Lazare Kaplan Reports Improved Sales, Still Unable to Release Full Results

(IDEX Online News) - Lazare Kaplan International Inc. estimated that net sales in its third quarter totaled $39.5 million. The company expressed caution in its filings, saying that it has been unable to resolve material uncertainties.

LKI has been in a legal and commercial battle to resolve what it described as it inability “to resolve a material uncertainty concerning (a) the collectability and recovery of certain assets, and (b) the Company's potential obligations under certain lines of credit and a guaranty.” This led to repeated delays in its financial filings.

Estimated net sales in the nine months ended February 28, 2011 are $101.5 million as compared to net sales of $126.1 million in the corresponding period of the last fiscal year.

LKI settled some of the reported uncertainties, $64 million in obligations, when it reached a settlement with two of its lenders, ABN AMRO Bank and the Royal Bank of Scotland, paying the two banks $14 million.

“The Company is continuing to pursue final resolution of the remaining Material Uncertainties, of which it can give no assurance of success,” LKI said on Thursday.

Because the company is unable to assess the potential effect or resolution of the remaining uncertainties will have on its financial results, LKI is unable to finalize its financial statements for Q3 2011 or file its Form 10-Q for that period, it reported.

In addition, LKI has been unable to finalize its audited financial statements for the fiscal years ended May 31, 2009 and May 31, 2010, and its financial statements for the fiscal quarters ended August 31, 2009, November 30, 2009, February 28, 2010, August 31, 2010, and November 30, 2010.

While stating that it is aggressively working to resolve the remaining material uncertainties, it added that it is not in a position to give a reasonable estimate of the its gross margin or pre-tax income.