Charles & Colvard, Ltd., the sole source of moissanite, a created jewel available for use in fine jewelry, today reported second quarter sales of $4.3 million, resulting in income before taxes of $918,000 and net income of $502,000, the Morrisville, N.C.-based company said in a statement. This represents a 6% increase over last year’s second quarter sales of $4.1 million, a 44% gain over last year’s pretax income of $638,000, and a 45% improvement over 2002 pro forma net income of $347,000.
Sales for the six months ended June 30 totaled $8.7 million on shipments of 48,600 cts. Net income for the first half of 2003 was $1,03 million. Year-to-date sales are 6% ahead of first half 2002 sales of $8.2 million on shipments of 51,000 cts. Net income for the first-half of 2003 was 67% ahead of 2002 results, the company said.
North American sales, which represents 87% of total sales, were up 9% for the quarter (down 3% in ct. shipments) primarily due to a 13% increase in the average selling price per ct., as customers purchased a higher percentage of larger stones. International sales for the second quarter fell 10% and thus shipments of 23,500 cts. for the current period were 7% below the 25,300 cts. in the same period of 2002.
Gross margin as a percentage of sales for the second quarter was 67.7%, an increase of 7.8% when compared to the same quarter in 2002. This increase was primarily caused by a 13% increase in average selling price per ct. and improved yields during the specific FIFO period being relieved from inventory.
Operating expenses were up 9% for the quarter when compared to last year amounts due to higher sales and marketing expenditures used to promote customer sales opportunities. As a percentage of sales operating expenses for the quarter were one percent higher than last year.
“A 52% increase in operating income versus the second quarter of last year demonstrates our commitment to our shareholders,” said Bob Thomas, president and CEO of Charles & Colvard. “Although our top line growth did not meet our internal goals, the 9% increase in North American sales volume is, we feel, a major achievement, given the current economic climate.”