Gross Margins on Branded Diamonds Propels Lazare Kaplan

Diamond company Lazare Kaplan reports today net sales of $235.8 million for the fiscal year and increase of 16 percent over the last year for sales of rough and polished diamonds.

Lazare Kaplan International released today financial results for the fourth quarter and fiscal year ended May 31, 2004. For the fourth quarter net sales were $64.5 million, an increase of 44 percent, compared to the same period last year.

Net income for the fourth quarter and fiscal year was $1.2 million and $2.4 million, compared to $0.3 million and $1.1 million in the comparable periods last year.

Net income for the fiscal year included a charge of approximately $1.5 million ($1.0 million after tax) in connection with the adoption of FASB Statement No. 142, "Goodwill and other Intangible Assets". This non-cash charge was recorded as the cumulative effect of a change in accounting principle.

Polished diamond gross margin for the fourth quarter and fiscal year was 15.3% compared to 15.8% and 15.2% for the same periods in the prior year. While comparable to the prior year periods, fiscal 2004 polished diamond gross margin percentages reflect improved margin on branded products offset by lower gross margin on commercial diamonds.

Rough diamond gross margin for the fourth quarter and fiscal year was 5.5% and 4.6% compared to 5.5% and 3.9% for the same periods in the prior year.

The results helped company shares move up $0.30 to $7.90, still 15 percent below its value three months ago and well below the $9.19 high mark of the past year.