HOTJ Q1 Sales Triple

House of Taylor Jewelry, Inc. (HOTJ) yesterday announced that net sales for the first quarter of 2007 rose more than threefold to $4.5 million from $1.4 million for the comparable period last year. The company also announced that its products were sold in more than 420 doors as of May 2007, almost double the number at the same time last year.

HOTJ reported that the majority of the newly opened doors were accomplished with their Kathy Ireland Jewelry designs. Jack Abramov, president and chief executive officer said, "We believe this underscores the impressive growth potential for this product line, with price points from $200 to $3,500 and targeted for the broader spectrum of consumers."

Abramov also noted the continued success of an initiative launched late last year to enhance market penetration and brand awareness through the sale of branded loose diamonds, which accounted for approximately $2.7 million of the sales increase in the current quarter.

Partially offsetting the increase was a decrease in 2007 sales from the discontinued Mirabelle line, as compared with the prior-year period.

Gross profit increased to $504,000 for the 2007 first quarter from $10,000 for the corresponding 2006 period, primarily due to higher sales in 2007.

Increased sales coupled with lower selling, shipping, and general and administrative expenses reduced House of Taylor Jewelry's operating loss for the 2007 first quarter to $1.4 million from $2 million for the comparable period last year.

The company recorded interest expense for the 2007 first quarter of $1.7 million, compared with $124,000 last year, driven primarily by a non-cash expense of $1.3 million related to the amortization of costs associated with convertible notes. The increase in non-cash amortization expense resulted in the increased 2007 first quarter net loss of $3 million, or $0.08 per share, compared with a net loss of $2.1 million, or $0.06 a share, in the same period last year.

"Since launching our current business operations two years ago, we have concentrated on building the company's infrastructure and broadening our product sources. We are now focused on newer domestic and international growth opportunities that will eventually propel our brands into thousands of retail stores worldwide," Abramov added.