Charles & Colvard, Ltd., Morrisville, N.C., the sole source of moissanite—a created jewel available for use in fine jewelry—reported first quarter sales of $4.4 million resulting in income before taxes of $954,000 and net income of $532,000.

This represents a 5% increase over last year’s first quarter sales of $4.2 million, a 91% gain over last year’s pretax income of $500,000, a 6% increase in net income and a 97% improvement over 2002 pro forma net income of $271,000.

North American carat shipments, which represent 87% of total shipments, were up 5% (14% in dollar volume) for the quarter, primarily due to distribution expansion into a number of new markets and increased volume with retailers. International carat sales for the first quarter decreased 34% and thus shipments of 25,100 carats for the current period were 2% below the 25,700 carats in the same period of 2002.

Gross margin as a percentage of sales for the first quarter was 61.2%, an increase of 10.3% when compared to the same quarter in 2002. This increase was primarily caused by a 9% increase in average selling price per carat and improved yields during the specific FIFO period being relieved from inventory.

“Doubling our operating income versus the first quarter last year demonstrates our commitment to our shareholders by delivering this outstanding fundamental performance,” Bob Thomas, president and chief executive officer of Charles & Colvard, said in a statement. “Although our top line growth did not meet our internal goals, the 14% increase in North American sales volume is, we feel, a major achievement, given the performance of the industry as a whole, the current economic climate and the general concern brought about by the war in Iraq.”

JCK