Lazare Kaplan International Inc., New York, reported that for the three- and nine-month period, ended February 28, polished diamond sales were $39.2 million and $116.5 million, a decrease of 4.7% and 22.7% compared to the same periods last year. The decrease was primarily attributable to a softening of consumer demand resulting from recessionary conditions existing in the United States and Southeast Asia.
Rough diamond third quarter sales were $9.1 million compared to $14 million in the third quarter during the previous year. For the nine months, rough diamond sales were $29.3 million compared to $60.2 million in the same period last year. The decrease for the three and nine month periods was attributable to reduced rough buying in response to perceived softness in market demand, the company reported.
For the nine months, net sales were $145.8 million compared to $211 million in the same period last year.
Selling, general, and administrative expense for the third quarter was $4.9 million compared to $5.5 million for the same period last year. For the nine-month period, selling, general, and administrative expense was $14.9 million compared to $17.8 million in the comparable period last year. This decrease was primarily attributable to cost reduction programs instituted during the year.
During the third quarter, the company generated $20.2 million in cash flow from operations and $11.5 million (net of costs) from the sale of common stock (including treasury shares). Outstanding borrowings were reduced during this period by approximately $31.6 million. At February 28, outstanding bank loans amounted to $26 million, the company reported.
“An improving economic outlook, conservative inventory polices by our customers, and better than expected consumer spending are having their effect on demand for polished diamonds,” Leon Tempelsman, president of Lazare Kaplan International, said in a statement. “A more robust demand for our products is very welcome. But prudence requires that, for the time being, we stay the course and continue to cut costs and maximize cash flow to offset on-going pressures on margins and get the full benefits from improving sales.”
Lazare Kaplan International Inc. sells its diamond and jewelry products through a worldwide distribution network. The Company is noted for its ideal cut diamonds which it markets internationally under the brand name, Lazare Diamonds(R).