SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) (X) Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2005 ------------- ( ) Transition Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to --------------- ---------------- Commission File Number 1-11048 -------------------------------------------- DGSE Companies, Inc. --------------------- (Name of small business issuer) Nevada 88-0097334 - ---------------------------- ------------------------------- (State or other jurisdiction (I.R.S. Employer Identification of incorporation or organization) Number) 2817 Forest Lane, Dallas, Texas 75234 - ---------------------------------------- ---------------- (Address of principal executive offices) (Zip Code) (Issuer's telephone number, including area code) (972) 484-3662 -------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at August 15, 2005 - ---------------------------- ---------------------------------- Common Stock, $.01 per value 4,913,290
<TABLE> <CAPTION> PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets (Unaudited) ASSETS June 30, December 31, 2005 2004 ------------ ------------ <S> <C> <C> CURRENT ASSETS Cash and cash equivalents $ 152,466 314,897 Trade receivables 842,820 907,238 Inventories 7,156,305 6,791,383 Prepaid expenses 293,026 161,985 ------------ ------------ Total current assets 8,444,617 8,175,503 MARKETABLE SECURITIES - AVAILABLE FOR SALE 77,062 77,062 PROPERTY AND EQUIPMENT - AT COST, NET 961,767 885,301 DEFERRED INCOME TAXES 15,944 15,994 GOODWILL 837,117 837,117 OTHER ASSETS 299,893 290,722 ------------ ------------ Total Assets $ 10,636,400 $ 10,281,699 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Notes payable $ 2,381,457 548,093 Current maturities of long-term debt 371,623 76,172 Accounts payable - trade 255,685 590,412 Accrued expenses 93,155 513,775 Customer deposits 130,727 67,173 Federal income taxes payable 189,638 146,210 ------------ ------------ Total current liabilities 3,422,285 1,941,835 Long-term debt, less current maturities 1,393,635 2,749,278 ------------ ------------ Total liabilities 4,815,920 4,691,113 SHAREHOLDERS' EQUITY Common stock, $.01 par value; authorized 10,000,000 shares; issued and outstanding 4,913,290 shares at The end of each period 49,133 49,133 Additional paid-in capital 5,708,760 5,708,760 Accumulated other comprehensive (loss) (122,582) (122,582) Retained earnings (deficit) 185,169 (44,725) ------------ ------------ Total shareholders' equity 5,820,480 5,590,586 ------------ ------------ $ 10,636,400 $ 10,281,699 ============ ============ </TABLE> The accompanying notes are an integral part of these consolidated financial statements
<TABLE> <CAPTION> DGSE Companies, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS Three months ended (Unaudited) June 30, 2005 June 30, 2004 ------------- ------------- <S> <C> <C> Revenue Sales $ 6,708,363 $ 6,170,192 Pawn services charges 92,047 47,084 ------------- ------------- 6,800,410 6,217,276 Costs and expenses Cost of goods sold 5,453,742 4,988,111 Selling, general and administrative expenses 1,105,367 896,500 Depreciation and amortization 49,068 37,112 ------------- ------------- 6,608,177 5,921,723 Operating income 192,233 295,553 ------------- ------------- Other income (expense) Interest expense (72,039) (73,005) ------------- ------------- Total other income (expense) (72,039) (73,005) Income (loss) before income taxes 120,194 222,548 Income tax expense 40,866 75,666 ------------- ------------- Net income (loss) from continuing operations 79,328 146,882 Loss from discontinued operations, net of income taxes -- (46,106) ------------- ------------- Net income (loss) $ 79,328 $ 100,776 ============= ============= Earnings per common share Basic and diluted From continuing operations $ .02 $ .03 From discontinued operations -- (.01) ------------- ------------- $ .02 $ .02 ============= ============= Weighted average number of common shares: Basic 4,913,290 4,913,290 Diluted 5,069,489 5,161,616 </TABLE> The accompanying notes are an integral part of these consolidated financial statements
<TABLE> <CAPTION> DGSE Companies, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS Six months ended (Unaudited) June 30, 2005 June 30, 2004 ------------- ------------- <S> <C> <C> Revenue Sales $ 13,346,277 $ 12,921,644 Pawn services charges 171,945 94,714 ------------- ------------- 13,518,222 13,016,358 Costs and expenses Cost of goods sold 10,770,615 10,441,033 Selling, general and administrative expenses 2,164,251 1,805,482 Depreciation and amortization 91,871 72,397 ------------- ------------- 13,026,737 12,318,912 ------------- ------------- Operating income 491,485 697,446 ------------- ------------- Other income (expense) Interest expense (143,163) (145,058) ------------- ------------- Total other income (expense) (143,163) (145,058) Income before income taxes 348,322 552,388 Income tax expense 118,429 187,812 ------------- ------------- Net income from continuing operations 229,893 364,576 Loss from discontinued operations, net of income taxes -- (78,101) ------------- ------------- Net income $ 229,893 $ 286,475 ============= ============= Earnings per common share Basic and diluted From continuing operations $ .05 $ .07 From discontinued operations -- (.01) ------------- ------------- $ .05 $ .06 Weighted average number of common shares: Basic 4,913,290 4,913,290 Diluted 5,069,489 5,161,616 </TABLE> The accompanying notes are an integral part of these consolidated financial statements
<TABLE> <CAPTION> DGSE COMPANIES, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30, 2005 2004 ----------- ----------- <S> <C> <C> Cash Flows From Operations Reconciliation of income to net cash used in operating activities Net income $ 229,893 $ 286,475 Depreciation and amortization 91,871 72,397 (Increase) decrease in operating assets and liabilities Trade receivables 89,714 122,053 Inventories (364,922) (308,780) Prepaid expenses and other current assets (131,041) (29,772) Accounts payable and accrued expenses (755,347) (936,918) Change in customer deposits 63,554 (71,983) Federal income taxes payable 43,428 (152,423) Other assets (9,171) (263) ----------- ----------- Total net cash used in operating activities (742,021) (1,019,214) Cash flows from investing activities Pawn loans made (329,428) (297,901) Pawn loans repaid 223,053 244,266 Recovery of pawn loan principal through Sale of forfeited collateral 111,522 35,166 Pay day loans made (51,580) -- Pay day loans repaid 21,138 -- Purchase of property and equipment (168,287) (81,519) ----------- ----------- Net cash (used) provided by investing activities (193,582) (99,988) Cash flows from financing activities Proceeds from notes issued 3,181,365 825,000 Payments on notes payable (2,408,193) (121,934) ----------- ----------- Net cash provided by financing activities 773,172 703,066 ----------- ----------- Net decrease in cash and cash equivalents (162,431) (416,136) Cash and cash equivalents at beginning of year 314,897 735,293 ----------- ----------- Cash and cash equivalents at end of period $ 152,466 $ 319,157 =========== =========== </TABLE> Supplemental disclosures: Interest paid for the six months ended June 30, 2005 and 2004 was $ 143,163 and $ 145,058, respectively. Income taxes paid for the six months ended June 30, 2005 and 2004 was $75,000 and $300,000, respectively. Pawn loans forfeited and transferred to inventory amounted to $ 184,381 and $ 41,388, respectively, for the six months ended June 30, 2005 and 2004. The accompanying notes are an integral part of these consolidated financial statements.
<TABLE> <CAPTION> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ------------------------------------------ (1) Basis of Presentation: The accompanying unaudited condensed consolidated financial statements of DGSE Companies, Inc. and Subsidiaries include the financial statements of DGSE Companies, Inc. and its wholly-owned subsidiaries, DGSE Corporation, National Jewelry Exchange, Inc., Charleston Gold and Diamond Exchange, Inc. and American Pay Day Centers, Inc. In July 2004 the Company sold the goodwill and trade name of Silverman Consultants, Inc. and discontinued the operations of this subsidiary. As a result, operating results for this subsidiary have been reclassified to discontinued operations for all periods presented. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The Company's operating results for the periods ended June 30, 2005, are not necessarily indicative of the results that may be expected for the year ended December 31, 2005. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2004. Certain reclassifications were made to the prior year's consolidated financial statements to conform to the current year presentation. Pawn loans receivable in the amount of $ 132,811 and $ 107,562 as of June 30, 2005 and 2004, respectively, are included in the Consolidated Balance Sheets caption trade receivables. The related pawn service charges receivable in the amount of $ 74,299 and $ 49,119 as of June 30, 2005 and 2004, respectively, are also included in the Consolidated Balance Sheets caption trade receivables. Pay day loans receivable in the amount of $ 28,142 as of June 30, 2005 are also included in the Consolidated Balance Sheets caption trade receivables. There were no pay day loans receivable as of June 30, 2004. The 10-K for the year ended December 31, 2004 and the 10-Q for the period ended March 31, 2005 will be amended to include additional disclosures. (2) - Earnings per share A reconciliation of the income and shares of the basic earnings per common share and diluted earnings per common share for the periods ended June 30, 2005, and 2004 is as follows: 2005 2005 Six months Three months ---------- ------------ Per-Share Per-Share Income Shares Amount Income Shares Amount --------- --------- --------- --------- --------- --------- <S> <C> <C> <C> <C> <C> <C> Basic earnings per common share Income from operations allocable to common shareholders $ 229,893 4,913,290 $ .05 $ 79,328 4,913,290 $ .02 Effect of dilutive securities Stock options -- 156,199 -- -- 156,199 -- --------- --------- --------- --------- --------- --------- Diluted earnings per common share Income from operations available to common shareholders plus assumed conversions $ 229,893 5,069,489 $ .05 $ 79,328 5,069,489 $ .02 ========= ========= ========= ========= ========= ========= 2005 2005 Six months Three months ---------- ------------ Per-Share Per-Share Income Shares Amount Income Shares Amount --------- --------- --------- --------- --------- --------- Basic earnings per common share Income from operations allocable to common shareholders $ 286,475 4,913,290 $ .06 $ 100,776 4,913,290 $ .02 Effect of dilutive securities Stock options -- 248,326 -- -- 248,326 -- --------- --------- --------- --------- --------- --------- Diluted earnings per common share Income from operations available to common shareholders plus assumed conversions $ 286,475 5,161,616 $ .06 $ 100,776 5,161,616 $ .02 ========= ========= ========= ========= ========= ========= </TABLE>
<TABLE> <CAPTION> (3) - Business segment information Management identifies reportable segments by product or service offered. Each segment is managed separately. Corporate and other includes certain general and administrative expenses not allocated to segments and pawn operations. The Company's operations by segment for the six months ended June 30 were as follows: (Amounts in thousands) Retail Wholesale Rare Discontinued Corporate Jewelry Jewelry Bullion Coins Operations and Other Consolidated ------------ ------------ ------------ ------------ ------------ ------------ ------------ <S> <C> <C> <C> <C> <C> <C> <C> Revenues 2005 $ 6,428 $ 1,947 $ 3,572 $ 1,163 -- $ 408 $ 13,518 2004 6,178 1,871 4,193 570 -- 204 13,016 Net income (loss) 2005 160 98 15 88 (131) 230 2004 203 96 42 27 (78) (4) 286 Identifiable Assets 2005 7,781 1,735 165 174 5 776 10,636 2004 7,739 1,715 119 149 415 783 10,920 Capital Expenditures 2005 151 -- -- -- -- 17 168 2004 81 -- -- -- -- -- 81 Depreciation and Amortization 2005 56 11 -- -- -- 25 92 2004 56 11 -- -- -- 5 72 The Company's operations by segment for the three months ended June 30 were as follows: (Amounts in thousands) Retail Wholesale Rare Discontinued Corporate Jewelry Jewelry Bullion Coins Operations and Other Consolidated ------------ ------------ ------------ ------------ ------------ ------------ ------------ Revenues 2005 $ 3,408 $ 1,007 $ 1,579 $ 614 -- $ 192 $ 6,800 2004 3,069 977 1,796 274 -- 101 6,217 Net income (loss) 2005 74 43 4 41 -- (83) 79 2004 99 49 (1) 11 (46) (12) 100 Identifiable Assets 2005 7,781 1,735 165 174 5 776 10,636 2004 7,739 1,715 119 149 415 783 10,920 Capital Expenditures 2005 144 -- -- -- -- 7 151 2004 8 -- -- -- -- -- 8 Depreciation and Amortization 2005 28 6 -- -- -- 15 49 2004 28 6 -- -- -- 3 37 </TABLE>
<TABLE> <CAPTION> (4) Other Comprehensive income: Other comprehensive income is as follows: Tax Before Tax (Expense) Net-of-Tax Amount Benefit Amount ---------- ---------- ---------- <S> <C> <C> <C> Other comprehensive income at December 31, 2003 $ -- $ -- $ -- Unrealized holding gains arising during the Three months ended March 31, 2004 106,373 (36,167) 70,206 ---------- ---------- ---------- Other comprehensive income at March 31, 2004 106,373 (36,167) 70,206 Unrealized holding losses during the Three months ended June 30, 2004 (86,020) 29,247 (56,773) ---------- ---------- ---------- Other comprehensive income at June 30, 2004 $ 20,353 $ (6,920) $ 13,433 ========== ========== ========== Other comprehensive income loss at December 31, 2004, March 31,2005 And June 30, 2005 $ (150,784) $ 28,202 $ (122,582) ========== ========== ========== </TABLE> (5) Stock-based Compensation: The Company accounts for stock-based compensation to employees using the intrinsic value method. Accordingly, compensation cost for stock options to employees is measured as the excess, if any , of the quoted market price of the Company's common stock at the date of the grant over the amount an employee must pay to acquire the stock. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of FASB Statement No. 123, Accounting for Stock-Based Compensation, to stock-based employee compensation. Six Months Ended June 30, ------------------------- 2005 2004 ----------- ----------- Net income as reported $ 229,893 $ 286,475 Deduct: Total stock-based employee compensation Expense determined under fair value based method For all awards, net of related tax effects -- -- ----------- ----------- Pro forma net income $ 229,893 $ 286,475 =========== =========== Earnings per share: Basic - as reported $.05 $.06 Basic - pro forma $.05 $.06 Diluted - as reported $.05 $.06 Diluted pro forma $.05 $.06
Three Months Ended June 30, --------------------------- 2005 2004 ----------- ------------ Net income as reported $ 79,328 $ 100,776 Deduct: Total stock-based employee compensation Expense determined under fair value based method - For all awards, net of related tax effects -- -- ----------- = ------------ Pro forma net income $ 79,328 $ 100,776 =========== ============ Earnings per share: Basic - as reported $.02 $.02 Basic - pro forma $.02 $.02 Diluted - as reported $.02 $.02 Diluted pro forma $.02 $.02 The fair value of these options was estimated at the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions used for grants after 1998, expected volatility of 70% to 96%, risk-free rate of 3.9% to 6.6%, no dividend yield and expected life of 5 to 8 years. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION Results of Operations - --------------------- Six months ended June 30, 2005 vs 2004: Sales increased by $ 424,633 (3.3%) in 2005. This increase was primarily the result of a $250,000 (4.0%) increase in retail jewelry sales, a $ 76,000 (4.1%) increase in wholesale jewelry sales and a $ 583,000 (104.0%) increase in the sale of rare coin products. These increases were the result of increased concentration in the local markets through increased advertising. Bullion sales decreased $ 621,000 (14.8%) due to reduced volatility in the bullion market. Pawn service fees increased by $77,231 in 2005 due to an increase in pawn loans outstanding during the year. Cost of goods as a percentage of sales was stable during the periods at 80.7% in 2005 and 80.8% in 2004. Selling, general and administrative expenses increased by $358,769 or 19.9%. This increase was primarily due to an increase in staff and payroll related cost ($167,000), higher advertising cost ($43,000) and $ 73,000 in cost related to the new pay day loan stores. The increase in staff was necessary to maintain a high level of customer service as sales increase and the opening of three pay day loan stores. The increase in advertising was necessary in order to attract new customers in our local markets. Depreciation and amortization increased by $20,000 during 2005 due to capital assets acquired for the pay day loan stores. Historically, changes in the market prices of precious metals have had a significant impact on both revenues and cost of sales in the rare coin and precious metals segments in which the Company operates. It is expected that due to the commodity nature of these products, future price changes for precious metals will continue to be indicative of the Company's performance in these business segments. Changes in sales and cost of sales in the retail and wholesale jewelry segments are primarily influenced by the national economic environment. It is expected that this trend will continue in the future due to the nature of these product. Income taxes are provided at the corporate rate of 34% for both 2005 and 2004.
Loss from discontinued operations during 2004 in the amount of $ 78,101 net of income taxes is the operating results of Silverman Consultants, Inc. which was sold during 2004. Three months ended June 30, 2005 vs 2004: - ----------------------------------------- Sales increased by $ 535,171 (8.7%) in 2005. This increase was primarily the result of a $339,000 (11.0%) increase in retail jewelry sales, a $ 30,000 (3.1%) increase in wholesale jewelry sales and a $ 340,000 (124.1%) increase in the sale of rare coin products. These increases were the result of increased concentration in the local markets through increased advertising. Bullion sales decreased $ 217,000 (12.8%) due to reduced volatility in the bullion market. Pawn service fees increased by $44,963 in 2005 due to an increase in pawn loans outstanding during the year. Cost of goods as a percentage of sales was stable during the periods at 81.6% in 2005 and 80.8% in 2004. Selling, general and administrative expenses increased by $208,867 or 23.3%. This increase was primarily due to an increase in staff and payroll related cost ($54,000), higher advertising cost ($22,000) and $ 49,000 in cost related to the new pay day loan stores. The increase in staff was necessary to maintain a high level of customer service as sales increase and the opening of three pay day loan stores. The increase in advertising was necessary in order to attract new customers in our local markets. Depreciation and amortization increased by $12,000 during 2005 due to capital assets acquired for the pay day loan stores. Historically, changes in the market prices of precious metals have had a significant impact on both revenues and cost of sales in the rare coin and precious metals segments in which the Company operates. It is expected that due to the commodity nature of these products, future price changes for precious metals will continue to be indicative of the Company's performance in these business segments. Changes in sales and cost of sales in the retail and wholesale jewelry segments are primarily influenced by the national economic environment. It is expected that this trend will continue in the future due to the nature of these product. Income taxes are provided at the corporate rate of 34% for both 2005 and 2004. Loss from discontinued operations during 2004 in the amount of $ 46,106 net of income taxes is the operating results of Silverman Consultants, Inc. which was sold during 2004. Liquidity and Capital Resources The Company's short-term debt, including current maturities of long-term debt totaled $ 624,265 as of December 31, 2004. During March 2005 the Company re-financed its outstanding bank debt. This new credit facility in the amount of $3,500,000 extended the maturity of its bank debt to March 31, 2006 and provided the Company with an additional $700,000 of unused liquidity. Management of the Company expects capital expenditures to total approximately $100,000 during the next twelve months. It is anticipated that these expenditures will be funded from working capital and its new credit facility. As of June 30, 2004 there were no commitments outstanding for capital expenditures. The Company incurred $ 105,215 of prepaid construction costs in the six months ended June 30, 2005 related to its new facility in Charleston, South Carolina. In the event of significant growth in retail and or wholesale jewelry sales, the demand for additional working capital will expand due to a related need to stock additional jewelry inventory and increases in wholesale accounts receivable. Historically, vendors have offered the Company extended payment terms to finance the need for jewelry inventory growth and management of the Company believes that they will continue to do so in the future. Any significant increase in wholesale accounts receivable will be financed under the Company's bank credit facility.
<TABLE> <CAPTION> The ability of the Company to finance its operations and working capital needs are dependent upon management's ability to negotiate extended terms or refinance its debt. The Company has historically renewed, extended or replaced short-term debt as it matures and management believes that it will be able to continue to do so in the near future. From time to time, management has adjusted the Company's inventory levels to meet seasonal demand or in order to meet working capital requirements. Management is of the opinion that if additional working capital is required, additional loans can be obtained from individuals or from commercial banks. If necessary, inventory levels may be adjusted or a portion of the Company's investments in marketable securities may be liquidated in order to meet unforeseen working capital requirements. Contractual Cash Obligations Payments due by year end - ---------------------------- -------------------------------------------------------------- Total 2005 2006 2007 2008 2009 Thereafter ---------- ---------- ---------- ---------- ---------- ---------- ---------- <S> <C> <C> <C> Notes payable $2,381,457 $ 266,758 $2,114,699 -- -- -- -- Long-term debt and capital leases 1,765,258 219,444 383,623 $ 365,623 $ 133,956 $ 369,728 $ 292,884 Federal income taxes 189,638 189,638 -- -- -- -- -- Operating leases 516,002 127,944 118,447 108,018 88,394 73,199 -- ---------- ---------- ---------- ---------- ---------- ---------- ---------- $4,852,355 $ 803,784 $2,616,769 $ 473,641 $ 222,350 $ 442,927 $ 292,884 ========== ========== ========== ========== ========== ========== ========== </TABLE> In addition, the Company estimates that it will pay approximately $ 275,000 in interest during the next twelve months. This report contains forward-looking statements which reflect the view of Company's management with respect to future events. Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from such expectations are a down turn in the current strong retail climate and the potential for fluctuations in precious metals prices. The forward-looking statements contained herein reflect the current views of the Company's management and the Company assumes no obligation to update the forward-looking statements or to update the reasons actual results could differ from those contemplated by such forward-looking statements. ITEM 3. Quantitative and Qualitative Disclosures About Market Risk. The following discussion about the Company's market risk disclosures involves forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements. The Company is exposed to market risk related to changes in interest rates and gold values. The Company also is exposed to regulatory risk in relation to its payday loans. The Company does not use derivative financial instruments. The Company's earnings and financial position may be affected by changes in gold values and the resulting impact on pawn lending and jewelry sales. The proceeds of scrap sales and the Company's ability to liquidate excess jewelry inventory at an acceptable margin are dependent upon gold values. The impact on the Company's financial position and results of operations of a hypothetical change in gold values cannot be reasonably estimated. ITEM 4. Controls and Procedures Under the supervision and with the participation of the Company's management, including its Chief Executive Officer and Chief Financial Officer, the Company has evaluated the effectiveness of its disclosure controls and procedures, as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective in enabling the Company to record, process, summarize and report information required to be included in its periodic SEC filings within the required time period. There has been no change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
Item 6. Exhibits and Reports on Form 8-K. Exhibits: 31.1 Certificate of L.S. Smith pursuant to Section 3026 of the Sarbanes-Oxley Act of 2002, Chief Executive Officer. 32.2 Certificate of John Benson pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Chief Financial Officer . 32.2 Certificate of L.S. Smith pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Chief Executive Officer. 32.2 Certificate of John Benson pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Chief Financial Officer. Reports on Form 8-K: None
SIGNATURES In accordance with Section 13 and 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. DGSE Companies, Inc. By: /s/ L. S. Smith Dated: August 15, 2005 ------------------------- L. S. Smith Chairman of the Board, Chief Executive Officer and Secretary In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated. By: /s/ L. S. Smith Dated: August 15, 2005 ------------------------- L. S. Smith Chairman of the Board, Chief Executive Officer and Secretary By: /s/ W. H. Oyster Dated: August 15, 2005 ------------------------- W. H. Oyster Director, President and Chief Operating Officer By: /s/ John Benson Dated: August 15, 2005 ------------------------- John Benson Chief Financial Officer (Principal Accounting Officer)