RAPAPORT... Charles & Colvard's sales rose 15 percent to $2.85 million in the first quarter that ended on March 31, 2010. The retailer reduced its total costs and expenses by $1.04 million, or 28 percent year over year, for the quarter and reported a net income of $298,000 against the loss of $1.28 million it posted for the first quarter of 2009. Randy N. McCullough, the group's chief executive officer (CEO), said the period was Charles & Colvard's first profitable quarter since the third quarter of fiscal 2007.

"We believe that these results are an initial indication that our new strategy of growing our core business with key jewelry manufacturers and distributors, developing leading jewelry brands globally featuring moissanite and increasing our focus on the end consumer is beginning to take hold," McCullough stated. "As we continue to execute on this strategy, we believe the results will propel Charles & Colvard to new heights of revenue growth and profitability."

The company had $2.79 million in cash on hand and $5.05 million in liquid, long-term investments at the end of the quarter. Its total inventory, including long-term and consignment inventory, stood at $38.49 million at the end of the quarter, down from the $39.13 million it held at the end of fiscal year 2009. Charles & Colvard purchased $289,000 of raw material during the quarter.

LH