Charles & Colvard Q2 Net Sales Down 11% from 2006

Charles & Colvard, Ltd., the moissanite manufacturer, on Monday reported its second quarter operating results for 2007. Net quarterly sales decreased 11 percent to $7.6 million, from last year’s $8.5 million. Gross profit decreased 14 percent to $5.5 million compared to $6.4 million in the prior year.

President and CEO Bob Thomas commented, “Our second quarter sales results reflect a number of factors, including a weak overall jewelry retail environment.

“Sales of moissanite jewels to our top four direct customers, which represented 71 percent of total sales, were down 18 percent in the second quarter compared to the prior year. At the same time, sales to our remaining direct customers were up 14 percent over the same quarter last year.”

The company expects sales to strengthen in the second half of the year compared to the first half, with a larger percentage expected in the fourth quarter due to the holiday season.

Charles & Colvard's U.S. sales in the second quarter decreased 12 percent to $6.3 million compared to the second quarter of 2006. International sales decreased 8% to $1.2 million, with strong results from Thailand and Taiwan offset by reduced sales to Canada.

Total shipments of 46,800 carats for the current period were 9 percent less than the 51,100 carats shipped in the same period of 2006. The volume of shipments in the U.S. decreased 7 percent while international shipments decreased 15 percent.