House of Taylor to File Annual Report Late

House of Taylor Jewelry, Inc. said Tuesday that it has notified the U.S. Securities and Exchange Commission that it will be late in filing its annual report for the period ended Dec. 31, 2007.

In a Form NT 10-K filing, the House of Taylor said its annual report “could not be filed without unreasonable effort or expense within the prescribed time period because management requires additional time to compile and verify the data required to be included in the report.”

House of Taylor is a Los Angeles-based jewelry company whose principal shareholders include Dame Elizabeth Taylor, Kathy Ireland, and members of the Abramov family.

In the statement, the company said its estimated unedited results for fiscal 2007 include gross sales of $21.6 million, a decrease of 35.7 percent from gross sales for the year ended Dec. 31, 2006.

As a result of returns of $12.5 million and sales return allowance of $8.9 million (including $9.1 and $6.2 million, respectively, related to loose diamond sales), net sales for the year were $0.2 million, a decrease of 99.3 percent from net sales of $31.8 million for the year ended Dec. 31, 2006.

Interest expense totaled $6.9 million for the year, an increase of $3.3 million or 90 percent from the same period last year, the company said. This includes a $5.5 million non-cash expense resulting from the write-off of unamortized debt issuance costs and discount associated with the extinguishment of the company’s senior secured notes on Oct. 12, 2007, and the amortization of debt issuance costs and discount related to the term note and revolving note with New Stream Secured Capital, LP secured on Oct. 12, 2007. The balance is interest paid on the senior secured notes, term note, revolving note, and related party notes.

“We expect to record a net loss of $14.8 million for the year ended Dec. 31, 2007. Our net loss for the same period last year was $8.4 million,” the company said.

In its last filing in November, 2007, House of Taylor Jewelry reported that net sales for the third quarter of 2007 fell 59 percent to $4.9 million, year-over-year, saying the decline resulted from a $6.4 million drop in sales from loose diamonds as the company focused on sales of its branded jewelry. Gross profit for the period fell nearly 59 percent to $395,000, year-over-year.

As of Tuesday morning, House of Taylor Jewelry was trading at 14 cents per share.

Also in November, 2007, the company received a warning from Nasdaq, where its shares are traded, that it does not comply with the exchange’s minimum bid price requirement of $1.00 per share for 30 consecutive trading days.

The company has until April 28, to regain compliance or face a possible delisting from the exchange.