Charles & Colvard 2005 Sales Increase 82% to $43.5 Million

Charles $ Colvard, the sole source of moissanite, yesterday announced fourth quarter sales of $11.7 million and net income of $884,000. This represents a 34 percent increase over last year's fourth quarter sales of $8.7 million and a 90 percent increase versus last year's fourth quarter net income of $465,000.

Sales for 2005 were 82 percent ahead of 2004 sales of $23.9 million on shipments of 136,000 carats. The 2005 net income was 264 percent above 2004 net income of $1,612,000.

Bob Thomas, president and CEO of Charles & Colvard, noted that 2005 had been an extremely successful year for the company. "Revenue and earnings growth were fueled by our efforts to expand distribution and supported by an effective marketing campaign. Our fundamental strategy has not changed; we intend to grow revenue while remaining profitable by increasing awareness and demand for our brilliant jewel, moissanite."

U.S. sales, which represent 93 percent of total sales, rose 39 percent for the quarter (46 percent in carats). The company attributed the rise to sales to their largest distributor to the independent jeweler and to a lesser extent the rollout to jewelry departments leased to Finlay Enterprises that began in the first quarter of 2005.

Fourth quarter international sales decreased 10 percent (16 percent in carats) primarily due to decreased sales to Thailand, United Kingdom, and India offset by higher sales to Italy, Vietnam and Hong Kong.

Total Company shipments of 69,000 carats for the fourth quarter were 39 percent above the 50,000 carats in the same period of 2004.

Gross profit as a percentage of sales was 66.8 percent for 2005 and 71.9 percent for the fourth quarter, an increase of 2.6 and 11.1 percentage points respectively.

Thomas also announced that moissanite jewelry will be available in 90 Helzberg Diamond stores by the end of the first quarter, an increase of 50 stores. In addition, Zales Corporation has expanded its testing of moissanite to include 20 stores within their Zales Outlet chain and will begin testing during the second quarter in Zales-Canada, People's Division.

Recently, K&G Creations announced that Sarah Ferguson, the Duchess of York, has signed an exclusive jewelry licensing agreement to create a collection of unique jewelry designs featuring Charles & Colvard created moissanite.