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DGSE Companies, Inc. Announces Record Revenues of $9,720,997 for the Fiscal First Quarter of 2006; Net Income Per Share of $.03

Posted on: Monday, 1 May 2006, 09:01 CDT

DGSE Companies, Inc. (NASDAQ: DGSE), 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 year ended March 31, 2006.

Earnings

 --  Basic and diluted net income for the fiscal first quarter was $.03     versus $.03 per share in the equivalent period in fiscal 2005.      

Revenues

 --  Total Revenues for the Fiscal First Quarter of 2006 were $9,720,997.     Revenues for the equivalent quarter of 2005 were $6,717,812.      

Performance Metrics & Liquidity

 --  EBITDA (earnings before interest, taxes, depreciation and     amortization) was $340,876 in first quarter of 2006 or $.07 per share.     Trailing 12 months EBITDA was $1,189,636 or $.24 per share. --  Shareholders equity at the end of the first quarter of 2006 was     $6,226,482 or $1.27 per share. This represents an increase of 8.55 percent     versus $5,741,150 or $1.17 per share as of March 31, 2005.      

"The fiscal first quarter marked important developments for DGSE," noted William H. Oyster, President and Chief Operating Officer of DGSE Companies, Inc. Mr. Oyster continued, "Our Pay Day loan operations in New Mexico are enjoying impressive loan growth and we expect them to break-even in the second quarter. The rare coin segment of our business continues to experience dynamic growth with revenue more than doubling in the first quarter and our precious metals operations are also growing at a robust rate. Revenues in from the internet exceeded $1,000,000 in the first quarter of 2006 up from $200,000 in the first quarter of 2005. Additionally, our portfolio of internet names exceeded 1000 for the first time and is generating income from sales and other activities. Our jewelry and watch sales continue to make DGSE one of the largest wholesalers and retailers in the United States. We expect 2006 to see expansion of our revenues and earnings in all segments of our business and further growth in our higher margin business components."

DGSE Companies, Inc. wholesales and retails jewelry, diamonds, fine watches and precious metal bullion products and rare coins to domestic and international customers through its Dallas Gold and Silver Exchange and Charleston Gold and Diamond 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, the Company operates live Internet auctions which can be accessed at www.dgse.com. Real-time price quotations and real-time order execution in precious metals are provided on another DGSE web site at www.USBullionExchange.com. Wholesale customers can access our full vintage watch inventory through the restricted site at www.FairchildWatches.com.

The Company is headquartered in Dallas, Texas and its common stock trades on The Nasdaq Stock Market(R) under the symbol "DGSE."

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 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.

                                              SUMMARY OF OPERATIONS                                               THREE MONTHS ENDED                                                     MARCH 31,                                                 2006         2005                                             -----------   ----------- REVENUE                                     $ 9,720,997   $ 6,717,812 NET INCOME                                  $   148,480   $   150,564 BASIC AND DILUTED INCOME PER COMMON SHARE   $       .03   $       .03 WEIGHTED AVERAGE SHARES OUTSTANDING:    BASIC                                      4,913,290     4,913,290    DILUTED                                    4,913,390     5,137,431 

 For further information, please contact: William H. Oyster President and COO of DGSE (800) 527-5307  

SOURCE: DGSE Companies, Inc.

Source: MARKET WIRE

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