NEW YORK, Oct. 12, 2005 (PRIMEZONE) -- Lazare Kaplan International Inc. (AMEX:LKI) today announced financial results for the first quarter of fiscal 2006 ended August 31, 2005.
Net sales for the three months ended August 31, 2005 and 2004 were $138.9 million and $78.3 million, respectively, an increase of $60.6 million over the comparable period in the prior year. The increase in net sales reflects higher sales of both polished and rough diamonds.
Gross margin on net sales was $9.0 million, or 6.5%, compared to $9.9 million, or 12.6%, in the first quarter last year. The decline in gross margin reflects a shift in sales mix with a higher percentage of first quarter 2006 revenues derived from rough diamond trading compared to the same period last year. In addition, a higher percentage of polished sales were derived from fine cut commercial diamonds (which typically carry a lower gross margin than branded diamonds) in the three months ended August 31, 2005 than in the comparable prior year period.
For the three months ended August 31, 2005, income before income taxes was $1.4 million compared to $3.8 million in the comparable prior year period.
Net income for the three month period ended August 31, 2005 was $0.9 million or $0.10 per fully diluted share, compared to $2.5 million or $0.29 per fully diluted share in the comparable prior year period. Fully diluted earnings per share for the three month period ended August 31, 2005 are based on the weighted average number of shares outstanding of 9,011,287 compared to 8,650,551 in the comparable prior year period.
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.
FINANCIAL HIGHLIGHTS
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(In thousands, except per share and share data)
Three Months Ended
August 31, 2005 and 2004 (unaudited) 2005 2004
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Net sales $ 138,856 $ 78,307
Cost of Sales 129,874 68,416
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8,982 9,891
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Selling, general and
administrative expenses 6,687 5,646
Interest expense 903 445
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7,590 6,091
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Income before income taxes 1,392 3,800
Income tax provision 484 1,293
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NET INCOME $ 908 $ 2,507
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EARNINGS PER SHARE
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Basic earnings per share $ 0.11 $ 0.30
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Average number of shares
outstanding during the period 8,368,621 8,494,177
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Diluted earnings per share $ 0.10 $ 0.29
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Average number of shares outstanding
during the period assuming dilution 9,011,287 8,650,551
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