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SEGMENT INFORMATION | 6 Months Ended
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Jun. 30, 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 changes to 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. The Company’s financial performance is based on the following segments: consumer and commercial. The consumer segment includes Dallas Gold & Silver Exchange, which has six operating retail stores in the Dallas/Fort Worth Metroplex (“DFW”), one retail location in Phoenix, Arizona, as stated in a footnote to Note 6 – Property and Equipment, that has not yet opened, 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. A portion of certain corporate costs and expenses is allocated, including information technology as well as rental income and expenses relating to our corporate headquarters, to the 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. The 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 June 30, 2023 and 2022:
|  | For The Three Months Ended June 30, |
|  | 2023 |  |  | 2022 |
|  | Consumer |  |  | Commercial |  |  | Consolidated |  |  | Consumer |  |  | Commercial |  |  | Consolidated |
Revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales |  | $ | 39,641,434 |  |  | $ | 10,662,093 |  |  | $ | 50,303,527 |  |  | $ | 30,339,127 |  |  | $ | 12,300,591 |  |  | $ | 42,639,718 |
Cost of goods sold |  |  | 35,546,792 |  |  |  | 3,994,688 |  |  |  | 39,541,480 |  |  |  | 26,150,543 |  |  |  | 5,011,175 |  |  |  | 31,161,718 |
Gross profit |  |  | 4,094,642 |  |  |  | 6,667,405 |  |  |  | 10,762,047 |  |  |  | 4,188,584 |  |  |  | 7,289,416 |  |  |  | 11,478,000 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Selling, general and administrative expenses (1) |  |  | 2,472,973 |  |  |  | 5,889,581 |  |  |  | 8,362,554 |  |  |  | 2,252,909 |  |  |  | 4,947,824 |  |  |  | 7,200,733 |
Depreciation and amortization |  |  | 79,408 |  |  |  | 256,766 |  |  |  | 336,174 |  |  |  | 101,434 |  |  |  | 178,082 |  |  |  | 279,516 |
|  |  | 2,552,381 |  |  |  | 6,146,347 |  |  |  | 8,698,728 |  |  |  | 2,354,343 |  |  |  | 5,125,906 |  |  |  | 7,480,249 |
Operating income |  |  | 1,542,261 |  |  |  | 521,058 |  |  |  | 2,063,319 |  |  |  | 1,834,241 |  |  |  | 2,163,510 |  |  |  | 3,997,751 |
Other income/expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other income (1) |  |  | 23,929 |  |  |  | 129,723 |  |  |  | 153,652 |  |  |  | 9,397 |  |  |  | 12,004 |  |  |  | 21,401 |
Interest expense |  |  | 58,209 |  |  |  | 56,479 |  |  |  | 114,688 |  |  |  | 61,663 |  |  |  | 59,379 |  |  |  | 121,042 |
Income before income taxes |  |  | 1,507,981 |  |  |  | 594,302 |  |  |  | 2,102,283 |  |  |  | 1,781,975 |  |  |  | 2,116,135 |  |  |  | 3,898,110 |
Income tax expense |  |  | 339,672 |  |  |  | 158,902 |  |  |  | 498,574 |  |  |  | 15,391 |  |  |  | 34,861 |  |  |  | 50,252 |
Net income |  | $ | 1,168,309 |  |  | $ | 435,400 |  |  | $ | 1,603,709 |  |  | $ | 1,766,584 |  |  | $ | 2,081,274 |  |  | $ | 3,847,858 |
(1) Starting January 1, 2023, expenses previously classified as other expenses related to the Company’s corporate campus overhead have been included in selling, general, and administrative expenses. Since the presentation of these expenses changed January 1, 2023, management believes the presentation of the 2022 corporate campus overhead should be reclassified to selling, general, and administrative expense for comparison purposes for the three and six months ended June 30, 2022. The following separates the consumer and the commercial financial results of operations for the six months ended June 30, 2023 and 2022:
|  | For The Six Months Ended June 30, |
|  | 2023 |  |  | 2022 |
|  | Consumer |  |  | Commercial |  |  | Consolidated |  |  | Consumer |  |  | Commercial |  |  | Consolidated |
Revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales |  | $ | 76,345,831 |  |  | $ | 22,346,736 |  |  | $ | 98,692,567 |  |  | $ | 66,121,999 |  |  | $ | 23,932,817 |  |  | $ | 90,054,816 |
Cost of goods sold |  |  | 68,266,221 |  |  |  | 8,254,397 |  |  |  | 76,520,618 |  |  |  | 57,709,953 |  |  |  | 11,155,829 |  |  |  | 68,865,782 |
Gross profit |  |  | 8,079,610 |  |  |  | 14,092,339 |  |  |  | 22,171,949 |  |  |  | 8,412,046 |  |  |  | 12,776,988 |  |  |  | 21,189,034 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Selling, general and administrative expenses (1) |  |  | 4,868,998 |  |  |  | 11,398,859 |  |  |  | 16,267,857 |  |  |  | 4,433,466 |  |  |  | 9,412,238 |  |  |  | 13,845,704 |
Depreciation and amortization |  |  | 177,542 |  |  |  | 512,983 |  |  |  | 690,525 |  |  |  | 208,397 |  |  |  | 363,066 |  |  |  | 571,463 |
|  |  | 5,046,540 |  |  |  | 11,911,842 |  |  |  | 16,958,382 |  |  |  | 4,641,863 |  |  |  | 9,775,304 |  |  |  | 14,417,167 |
Operating income |  |  | 3,033,070 |  |  |  | 2,180,497 |  |  |  | 5,213,567 |  |  |  | 3,770,183 |  |  |  | 3,001,684 |  |  |  | 6,771,867 |
Other income/expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other income (1) |  |  | 47,463 |  |  |  | 316,968 |  |  |  | 364,431 |  |  |  | 24,014 |  |  |  | 24,027 |  |  |  | 48,041 |
Interest expense |  |  | 117,827 |  |  |  | 113,925 |  |  |  | 231,752 |  |  |  | 122,904 |  |  |  | 121,377 |  |  |  | 244,281 |
Income before income taxes |  |  | 2,962,706 |  |  |  | 2,383,540 |  |  |  | 5,346,246 |  |  |  | 3,671,293 |  |  |  | 2,904,334 |  |  |  | 6,575,627 |
Income tax expense |  |  | 657,513 |  |  |  | 558,707 |  |  |  | 1,216,220 |  |  |  | 28,568 |  |  |  | 51,976 |  |  |  | 80,544 |
Net income |  | $ | 2,305,193 |  |  | $ | 1,824,833 |  |  | $ | 4,130,026 |  |  | $ | 3,642,725 |  |  | $ | 2,852,358 |  |  | $ | 6,495,083 |
(1) Starting January 1, 2023, expenses previously classified as other expenses related to the Company’s corporate campus overhead have been included in selling, general, and administrative expenses. Since the presentation of these expenses changed January 1, 2023, management believes the presentation of the 2022 corporate campus overhead should be reclassified to selling, general, and administrative expense for comparison purposes for the three and six months ended June 30, 2022.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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