In This Article:
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Revenue: $5.3 million in Q3 FY 2024, down 21% from $6.6 million in Q3 FY 2023.
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Gross Margin: 23% in Q3 FY 2024, down from 32% in Q3 FY 2023.
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Net Income: Net loss of $3.6 million in Q3 FY 2024, improved from a net loss of $8.4 million in Q3 FY 2023.
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Earnings Per Share: Loss of $0.12 per diluted share in Q3 FY 2024, compared to a loss of $0.28 per diluted share in Q3 FY 2023.
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Inventory: $25.3 million as of March 31, 2024, down from $33.3 million as of March 31, 2023.
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Free Cash Flow: Used $2.1 million in operations during Q3 FY 2024, compared to $800,000 used in Q3 FY 2023.
Release Date: May 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Revenue declines are shrinking across sequential quarters, showing signs of stabilization.
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Increased sales in key product lines, with Forever One and KDL lab-grown diamond sales up from the previous year.
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Expansion into new markets and product categories, including the launch of the Everbright gem brand.
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Strategic investments in marketing and digital platforms to enhance brand awareness and customer engagement.
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Strong liquidity position with $9.2 million in cash and access to additional credit facilities.
Negative Points
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Overall revenue for Q3 was down 21% compared to the same quarter last year.
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Continued margin erosion due to rising gold prices and increased promotional activities.
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Significant increase in operating expenses, particularly in sales and marketing.
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Net loss reported for the quarter, although lower than the previous year's loss.
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Challenges in the jewelry and gemstone market, including pricing pressures and weak consumer confidence.
Q & A Highlights
Q: Do you still have your stock buyback in place and are management buying stock back personally? A: Don O'Connell, President and CEO of Charles & Colvard, confirmed that directors, including himself, have bought a significant amount of shares recently. He mentioned that $4.5 million remains in the repurchase program for stock buybacks.
Q: Are you gentlemen going to buy back stock at a sort of book value here? A: Don O'Connell noted that the company is trading below book value and considers it a wise move to buy back stock, ensuring they maintain liquidity and complete ongoing initiatives.
Q: At what point do you think the company could at least turn cash flow positive? A: Don O'Connell explained that the company is focusing on completing goals and initiatives that include building out capabilities and marketing strategies. He emphasized the importance of getting a return on ad spend and mentioned the launch of a next-gen website expected to drive future growth and help achieve profitability.