Lazare Kaplan International saw revenues increase in fiscal 2014—but the good news was clouded by the publicly traded company’s continued inability to file complete financial reports.
The New York City diamond house said in an 8-K filed Sept. 2 that its revenue rose to $71 million for fiscal year 2014, compared to $68.2 million the prior year. However, a major contributor to that was the settlement of its lawsuit against the Gemological Institute of America over diamond inscription patents, which resulted in a $15 million payout to LKI and disbursement of an annual royalty. The diamantaire’s overall gem sales decreased to $54.3 million, which was due to a drop in sales of nonbranded polished, the company said.
LKI once again announced that it would not be filing complete financial results for the fiscal year due to what it called “material uncertainties” involving the collection of certain assets and its obligations under lines of credit. It hasn’t filed complete financial results since 2009.
The company remains in litigation against Antwerp Diamond Bank. In the United States, the two parties are engaging in discovery. Its Antwerp litigation against the bank will be heard in December. ADB claims LKI owes it money under a $45 million credit facility, which LKI disputes.
LKI “believes that the continued existence of this litigation and the remaining material uncertainties have a significant detrimental effect on the Company’s ability to transact business in the ordinary course,” its filing says. “This includes, without limitation, the ability of the Company to maintain and/or expand its operations.”