NEW YORK, Oct. 13, 2006 (PRIMEZONE) -- Lazare Kaplan International Inc. (AMEX:LKI) today announced financial results for the first quarter of fiscal 2007 ended August 31, 2006.
Net sales for the three months ended August 31, 2006 were $138.9 million, equaling net sales in the comparable prior year period. Net sales for the current three-month period reflect a decrease in polished diamond sales offset by an increase in the sale of rough diamonds.
During the three months ended August 31, 2006, gross margin on net polished sales was 11.7% compared to 12.5% in the first quarter last year. The decline in polished gross margin percentage reflects a lower gross margin achieved on the sale of fine cut commercial diamonds partially offset by an increase in the gross margin achieved on the sale of branded diamonds.
Gross margin from the sale of rough diamonds for the three months ended August 31, 2006 was 1.3% compared to 3.8% for the comparable prior year period. The decrease in rough gross margin percentage reflects increased rough costs and associated fees charged by diamond producers at a time of excess supply and soft demand from diamond manufacturers. Additionally, the decrease in rough gross margin reflects costs incurred by the Company in connection with the expansion of Angolan sourcing and trading operations.
Net loss for the three months ended August 31, 2006 was $(1.8) million or $(0.22) per fully diluted share compared to net income of $0.9 million or $0.10 per fully diluted share in the comparable prior year period. Fully diluted earnings per share for the three-month period ended August 31, 2006 are based on the weighted average number of shares outstanding of 8,197,259 compared to 9,011,287 in the comparable prior year period.
Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties which may cause the Company's actual results in future periods to differ materially from forecasted results. Those risks include a softening of retailer or consumer acceptance of or demand for the Company's products, pricing pressures, adequate supply of rough diamonds and other competitive factors. These and other risks are more fully described in the Company's filings with the Securities and Exchange Commission. The information contained in this press release is accurate only as of the date issued. Investors should not assume that the statements made in these documents remain operative at a later time. Lazare Kaplan International Inc. undertakes no obligation to update any information contained in this news release.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share and share data)
August 31, 2006 and 2005 Three Months Ended
(unaudited) 2006 2005
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Net sales $ 138,884 $ 138,856
Cost of Sales 133,639 129,874
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5,245 8,982
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Selling, general and
administrative expenses 6,239 6,687
Equity in (income)/loss of
joint ventures (293) --
Interest expense 1,722 903
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7,668 7,590
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Income/(loss) before
income taxes (2,423) 1,392
Income tax provision/(benefit) (598) 484
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NET INCOME / (LOSS) $ (1,825) $ 908
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EARNINGS PER SHARE
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Basic earnings/(loss)
per share $ (0.22) $ 0.11
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Average number of shares
outstanding during the period 8,197,259 8,368,621
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Diluted earnings/(loss)
per share $ (0.22) $ 0.10
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Average number of shares
outstanding during the period
assuming dilution 8,197,259 9,011,287
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