SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2022

SEGMENT INFORMATION

Segment Information

NOTE 10 — 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 six 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, Teladvance, CEX and Avail. These five companies 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 March 31, 2022 and 2021:

	For The Three Months Ended March 31,
	2022									2021
	DGSE			ECHG			Consolidated			DGSE		ECHG		Consolidated
Revenue:
Sales	$	35,782,872		$	11,632,226		$	47,415,098		$	18,914,501	$	6,575,940	$	25,490,441
Cost of goods sold		31,559,410			6,144,654			37,704,064			16,106,866		3,079,311		19,186,177
Gross profit		4,223,462			5,487,572			9,711,034			2,807,635		3,496,629		6,304,264
Expenses:
Selling, general and administrative expenses		2,137,949			4,421,806			6,559,755			1,782,437		2,370,792		4,153,229
Depreciation and amortization		106,963			184,984			291,947			96,822		108,090		204,912
		2,244,912			4,606,790			6,851,702			1,879,259		2,478,882		4,358,141
Operating income		1,978,550			880,782			2,859,332			928,376		1,017,747		1,946,123
Other income/expense:
Other income (expense)		(27,992	)		(30,584	)		(58,576	)		111,731		160,210		271,941
Interest expense		61,241			61,998			123,239			68,485		110,537		179,022
Income before income taxes		1,889,317			788,200			2,677,517			971,622		1,067,420		2,039,042
Income tax expense		13,177			17,115			30,292			13,705		17,065		30,770
Net income	$	1,876,140		$	771,085		$	2,647,225		$	957,917	$	1,050,355	$	2,008,272