Charles & Colvard reports third quarter sales and income increases

Charles & Colvard, Ltd., Morrisville, N.C., the sole source of moissanite—a created jewel available for use in fine jewelry— on Thursday reported third quarter sales of $3.2 million on shipments of 17,400 carats, resulting in net income of $572,000 or $.04 per diluted share. This represents a 49% increase over last year’s third quarter sales of $2.1 million on shipments of 11,800 carats and a 255% improvement over net income of $161,000 or $.01 per diluted share.

Carat shipments for the current third quarter were 48% ahead of shipments during the same period of 2001, the company reported. North American carat shipments, which represents 87% of total shipments, rose 58% for the quarter, primarily due to distribution into a number of new outlets, increased volume with retailers including several new chains, and growing sales through home shopping television customers. International carat sales rose 3% primarily due to expansion of the European home shopping channel distribution.

The average selling price per carat for the third quarter was 14% greater than the preceding quarter and 3% above the third quarter of 2001, the company said. This increase, which was a primary reason for the gross margin of 69.5%, was due to increased sales of larger stones, which have a higher selling price per carat. Improved finished goods yields from raw material also contributed to the increase in gross margin.

Sales for the nine months ended September 30, 2002 aggregated $11.4 million on shipments of 68,400 carats. Net income for the period was $1,710,000, the company reported. Year-to-date sales are 52% ahead of the first nine months of 2001 sales of $7.5 million on shipments of 39,700 carats. Net income thus far this year rose nearly 123% compared to $767,000 or $.06 per diluted share in 2001.

“This represents another strong sales quarter for the Company,” Bob Thomas, Chairman, President and Chief Executive Officer of Charles & Colvard, said. “A 49% increase in overall sales, with a 58% increase in North America, is particularly gratifying when compared to sales levels being seen in the jewelry industry as a whole.”

He adds, “Positive cash flow from operations for the sixth consecutive quarter is significant in light of our increased raw material purchases. We anticipate the need for higher levels of finished goods production to satisfy the increasing consumer demand for moissanite.”