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Charles & Colvard's Sales +20% But Loss Widens to $6M

Aug 1, 2014 2:10 PM   By Jeff Miller
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RAPAPORT... Charles & Colvard's revenue rose 20.4 percent year on year to $7.84 million for the second quarter that ended on June 30. However, costs and expenses jumped 34.1 percent to $9.88 million, driving a quarterly loss higher to $6.19 million compared with a loss of $491,585 one year earlier.

During the period, U.S. sales increased 35 percent to $7.3 million and international sales fell 50 percent to almost $600,000. Loose jewel sales, including Forever Brilliant® moissanite, dropped 2 percent to $4 million; however, finished jewelry sales surged 57 percent to $3.8 million.  Revenue from Charles & Colvard's direct-to-consumer businesses, Moissanite.com and Lulu Avenue®, increased 59 percent.

The net loss for the second quarter included an income tax expense of $4.2 million, resulting from a valuation allowance on certain deferred tax assets. The company secured a new three-year $10 million asset-backed credit facility with Wells Fargo Bank, providing working capital for general corporate purposes and for pursuing continued growth opportunities.

Randy N. McCullough, the CEO of Charles & Colvard, said, “Our new sales hires hit the ground running in April and May and we believe their efforts will begin to make an impact on our sales. Our new marketing initiatives have been well received, and we are also making inroads into expanding our domestic customer base, particularly with U.S. sales increasing 35 percent and accounting for 93 percent% of our business this quarter. Our direct-to-consumer businesses also increased as we believe customers are drawn to the benefits of shopping for our fine jewelry in the comfort of their homes.”

Tags: charles, colvard, Jeff Miller, Jewelry, marketing, moissanite
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