SEGMENT INFORMATION

3 Months Ended

Mar. 31, 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 change to the 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. Our financial performance is based on the following segments: consumer and commercial.

The consumer segment includes Dallas Gold & Silver Exchange, which has six retail stores in the Dallas/Fort Worth Metroplex (“DFW”), 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.

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 the consumer and the commercial financial results of operations for the three months ended March 31, 2023 and 2022:

	For The Three Months Ended March 31,
	2023						2022
	Consumer		Commercial		Consolidated		Consumer			Commercial			Consolidated
Revenue:
Sales	$	36,704,397	$	11,684,643	$	48,389,040	$	35,782,872		$	11,632,226		$	47,415,098
Cost of goods sold		32,719,429		4,259,709		36,979,138		31,559,410			6,144,654			37,704,064
Gross profit		3,984,968		7,424,934		11,409,902		4,223,462			5,487,572			9,711,034
Expenses:
Selling, general and administrative expenses		2,396,025		5,509,278		7,905,303		2,137,949			4,421,806			6,559,755
Depreciation and amortization		98,134		256,217		354,351		106,963			184,984			291,947
		2,494,159		5,765,495		8,259,654		2,244,912			4,606,790			6,851,702
Operating income		1,490,809		1,659,439		3,150,248		1,978,550			880,782			2,859,332
Other income/expense:
Other income (expense)		23,534		187,245		210,779		(27,992	)		(30,584	)		(58,576	)
Interest expense		59,618		57,446		117,064		61,241			61,998			123,239
Income before income taxes		1,454,725		1,789,238		3,243,963		1,889,317			788,200			2,677,517
Income tax expense		317,841		399,805		717,646		13,177			17,115			30,292
Net income	$	1,136,884	$	1,389,433	$	2,526,317	$	1,876,140		$	771,085		$	2,647,225