Exhibit 99.1
Harry Winston Diamond Corporation Reports Record
Fourth Quarter Sales and Strong Year-End Results
TORONTO, CANADA (March 22, 2011) – Harry Winston Diamond Corporation (TSX:HW, NYSE:HWD) (the “Company”) today announced its fourth quarter and year-end results for the period ending January 31, 2011.
Fourth Quarter Highlights:
- Consolidated sales increased 61% to $215.4 million from $133.7 million in the comparable quarter of the prior year.
- For the mining segment, rough diamond sales for the fourth quarter were 30% higher at $82.7 million compared to $63.5 million for the fourth quarter last year. This increase resulted primarily from a 23% increase in the Company’s achieved rough diamond prices.
- Rough diamond production during the calendar quarter from the Diavik Diamond Mine was 1.54 million carats, compared to 1.53 million carats for the fourth calendar quarter of last year (on a 100% basis).
- Luxury brand segment sales for the fourth quarter increased 89% to $132.7 million from $70.2 million for the comparable quarter of the prior year.
- Consolidated net earnings attributable to shareholders for the fourth quarter were $9.9 million or $0.12 per share compared to a consolidated net loss attributable to shareholders of $3.4 million or $0.04 per share in the fourth quarter of the prior year. Included in consolidated net earnings attributable to shareholders for the quarter was a net foreign exchange loss of $3.0 million or $0.04 per share primarily on future income tax liabilities compared to a net foreign exchange loss of $2.0 million or $0.03 per share in the comparable quarter of the prior year.
Robert Gannicott, Chairman and Chief Executive Officer stated: “This past year we have seen rapid growth in diamond demand, which has had a positive effect on both segments of our business. New customers in emerging markets, especially Asia, have replaced demand from the traditional markets such as America during the financial crisis. As recovery in America and development in the BRIC economies continues, the outlook for rough diamond prices, led by jewelry sales, is expected to be robust.”
He continued, “Our operating earnings improved by $86 million versus the prior year as we swung decisively from loss to profitability on the back of strongly improved revenues.”
Annual Results Highlights:
- Consolidated sales were $624.0 million for the year ended January 2011 compared to $412.9 million for the prior year, resulting in earnings from operations of $64.5 million, compared to a loss from operations of $22.0 million last year.
- For the mining segment, rough diamond sales increased 49% to $279.2 million from $187.9 million in the prior year. The increase in sales resulted from a 62% increase in the Company’s achieved rough diamond prices while the volume of carats sold during the year decreased 8%. The increase in sales resulted in earnings from operations for the year of $50.2 million compared to a loss from operations of $6.3 million in the prior year.
- Rough diamond production for the calendar year 2010 was 6.5 million carats compared to 5.5 million carats in the prior calendar year (on a 100% basis). The lower production in the prior calendar year was a planned response to the softness in the rough diamond market that included a six-week summer shut-down.
- Luxury brand segment sales increased 53% to $344.8 million from $225.0 million in the prior year. The increase in sales resulted in earnings from operations for the year of $14.3 million compared to a loss from operations of $15.7 million in the prior year.
- Harry Winston Diamond Corporation recorded consolidated net earnings attributable to shareholders of $21.7 million or $0.27 per share for the year, compared to consolidated net loss attributable to shareholders of $73.2 million or $0.99 per share in the prior year. Included in the consolidated net earnings attributable to shareholders for the year was a net foreign exchange loss of $14.4 million or $0.18 per share primarily on future income tax liabilities compared to net foreign exchange loss of $31.5 million or $0.43 per share in the prior year.
- The prior year consolidated net loss attributable to shareholders also included a non-cash dilution loss of $34.8 million or $0.47 per share as a result of the investment by Kinross Gold Corporation in Harry Winston Diamond Limited Partnership, which holds the Company’s 40% interest in the Diavik Diamond Mine.
Fourth Quarter and Fiscal 2011 Financial Summary
(US$ in millions except Earnings per Share amounts)
| Three months | Three months | Twelve months | Twelve months |
| ended | ended | ended | ended |
| Jan. 31, 2011 | Jan. 31, 2010 | Jan. 31, 2011 | Jan. 31, 2010 |
Sales | 215.4 | 133.7 | 624.0 | 412.9 |
- Mining Segment | 82.7 | 63.5 | 279.2 | 187.9 |
- Luxury Brand Segment | 132.7 | 70.2 | 344.8 | 225.0 |
Earnings (loss) from operations | 20.4 | (3.1) | 64.5 | (22.0) |
- Mining Segment | 15.2 | 1.6 | 50.2 | (6.3) |
- Luxury Brand Segment | 5.2 | (4.7) | 14.3 | (15.7) |
Net earnings (loss) attributable to shareholders | 9.9 | (3.4) | 21.7 | (73.2) |
Earnings (loss) per share | $0.12 | $(0.04) | $0.27 | $(0.99) |
Mr. Gannicott commented on the Company’s outlook, “Although the commercial impact of the human tragedy in Japan has yet to be measured, we are thankful that our personnel and retail salons there are all unharmed. Last year Japan was 11% of global diamond jewelry consumer demand and 18% of our own luxury brand sales.
For fiscal 2012 we expect a continued advance in luxury brand revenues and earnings driven by demand. Mining revenues will advance with higher diamond prices and improved ore mix. Mining costs will increase as open pit tonnage is supplemented by underground production, but to a lesser extent than originally expected due to the implementation of lower cost mining methods.”
The Company is in the process of updating the mine plan which it expects to share publicly in the near future.
Mr. Gannicott concluded, “We believe our business makes the best use of positioning in both ends of the complex but rewarding diamond business.”
Conference Call and Webcast
Beginning at 8:30AM (ET) on Wednesday, March 23, the Company will host a conference call for analysts, investors and other interested parties. Listeners may access a live broadcast of the conference call on the Company's investor relations web site athttp://investor.harrywinston.com or by dialing 800-510-9834 within North America or 617-614-3669 from international locations and entering passcode 83841709.
An online archive of the broadcast will be available by accessing the Company's investor relations web site athttp://investor.harrywinston.com. A telephone replay of the call will be available one hour after the call through 11:00PM (ET) through Wednesday, April 6, 2011, by dialing 888-286-8010 within North America or 617-801-6888 from international locations and entering passcode 15226198.
New Investor Website
The Company is pleased to announce the launch of its newly redesigned investor website. We invite you to visit the newhttp://investor.harrywinston.com today.
About Harry Winston Diamond Corporation
Harry Winston Diamond Corporation is a diamond enterprise with premium assets in the mining and retail segments of the diamond industry. Harry Winston supplies rough diamonds to the global market from its 40 percent ownership interest in the Diavik Diamond Mine. The Company’s luxury brand segment is a premier diamond jeweler and luxury timepiece retailer with salons in key locations, including New York, Paris, London, Beijing, Tokyo, Hong Kong and Beverly Hills.
The Company focuses on the two most profitable segments of the diamond industry, mining and retail, in which its expertise creates shareholder value. This unique business model provides key competitive advantages; rough diamond sales and polished diamond purchases provide market intelligence that enhances the Company’s overall performance.
For more information, please visitwww.harrywinston.com. or for investor information, visithttp://investor.harrywinston.com.
Contacts:
Ms. Laura Kiernan, Director, Investor Relations – (212) 315-7934 or lkiernan@harrywinston.com
Ms. Kelley Stamm, Manager, Investor Relations – (416) 205-4380 or kstamm@harrywinston.com
