Charles & Colvard Reports Record Profits; Second Quarter Sales Up 65%, Profits Up 78%.Business Editors MORRISVILLE Morrisville, borough (1990 pop. 9,765), Bucks co., SE Pa., on the Delaware River opposite Trenton, N.J.; settled c.1624 by the Dutch West India Company, inc. 1804. Water pumps, clutches, coatings, and concrete and rubber products are among the manufactures. , N.C.--(BUSINESS WIRE)--July 18, 2002 Charles & Colvard, Ltd., (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CTHR) the sole source of moissanite - a created jewel available for use in fine jewelry jewelry, personal adornments worn for ornament or utility, to show rank or wealth, or to follow superstitious custom or fashion. The most universal forms of jewelry are the necklace, bracelet, ring, pin, and earring. - today reported operating results for the second quarter of 2002. The Company reported second quarter sales of $4.1 million on shipments of 25,300 carats, resulting in net income of $638,000 or $.05 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. This represents a 65% increase over last year's second quarter sales of $2.5 million on shipments of 12,500 carats and a 78% improvement over the 2001 second quarter net income of $359,000 or $.03 per diluted share. Carat shipments during the second quarter of 2002 were 103% above shipments during the same period of 2001. North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. carat shipments were up 115% for the quarter, primarily due to distribution expansion into a number of new outlets, with increased distribution at brick and mortar See bricks and mortar. retailers including several new chains, and increased sales to home shopping Home Shopping commonly refers to the electronic retailing / home shopping channels industry, which includes such billion dollar companies as HSN, QVC, eBay, ShopNBC, Buy.com, and Amazon.com. television customers. International carat sales rose 55% primarily due to expansion of European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. home shopping channel distribution and increased sales in certain Asian and Central American countries Noun 1. Central American country - any one of the countries occupying Central America; these countries (except for Belize and Costa Rica) are characterized by low per capita income and unstable governments Central American nation . The average selling price The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. for the second quarter was 2% above the first quarter of 2002 and 14% below the second quarter of 2001. The reduction from 2001 was due primarily to increased sales of smaller stones, which have a lower price per carat. Sales for the six months ended June 30, 2002 aggregated $8.2 million on shipments of 51,000 carats. Net income for the first half of 2002 was $1,138,000 or $.08 per diluted share. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. sales are 53% ahead of first half 2001 sales of $5.4 million on shipments of 28,000 carats. Six months net income rose nearly 88% compared to $606,000 or $.05 per diluted share in the first half of 2001. Bob Thomas For the Irish footballer, see . Bob Thomas (born March 1, 1965 in Appalachia, Virginia) is a radio personality, actor, and writer. He was one of the top radio announcers in Knoxville, Tennessee for 25 years. , Chairman, President and Chief Executive Officer of Charles & Colvard, said, "This represents our third consecutive quarter of record profits. Equally satisfying is the 65% increase in second quarter sales which to us means that we, along with our distribution partners, are creating growing recognition and demand for moissanite jewelry." Mr. Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs continued, "Second quarter carat sales more than doubled those in the same quarter last year. Our 115% increase in North American carat shipments is particularly noteworthy when compared to sales levels seen within other segments of the jewelry industry." He concluded, "Charles & Colvard is positioned for continued improvement in sales and earnings. We have a number of promising new leads emanating from the Las Vegas Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. Jewelry Show last month. In addition, as recently reported, the military base market is showing promise, and expanded testing of moissanite at additional bases is underway. If successful, this may lead to the permanent addition of moissanite in early 2003. We are pursuing additional jewelry chains and independent jewelers as well." CONFERENCE CALL The management of Charles & Colvard, Ltd. will host a conference call at 4:30 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT today to discuss second quarter results and recent corporate developments. After opening remarks, there will be a question and answer period. Interested parties may participate in the call by dialing 888-802-8576 (973-582-2749 for international callers) - please call in 10 minutes before the conference is scheduled to begin and ask for the Charles & Colvard call. The conference call will also be broadcast live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the via http://www.vcall.com/EventPage.asp?ID=81923. To listen to the live call, go to the web site at least 15 minutes early to download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. If you are unable to listen live, the conference call will be archived and can be accessed for approximately 30 days. A recorded telephone replay of the call will also be available for approximately one week following the live call. Listeners may dial 877-519-4471 (973-341-3080 for international callers) and use the code no.3382026 for the telephone replay. Charles & Colvard, based in the Research Triangle Park Research Triangle Park, research, business, medical, and educational complex situated in central North Carolina. It has an area of 6,900 acres (2,795 hectares) and is 8 × 2 mi (13 × 3 km) in size. Named for the triangle formed by Duke Univ. area of North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. , is the sole source of moissanite, a created jewel used in fine jewelry. Moissanite is near colorless col·or·less adj. 1. Lacking color. 2. Weak in color; pallid. 3. Lacking animation, variety, or distinction; dull. See Synonyms at dull. , with more fire, brilliance and luster than a fine diamond, but retails for only a fraction of the cost. For more information, please access www.moissanite.com. This press release may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Such forward-looking statements are subject to a number of material risks, uncertainties and contingencies Contingencies (ISSN 1048-9851) is the bimonthly magazine of the American Academy of Actuaries, providing a large and diverse readership with general interest and technical articles on a wide range of issues related to the actuarial profession. that could cause actual results to differ materially from those set forth in the forward-looking statements. Those risks and uncertainties include but are not limited to: the company's reliance on Cree, Inc. as the sole supplier of the raw materials; the cost of developing distribution channels; difficulties obtaining silicon carbide silicon carbide, chemical compound, SiC, that forms extremely hard, dark, iridescent crystals that are insoluble in water and other common solvents. Widely used as an abrasive, it is marketed under such familiar trade names as Carborundum and Crystolon. crystals from the sole supplier in desired qualities, sizes and volumes; and other risks and uncertainties set forth in the Company's 10-K for the year ended December 31, 2001, 10-Q and other filings with the Securities and Exchange Commission.
Charles & Colvard, Ltd.
Condensed Consolidated Statements Of Operations
Three Months Six Months
Ended June 30, Ended June 30,
---------------------- ----------------------
2002 2001 2002 2001
---------- ---------- ---------- ----------
(unaudited) (unaudited) (unaudited) (unaudited)
Net sales $4,075,602 $2,462,732 $8,225,748 $5,362,716
Cost of goods sold 1,632,901 1,084,089 3,671,855 2,346,788
---------- ---------- ---------- ----------
Gross profit 2,442,701 1,378,643 4,553,893 3,015,928
Operating expenses:
Marketing and sales 1,125,730 592,556 2,179,376 1,306,138
General and
administrative 732,063 478,307 1,339,275 1,177,553
Other expense - 46,999 - 94,103
---------- ---------- ---------- ----------
Total
operating expenses 1,857,793 1,117,862 3,518,651 2,577,794
---------- ---------- ---------- ----------
Operating income 584,908 260,781 1,035,242 438,134
Interest income, net 52,879 98,263 102,755 168,084
---------- ---------- ---------- ----------
Net income $ 637,787 $ 359,044 $1,137,997 $ 606,218
========== ========== ========== ==========
Net income per share:
Basic $ 0.05 $ 0.03 $ 0.09 $ 0.05
========== ========== ========== ==========
Diluted $ 0.05 $ 0.03 $ 0.08 $ 0.05
========== ========== ========== ==========
Weighted-average
common shares:
Basic 13,377,484 13,447,714 13,375,626 11,662,933
========== ========== ========== ==========
Diluted 13,707,458 13,465,408 13,641,479 11,669,081
========== ========== ========== ==========
Charles & Colvard, Ltd.
Condensed Consolidated Balance Sheets
June 30, December 31,
2002 2001
----------- -----------
Assets (unaudited)
Current Assets:
Cash and equivalents $12,542,770 $10,236,319
Accounts receivable 2,814,005 2,803,117
Interest receivable 14,952 13,824
Inventory, net 20,370,726 21,341,071
Prepaid expenses 209,682 214,749
----------- -----------
Total Current Assets 35,952,135 34,609,080
Equipment, net 405,450 342,281
Patent and license rights, net 292,656 290,569
----------- -----------
Total Assets $36,650,241 $35,241,930
=========== ===========
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable:
Cree, Inc. $ 421,244 $ 405,020
Other 224,845 154,831
Accrued payroll 323,294 202,012
Accrued expenses 306,264 272,490
Deferred revenue 90,303 129,801
---------- -----------
Total Current Liabilities 1,365,950 1,164,154
Commitments
Shareholders' Equity:
Common stock 55,190,702 55,182,692
Additional paid-in capital - stock options 2,024,514 1,964,006
Accumulated deficit (21,930,925) (23,068,922)
----------- -----------
Total Shareholders' Equity 35,284,291 34,077,776
----------- -----------
Total Liabilities
and Shareholders' Equity $36,650,241 $35,241,930
=========== ===========
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