NEW YORK, Jan. 12, 2007 (PRIME NEWSWIRE) -- Lazare Kaplan International Inc. (AMEX:LKI) today announced financial results for the second quarter of fiscal 2007 ended November 30, 2006.
Net sales for the three and six month periods ended November 30, 2006 were $94.4 million and $233.3 million, a decrease of approximately 2% and 1% compared to the respective prior year periods. Gross margin for the three and six months ended November 30, 2006 was 5.2% and 4.4%, respectively compared to 6.3% and 6.4% in the comparable prior year periods.
The decrease in sales and gross margin for the three and six month periods reflects a shift in sales mix with a higher percentage of overall sales derived from lower margin rough diamond trading and the sale of fine cut commercial polished diamonds. In addition, during the three months ended November 30, 2006 the Company sought to close out certain slower moving commercial polished diamonds at reduced prices to maximize cash flow and reduce inventory-carrying costs.
Net income / (loss) for the three and six month periods ended November 30, 2006 was $(1.4) million, or $(0.17) per share, and $(3.2) million, or $(0.39) per share, compared to $(0.4) million, or $(0.05) per share, and $0.5 million, or $0.06 per share, in the respective prior year periods. Fully diluted earnings per share for the three and six month period ended November 30, 2006 are based on the weighted average number of shares outstanding of 8,197,634 and 8,197,420, as compared to 8,327,060 and 8,782,278 in the comparable prior year periods.
Lazare Kaplan International Inc. sells its diamonds and jewelry products through a worldwide distribution network. The Company is noted for its ideal cut diamonds, which it markets internationally under the brand name, Lazare Diamonds(r).
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
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(In thousands, except per share and per share data)
November 30, Three Months Ended Six Months Ended
(unaudited) 2006 2005 2006 2005
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Net sales $ 94,411 $ 96,275 $ 233,295 $ 235,131
Cost of Sales 89,482 90,221 223,121 220,095
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4,929 6,054 10,174 15,036
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Selling, general and
administrative
expenses 6,831 6,429 13,070 13,116
Equity in income
of joint ventures (907) -- (1,200) --
Interest expense,
net of interest
income 1,548 341 3,270 1,244
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7,472 6,770 15,140 14,360
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Income / (loss)
before income
taxes (2,543) (716) (4,966) 676
Income tax
provision /
(benefit) (1,180) (309) (1,778) 175
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NET INCOME /
(LOSS) $ (1,363) $ (407) $ (3,188) $ 501
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EARNINGS / (LOSS)
PER SHARE
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Basic earnings /
(loss) per share $ (0.17) $ (0.05) $ (0.39) $ 0.06
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Average number
of shares
outstanding
during the
period 8,197,634 8,327,060 8,197,420 8,348,798
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Diluted earnings
/ (loss) per
share $ (0.17) $ (0.05) $ (0.39) $ 0.06
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Average number
of shares
outstanding
during the period
assuming dilution 8,197,634 8,327,060 8,197,420 8,782,278
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