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RAPAPORT... Charles & Colvard Ltd. reported that sales plummeted 34 percent year on year to $4.5 million in the third quarter that ended on September 30. Revenue from the moissanite maker's U.S. division fell 9 percent to $3.5 million, while international sales declined 66 percent to $1 million. Loose jewel sales, including the branded, whiter Forever Brilliant® moissanite, contracted 52 percent to $2.3 million and finished jewelry sales rose 8 percent to $2.2 million.
Cash and liquid investments totaled $2.7 million on September 30, which was up $88,000 from the amount on December 31. Charles & Colvard maintained no outstanding debt during the quarter. Total inventory, including long-term and consigned inventory, was $41.1 million, down slightly from $42.4 million on December 31.
Charles & Colvard recorded a loss of $3.1 million, or 15 cents per share, compared with a loss of $1.2 million, or 6 cents per share, one year ago.
“In the third quarter of 2013, as we began to expand the China market, we had significant sales to several international distributors. Due to economic and market conditions and our ongoing evaluation of our distributors, we were unable to replicate those results this quarter and as a result saw a decrease in sales to distributors in the China market,” said Randy N. McCullough, the CEO of Charles & Colvard. “While we are very disappointed in these results, we remain focused on increasing sales regardless of market conditions. As such, we are concentrating on several initiatives to strengthen our positioning well into the future and drive revenue growth, especially in the U.S. market, for the fourth quarter which historically has been strong for us.” Charles & Colvard formalized an agreement with a large retailer’s ecommerce site to offer Forever Brilliant® moissanite jewelry for sale and it launched the Survivor Collection™, following the close of the third quarter. McCullough added that the company is exploring additional partnerships with retailers, designers and artists.
"We believe these are steps in the right direction that will allow us to leverage not only our relationships and channels, but the brands and channels of others as well. Simultaneously, as our online sales continue to improve, we are bolstering our online presence and marketing in several ways. Most recently, this is demonstrated by the launch of our new, user friendly, welcoming and highly functional website which you can see at www.CharlesandColvard.com. Also, we launched a Survivor Collection website that has received some significant recognition among cancer survivors. We look forward to sharing news about our progress as these and other initiatives unfold,” said McCullough.
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