I bought some earrings for my mother and she thought they
were real. I couldn't tell the difference but that's not saying anything. I think this stock is done falling and is a hidden gem. Cheap too, with 76 cents per share in cash
Charles & Colvard Reports Sequential Profitable Quarters
Positive Cash Flow from Operations Achieved in Second
Quarter 2001
MORRISVILLE, N.C., July 19 /PRNewswire/--
Charles & Colvard, Ltd. (Nasdaq: CTHR - news), the sole source of moissanite -- a created jewel available for use in fine jewelry -- today reported operating results for the second quarter of 2001 which ended June 30, 2001.
The company reported net income for the quarter of $359,000 or $.03 per share on second quarter sales of $2.5 million and shipments of 12,500 carats. Operating income was $261,000. In the year-earlier quarter, the company reported a net loss of $1.3 million or $.17 per share on second quarter sales of $3.6 million and shipments of 19,000 carats. The company also reported an operating loss of $1.4 million for the second quarter of 2000.
Carat shipments during the second quarter of 2001 were 35 percent below shipments during the second quarter of 2000. The gross margin for the second quarter was 56 percent, slightly above the 55 percent in the second quarter of 2000. Average selling prices were consistent with the first quarter of 2001 and slightly above the second quarter of 2000.
Sales for the six months ended June 30, 2001 aggregated $5.4 million on shipments of 28,000 carats. The net income for the six months is $606,000 or $.05 per share. For the same period in 2000, sales aggregated $6.7 million on shipments of 34,500 carats and the net loss was $3.4 million or $.47 per share.
During the second quarter of 2001, North American sales amounted to $2.0 million and international sales were $510,000. In the year earlier quarter, North American sales were $2.5 million and international sales were $1.2 million.
In April 2000 the company implemented a price increase to its jewelry store customers. Subsequently, during the second quarter of 2000 the company changed its method of distribution from selling directly to jewelry stores to selling via distributors. Therefore, in addition to the economy's negative effects on the jewelry industry, lower sales in the second quarter of 2001 can be attributed to the fact that in the same period in 2000, new distributors purchased their initial inventory from the company and a number of jewelry store customers purchased jewels prior to a price increase.
The improvements in operating income and net income over both the first quarter of 2001 and the second quarter of 2000 are the result of previously announced initiatives including a revised business model and a restructuring to reduce operating expenses.
Bob Thomas, president, chairman and chief executive officer of Charles & Colvard, said, ``Charles & Colvard has maintained the profitability reached in the first quarter of 2001. We are working to sustain profitability, while we continue to expand distribution and increase product awareness. I am pleased to announce this is the first quarter in the company's history that we have generated positive cash flow from operations.''
Thomas continued, ``As has been widely reported, soft retail jewelry sales have caused a sizable decline in revenue versus last year for the retail jewelry industry. Obviously, with less money in the pockets of consumers and less traffic in the stores, the opportunity to sell any jewelry product is reduced. Achieving positive operating cash flow for the quarter is particularly significant in light of the tough economic conditions within the industry.''
Charles & Colvard, based in the Research Triangle Park area of North Carolina, became a public company in 1997. For more information, please access moissanite.com.
This press release contains forward-looking statements that relate to the company's future plans and objectives. All amounts above have been rounded. These statements are subject to numerous risks and uncertainties, including without limitation the limited operating history upon which the company and its prospects can be evaluated, the need for further development of the company's products, the company's reliance on Cree, Inc. (Nasdaq: CREE - news) as a developer and supplier of silicon carbide crystals, the small size of the current market for the company's products and uncertainty of market acceptance and demand for such products in the future. These and other risks and uncertainties, which are detailed in the company's filings with the SEC including Forms 10-K and 10-Q could cause actual results and developments to be materially different from those expressed or implied by any of the forward- looking statements included in this press release.
Charles & Colvard, Ltd.
Condensed Consolidated Statements Of Operations
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2001 2000 2001 2000
Net sales $2,462,732 $3,647,621 $5,362,716 $6,658,871
Cost of goods sold 1,084,089 1,656,431 2,346,788 3,033,179
Gross profit 1,378,643 1,991,190 3,015,928 3,625,692
Operating expenses:
Marketing and sales 592,556 1,559,753 1,306,138 4,015,930
General and
administrative 478,307 1,126,993 1,177,553 2,116,322
Research and
development 2,775 416,159 3,808 855,791
Other expense 44,224 252,577 90,295 253,201
Total operating
expenses 1,117,862 3,355,482 2,577,794 7,241,244
Operating income
(loss) 260,781 (1,364,292) 438,134 (3,615,552)
Interest income, net 98,263 113,782 168,084 254,880
Net income (loss) $ 359,044 $(1,250,510) $ 606,218 $(3,360,672)
Basic and diluted
net income (loss)
per share: $ 0.03 $ (0.17) $ 0.05 $ (0.47)
Weighted-average
common shares:
Basic 13,447,714 7,157,671 11,662,933 7,133,487
Diluted 13,465,408 7,157,671 11,669,081 7,133,487
Charles & Colvard, Ltd.
Condensed Consolidated Balance Sheets
June 30, December 31,
Assets (Unaudited) 2001 2000
Current Assets
Cash and equivalents $10,018,282 $ 3,826,402
Accounts receivable 1,133,619 1,468,041
Interest receivable 29,489 18,890
Inventory, net 22,440,201 23,071,416
Prepaid expenses and other assets 183,384 301,267
Total current assets 33,804,975 28,686,016
Equipment, net 386,471 552,272
Patent and license rights, net 314,525 369,706
Total assets $34,505,971 $29,607,994
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable:
Cree, Inc. $ 230,698 $ 1,147,718
Other 261,513 847,428
Accrued expenses and other liabilities 398,639 640,068
Deferred revenue 91,857 112,996
Total current liabilities 982,707 2,748,210
Commitments
Shareholders' Equity
Common stock 55,258,692 49,226,697
Additional paid-in capital - stock options 1,952,011 1,926,744
Accumulated deficit (23,687,439) (24,293,657)
Total shareholders' equity 33,523,264 26,859,784
Total liabilities and shareholder's equity $34,505,971 $29,607,994
SOURCE: Charles & Colvard |
