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Lazare Kaplan's 2Q Sales Expected to Fall 44%

Jan 17, 2010 8:21 AM   By Avi Krawitz
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RAPAPORT... Lazare Kaplan International (LKI) reported that the economic downturn continued to impact its business in the second fiscal quarter that ended on November 30, 2009, with the manufacturer anticipating a year over year sales decline of 44 percent to an estimated $23 million for the quarter. LKI also predicted that its net sales for the first half of 2009 would be found to have declined by 19 percent to an estimated $41.3 million.

“Uncertainties regarding future economic prospects and a decline in consumer confidence during fiscal 2009 and continuing in the current fiscal year translated into lower purchases and sales by diamond retailers, wholesalers and producers and adversely impacted the company's operations,” the diamond manufacturer explained in statement to the U.S. Securities and Exchange Commission (SEC) on Friday.

The company informed the New York Stock Exchange (NYSE) that it would be late in filing its results for the second fiscal quarter due to uncertainties surrounding the collectability and recovery of certain assets, as well as its potential obligations under certain lines of credit, which affected its 2009 fiscal results. LKI has yet to file its 2009 annual report or its first-quarter 2010 results, after missing the December 31 deadline. It has requested a new filing extension deadline of May 31, 2010. 

LKI also reported that it continued to focus on cash flow while reducing its operating costs and manufacturing overhead during the quarter, but added that gross margins in the current fiscal year “remained under significant pressure as a result of price competition, overhead absorption and inventory valuation considerations.”

LKI recently announced that it plans to open an office in Israel, where it will polish a significant volume of rough diamonds. This announcement followed last week's news that the Antwerp Diamond Bank (ADB) terminated two credit facilities held by LKI’s Antwerp subsidiary, with $43 million still outstanding.

LH
Tags: Antwerp Diamond Bank, Israel, Lazare kaplan, Manufacturing
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