Charles & Colvard Reports Fourth Quarter and Fiscal Year 2020 Financial Results
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Charles & Colvard Reports Fourth Quarter and Fiscal Year 2020 Financial Results

Thursday, September 3, 2020 4:05 PM
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Topic:
Earnings

- Generated Positive Operating Cash Flow of $1.8 Million in Q4 2020 -

- Delivered Q4 2020 Gross Margin % Performance of 41% -

- Maintained Strong Balance Sheet and Liquidity -

- Conference Call with Accompanying Slide Presentation Scheduled Today at 4:30 PM ET -

RESEARCH TRIANGLE PARK, NC / ACCESSWIRE / September 3, 2020 / Charles & Colvard, Ltd. (NASDAQ:CTHR) (the "Company"), the original and leading worldwide source of created moissanite, reported financial results for the fourth quarter and fiscal year ended June 30, 2020. For the fourth quarter of fiscal 2020, the Company reported net sales of $4.4 million and net loss of $1.0 million, or $0.04 loss per diluted share, which includes the non-recurring impact of severance and stock-based compensation from the Company's CEO transition and severance cost for the reduction in staff. For the fiscal year ended June 30, 2020, the Company reported net sales of $29.2 million and net loss of $6.2 million, or $0.22 loss per diluted share, which includes the impact of $5.3 million related to the write-off of legacy material inventory.

"During this quarter, despite these trying times, we were able to generate positive operating cash flow by taking proactive measures to contract and realign our business," said Don O'Connell, President and CEO of Charles & Colvard. "We rightsized the business across all functional areas including reorganizing the management team, reducing staff and pivoting our marketing and advertising efforts. We were able to capitalize on our in-stock inventory position to support multiple online channels that saw a growing demand as the traditional retail landscape shifted due to the impacts of COVID-19. Due to these efforts, we began to see positive trends in June, which helped mitigate the continued impact of global shutdowns during the previous months. For the full year, our Online Channels segment and finished jewelry sales drove nearly 60% of revenue, led by our Forever OneTM, Moissanite by Charles & Colvard® and Signature Collection brands."

"As we look forward, we plan to execute strategies focused on driving shareholder value. With our solid cash reserves, healthy balance sheet, and dedicated team, we believe we are poised to capitalize on the recent momentum and increase our market share in the ever-expanding lab-grown space. We plan to increase brand awareness, expand our product offerings, and grow our digital footprint in our quest to become an industry leading fine jewelry company. We are committed to delivering financial performance through operational excellence and timely strategic actions," Mr. O'Connell concluded.

Recent Corporate Highlights

  • Appointed Don O'Connell to the position of President and Chief Executive Officer, effective June 1, 2020;
  • Added new retailer, Hudson's Bay, the iconic Canadian department store, providing an assortment of fine jewelry featuring Moissanite by Charles & Colvard® gemstones for the retailer's robust digital audience on TheBay.com;
  • Received $965,000 loan pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act;
  • Introduced the Virtual Bridal Ring Consultation service, which enables customers to request an individualized online shopping session with one of Charles & Colvard's bridal jewelry experts;
  • Created the National Women's Soccer League National Championship rings and serves as the official jewelry sponsor of the North Carolina Courage professional women's soccer team; and
  • Presented at Planet MicroCap Showcase Virtual Investor Conference and Diamond Equity Research Virtual Emerging Growth Invitational.

Financial Summary for Fourth Quarter Fiscal 2020
(Quarter Ended June 30, 2020 Compared to Quarter Ended June 30, 2019)

  • Net sales were $4.4 million for the quarter, a decrease of 42% compared with $7.6 million in the year-ago quarter.
  • In the Online Channels segment, which consists of e-commerce outlets including charlesandcolvard.com, third-party online marketplaces, drop-ship retail and other pure-play, exclusively e-commerce outlets, net sales totaled $3.0 million, for a decrease of 18%, representing 68% of total net sales for the quarter, compared with $3.6 million, or 48% of total net sales in the year-ago quarter.
  • In the Traditional segment, which consists of wholesale and retail customers, net sales totaled $1.4 million, for a decrease of 64%, representing 32% of total net sales for the quarter, compared with $4.0 million, or 52% of total net sales, in the year-ago quarter.
  • Finished jewelry net sales were $3.0 million for the quarter, a decrease of 20% compared with $3.7 million in the year-ago quarter.
  • Loose jewel net sales were $1.4 million for the quarter, a decrease of 63% compared with $3.9 million in the year-ago quarter.
  • Operating expenses were $2.8 million for the quarter, compared to $3.2 million in the year-ago quarter.
  • Net loss was $1.0 million, or $0.04 loss per diluted share for the quarter. This compared with net income of $162,000, or $0.01 earnings per diluted share, in the year-ago quarter.
  • Weighted average shares outstanding on a diluted basis was 28.7 million for the quarter, compared to 23.7 million in the year-ago quarter.

Financial Summary for Fiscal Year 2020

  • Net sales were $29.2 million for the fiscal year ended June 30, 2020, a decrease of 9% compared with $32.2 million in the year-ago period.
  • In the Online Channels segment, net sales increased 2% to $16.6 million, representing 57% of total net sales, for the fiscal year ended June 30, 2020, compared with $16.3 million, representing 51% of total net sales, in the year-ago period.
  • In the Traditional segment, net sales totaled $12.6 million, for a decrease of 21%, representing 43% of total net sales, for the fiscal year ended June 30, 2020, compared with $15.9 million, representing 49% of total net sales, in the year-ago period.
  • Finished jewelry net sales were $16.8 million for the fiscal year ended June 30, 2020, an increase of 9% compared with $15.5 million in the year-ago period.
  • Loose jewel net sales were $12.4 million for the fiscal year ended June 30, 2020, a decrease of 26% compared with $16.8 million in the year-ago period.
  • Cost of goods sold was $21.2 million for the fiscal year ended June 30, 2020, which included $5.3 million related to the write-off of legacy material inventory, compared to $17.4 million in the year-ago period.
  • Operating expenses were $14.3 million for the fiscal year ended June 30, 2020, compared to $12.6 million in the year-ago period.
  • Net loss was $6.2 million, or $0.22 loss per diluted share, for the fiscal year ended June 30, 2020, including the impact of the write-off of legacy material inventory. This compared with net income of $2.3 million, or $0.10 per diluted share, in the year-ago period.
  • Weighted average shares outstanding on a diluted basis was 28.6 million for the fiscal year ended June 30, 2020, compared to 22.1 million in the year-ago period.

Financial Position

Cash, cash equivalents and restricted cash totaled $14.6 million at June 30, 2020, representing an increase of $1.6 million from $13.0 million at June 30, 2019. Total inventory was $30.6 million at June 30, 2020, compared with $33.7 million at June 30, 2019. Total debt outstanding was $1.0 million at June 30, 2020, compared to none at June 30, 2019.

Investor Conference Call

Charles & Colvard will host an investor conference call and webcast presentation to discuss its financial results for the fourth quarter and fiscal year ended June 30, 2020 at 4:30 p.m. ET on Thursday, September 3, 2020. The investor conference call and accompanying presentation slides will be webcast live on the Internet and can be accessed in the Investor Relations section of the Company's website at https://ir.charlesandcolvard.com/events.

To participate via telephone, callers should dial 844-875-6912 (U.S. toll-free) or 412-317-6708 (international) and ask to be connected to the "Charles & Colvard, Ltd. Conference Call" a few minutes before 4:30 p.m. ET on Thursday, September 3, 2020.

A replay of this conference call will be available until September 10, 2020 at 877-344-7529 (U.S. toll-free) or 412-317-0088 (international). The replay conference ID is 10147035. The call will also be available for replay 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 can be accessible, beautiful, and conscientious. As an e-commerce driven business, the Company brings revolutionary gemstones and jewelry to market through the use of innovative technology and direct-to-consumer engagement. Charles & Colvard is the original pioneer of lab-created moissanite, a rare gemstone formed from silicon carbide. Consumers seek Charles & Colvard fashion, bridal and fine jewelry because of its exceptional quality, incredible value and shared beliefs in environmental and social responsibility. Charles & Colvard was founded in 1995 and is based in North Carolina's Research Triangle Park. 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," "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, financial condition and results of operations could continue to be adversely affected by an ongoing COVID-19 pandemic and related global economic 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) the execution of our business plans could significantly impact our liquidity; (4) our business and our results of operations could be materially adversely affected as a result of general and economic conditions; (5) 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; (6) we face intense competition in the worldwide gemstone and jewelry industry; (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 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; (11) our failure to maintain compliance with The Nasdaq Stock Market's continued listing requirements could result in the delisting of our common stock; (12) we may experience quality control challenges from time to time that can result in lost revenue and harm to our brands and reputation; (13) seasonality of our business may adversely affect our net sales and operating income; (14) our operations could be disrupted by natural disasters; (15) our loan, pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act as administered by the U.S. Small Business Administration may not be forgiven or may subject us to challenges and investigations regarding qualification for the loan; (16) 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; (17) negative or inaccurate information on social media could adversely impact our brand and reputation; (18) we depend on an exclusive supply agreement, or the Supply Agreement, with Cree, Inc., 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; (19) sales of moissanite jewelry could be dependent upon the pricing of precious metals, which is beyond our control; (20) our current customers may potentially perceive us as a competitor in the finished jewelry business; (21) 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; (22) a failure of our information technology infrastructure or a failure to protect confidential information of our customers and our network against security breaches could adversely impact our business and operations; (23) if we fail to evaluate, implement, and integrate strategic acquisition or disposition opportunities successfully, our business may suffer; (24) governmental regulation and oversight might adversely impact our operations; and (25) some anti-takeover provisions of our charter documents may delay or prevent a takeover of our company, in addition to the other risks and uncertainties described in our filings with the SEC, including our Annual Report on Form 10-K for the fiscal year ended June 30, 2020 and subsequent reports filed with the U.S. Securities and Exchange Commission (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 SEC that discuss other factors relevant to our business.

Contacts:

Clint J. Pete
Chief Financial Officer
919-468-0399
[email protected]

Jenny Kobin
Investor Relations
800-695-0650
[email protected]

-Financial Tables Follow-

Appendix A

CHARLES & COLVARD, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 
  Three Months Ended
June 30,
    Year Ended
June 30,
 
 
  2020     2019     2020     2019  
 
  (unaudited)     (unaudited)     (unaudited)        
Net sales
  $ 4,430,460     $ 7,607,700     $ 29,189,020     $ 32,244,109  
Costs and expenses:
                               
Cost of goods sold
    2,621,138       4,241,982       21,200,207       17,352,167  
Sales and marketing
    1,533,956       2,083,005       9,443,244       7,983,506  
General and administrative
    1,313,855       1,123,806       4,861,297       4,640,810  
Research and development
    -       647       -       2,069  
Total costs and expenses
    5,468,949       7,449,440       35,504,748       29,978,552  
(Loss) Income from operations
    (1,038,489 )     158,260       (6,315,728 )     2,265,557  
Other income (expense):
                               
Interest income
    11,908       11,022       158,091       11,022  
Interest expense
    (348 )     (1,213 )     (884 )     (2,198 )
Loss on foreign currency exchange
    (770 )     (33 )     (1,829 )     (344 )
Other expense
    -       -       -       (13 )
Total other income, net
    10,790       9,776       155,378       8,467  
(Loss) Income before income taxes
    (1,027,700 )     168,036       (6,160,350 )     2,274,024  
Income tax (expense) benefit
    (493 )     (6,122 )     (1,733 )     1,443  
Net (loss) income
  $ (1,028,193 )   $ 161,914     $ (6,162,083 )   $ 2,275,467  
 
                               
 
                               
Net (loss) income per common share:
                               
Basic
  $ (0.04 )   $ 0.01     $ (0.22 )   $ 0.10  
Diluted
  $ (0.04 )   $ 0.01     $ (0.22 )   $ 0.10  
 
                               
Weighted average number of shares used in computing net (loss) income per common share:
                               
Basic
    28,699,767       22,986,531       28,644,133       21,860,699  
Diluted
    28,699,767       23,670,417       28,644,133       22,111,223  
 
                               

CHARLES & COLVARD, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS

 
  June 30, 2020     June 30, 2019  
 
  (unaudited)        
ASSETS
           
Current assets:
           
Cash and cash equivalents
  $ 13,993,032     $ 12,465,483  
Restricted cash
    624,202       541,062  
Accounts receivable, net
    670,718       1,962,471  
Inventory, net
    7,443,257       11,909,792  
Prepaid expenses and other assets
    1,177,860       989,559  
Total current assets
    23,909,069       27,868,367  
Long-term assets:
               
Inventory, net
    23,190,702       21,823,928  
Property and equipment, net
    999,061       1,026,098  
Intangible assets, net
    170,151       97,373  
Operating lease right-of-use asset
    584,143       -  
Other assets
    51,461       330,615  
Total long-term assets
    24,995,518       23,278,014  
TOTAL ASSETS
  $ 48,904,587     $ 51,146,381  
 
               
LIABILITIES AND SHAREHOLDERS' EQUITY
               
Current liabilities:
               
Accounts payable
  $ 3,748,235     $ 3,279,548  
Operating lease liabilities
    622,493       -  
Current maturity of long-term debt
    193,000       -  
Accrued expenses and other liabilities
    1,922,332       1,418,232  
Total current liabilities
    6,486,060       4,697,780  
Long-term liabilities:
               
Long-term debt
    772,000       -  
Noncurrent operating lease liabilities
    203,003       -  
Deferred rent
    -       236,745  
Accrued income taxes
    7,947       6,214  
Total long-term liabilities
    982,950     242,959  
Total liabilities
    7,469,010       4,940,739  
Commitments and contingencies
               
Shareholders' equity:
               
Common stock, no par value; 50,000,000 shares authorized; 28,949,410 and 28,027,569 shares issued and outstanding at June 30, 2020 and 2019, respectively
    54,342,864       54,342,864  
Additional paid-in capital
    25,880,165       24,488,147  
Accumulated deficit
    (38,787,452 )     (32,625,369 )
Total shareholders' equity
    41,435,577       46,205,642  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
  $ 48,904,587     $ 51,146,381  

CHARLES & COLVARD, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 
  Year Ended June 30,  
 
  2020     2019  
 
  (unaudited)        
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net (loss) income
  $ (6,162,083 )   $ 2,275,467  
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
               
Depreciation and amortization
    490,235       481,319  
Stock-based compensation
    459,538       502,805  
Provision for uncollectible accounts
    8,788       27,056  
(Recovery of) Provision for sales returns
    (42,000 )     98,000  
Inventory write-off
    5,863,991       393,000  
Provision for accounts receivable discounts
    3,751       6,275  
Changes in operating assets and liabilities:
               
Accounts receivable
    1,321,214       (328,080 )
Inventory
    (2,764,230 )     (2,298,182 )
Prepaid expenses and other assets, net
    490,438       (14,144 )
Accounts payable
    468,687       (891,404 )
Deferred rent
    -       (156,306 )
Accrued income taxes
    1,733       21,706  
Accrued expenses and other liabilities
    109,123       799,287  
Net cash provided by operating activities
    249,185       916,799  
 
               
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Purchases of property and equipment
    (458,854 )     (361,440 )
Payments for intangible assets
    (77,122 )     (64,319 )
Net cash used in investing activities
    (535,976 )     (425,759 )
 
               
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Proceeds from long-term debt
    965,000       -  
Issuance of common stock, net of offering costs
    932,480       9,058,568  
Stock option exercises
    -       63,751  
Net cash provided by financing activities
    1,897,480       9,122,319  
 
               
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
    1,610,689       9,613,359  
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF YEAR
    13,006,545       3,393,186  
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF YEAR
  $ 14,617,234     $ 13,006,545  
 
               
Reconciliation to Condensed Consolidated Balance Sheets:
  June 30, 2020     June 30, 2019  
Cash and cash equivalents
  $ 13,993,032     $ 12,465,483  
Restricted cash
    624,202       541,062  
 
  $ 14,617,234     $ 13,006,545  
 
               
Supplemental disclosure of cash flow information:
               
Cash paid during the year for interest
  $ 884     $ 2,198  
Cash paid during the year for taxes
  $ 2,050     $ 5,764  






 

 



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; product line gross profit, or the excess of product line sales over product line cost of goods sold; and operating (loss) income. 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, rent, utilities, and corporate overhead allocations; freight out; inventory valuation allowance adjustments; and other inventory adjustments, comprising costs of quality issues, damaged goods, and inventory write-downs.

The Company allocates certain general and administrative expenses between its Online Channels segment and its Traditional segment primarily based on net sales and number of employees to arrive at segment operating (loss) income. Unallocated expenses remain in its Traditional segment.

Summary unaudited financial information by reportable segment for the three months ended June 30, 2020 is as follows:

 
  Three Months Ended June 30, 2020  
 
  Online Channels     Traditional     Total  
Net sales
                 
Finished jewelry
  $ 2,636,333     $ 364,784     $ 3,001,117  
Loose jewels
    359,565       1,069,778       1,429,343  
Total
  $ 2,995,898     $ 1,434,562     $ 4,430,460  
 
                       
Product line cost of goods sold
                       
Finished jewelry
  $ 1,020,925     $ 192,340     $ 1,213,265  
Loose jewels
    131,213       537,818       669,031  
Total
  $ 1,152,138     $ 730,158     $ 1,882,296  
 
                       
Product line gross profit
                       
Finished jewelry
  $ 1,615,408     $ 172,444     $ 1,787,852  
Loose jewels
    228,352       531,960       760,312  
Total
  $ 1,843,760     $ 704,404     $ 2,548,164  
 
                       
Operating loss
  $ (311,606 )   $ (726,883 )   $ (1,038,489 )
 
                       
Depreciation and amortization
  $ 46,347     $ 77,566     $ 123,913  
 
                       
Capital expenditures
  $ 60,395     $ 3,634     $ 64,029  
 
                       

CHARLES & COLVARD, LTD.
SUMMARY FINANCIAL INFORMATION BY REPORTABLE SEGMENT
(unaudited)

Summary unaudited financial information by reportable segment for the three months ended June 30, 2019 is as follows:

 
  Three Months Ended June 30, 2019  
 
  Online Channels     Traditional     Total  
Net sales
                 
Finished jewelry
  $ 2,978,950     $ 768,438     $ 3,747,388  
Loose jewels
    657,659       3,202,653       3,860,312  
Total
  $ 3,636,609     $ 3,971,091     $ 7,607,700  
 
                       
Product line cost of goods sold
                       
Finished jewelry
  $ 1,170,046     $ 528,020     $ 1,698,066  
Loose jewels
    226,320       1,591,149       1,817,469  
Total
  $ 1,396,366     $ 2,119,169     $ 3,515,535  
 
                       
Product line gross profit
                       
Finished jewelry
  $ 1,808,904     $ 240,418     $ 2,049,322  
Loose jewels
    431,339       1,611,504       2,042,843  
Total
  $ 2,240,243     $ 1,851,922     $ 4,092,165  
 
                       
Operating income (loss)
  $ 250,539     $ (92,279 )   $ 158,260  
 
                       
Depreciation and amortization
  $ 48,874     $ 76,633     $ 125,507  
 
                       
Capital expenditures
  $ 6,400     $ 17,770     $ 24,170  
 
                       

CHARLES & COLVARD, LTD.
SUMMARY FINANCIAL INFORMATION BY REPORTABLE SEGMENT
(unaudited)

Summary unaudited financial information by reportable segment for the year ended June 30, 2020 is as follows:

 
  Year Ended June 30, 2020  
 
  Online Channels     Traditional     Total  
Net sales
                 
Finished jewelry
  $ 13,680,440     $ 3,097,188     $ 16,777,628  
Loose jewels
    2,944,100       9,467,292       12,411,392  
Total
  $ 16,624,540     $ 12,564,480     $ 29,189,020  
 
                       
Product line cost of goods sold
                       
Finished jewelry
  $ 5,760,413     $ 1,709,377     $ 7,469,790  
Loose jewels
    1,198,275       4,863,911       6,062,186  
Total
  $ 6,958,688     $ 6,573,288     $ 13,531,976  
 
                       
Product line gross profit
                       
Finished jewelry
  $ 7,920,027     $ 1,387,811     $ 9,307,838  
Loose jewels
    1,745,825       4,603,381       6,349,206  
Total
  $ 9,665,852     $ 5,991,192     $ 15,657,044  
 
                       
Operating loss
  $ (249,016 )   $ (6,066,712 )   $ (6,315,728 )
 
                       
Depreciation and amortization
  $ 177,703     $ 312,532     $ 490,235  
 
                       
Capital expenditures
  $ 305,570     $ 153,284     $ 458,854  

CHARLES & COLVARD, LTD.
SUMMARY FINANCIAL INFORMATION BY REPORTABLE SEGMENT

Summary financial information by reportable segment for the year ended June 30, 2019 is as follows:

 
  Year Ended June 30, 2019  
 
  Online Channels     Traditional     Total  
Net sales
                 
Finished jewelry
  $ 12,641,687     $ 2,815,656     $ 15,457,343  
Loose jewels
    3,697,069       13,089,697       16,786,766  
Total
  $ 16,338,756     $ 15,905,353     $ 32,244,109  
 
                       
Product line cost of goods sold
                       
Finished jewelry
  $ 5,220,551     $ 1,638,561     $ 6,859,112  
Loose jewels
    1,583,404       6,659,426       8,242,830  
Total
  $ 6,803,955     $ 8,297,987     $ 15,101,942  
 
                       
Product line gross profit
                       
Finished jewelry
  $ 7,421,136     $ 1,177,095     $ 8,598,231  
Loose jewels
    2,113,665       6,430,271       8,543,936  
Total
  $ 9,534,801     $ 7,607,366     $ 17,142,167  
 
                       
Operating income
  $ 1,643,552     $ 622,005     $ 2,265,557  
 
                       
Depreciation and amortization
  $ 172,819     $ 308,500     $ 481,319  
 
                       
Capital expenditures
  $ 69,975     $ 291,465     $ 361,440  

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  consolidated financial statements for each applicable period presented herein is as follows:

 
  Three Months
Ended
June 30, 2020
    Year
Ended
June 30, 2020
 
Product line cost of goods sold by reportable segment
  $ 1,882,296     $ 13,531,976  
Non-capitalized manufacturing and production control expenses
    339,457       1,443,698  
Freight out
    85,179       510,612  
Inventory write-off
    243,000       5,863,991  
Other inventory adjustments
    71,206       (150,070 )
Consolidated cost of goods sold
  $ 2,621,138     $ 21,200,207  

 

 
 
Three Months
Ended
June 30, 2019
   
Year
Ended
June 30, 2019
 
Product line cost of goods sold by reportable segment
  3,515,535     15,101,942  
Non-capitalized manufacturing and production control expenses
    412,777       1,442,446  
Freight out
    149,545       578,772  
Inventory write-off
    16,000       393,000  
Other inventory adjustments
    148,125       (163,993
Consolidated cost of goods sold
  4,241,982     17,352,167  

SOURCE: Charles & Colvard, Ltd.

Charles & Colvard, Ltd.
Exchange:
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CTHR
$0.85
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