Charles & Colvard, Ltd., the global source of created jewel moissanite, saw its net sales increase 3 percent in the three months ended December 31, 2006 to US$12.1 million as compared to US$11.7 million in the fourth quarter of 2005.Charles & Colvard’s domestic sales in the fourth quarter increased 1 percent to US$11.0 million compared to the fourth quarter of 2005. International sales for the fourth quarter increased 31 percent to US$1.1 million, with strong results from all key geographic regions. Total shipments of 69,700 carats for the current period were 1 percent more than the 68,900 carats shipped in the same period of 2005. Shipments of carats in the U.S. decreased 1 percent while international shipments of carats increased 32 percent.
“Our sales increase was attributable to the additional number of doors that sold moissanite jewelry in the fourth quarter. We believe the strength of our overall sell-thru levels were negatively impacted as some of our leading department store chains and mall jewelry retailers increased prices of moissanite products which led to a slower number of product reorders in the fourth quarter. We continue to work aggressively to add new points of distribution and believe these efforts will result in continued improvement to our business. We added approximately 270 doors in the fourth quarter of 2006 primarily from Kohl’s, Zales Canada and Sears. We continue to work with our existing retailers and their moissanite jewelry suppliers to broaden the existing moissanite collection and offer more styles at appropriate price points to increase same store sales activity. In addition, we continue to develop promising sales opportunities within home television shopping. HSN, one of the leading home television shopping networks, has agreed to increase the total number of programming hours dedicated to moissanite sales to 25 hours in fiscal 2007 compared to 9 in the prior year. We continue to work methodically to raise the profile of moissanite and believe that our marketing efforts over the past year have continued to raise customer awareness. The company received the results of a recently completed third party study that highlights moissanite consumer awareness levels. We are pleased to report that over the past year, consumer awareness for moissanite within the U.S. increased from 7.8 percent at the end of 2005 to 10.5 percent at the end of 2006,” explains Bob Thomas, President and Chief Executive Officer.
“As we look to 2007, we expect to continue to make progress with current customers and to further expand our customer base. We continue to make improvements to our infrastructure and improve the quality of management to properly service and expand the number of manufacturers and points of retail distribution. We will continue to work ambitiously to build consumer awareness and demand for moissanite jewelry to drive sales within our multiple channels of distribution. Overall, we are committed to building value for our shareholders and believe our planned initiatives have better positioned our company for future growth,” concludes Thomas.
