LJ International notes sustained growth

01 Jul '08

2 min read

LJ International Inc (LJI) a leading jewelry manufacturer and retailer, announced financial results for the fiscal year ended December 31, 2007.

Revenues for 2007 totaled $152.0 million, up 23% from $123.8 million in 2006. Most of the increase was due to a 127% increase in sales for the Company's retail operations, to $34.3 million from $15.1 million. Wholesale revenues also increased, by 8%, to $117.7 million in 2007 from $108.7 million in 2006.

Net income for fiscal 2007 was $1.5 million, or $0.07 per diluted share, compared to $5.3 million, or $0.29 per diluted share, in 2006.

The decrease was primarily due to costs associated with the opening of an additional 50 new ENZO retail stores during the year.

These start-up and ongoing operating costs consisted primarily of rental expenses, advertising spending and increased staffing. The Company's ENZO Division expanded its
number of retail stores in China from 41 in 2006 to 91 in 2007.

CEO Notes Sustained Growth:
"Results are encouraging to us because they show that LJI was able to maintain its strong top-line growth and still remain profitable in a challenging global market for luxury consumer products," said Yu Chuan Yih, Chairman and CEO of LJ International.

"The past year also saw us maintain steady progress toward our goal of becoming a leading retailer as well as wholesale distributor of fine jewelry.

With 100 ENZO retail stores open in China, Hong Kong and Macau, we will now be able to take advantage of China's continued economic boom.

Our retail operation also gives us welcome diversification at a time when our older, primarily North American-based wholesale business must contend with the effects of an economic slowdown."

Sales Trend Leads to China:
On a geographic basis, the Company's revenues in 2007 continued the previous year's trend of growing modestly in North America, falling in Japan and increasing sharply in China.

Sales in Europe also grew strongly. China sales rose 83%, to $36.7 million in 2007 from $20.0 million in 2006. North American sales rose 5%, to $80.6 million from $76.9 million.

Sales in Japan fell 10%, to $2.2 million from $2.5 million, while sales to Europe and other countries rose 33%, to $32.6 million from $24.5 million. Sales to North America, Japan, Europe and other countries outside China were predominantly wholesale.

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