hunt are totally unique and have the potential to have a material impact on both our revenues and earnings. In addition to the robust top line growth in the last two quarters, we are in the first stages of significant margin growth as a greater percentage of our overall business is conducted directly with consumers and we exploit the significant advantages that come from scale and our recent new activities."

DGSE Companies, Inc. wholesales, retails and auctions jewelry, diamonds, fine watches, and precious metal bullion and rare coins products to domestic and international customers through its Dallas Gold and Silver Exchange, Charleston Gold and Diamond Exchange, Superior Galleries and National Jewelry Exchange subsidiaries and well as through the internet. DGSE also owns Fairchild International, Inc., one of the largest vintage watch wholesalers in the country. In addition to its retail facilities in Dallas and Euless, Texas, Charleston, South Carolina and Woodland Hills, California, the Company operates live Internet auctions which can be accessed at and through Superior Galleries' website at Real-time price quotations and real-time order execution in precious metals are provided on another DGSE web site at Wholesale customers can access our full vintage watch inventory through the restricted site at DGSE also purchases precious metals, rare coins, watches, diamonds and jewelry through and over 900 supporting websites. The Company also makes collateralized consumer loans at its two Dallas locations.

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

This press release includes statements which may constitute "forward-looking" statements, usually containing the words "believe", "estimate", "project", "expect" or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company's products and services in the marketplace, competitive factors, dependence upon third-party vendors, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release. In addition to the results presented in accordance with Generally Accepted Accounting Principles throughout this press release, DGSE has presented non-GAAP financial measures such as EBITDA. The Company believes that these non-GAAP measures, viewed in addition to and not in lieu of the Company's reported GAAP results, provide useful information to investors because they are an integral part of the Company's internal evaluation of operating performance. In addition, they are measures that DGSE uses to evaluate management's effectiveness. DGSE's non-GAAP financial measures may not be comparable to similarly titled measures presented by other companies.

 DGSE Companies, Inc.  Summary of Operations  Six Months Ended       Three Months Ended  2008        2007        2008        2007  Revenue                $59,102,788 $22,687,570 $26,375,246 $12,513,302  Net Income             $   967,179 $   460,248 $   489,924 $   289,961  Earnings per share:  Basic and Diluted    $       .10 $       .09 $       .05 $       .04