Discontinued Operations

6 Months Ended

Jun. 30, 2014

Discontinued Operations [Abstract]

Discontinued Operations

(10) Discontinued Operations

In January of 2014, the Company elected to discontinue the operations of six of its 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 Company officially discontinued these operations on February 3, 2014, and the operating results for these six locations for the three months ended March 31, 2014 and 2013 were reclassified as discontinued operations in the consolidated statements of operations for the quarter ended March 31, 2014.

In April of 2014, the Company elected to discontinue the operations of all 17 remaining Southern Bullion locations. During 2013, the Southern Bullion operations generated a net loss of approximately $1.9 million. The significant change in the precious metal markets, 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. The Company officially discontinued these operations on or about April 19, 2014. The operating results for all Southern Bullion operations have been reclassified as discontinued operations in the consolidated statements of operations beginning with the quarter ending June 30, 2014.

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Revenue:
Sales	$	2,621,472	$	5,748,707	$	5,367,808	$	12,759,770
Cost of goods sold		2,219,180		4,499,297		3,647,677		9,470,669
Gross margin		402,292		1,249,410		1,720,131		3,289,101
Expenses:
Selling, general, and administrative expenses		1,111,953		1,763,783		2,555,127		3,620,903
Depreciation and amortization		3,159,214		87,115		3,259,552		174,869
Total expenses		4,271,167		1,850,898		5,814,679		3,795,772
Operating loss		(3,868,875)		(601,488)		(4,094,548)		(506,671)
Other expense (income):
Other income, net		(14,632)		(2,485)		(19,398)		(17,821)
Interest expense		7,139		-		10,888		-
		(7,493)		(2,485)		(8,510)		(17,821)
Loss from discontinued operations before income taxes		(3,861,382)		(599,003)		(4,086,038)		(488,850)
Income tax expense		51,790		-		65,527		-
Loss from discontinued operations after income taxes	$	(3,913,172)	$	(599,003)	$	(4,151,565)	$	(488,850)

Discontinued operations for the quarter ended June 30, 2014 include store operations for part of April, 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 quarter ended June 30, 2014, discontinued operations also includes the write-off of the $2.9 million intangible asset attributed to the “Southern Bullion Coin & Jewelry” trade name. The Company does not anticipate that it will utilize this trade name in the foreseeable future. The current quarter also includes the write-off of approximately $296,000 related to the net book value of fixed assets previously utilized in Southern Bullion operations. The Company believes it has now recognized all material expenses related to the closure of Southern Bullion operations.