SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2021

SEGMENT INFORMATION

NOTE 11 - Segment Information

NOTE 11 — SEGMENT INFORMATION

We determine our business segments based upon an internal reporting structure. Our financial performance is based on the following segments: DGSE and ECHG.

The DGSE segment includes Dallas Gold & Silver Exchange, which has five retail stores in the Dallas/Fort Worth Metroplex, and Charleston Gold & Diamond Exchange, which has one retail store in Mt. Pleasant, South Carolina.

The ECHG segment includes Echo, ITAD USA and Teladvance. These three companies were added during 2019 and are involved in recycling and the reuse of electronic components.

We allocate a portion of certain corporate costs and expenses, including information technology as well as rental income and expenses relating to our corporate headquarters, to our 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. Our 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 DGSE and ECHG’s financial results of operations for the three months ended June 30, 2021 and 2020:

	For The Three Months Ended June 30,
	2021						2020
	DGSE		ECHG		Consolidated		DGSE			ECHG		Consolidated
Revenue:
Sales	$	23,012,324	$	10,711,682	$	33,724,006	$	14,349,029		$	6,196,578	$	20,545,607
Cost of goods sold		19,915,328		6,680,788		26,596,116		12,734,264			3,340,085		16,074,349
Gross profit		3,096,996		4,030,894		7,127,890		1,614,765			2,856,493		4,471,258
Expenses:
Selling, general and administrative expenses		1,889,895		2,941,330		4,831,225		1,545,168			2,071,502		3,616,670
Depreciation and amortization		97,435		118,784		216,219		79,240			100,466		179,706
		1,987,330		3,060,114		5,047,444		1,624,408			2,171,968		3,796,376
Operating income (loss)		1,109,666		970,780		2,080,446		(9,643	)		684,525		674,882
Other income/expense:
Other income, net		119,460		163,595		283,055		9,078			42,788		51,866
Interest expense		68,692		109,012		177,704		44,100			100,197		144,297
Income before income taxes		1,160,434		1,025,363		2,185,797		(44,665	)		627,116		582,451
Income tax expense		14,185		18,500		32,685		4,262			12,015		16,277
Net income (loss)	$	1,146,249	$	1,006,863	$	2,153,112	$	(48,927	)	$	615,101	$	566,174

The following separates DGSE’s and ECHG’s financial results of operations for the six months ended June 30, 2021 and 2020:

	For The Six Months Ended June 30,
	2021						2020
	DGSE		ECHG		Consolidated		DGSE		ECHG		Consolidated
Revenue:
Sales	$	41,926,825	$	17,287,622	$	59,214,447	$	34,712,613	$	11,662,137	$	46,374,750
Cost of goods sold		36,022,194		9,760,099		45,782,293		30,733,666		5,868,546		36,602,212
Gross profit		5,904,631		7,527,523		13,432,154		3,978,947		5,793,591		9,772,538
Expenses:
Selling, general and administrative expenses		3,672,332		5,312,122		8,984,454		3,418,174		4,023,696		7,441,870
Depreciation and amortization		194,257		226,874		421,131		156,281		203,154		359,435
		3,866,589		5,538,996		9,405,585		3,574,455		4,226,850		7,801,305
Operating income		2,038,042		1,988,527		4,026,569		404,492		1,566,741		1,971,233
Other income/expense:
Other income, net		231,191		323,805		554,996		36,446		57,110		93,556
Interest expense		137,177		219,549		356,726		88,893		200,719		289,612
Income before income taxes		2,132,056		2,092,783		4,224,839		352,045		1,423,132		1,775,177
Income tax expense		27,890		35,565		63,455		12,547		22,307		34,854
Net income	$	2,104,166	$	2,057,218	$	4,161,384	$	339,498	$	1,400,825	$	1,740,323