D.G. Jewelry Announces Third Quarter and Nine Months 1999 Results.

TORONTO--(BUSINESS WIRE)--Nov. 16, 1999--

D.G. Jewelry Inc. (Nasdaq:DGJL), which designs, manufactures, merchandises and distributes stone-set jewelry, today reported revenues and net income for the three months and nine months ended Sept. 30, 1999.

Third quarter income before income taxes and the company's share of losses on its investment in NetJewels.com, a 50%-owned subsidiary, increased to $1,087,473 from $717,795 for the comparable period in 1998, an increase of 51%. (All amounts expressed in U.S. Dollars.) Nine months income before income taxes and the company's share of losses on its investment in NetJewels.com, a 50%-owned subsidiary increased to $3,929,063 from $3,209,071 from the comparable period in 1998.

Third quarter Net Income amounted to $236,627 compared to the year earlier period of $629,342. Net Income for the nine months ended September 30, 1999 was $2,565,391 compared to $2,624,960, in the year-earlier period.

Revenues for the quarter were $6,974,520 compared to $11,613,903 and $23,118,091 compared to $26,517,727 for the nine months ended September 30, 1999 and 1998, respectively.

Earnings per share on a fully diluted basis for the quarter amounted to 4 cents compared to 11 cents, in the 1998 comparable period. For the nine months, the company reported fully diluted EPS of 41 cents compared to 46 cents for the comparable period in 1998. 1999 numbers reflect our share ($500,822) of losses incurred in the Company's 50% owned subsidiary, NetJewels.com. In addition the number of shares used to calculate EPS, increased in 1999 to 6,498,773 from 5,565,000 in 1998, due to a private placement of shares during 1999 and other issuances.

The Company increased gross margins to record levels -- 35.20% from 20.45% for the comparative quarter and 33.29% from 25.37% for the comparative nine months. At the same time, expenses have been kept at manageable levels.

Jack Berkovits, CEO of D.G. Jewelry, said, "Our results for the quarter and the nine months are a tribute to the strong foundation which our management staff and associates have laid over the last thirty years. Our highly selective screening process for potential clients for our products, has allowed us to maintain a base of clients whose goal is to be profitable for their shareholders while allowing us to enhance our own shareholders' value, simultaneously reducing our risk from bad debts or other adverse business conditions.

"We are thrilled with the early results of our Internet initiative. NetJewels.com, the Company's 50% owned subsidiary has recently filed a registration statement with the Securities and Exchange Commission for an initial public offering. NetJewels.com has exhibited consistent growth in revenues as well as in membership. NetJewels.com anticipates that the success demonstrated in its initial foray into the lucrative and fast growing Business to Business market will be a consistent source of future sales. NetJewels.com has made additions to its management team and overall staff in its attempt to become the dominant online jeweler targeting price conscious consumers. We expect that losses incurred on this investment will be short-lived and that the investment will eventually result in great value to our shareholders."

D.G. Jewelry Inc. is primarily engaged in the design, merchandising and distribution of stone-set jewelry for major retailers including department stores, mass merchants, shopping networks, major high-volume retailers and other major discounters in the U.S., Canada and Europe. For more information, please visit us at www.dgjewellery.com.

Except for the historical information contained herein the matters discussed in this earnings release include forward-looking statements that may involve a number of risks and uncertainties. Actual results may vary significantly based on a number of factors, including, but not limited to, risks in product demand, the impact of competitive products and pricing, changing economic conditions, both here and abroad, release and sales of new products, and other risk factors detailed in the company's most recent annual report and filings with the Securities and Exchange Commission. -0-

D.G. Jewelry Inc.
Interim Consolidated Statements of Operations
for the three and nine months ended September, 1999
and 1998 (amounts expressed in US dollars)(Unaudited)

                                 For the period ended Sept. 30
                             three months             nine months
                            $           $            $           $
                          1999        1998         1999        1998

SALES                  6,974,520   11,613,903   23,118,091  26,517,727
Cost of sales          4,519,246    9,238,851   15,421,779  19,789,691
GROSS PROFIT           2,455,274    2,375,052    7,696,312   6,728,036
                       ---------   ----------   ----------  ----------
Other income              12,444    1,003,005       12,507   1,003,005
Gross earnings         2,467,718    3,378,057    7,708,819   7,731,041
                       ---------   ----------   ----------  ----------
EXPENSES
Selling                  353,868      835,676    1,454,568   1,907,167
General and
  administrative         443,612      508,501      883,280   1,178,904
                       ---------   ----------   ----------  ----------
                         797,480    1,344,177    2,337,848   3,086,071
                       ---------   ----------   ----------  ----------
Operating income       1,670,238    2,033,880    5,370,971   4,644,970
                       ---------   ----------   ----------  ----------
Interest expenses        506,207      252,948    1,105,527   1,105,081
Other expenses            76,558    1,063,137      336,381     330,818
Loss on investment-
  NETJEWELS              500,822        --         500,822       --
                       ---------   ----------   ----------  ----------
                       1,083,587    1,316,085    1,942,730   1,435,899
                       ---------   ----------   ----------  ----------
Income before income
  taxes                  586,651      717,795    3,428,241   3,209,071
Provision for income
  taxes                  350,024       88,453      862,850     584,111
                       ---------   ----------   ----------  ----------
Net income               236,627      629,342    2,565,391   2,624,960
Earnings per common
  share                     0.04         0.12        0.43         0.51
                       ---------   ----------   ----------  ----------
Earnings per common
  share assuming dilution   0.04         0.11        0.41         0.46
                       ---------   ----------   ----------  ----------
Average weighted number
  of shares
   Basic               6,374,197    5,165,000   6,027,419    5,165,000
                       ---------   ----------   ----------  ----------
   Diluted             6,498,773    5,565,000   6,244,624    5,665,000
                       ---------   ----------   ----------  ----------