Conference Call with Accompanying Slide
Presentation Scheduled Today at 4:30 PM
ET
RESEARCH
TRIANGLE PARK, N.C., Oct. 12,
2023 /PRNewswire/ -- Charles & Colvard, Ltd.
(Nasdaq: CTHR) (the "Company"), a globally recognized fine jewelry
company that specializes in moissanite and lab grown diamonds,
reported financial results for the fourth quarter ended
June 30, 2023 ("Fourth Quarter Fiscal
2023").
Management Commentary
"While the challenging macroeconomic backdrop and weakened
consumer outlook created significant headwinds on the jewelry and
gemstone industry, and on the Company's Q4 and fiscal year 2023
revenues, the Company's cash position remained strong at
$15.6 million. The downward
pricing pressure on moissanite and lab grown diamond impacted
margins and, as a result, the Company recently reevaluated its
supply chain, gemstone cost, pricing methodology and go-to-market
strategy," said Don O'Connell,
President and CEO of the Company.
"We firmly believe that our proactive measures, combined with
our unwavering determination, will enable us to overcome the
obstacles that we and the industry have encountered and pave the
way for a brighter future. We are confident that our long-term
business strategy will create long-term value for our
shareholders. As we continue to look ahead, we remain
optimistic and excited about the future prospects of the Company
and our commitment to the Company's strategic initiatives,"
concluded O'Connell.
Recent Corporate Highlights
- Hosted a private/invite-only Spring Preview in New York City in April, with more than 30
editors and influencers from well-known publications and websites
such as The Knot, NBCU, Today, and US
Weekly to showcase its new expanded fine jewelry styles;
- Expanded its assortment of new Forever OneTM
moissanite and Caydia® lab grown diamond fine jewelry
styles on charlesandcolvard.com across all categories including
its: Signature Collection in both moissanite and lab grown diamond;
Exotics Collection in both moissanite and lab grown diamond; Made
in Color Collection in lab grown diamond; fashion jewelry
assortment in both moissanite and lab grown diamond; and unisex
bands in lab grown diamond;
- Launched a Successful Mother's Day campaign
on charlesandcolvard.com;
- Launched a Father's Day campaign on charlesandcolvard.com
as the Company expanded its customer base to highlight men's and
unisex jewelry—the first strictly men's promotion that the Company
has completed;
- Launched the Company's new owned B2B web property,
charlesandcolvarddirect.com, selling loose moissanite gems—Forever
OneTM and Moissanite by Charles &
Colvard®—to select retailers;
- Launched 3 new dropship partnerships featuring Moissanite by
Charles & Colvard® fine jewelry;
- Launched an ad campaign in May and June promoting the Company's
Signature Showroom in the local Midtown Magazine;
- Attended JCK in Las Vegas in
June to engage with its customers and its vendors in support of
growing its customer base and product assortment;
- Showcased and highlighted its brand at the Direct Selling
Association's annual conference in Scottsdale, Arizona in June to further build
its brand awareness and establish non-traditional
partnerships;
- Appeared in 34 brand and product placements and 23 features,
including notable outlets such as Marie
Claire, The Hollywood Reporter, Brides,
JCK, The Knot and AC Magazine; and
- Increased revenue on its moissaniteoutlet.com owned web
property by 64% for the quarter.
Financial Summary for Fourth Quarter Fiscal 2023
(Quarter Ended June 30, 2023 Compared
to Quarter Ended June 30,
2022)
- Net sales of $5.6 million for the
quarter, a decrease of 40% from $9.3
million in the year-ago quarter.
- In the Online Channels segment, which consists of e-commerce
outlets including charlesandcolvard.com, moissaniteoutlet.com,
charlesandcolvarddirect.com, third-party online marketplaces,
drop-ship retail and other pure-play e-commerce outlets, net sales
of $4.2 million, a decrease of 27%
from the year-ago quarter, representing 75% of total net sales for
the quarter, compared to $5.7
million, or 62% of total net sales in the year-ago
quarter.
- In the Traditional segment, which consists of wholesale and
brick-and-mortar customers, net sales of $1.4 million, a decrease of 61% from the year-ago
quarter, representing 25% of total net sales for the quarter,
compared to $3.6 million, or 38% of
total net sales, in the year-ago quarter.
- Finished jewelry net sales of $4.7
million, a decrease of 23% for the quarter, compared to
$6.1 million in the year-ago
quarter.
- Loose jewel net sales decreased 73% to $0.9 million for the quarter, compared to
$3.2 million in the year-ago
quarter.
- Cost of goods sold increased 92% to $10.6 million for the quarter, compared to
$5.5 million in the year-ago quarter.
The current quarter included a $5.9
million inventory write-down of certain moissanite and
lab-grown diamond raw material and gems.
- Gross loss was $5.0 million for
the quarter, compared to gross profit of $3.8 million in the year-ago quarter. The current
quarter included a $5.9 million
inventory write-down of certain moissanite and lab-grown diamond
raw material and gems.
- Operating expenses increased 16% to $4.3
million for the quarter, compared to $3.7 million in the year-ago quarter, primarily
due to increased investment in marketing strategies and new
initiatives.
- Net loss was $9.3 million, or
$0.30 loss per diluted share for the
quarter, compared to net income of $0.04
million, or $0.00 earnings per
diluted share, in the year-ago quarter. The current quarter
included a $5.9 million inventory
write-down referred to above.
- Weighted average diluted shares outstanding were 30.3 million
for the quarter, compared to 31.2 million in the year-ago
quarter.
Financial Summary for Fiscal Year 2023
- Net sales decreased 31% to $29.9
million for the fiscal year ended June 30, 2023, compared to $43.1 million in the year-ago period.
- Online Channels segment net sales decreased 20% year over year
to $21.5 million, representing 72% of
total net sales, for the fiscal year ended June 30, 2023, compared to $26.8 million, or 62% of total net sales in the
year-ago period.
- Traditional segment net sales decreased 48% year over year to
$8.5 million, representing 28% of
total net sales, for the fiscal year ended June 30, 2023, compared to $16.3 million, or 38% of total net sales, in the
year-ago period.
- Finished jewelry net sales decreased 19% to $24.0 million for the fiscal year ended
June 30, 2023, compared to
$29.7 million in the year-ago
period.
- Loose jewel net sales were $6.0
million for the fiscal year ended June 30, 2023, a decrease of 55%, compared to
$13.4 million in the year-ago
period.
- Cost of goods sold increased 10% to $25.2 million for the fiscal year ended
June 30, 2023, compared to
$22.8 million in the year-ago
period.
- Gross profit was $4.7 million for
the fiscal year ended June 30, 2023,
compared to $20.2 million in the year
ago period. The current period included a $5.9 million inventory write-down of certain
moissanite and lab-grown diamond raw material and gems.
- Operating expenses increased 8% to $18.7
million for the fiscal year ended June 30, 2023, compared to $17.4 million in the year-ago period.
- Net loss was $19.6 million, or
$0.64 loss per diluted share, for the
fiscal year ended June 30, 2023,
compared to net income of $2.4
million, or $0.08 earnings per
diluted share, in the year-ago period. The current period
included a $5.9 million inventory
write-down referred to above and income tax expense of $5.9 million, which is related to the
establishment of a deferred tax asset valuation allowance.
- Weighted average shares outstanding on a diluted basis were
30.4 million for the fiscal year ended June
30, 2023, compared to 31.3 million in the year-ago
period.
Financial Position
Cash, cash equivalents and restricted cash totaled $15.6 million as of June
30, 2023, representing a decrease of $5.6 million from $21.2
million as of June 30, 2022.
Total inventory decreased to $26.8
million as of June 30, 2023,
down from $33.5 million as of
June 30, 2022. The Company had no
debt outstanding as of June 30,
2023.
Investor Conference Call
Charles & Colvard will host an investor conference call and
webcast presentation to discuss its financial results for the
quarter and fiscal year ended June 30,
2023 at 4:30 p.m. ET on
Thursday, October 12, 2023.
Live Call-In Information: Interested parties can
access the conference call by dialing (844) 875-6912 (U.S.
toll-free) or (412) 317-6708 (international) and asking to be
joined into the Charles & Colvard call.
Live Webcast Information: Interested parties can access
the conference call and accompanying presentation slides via a live
webcast, which is available in the Investor Relations section of
the Company's website at https://ir.charlesandcolvard.com/events or
https://www.webcaster4.com/Webcast/Page/346/49015.
A replay of this conference call will be available until
October 19, 2023 at (877) 344-7529
(U.S. toll-free) or (412) 317-0088 (international). The replay
conference code is 2485294. A webcast replay will be available in
the Investor Relations section of the Company's website at
https://ir.charlesandcolvard.com/events.
About Charles & Colvard, Ltd.
Charles & Colvard, Ltd. (Nasdaq: CTHR) believes that fine
jewelry should be as ethical as it is exquisite. Charles &
Colvard is the original creator of lab grown moissanite (a rare
gemstone formed from silicon carbide). The Company brings
revolutionary gems and fine jewelry to market by using exclusively
Made, not MinedTM above ground gemstones and a
dedication to 100% recycled precious metals. Their Forever One™
moissanite and Caydia® lab grown diamond brands provide
exceptional quality, incredible value and a conscious approach to
bridal, high fashion, and everyday jewelry. Charles & Colvard
was founded in 1995 and is based in North
Carolina's Research Triangle
Park region. For more information, please visit
www.charlesandcolvard.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Statements expressing expectations regarding our future
and projections relating to our products, sales, revenues, and
earnings are typical of such statements and are made under the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements include, but are not limited to,
statements about our plans, objectives, representations, and
contentions and are not historical facts and typically are
identified by use of terms such as "may," "will," "should,"
"could," "expect," "intend," "plan," "anticipate," "believe,"
"estimate," "predict," "continue," and similar words, although some
forward-looking statements are expressed differently.
All forward-looking statements are subject to the risks and
uncertainties inherent in predicting the future. You should be
aware that although the forward-looking statements included herein
represent management's current judgment and expectations, our
actual results may differ materially from those projected, stated,
or implied in these forward-looking statements as a result of many
factors including, but not limited to, (1) our business and our
results of operations could be materially adversely affected as a
result of general economic and market conditions; (2) our future
financial performance depends upon increased consumer acceptance,
growth of sales of our products, and operational execution of our
strategic initiatives; (3) we face intense competition in the
worldwide gemstone and jewelry industry; (4) our information
technology, or IT, infrastructure, and our network has been and may
be impacted by a cyber-attack or other security incident as a
result of the rise of cybersecurity events; (5) constantly evolving
privacy regulatory regimes are creating new legal compliance
challenges; (6) we have historically been dependent on a single
supplier for substantially all of our silicon carbide, or SiC,
crystals, the raw materials we use to produce moissanite jewels; if
our supply of high-quality SiC crystals is interrupted, our
business may be materially harmed; (7) we are subject to certain
risks due to our international operations, distribution channels
and vendors; (8) our business and our results of operations could
be materially adversely affected as a result of our inability to
fulfill orders on a timely basis; (9) we are currently dependent on
a limited number of distributor and retail partners in our
Traditional segment for the sale of our products; (10) we may
experience quality control challenges from time to time that can
result in lost revenue and harm to our brands and reputation; (11)
the effects of COVID-19 and other potential future public health
crises, epidemics, pandemics or similar events on our business,
operating results, and cash flows are uncertain; (12) seasonality
of our business may adversely affect our net sales and operating
income; (13) our operations could be disrupted by natural
disasters; (14) sales of moissanite and lab grown diamond jewelry
could be dependent upon the pricing of precious metals, which is
beyond our control; (15) our current customers may potentially
perceive us as a competitor in the finished jewelry business; (16)
if the e-commerce opportunity changes dramatically or if e-commerce
technology or providers change their models, our results of
operations may be adversely affected; (17) governmental regulation
and oversight might adversely impact our operations; (18) the
execution of our business plans could significantly impact our
liquidity; (19) we are subject to arbitration, litigation and
demands, which could result in significant liability and costs, and
impact our resources and reputation; (20) the financial
difficulties or insolvency of one or more of our major customers or
their lack of willingness and ability to market our products could
adversely affect results; (21) negative or inaccurate information
on social media could adversely impact our brand and reputation;
(22) we rely on assumptions, estimates, and data to calculate
certain of our key metrics and real or perceived inaccuracies in
such metrics may harm our reputation and negatively affect our
business; (23) we may not be able to adequately protect our
intellectual property, which could harm the value of our products
and brands and adversely affect our business;
(24) environmental, social, and governance matters may impact
our business, reputation, financial condition, and results of
operations; (25) if we fail to evaluate, implement, and integrate
strategic acquisition or disposition opportunities successfully,
our business may suffer; (26) our failure to maintain compliance
with The Nasdaq Stock Market's continued listing requirements could
result in the delisting of our common stock; (27) some
anti-takeover provisions of our charter documents may delay or
prevent a takeover of our Company; and (28) we cannot guarantee
that our share repurchase program will be utilized
to the full value approved, or that it will enhance long-term
stockholder value and repurchases we consummate could increase the
volatility of the price of our common stock and could have a
negative impact on our available cash balance, in addition to the
other risks and uncertainties described in more detail in our
filings with the U.S. Securities and Exchange Commission (the
"SEC"), including our Annual Report on Form 10-K for the fiscal
year ended June 30, 2023 and
subsequent reports filed with the SEC. Forward-looking statements
speak only as of the date they are made. We undertake no obligation
to update or revise such statements to reflect new circumstances or
unanticipated events as they occur except as required by the
federal securities laws, and you are urged to review and consider
disclosures that we make in the reports that we file with the
Securities and Exchange Commission, or SEC, that discuss other
factors relevant to our business.
- Financial Tables Follow –
Appendix
A
|
CHARLES &
COLVARD, LTD.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
Three Months Ended
June 30,
|
|
Year Ended June
30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
Net sales
|
$
|
5,564,231
|
|
$
|
9,303,743
|
|
$
|
29,946,234
|
|
$
|
43,089,024
|
|
Cost of goods
sold
|
|
10,561,473
|
|
|
5,498,676
|
|
|
25,212,383
|
|
|
22,845,702
|
|
Gross (loss)
profit
|
|
(4,997,242)
|
|
|
3,805,067
|
|
|
4,733,851
|
|
|
20,243,322
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
2,970,983
|
|
|
2,679,364
|
|
|
13,686,049
|
|
|
12,421,138
|
|
General and
administrative
|
|
1,369,034
|
|
|
1,068,296
|
|
|
5,023,822
|
|
|
4,948,980
|
|
Total operating
expenses
|
|
4,340,017
|
|
|
3,747,660
|
|
|
18,709,871
|
|
|
17,370,118
|
|
(Loss) Income from
operations
|
|
(9,337,259)
|
|
|
57,407
|
|
|
(13,976,020)
|
|
|
2,873,204
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
128,327
|
|
|
17,313
|
|
|
297,262
|
|
|
19,277
|
|
Loss on foreign
currency exchange
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(34)
|
|
Total other income,
net
|
|
128,327
|
|
|
17,313
|
|
|
297,262
|
|
|
19,243
|
|
(Loss) Income before
income taxes
|
|
(9,208,932)
|
|
|
74,720
|
|
|
(13,678,758)
|
|
|
2,892,447
|
|
Income tax
expense
|
|
(43,881)
|
|
|
(33,950)
|
|
|
(5,902,036)
|
|
|
(518,532)
|
|
Net (loss)
income
|
$
|
(9,252,813)
|
|
$
|
40,770
|
|
$
|
(19,580,794)
|
|
$
|
2,373,915
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.30)
|
|
$
|
0.00
|
|
$
|
(0.64)
|
|
$
|
0.08
|
|
Diluted
|
$
|
(0.30)
|
|
$
|
0.00
|
|
$
|
(0.64)
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares used
in computing net (loss) income per
common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
30,344,954
|
|
|
30,534,331
|
|
|
30,376,745
|
|
|
30,363,076
|
|
Diluted
|
|
30,344,954
|
|
|
31,224,390
|
|
|
30,376,745
|
|
|
31,316,028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHARLES &
COLVARD, LTD.
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
June
30,
|
|
|
2023
|
|
2022
|
|
|
(unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
10,446,532
|
|
$
|
15,668,361
|
|
Restricted
cash
|
|
5,122,379
|
|
|
5,510,979
|
|
Accounts receivable,
net
|
|
380,085
|
|
|
2,220,816
|
|
Inventory,
net
|
|
7,476,046
|
|
|
11,024,276
|
|
Note
receivable
|
|
250,000
|
|
|
250,000
|
|
Prepaid expenses and
other assets
|
|
901,354
|
|
|
1,190,012
|
|
Total current
assets
|
|
24,576,396
|
|
|
35,864,444
|
|
Long-term
assets:
|
|
|
|
|
|
|
Inventory,
net
|
|
19,277,530
|
|
|
22,488,524
|
|
Property and
equipment, net
|
|
2,491,569
|
|
|
1,901,176
|
|
Intangible assets,
net
|
|
305,703
|
|
|
265,730
|
|
Operating lease
right-of-use assets
|
|
2,183,232
|
|
|
2,787,419
|
|
Deferred income taxes,
net
|
|
-
|
|
|
5,851,904
|
|
Other
assets
|
|
49,658
|
|
|
49,658
|
|
Total long-term
assets
|
|
24,307,692
|
|
|
33,344,411
|
|
TOTAL
ASSETS
|
$
|
48,884,088
|
|
$
|
69,208,855
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
$
|
4,786,155
|
|
$
|
4,401,229
|
|
Operating lease
liabilities, current portion
|
|
880,126
|
|
|
856,571
|
|
Accrued expenses and
other liabilities
|
|
1,395,479
|
|
|
1,546,483
|
|
Total current
liabilities
|
|
7,061,760
|
|
|
6,804,283
|
|
Long-term
liabilities:
|
|
|
|
|
|
|
Noncurrent operating
lease liabilities
|
|
2,047,742
|
|
|
2,846,805
|
|
Total long-term
liabilities
|
|
2,047,742
|
|
|
2,846,805
|
|
Total
liabilities
|
|
9,109,502
|
|
|
9,651,088
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
Common stock, no par
value; 50,000,000 shares authorized;
30,912,108 shares issued and 30,523,705 shares
outstanding at
June 30, 2023 and 30,778,046 shares issued and
30,747,759
shares outstanding at June 30, 2022
|
|
57,242,211
|
|
|
57,242,211
|
|
Additional paid-in
capital
|
|
26,205,919
|
|
|
25,956,491
|
|
Treasury stock, at
cost, 388,403 shares and 30,287 shares at June 30,
2023 and 2022, respectively
|
|
(489,979)
|
|
|
(38,164)
|
|
Accumulated
deficit
|
|
(43,183,565)
|
|
|
(23,602,771)
|
|
Total shareholders'
equity
|
|
39,774,586
|
|
|
59,557,767
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY
|
$
|
48,884,088
|
|
$
|
69,208,855
|
|
CHARLES &
COLVARD, LTD.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
Year Ended June
30,
|
|
|
2023
|
|
2022
|
|
|
|
(unaudited)
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
Net (loss)
income
|
$
|
(19,580,794)
|
|
$
|
2,373,915
|
|
Adjustments to
reconcile net (loss) income to net cash (used in) provided by
operating activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
653,157
|
|
|
479,308
|
|
Stock-based
compensation
|
|
249,428
|
|
|
774,341
|
|
Provision for
uncollectible accounts
|
|
98,000
|
|
|
14,000
|
|
Recovery of sales
returns
|
|
(23,000)
|
|
|
(84,000)
|
|
Inventory
write-downs
|
|
6,004,000
|
|
|
195,000
|
|
Recovery of accounts
receivable discounts
|
|
(4,496)
|
|
|
(4,285)
|
|
Deferred income
taxes
|
|
5,851,904
|
|
|
498,926
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
|
1,770,227
|
|
|
(484,457)
|
|
Inventory
|
|
755,224
|
|
|
(4,535,080)
|
|
Prepaid expenses and
other assets, net
|
|
892,845
|
|
|
926,780
|
|
Accounts
payable
|
|
384,926
|
|
|
1,626,856
|
|
Accrued income
taxes
|
|
-
|
|
|
(9,878)
|
|
Accrued expenses and
other liabilities
|
|
(926,512)
|
|
|
(1,198,873)
|
|
Net cash
(used in) provided by operating activities
|
|
(3,875,091)
|
|
|
572,553
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
(1,229,571)
|
|
|
(1,496,471)
|
|
Payments for intangible
assets
|
|
(53,952)
|
|
|
(64,188)
|
|
Net cash used in investing activities
|
|
(1,283,523)
|
|
|
(1,560,659)
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
Repurchases of common
stock
|
|
(451,815)
|
|
|
(38,164)
|
|
Stock option
exercises
|
|
-
|
|
|
758,659
|
|
Net cash (used in)
provided by financing activities
|
|
(451,815)
|
|
|
720,495
|
|
|
|
|
|
|
|
|
NET DECREASE IN CASH,
CASH EQUIVALENTS AND RESTRICTED CASH
|
|
(5,610,429)
|
|
|
(267,611)
|
|
CASH, CASH EQUIVALENTS
AND RESTRICTED CASH, BEGINNING OF
YEAR
|
|
21,179,340
|
|
|
21,446,951
|
|
CASH, CASH
EQUIVALENTS AND RESTRICTED CASH, END OF YEAR
|
$
|
15,568,911
|
|
$
|
21,179,340
|
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
|
|
Cash paid during the
year for taxes
|
$
|
5,900
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to
Condensed Consolidated Balance Sheets:
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
Cash
and cash equivalents
|
$
|
10,446,532
|
|
$
|
15,668,361
|
|
Restricted cash
|
|
5,122,379
|
|
|
5,510,979
|
|
|
$
|
15,568,911
|
|
$
|
21,179,340
|
|
|
|
|
|
|
|
|
Appendix
B
|
CHARLES &
COLVARD, LTD. SUMMARY FINANCIAL INFORMATION BY REPORTABLE
SEGMENT (unaudited)
|
|
The Company evaluates
the financial performance of its segments based on net sales and
product line gross
profit (loss), or the excess of product line sales over product
line cost of goods sold. The Company's product line
cost of goods sold is defined as product cost of goods sold,
excluding non-capitalized expenses from the
Company's manufacturing and production control departments,
comprising personnel costs, depreciation,
leases, utilities, and corporate overhead allocations; freight out;
inventory write-downs; and other inventory
adjustments, comprising costs of quality issues, and damaged
goods.
|
|
Summary unaudited
financial information by reportable segment for the three months
ended June 30, 2023 is as follows:
|
|
|
Three Months Ended
June 30, 2023
|
|
|
Online
Channels
|
|
Traditional
|
|
Total
|
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
Finished
Jewelry
|
$
|
3,950,598
|
|
$
|
737,101
|
|
|
$
|
4,687,699
|
|
Loose
jewels
|
|
227,570
|
|
|
648,962
|
|
|
|
876,532
|
|
Total
|
$
|
4,178,168
|
|
$
|
1,386,063
|
|
|
$
|
5,564,231
|
|
|
|
|
|
|
|
|
|
|
|
|
Product line cost of
goods sold
|
|
|
|
|
|
|
|
|
|
|
Finished
jewelry
|
$
|
1,917,937
|
|
$
|
846,802
|
|
|
$
|
2,764,739
|
|
Loose
jewels
|
|
82,447
|
|
|
320,398
|
|
|
|
402,845
|
|
Total
|
$
|
2,000,384
|
|
$
|
1,167,200
|
|
|
$
|
3,167,584
|
|
|
|
|
|
|
|
|
|
|
|
|
Product line gross
profit (loss)
|
|
|
|
|
|
|
|
|
|
|
Finished
jewelry
|
$
|
2,032,661
|
|
$
|
(109,701)
|
|
|
$
|
1,922,960
|
|
Loose
jewels
|
|
145,123
|
|
|
328,564
|
|
|
|
473,687
|
|
Total
|
$
|
2,177,784
|
|
$
|
218,863
|
|
|
$
|
2,396,647
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
|
48,209
|
|
$
|
127,663
|
|
|
$
|
175,872
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
$
|
249,340
|
|
$
|
96,201
|
|
|
$
|
345,541
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHARLES &
COLVARD, LTD. SUMMARY FINANCIAL INFORMATION BY REPORTABLE
SEGMENT (unaudited)
|
|
Summary unaudited
financial information by reportable segment for the three months
ended June 30, 2022 is as follows:
|
|
|
Three Months Ended
June 30, 2022
|
|
|
Online
Channels
|
|
Traditional
|
|
|
Total
|
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
Finished
Jewelry
|
$
|
4,879,657
|
|
$
|
1,186,529
|
|
|
$
|
6,066,186
|
|
Loose
jewels
|
|
852,118
|
|
|
2,385,439
|
|
|
|
3,237,557
|
|
Total
|
$
|
5,731,775
|
|
$
|
3,571,968
|
|
|
$
|
9,303,743
|
|
|
|
|
|
|
|
|
|
|
|
|
Product line cost of
goods sold
|
|
|
|
|
|
|
|
|
|
|
Finished
jewelry
|
$
|
2,132,703
|
|
$
|
1,051,674
|
|
|
$
|
3,184,377
|
|
Loose
jewels
|
|
332,228
|
|
|
1,329,565
|
|
|
|
1,661,793
|
|
Total
|
$
|
2,464,931
|
|
$
|
2,381,239
|
|
|
$
|
4,846,170
|
|
|
|
|
|
|
|
|
|
|
|
|
Product line gross
profit
|
|
|
|
|
|
|
|
|
|
|
Finished
jewelry
|
$
|
2,746,954
|
|
$
|
134,855
|
|
|
$
|
2,881,809
|
|
Loose
jewels
|
|
519,890
|
|
|
1,055,874
|
|
|
|
1,575,764
|
|
Total
|
$
|
3,266,844
|
|
$
|
1,190,729
|
|
|
$
|
4,457,573
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
|
61,857
|
|
$
|
67,253
|
|
|
$
|
129,110
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
$
|
191,141
|
|
$
|
55,034
|
|
|
$
|
246,175
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHARLES &
COLVARD, LTD. SUMMARY FINANCIAL INFORMATION BY REPORTABLE
SEGMENT (unaudited)
|
|
Summary unaudited
financial information by reportable segment for the year ended June
30, 2023 is as follows:
|
|
|
Year Ended June 30,
2023
|
|
|
Online
Channels
|
|
Traditional
|
|
|
Total
|
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
Finished
Jewelry
|
$
|
19,607,941
|
|
$
|
4,377,673
|
|
|
$
|
23,985,614
|
|
Loose
jewels
|
|
1,884,939
|
|
|
4,075,681
|
|
|
|
5,960,620
|
|
Total
|
$
|
21,492,880
|
|
$
|
8,453,354
|
|
|
$
|
29,946,234
|
|
|
|
|
|
|
|
|
|
|
|
|
Product line cost of
goods sold
|
|
|
|
|
|
|
|
|
|
|
Finished
jewelry
|
$
|
9,214,749
|
|
$
|
3,182,342
|
|
|
$
|
12,397,091
|
|
Loose
jewels
|
|
705,576
|
|
|
2,039,401
|
|
|
|
2,744,977
|
|
Total
|
$
|
9,920,325
|
|
$
|
5,221,743
|
|
|
$
|
15,142,068
|
|
|
|
|
|
|
|
|
|
|
|
|
Product line gross
profit
|
|
|
|
|
|
|
|
|
|
|
Finished
jewelry
|
$
|
10,393,192
|
|
$
|
1,195,331
|
|
|
$
|
11,588,523
|
|
Loose
jewels
|
|
1,179,363
|
|
|
2,036,280
|
|
|
|
3,215,643
|
|
Total
|
$
|
11,572,555
|
|
$
|
3,231,611
|
|
|
$
|
14,804,166
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
|
215,978
|
|
$
|
437,179
|
|
|
$
|
653,157
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
$
|
423,150
|
|
$
|
806,421
|
|
|
$
|
1,229,571
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHARLES &
COLVARD, LTD. SUMMARY FINANCIAL INFORMATION BY REPORTABLE
SEGMENT
|
|
Summary financial
information by reportable segment for the year ended June 30, 2022
is as follows:
|
|
|
Year Ended June 30,
2022
|
|
|
Online
Channels
|
|
Traditional
|
|
|
Total
|
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
Finished
jewelry
|
$
|
23,539,347
|
|
$
|
6,172,883
|
|
|
$
|
29,712,230
|
|
Loose
jewels
|
|
3,240,702
|
|
|
10,136,092
|
|
|
|
13,376,794
|
|
Total
|
$
|
26,780,049
|
|
$
|
16,308,975
|
|
|
$
|
43,089,224
|
|
|
|
|
|
|
|
|
|
|
|
|
Product line cost of
goods sold
|
|
|
|
|
|
|
|
|
|
|
Finished
jewelry
|
$
|
9,837,830
|
|
$
|
4,094,870
|
|
|
$
|
13,932,700
|
|
Loose
jewels
|
|
1,209,832
|
|
|
4,959,958
|
|
|
|
6,169,790
|
|
Total
|
$
|
11,047,662
|
|
$
|
9,054,828
|
|
|
$
|
20,102,490
|
|
|
|
|
|
|
|
|
|
|
|
|
Product line gross
profit
|
|
|
|
|
|
|
|
|
|
|
Finished
jewelry
|
$
|
13,701,517
|
|
$
|
2,078,013
|
|
|
$
|
15,779,530
|
|
Loose
jewels
|
|
2,030,870
|
|
|
5,176,134
|
|
|
|
7,207,004
|
|
Total
|
$
|
15,732,387
|
|
$
|
7,254,147
|
|
|
$
|
22,986,534
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
|
235,643
|
|
$
|
243,665
|
|
|
$
|
479,308
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
$
|
305,586
|
|
$
|
1,190,885
|
|
|
$
|
1,496,471
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHARLES &
COLVARD, LTD. SUMMARY FINANCIAL INFORMATION BY REPORTABLE
SEGMENT (unaudited)
|
|
An unaudited
reconciliation of the Company's total product line cost of goods
sold by reportable segment to its
cost of goods sold as reported in the unaudited condensed
consolidated financial statements for each applicable
period presented herein is as follows:
|
|
|
Three
Months
Ended
June 30,
2023
|
|
Year
Ended
June 30,
2023
|
|
|
Product line cost of
goods sold by reportable segment
|
$
|
3,167,584
|
|
$
|
15,142,068
|
|
|
Non-capitalized
manufacturing and production control expenses
|
|
550,263
|
|
|
2,210,494
|
|
|
Freight out
|
|
217,266
|
|
|
1,068,437
|
|
|
Inventory
write-downs
|
|
5,885,000
|
|
|
6,004,000
|
|
|
Other inventory
adjustments
|
|
741,360
|
|
|
787,384
|
|
|
Consolidated cost of
goods sold
|
$
|
10,561,473
|
|
$
|
25,212,383
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
Ended
June 30,
2022
|
|
Year
Ended
June 30,
2022
|
|
Product line cost of
goods sold by reportable segment
|
$
|
4,846,170
|
|
$
|
20,102,490
|
|
Non-capitalized
manufacturing and production control expenses
|
|
417,679
|
|
|
1,661,207
|
|
Freight out
|
|
218,207
|
|
|
1,195,062
|
|
Inventory (reserve
release) write-downs
|
|
(37,000)
|
|
|
195,000
|
|
Other inventory
adjustments
|
|
53,620
|
|
|
(308,057)
|
|
Consolidated cost of
goods sold
|
$
|
5,498,676
|
|
$
|
22,845,702
|
|
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SOURCE Charles & Colvard, Ltd.