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Discontinued Operations
 3 Months Ended
Mar. 31, 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 Coin and Jewelry ("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 have been reclassified as discontinued operations in the consolidated statements of operations as detailed in the table below.

 

    Three Months Ended March 31,  
    2014     2013  
             
Revenue:                
Sales   $ 914,497     $ 1,291,573  
Cost of sales     819,731       980,445  
Gross margin     94,766       311,128  
                 
Expenses:                
S,G&A expense     132,406       348,493  
Depreciation and amortization     -       -  
Total Expenses     132,406       348,493  
                 
Operating loss     (37,640 )     (37,365 )
                 
Other expense (income):                
Other (expense)/income, net     -       -  
Interest expense     -       -  
      -       -  
                 
Loss from discontinued operations before income taxes     (37,640 )     (37,365 )
                 
Income tax expense     -       -  
                 
Loss from discontinued operations after income taxes   $ (37,640 )   $ (37,365 )

 

Subsequent to the end of the first fiscal quarter of 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. These operations represented approximately 20% the Company's revenue, and approximately 70% of the Company's operating loss in Fiscal 2013. 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 locations are expected to be reclassified as discontinued operations in the consolidated statements of operations beginning with the quarter ending June 30, 2014.

 

The Company expects to report approximately $3.7 million in 2014 in non-recurring charges related to these closures. This includes approximately $2.9 million in expected write-offs related to the Southern Bullion trade name, approximately $400,000 in expected fixed asset write-downs, and approximately $500,000 in expected lease termination expenses, severance payments and other related costs.