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Segment Information

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Segment Information

(9) Segment Information

We determine our business segments based upon an internal reporting structure. We report our financial performance based on the following segments: DGSE and the Echo Entities.

Our DGSE segment includes Dallas Gold and Silver Exchange, which has four retail stores in the Dallas/Ft Worth Metroplex, and Charleston Gold and Diamond Exchange, which has one retail store in Charleston, South Carolina.

Our Echo Entities segment includes Echo Enrironmental Holdings and ITAD USA Holdings. These two companies were added May 20, 2019 and are involved in recycling and reusing electronic waste.

We allocate a portion of certain corporate costs and expenses, including information technology to our business segments that is included in Selling, general and administrative expenses. Our management team evaluates the operating performance of each segment and makes decisions about the allocation of resources according to each segment profit. The allocations are generally amounts agreed upon by management, which may differ from an arms-length amount.

The following segment seperates the results of Dallas Gold and Silver’s and the Echo Entity’s financial results of operations for the three months ending September 30, 2019:

		For The Three Months Ended
		September 30, 2019
		DGSE				Echo Entities				Consolidated

Revenue:
Sales		$	16,652,927			$	6,208,274			$	22,861,201
Cost of goods sold			14,634,075				3,040,672				17,674,747

Gross profit			2,018,852				3,167,602				5,186,454

Expenses:
Selling, general and administrative expenses			1,868,144				2,025,474				3,893,618
Depreciation and amortization			44,368				23,518				67,886

			1,912,512				2,048,992				3,961,504

Operating income			106,340				1,118,610				1,224,950

Other (income) expense:
Other (income) expense, net			(955	)			-				(955	)
Interest expense			46,764				101,956				148,720

Income before income taxes			60,531				1,016,654				1,077,185

Income tax expense			30,383				11,327				41,710

Net income per segment		$	30,148			$	1,005,327			$	1,035,475

The following segment seperates the results of Dallas Gold and Silver’s and the Echo Entity’s financial results of operations for the nine months ending September 30, 2019:

		For The Nine Months Ended
		September 30, 2019
		DGSE				Echo Entities				Consolidated

Revenue:
Sales		$	51,251,094			$	8,567,074			$	59,818,168
Cost of goods sold			44,743,932				4,303,985				49,047,917

Gross profit			6,507,162				4,263,089				10,770,251

Expenses:
Selling, general and administrative expenses			5,484,082				2,827,116				8,311,198
Depreciation and amortization			193,141				34,417				227,558

			5,677,223				2,861,533				8,538,756

Operating income			829,939				1,401,556				2,231,495

Other (income) expense:
Other (income) expense, net			(54,285	)			-				(54,285	)
Interest expense			106,970				133,808				240,778

Income before income taxes			777,254				1,267,748				2,045,002

Income tax expense			48,402				16,963				65,365

Net income per segment		$	728,852			$	1,250,785			$	1,979,637