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SEGMENT INFORMATION
6 Months Ended
Jun. 30, 2023
SEGMENT INFORMATION  
SEGMENT INFORMATION

NOTE 9 — SEGMENT INFORMATION

 

As stated in Note 1 – Basis of Presentation, we updated our two reportable segments by renaming the ECHG segment to the “Commercial” segment and the DGSE segment to the “Consumer” segment. The segment name changes did not result in any change to the composition of the Company’s operations and therefore did not result in any changes to historical results. Our operations conducted by each of our segments are more specifically described below.

 

We determine our business segments based upon an internal reporting structure. The Company’s financial performance is based on the following segments: consumer and commercial.

The consumer segment includes Dallas Gold & Silver Exchange, which has six operating retail stores in the Dallas/Fort Worth Metroplex (“DFW”), one retail location in Phoenix, Arizona, as stated in a footnote to Note 6 – Property and Equipment, that has not yet opened, and Charleston Gold & Diamond Exchange, which has one retail store in Mt. Pleasant, South Carolina. The consumer segment also operates the on-line Bullion Express brand.

 

The commercial segment includes Echo, ITAD USA, Teladvance, CEX and Avail. These five companies are involved in recycling and the reuse of electronic components.

 

A portion of certain corporate costs and expenses is allocated, including information technology as well as rental income and expenses relating to our corporate headquarters, to the business segments. These income and expenses are included in selling, general and administrative (“SG&A”) expenses, depreciation and amortization, other income, interest expense and income tax expense. The management team evaluates each segment and makes decisions about the allocation of resources according to each segment’s profit. Allocation amounts are generally agreed upon by management and may differ from arms-length allocations.

 

The following separates the consumer and the commercial financial results of operations for the three months ended June 30, 2023 and 2022:

 

 

 

For The Three Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

 

Consumer

 

 

Commercial

 

 

Consolidated

 

 

Consumer

 

 

Commercial

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$39,641,434

 

 

$10,662,093

 

 

$50,303,527

 

 

$30,339,127

 

 

$12,300,591

 

 

$42,639,718

 

Cost of goods sold

 

 

35,546,792

 

 

 

3,994,688

 

 

 

39,541,480

 

 

 

26,150,543

 

 

 

5,011,175

 

 

 

31,161,718

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

4,094,642

 

 

 

6,667,405

 

 

 

10,762,047

 

 

 

4,188,584

 

 

 

7,289,416

 

 

 

11,478,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses (1)

 

 

2,472,973

 

 

 

5,889,581

 

 

 

8,362,554

 

 

 

2,252,909

 

 

 

4,947,824

 

 

 

7,200,733

 

Depreciation and amortization

 

 

79,408

 

 

 

256,766

 

 

 

336,174

 

 

 

101,434

 

 

 

178,082

 

 

 

279,516

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,552,381

 

 

 

6,146,347

 

 

 

8,698,728

 

 

 

2,354,343

 

 

 

5,125,906

 

 

 

7,480,249

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

1,542,261

 

 

 

521,058

 

 

 

2,063,319

 

 

 

1,834,241

 

 

 

2,163,510

 

 

 

3,997,751

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income/expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (1)

 

 

23,929

 

 

 

129,723

 

 

 

153,652

 

 

 

9,397

 

 

 

12,004

 

 

 

21,401

 

Interest expense

 

 

58,209

 

 

 

56,479

 

 

 

114,688

 

 

 

61,663

 

 

 

59,379

 

 

 

121,042

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

1,507,981

 

 

 

594,302

 

 

 

2,102,283

 

 

 

1,781,975

 

 

 

2,116,135

 

 

 

3,898,110

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

339,672

 

 

 

158,902

 

 

 

498,574

 

 

 

15,391

 

 

 

34,861

 

 

 

50,252

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$1,168,309

 

 

$435,400

 

 

$1,603,709

 

 

$1,766,584

 

 

$2,081,274

 

 

$3,847,858

 

 

(1) Starting January 1, 2023, expenses previously classified as other expenses related to the Company’s corporate campus overhead have been included in selling, general, and administrative expenses. Since the presentation of these expenses changed January 1, 2023, management believes the presentation of the 2022 corporate campus overhead should be reclassified to selling, general, and administrative expense for comparison purposes for the three and six months ended June 30, 2022.

The following separates the consumer and the commercial financial results of operations for the six months ended June 30, 2023 and 2022:

 

 

 

For The Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

 

Consumer

 

 

Commercial

 

 

Consolidated

 

 

Consumer

 

 

Commercial

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$76,345,831

 

 

$22,346,736

 

 

$98,692,567

 

 

$66,121,999

 

 

$23,932,817

 

 

$90,054,816

 

Cost of goods sold

 

 

68,266,221

 

 

 

8,254,397

 

 

 

76,520,618

 

 

 

57,709,953

 

 

 

11,155,829

 

 

 

68,865,782

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

8,079,610

 

 

 

14,092,339

 

 

 

22,171,949

 

 

 

8,412,046

 

 

 

12,776,988

 

 

 

21,189,034

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses (1)

 

 

4,868,998

 

 

 

11,398,859

 

 

 

16,267,857

 

 

 

4,433,466

 

 

 

9,412,238

 

 

 

13,845,704

 

Depreciation and amortization

 

 

177,542

 

 

 

512,983

 

 

 

690,525

 

 

 

208,397

 

 

 

363,066

 

 

 

571,463

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,046,540

 

 

 

11,911,842

 

 

 

16,958,382

 

 

 

4,641,863

 

 

 

9,775,304

 

 

 

14,417,167

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

3,033,070

 

 

 

2,180,497

 

 

 

5,213,567

 

 

 

3,770,183

 

 

 

3,001,684

 

 

 

6,771,867

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income/expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (1)

 

 

47,463

 

 

 

316,968

 

 

 

364,431

 

 

 

24,014

 

 

 

24,027

 

 

 

48,041

 

Interest expense

 

 

117,827

 

 

 

113,925

 

 

 

231,752

 

 

 

122,904

 

 

 

121,377

 

 

 

244,281

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

2,962,706

 

 

 

2,383,540

 

 

 

5,346,246

 

 

 

3,671,293

 

 

 

2,904,334

 

 

 

6,575,627

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

657,513

 

 

 

558,707

 

 

 

1,216,220

 

 

 

28,568

 

 

 

51,976

 

 

 

80,544

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$2,305,193

 

 

$1,824,833

 

 

$4,130,026

 

 

$3,642,725

 

 

$2,852,358

 

 

$6,495,083

 

 

(1) Starting January 1, 2023, expenses previously classified as other expenses related to the Company’s corporate campus overhead have been included in selling, general, and administrative expenses. Since the presentation of these expenses changed January 1, 2023, management believes the presentation of the 2022 corporate campus overhead should be reclassified to selling, general, and administrative expense for comparison purposes for the three and six months ended June 30, 2022.