"The strong consumer awareness levels of both Dame Elizabeth Taylor and Kathy Ireland, combined with an experienced, passionate and dedicated management team, have enabled House of Taylor Jewelry to rapidly emerge in an extremely competitive industry as a leading international jewelry company with a powerful collection of brands."
"We continue to selectively expand our product assortment and channels of distribution to meet the growing demand from consumers for our branded jewelry products," Abramov said.
"We are particularly pleased with the demand, independent door penetration and sell thru for our Kathy Ireland Jewelry line, which targets the broader spectrum of consumers with price points from $200 to $3,500. Going forward, we expect to ramp-up sales, further increase market awareness and expand our Kathy Ireland bridal, diamond and fashion assortments in the most frequently purchased categories."
For the first half of 2007, net sales more than doubled to $9.3 million from $3.8 million for the first half of 2006. Gross profit as a percentage of sales improved significantly to 13.6% from 4.8% for the 2006 first half.
Gross profit increased to $1.3 million in the current six-month period from $184,000 a year earlier. Selling, shipping and general and administrative expenses in the 2007 second quarter declined to $4.1 million from $4.3 million in the year-ago six-month period.
The increased sales, higher gross profit margin and lower SG&A expenses resulted in a significant reduction of the company's operating loss to $2.8 million for the second half of 2007 from $4.1 million in the prior-year period. Included in the $2.8 million loss for the second half of 2007 is $905,000 of non-cash expenses relating to depreciation, amortization, allowances and share based compensation.
The company incurred interest expense for the year-to-date period of $2.9 million, which included $2.2 million of non-cash expense related to the amortization of costs associated with convertible notes. This compares with $906,000 of interest expense last year, which included $573,000 of non-cash expense related to the amortization of costs associated with convertible notes.
For the year-to-date period, House of Taylor Jewelry incurred a net loss of $3.0 million, or $0.07 per share, which included a non-cash gain of $2.7 million due to the change in the fair value of the warrant liability.
In the 2006 six-month period, the company sustained a net loss of $2.4 million, or $0.06 per share, which also included a non-cash gain of $2.6 million due to the change in the fair value of the warrant liability.
"We continue to establish and strengthen industry relationships that help position House of Taylor Jewelry in the market as a key branded supplier of consistent, well-priced polished diamonds and diamond jewelry."
"With the success of this initiative to date and an enviable portfolio of jewelry brands, we are maintaining our focus on expanding growth with an objective achieving and sustaining profitability," Abramov said.
House of Taylor Jewelry Inc
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