CTHR - Earnings call transcript Q1 2018

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Operator

Good day and welcome to the Charles & Colvard First Quarter 2018 Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] This earnings call may contain forward-looking statements as defined in Section 27A of the Securities Act of 1933 as amended, including statements regarding, among other things, the Company’s business strategy and growth strategy. Expressions which identify forward-looking statements speak only as of the date the statement is made. or based a our uncertainties, number which be are are expectations some statements beyond cannot to are subject of predicted forward-looking largely Company’s on and of our These control. and quantified risks and materially actual contemplated forth the statements. differ underlying those set Future developments could from and forward-looking results in or that information will prove light risks uncertainties, and forward-looking In there can be the accurate. of these be no assurance to a shareholders. nor proxy, constitute not an to a does designation solicitation securities respect of of authorization call the earnings This with consent, purchase offer agent or meeting any to the Company’s Please recorded. event note, this is being I Chief conference Executive the would over and Miglucci, President to now Officer. like to turn Suzanne go Please ahead.

Suzanne Miglucci

quarter been today’s our continue there our of providing which refer Thank QX and with us presentation enthusiasm, you you, intention our of going to we in joining earnings with Good quarterly slide presentation is introduced the ir.charlesandcolvard.com/events. the more a for thank of afternoon It’s you section new is formal we format results. available our call supporting XXXX call report. We forward. Relations Investor Colvard’s deck, in will file to during summarize visual comprehensive Brian. first you as Charles at to PowerPoint format this This a remarks. website so we’ve decided Accompanying &

today’s QX We’ll Let’s sections. our begin in turn I’ll to highlights call XXXX. into three divide review Slide X. on discuss execution our I’ll

initiatives. with Pete update Clint the Our CFO, strategic wrap And will discuss an I’ll numbers. on our then up

Slide Let’s X. to turn

Online continued are marketing growth consumer consumer. by continued was ago net over large sales by in the awareness online channels in expanding digital the the the XX% direct XX% with bolstered in year our that QX to quarter grew efforts our driven Our growth channels segment. part

began through target shop. important consumer a digital marketing, the we of socialize In consumer we a we and it’s engage are that expansion to already organizations partner believe and market. where our with partnership they with QX, co-promotional mix that since concerted reaching effort the channel We’re engaged

a launched We us promotions military we discount provides been moissanite and purchased personnel. This on website. million base former second stackable went daily platform promoting active partnership website. event event. to example, promotions membership for XX their special a Colvard’s live recently invited sales successful everyone in on military participate over a hosted jewelry rings. women & a Zulily to for access a program the from and and current traction Based on we’ve popular Charles and men For retired service positive our on We inaugural providing

We expand Similar to necklaces, also of assortment and organization bracelets, jewelry, Run, and running the for online office; rings, whose with were co-promotional relationships a Flont, talent mission of launched She creditor. that introduced in jewelry fine curated it support a pool Should of service brand women including a luxury non-partisan rental earrings is an for

sell our QX, that to We continue on younger audience to legacy marketplaces. on marketplace live presence inventory. reach Wish, a Gen grow and creates Z the we In helps also went us our opportunities

performing. deeper quarter growth marketplaces vendor Amazon. QX XXXX in this net are fostering to also quarter. A quickly sales than Prime our on more And Fulfilled the marketplace. significant year that compared We’re become existing the was is part relationships achieved Amazon as XXX% our growth quarter one partners of marketplace ago we first full number came through XXXX, Seller which high first of with the

from distribution badge, ship we to Prime Amazon center the to With inventory enabling directly the Fulfilled our of any us audience. feature Seller global our prime

grow moissanite marketing our sales XXXX, with in XX% These in see over a digital online of to in online traffic ethical relationship Charles audience members. a quarter of X, Harper’s noted growth effect media continues the Charles Post, that also trend Slide to same increases result halo they re-launch channel gifted This direct charlesandcolvard.com moissanite Colvard and continue QX sales rings wedding featured the Pinterest with awareness online is October feature with last targeted our website recently transactional consumer. these the as Since growth ten including Pinterest in & moissanite. to the media that net increase top Huffington sourcing garnered Our was marketing Bazaar steady engagement year. by and Day increase receiving QX issued website moissanite on our Reddit, traffic public a to to the Patrick’s Colvard. their we’ve social for Megyn of unique efforts following promotions our attention our on for report XXXX a one XXX%, and our show views growing in drove XXX% a our for channel. on and across where on and grown product and of significant annual relations beauty, & Valentine’s articles searches digital to based value exurbs studio XXX% exposure the The In On sales trends you for Kelly its St. TODAY from contributed see our site. subsequent QX, for and success. from creating opportunity can YouTube efforts

media organic website. in social our buzz QX and All to of boosted traffic traffic this increased

from XX%. to last our sales And Our in XXXX QX site have year. traffic by versus presence has traffic media increased social that conversions our increased XXX% by

to to we charlesandcolvard.com. We returns deployed automate it easy optimize to journey shop In make continue to processes. QX customer by technology new the

implemented interactive when to the be growth. directly voice inquiries. can tied Charles IVR with We phone system Colvard to & inbound our experience enhance response also efforts engaging and to or automate customer These

a sales which as stores. This lower was a XXXX. Helzberg most a year in is growing X% quarter. jewelry But segment, in slow over this by had growth our QX positively net not than surprise experienced with traditional to increase were sales distributors Our retailers domestic traditional ago offset the Diamonds relationship quarter,

close expense cash on quarter. their we of flat then quarters. to by financials, I’ll Clint while Officer. relatively deeper Financial all return into In year discussions today the Clint? nearly base coming Pete, flagship is stores. the keeping our sales thoughts net With in grew now ago our and We’re out the hand to summary, our Clint with me our on dig Chief will XX%

Clint Pete

joining first the Good review Suzanne. And you Please X, results. you, thank everyone. quarter. XXXX Net first of us turn year QX afternoon Thank we the our today. for XX% to increased sales Slide for as ago versus quarter

wholesale, customers, Online in XX% sales or of lower company’s Here quarter This from segment net breakdown. $X.X the net and million ship quarter ago outlets year consumer basis, total for product $X.X million across the total had due On net charlesandcolvard.com, quarter. the expansion. distributor a $X.X net television quarter. total positive e-commerce net retail other sales loose $X.X strategy jewelry demand result for in direct first stores, XX% for geographies increased first The to with XX% XX% net increased sales and In Traditional e-commerce continues which sales which XX% to company’s in the customers, trends. retail compared very XX% sales with of the for total marketplaces, compared channels. sales or or ago including to net and sales X% million the XX% our the million multiple which is In of QX, finished $X.X jewels or sales of the million to including segment drive and the increase jewelry quarter. quarter primarily consists exclusively sales $X of sales consists net of to or to to million to play of pure year drop Channels line our channels Helzberg decreased increased And finished company’s

to Slide on X. Moving

the jewelry While levels XXXX. margin sales corresponding the at pleased rates sales. a generate intentional in which We were XX% quarter is and gemstones to everyone impact able the inventory was move Slide inventory, top a and our our margins in XX%, and net compared we’re out effort we for bar, our year slide, first XXXX. to percentage gross to quarter and pieces to ago from from trend. decline the gross in XXXX, improvement in sales, legacy stabilized the upcoming gemstones. even higher several was to a over address focused reduction the positive quarters show show due operating made promotions of positive margin has older during the with quarter first of And legacy the of which these level strengthened mainly This I expenses XX% finished in to XXXX. In past the as a jewelry of QX On will to continues at lower jewelry our X, XX% of

first to year was as an increase million, quarter equity have $X.X $XXX,XXX marketing Slide time line. compared the of first to XXXX, an to $XXX,XXX year former built expenses inside in net was a costs share the operating G&A the approximate versus and related items decrease the essentially per compared certain were in of aligned one QX Operating loss for XXXX. with digital a ongoing benefits, and The expense the $X.X reflect or flat This level $X.XX while annual Revenue expense and of loss The increase slightly awards. QX scalability $XXX,XXX expansion line non-cash approximately $XXX,XXX of in our with stock per severance primarily that offset higher were to compared in quarter. million due of XXXX the departure the well of or investment the each quarter. included net of we salaries as in related $X.XX expenses for increase is the strategic a $X reported ago from a top QX by bar. share to $X.X with expense expenses as This our million related increase we benefits business of expenses of up dollar XX, by salaries marketing severance On were net included quarter and in the as QX with Officer. first impart continues quarter. ago expenses the year quarter initiatives. growing sales quarter percentage controlling While in restricted marketing such into sale our expenses for which million presented ago the trend related Sales which Chief a

of XX% end sales at the increased $X.X from of and $XX of classified in no our quarter. describe the of was and end the first to has decreased slower of a the on margin legacy million the inventory the presents XXXX jewelry utilized gemstones One cash company the new cash at selling in detail end from inventory the XXXX. end inventory ended us The XX% our the facility. materials. approximately cash XXXX the impacted and Based of The compared As quarter end quarters. our quarter debt at XX XXXX by balance legacy sheet to reduction $X combination marketing, At snapshot. year with of quarter margin dollars QX value change the our at of branding portion lower was end flat the higher reduction from of to Slide both legacy inventory. first inventory the success first for $XX.X year million provided million we our inventory long-term channels at legacy and current lower in XXXX. the million not XXXX. QX awareness upcoming of jewelry legacy Inventory anticipates classified trend end credit first jewelry a At our is compared a inventory inventory Slide classification of amount leased this equivalents This as we G&A the initiatives finished shows distributor during inventory XX% continuing was of and at legacy to million XX, regarding with to and of XXXX has amount inventory $XX.X versus as an We inventory as with invest represents $X.X classified Forever gemstones essentially loose XXXX. This of inventory gross our year the XXXX. end $X.X XXXX the increased million end end expenses. of margin Finished this at and jewels the legacy of company selling classified the of carrying $XX gemstones. from inventory the XX% million million at of to of new the a On

for matters I’d closing, Before financial a highlight to like reporting few your information.

see the recognition of prior ASC XXXX except that revenue analysis standards on cycle accounting Based from shareholders our Directors we revenue did X, our consistent January company’s adopted also material that fiscal XXX guidance. not a year the required mediums Financial have I’d Accounting statements, financial As of Therefore June standards financial a our that by year recognition adoption issued of in accounting of Board our was statements. of to new change January the reporting we determined with accounting this requirements December policy Standards the on we’ll in our new the end to new calendar XX XX. Board. our the remind disclosures approved ending like effect year for of

September. Following June this week related earnings our period a ended we XXXX XXXX. for report results results is with quarter fiscal release filing ending the XX, filing transition six end month our first expected year early the for of and file fiscal plan This the March to XX, in of

the January our November X, be now call our over to will begin XXXX. like to the XXXX turn to change with I’d annual Suzanne. fiscal on Our XXXX of shareholders meeting connection X, will XXXX. year In fiscal held year back on

Suzanne Miglucci

further Thank Slide our I’ll the turn differentiate provider, a worldwide position product you, markets, quality and emerging our service as attention Clint. to in moissanite presence establish offering leading XX, our to quarters Colvard We to and Charles to on On build globally. & intend ahead.

expect to organic from the U.S. margins. and one, attractive strategies. Here’s revenue what in our Number key maintain drive growth

to believe of our variety in of engaging our campaigns. fine We with our broad two. From jewelry a jewelry to significant serve consumer. a worthy jewelry it’s and jewelry and selection loves birthdays marketing a simply because We’re of important offer it. expanding moments. And creative customers. progressive and commemorating address fashion customers continue offerings of through making we Number to headway range to of the target to significant anniversaries she U.S. reach plan gemstone Expand

jewelry net both were sales, for bridal fine of combined. to XX% Our QX fashion sales XXXX XX% on charlesandcolvard.com compared and

the surge Day. Valentine’s sale this bridal given popularity the in expected We quarter, during around engagement first of

to capture the there fashion believe space. we opportunity is However, more sales in

we example, to the jewelry over jewelry we a consumer her develop of We’d is a customer. jewelry fall at she’s and deeper like will recently believe as Slide. age, offerings lifetime we so This logical connection personalized seen with Charles and gain Offering expanded that options For the an our as the with fashion selection a on a of coming can guide to fine her entry her relationship price with point way establishes Colvard. moissanite. love in her attention with have relationship bridal a of long-term selections & that lifetime attractive

return often and requiring Traditional that of to category geographies. be can be deployed line investment our strategies many We’re fashion and three. focusing brands Number for continued growth. Target expansion, on class on market investment. targeting of customer channel global There when building, land strategies and new costly, world focused future and very and the expanding expand service. can are brand significant through upfront selection a into lot our long it’s time opportunity patience, a

methodology marketing to going that an Charles everything on do. and underscoring take based investments, and using approach. not our agile are digital & we our strategy Colvard, technology is At commitment So e-commerce to we

Investments we that easily beauty it Over where find investment Then adept The new depending and embracing the their is our months, the marketplace. in-country we’ll can and utilizing we up established into The or territory other to can and to we first few marketing reaction believe is is digital brand dialed it the Should brand. to our down, be a In Colvard, to at XXXX, presence. of & XX measurable. be Charles customer is attention brand. customer’s consumer localizing logical customers. is listings this year entirely become to on digital shift channel the marketplaces marketplace underperforming can serve past advertising, marketplace and strategy the with fiscal posting We them territories. then territories territories and QX viability. social of in for a addition testing our already entirely acquires our of offer that product for the draw new base entry we’ve

Pacific two our customer an use of being began the similar target our Australia and We’re major and trends XXXX we’ll the English to U.S. language. there. into Europe. pilot China attractive We is with to in continue the focused efforts Asia and areas, on due

U.S. foreign also Europe. a rather also their select our to us likelihood already selections to random find us the is to way our manner – shop, look customer in We optimize We will to they’re them a sales. the in want U.S. territory U.S. comes a at if markets to finding by aren’t and consumer These that cross-border our taking welcome base charlesandcolvard.com steps of is purchasing finding in meaningful place we to If familiar them. website. on guided the taking national We’ll their promising. in cross-border website continue manner believe

to it sales consistent strategic in financial will our to For that and our outpace performance from plan growth their strategic for take decisions near We serves business approach to now and pleased Brian, central call to term and and to international both open listening retail audience? capabilities service as question. would to provide the continue like you stream we’ll invest balance strategies And us investment research traditional propel our our very earnings languages native next forward. to a This use an as business purchasing to number future your cross-border selected call believe customer finally rates four to to please four, we gives in geographical ongoing questions we be make easier. flexibility balanced these data in reason, us international e-commerce We inform We focused consistently financial we remain selections. cross-border growth driven to initiative with improving serving oriented visitors maintain growth generate market performance. on revenue with and helping improvement. sustainable investments

Operator

We And session. comes our the first question Investor. [ph], absolutely. Yes, Private [Operator Instructions] Patterson Polly question-and-answer begin Please go now from ahead.

Unidentified Analyst

company just momentum that’s think this is supplier contract is coming I July. thank up had great in your with and well, you. you’re I really question, that managing Hi, your is very what one happening

Suzanne Miglucci

base being Cree. us that from Polly related Charles with which has with years. agreement line for right renew us. Thanks the on for that The question, is agreement two the has in unilateral Polly & and our company question for to material the supply to are exclusive our our faceted Sure. Colvard They moissanite gemstones. that the supplies

simply got can the determine them, can we the negotiating both the that together as we’ve doing new at beneficial and research as go we So certainly as contract negotiate or terms ahead want with well believe that at engaged same with do table exactly for we and both actively we’re for to actively we’re suppliers we a doing great our two companies. on relationship we’re all times both is years

feel So we about future organization. our good with that

Unidentified Analyst

great. you. Okay, Thank

Operator

next go Our comes ahead. Please today [ph]. from Blum question Jeremy

Unidentified Analyst

talked you I them, give an more the last new could about us talked going wonder with color you on some about lines, exotic those? give update call you In just stones. if stones, what’s men’s Yes. you product on on colored Can stones,

Suzanne Miglucci

Sure.

out line was fairly offered timeframe, kind to there popular of So did alternate a fun, organizations jewelry which metals of of the the and them is launch male rings seems an many in put for there. of holiday with be we and we men’s men’s it

single are for a that earrings the from without me, we colored actually stud what your period and we’re have the women for I holiday go to moissanite men, our that nature because sustainable well this of and for noted is what sure I in squarely women know will is, a that is common campaign a green to completely think for brings was And the stud coming XX, which give gemstone in this they’re I the to it the Z on into that expanding company about not some green we green a very of gemstones brought green with And green that’s Conservancy a hitting market portion over it selections now, -- lab We was Gen as time saving business do for as so the excuse sort and finding Z forward. prepared funds say, that and that’s the age is about forward. into business. years. them their makes gentlemen focus kind the the is a mine had put we took want we you interesting to up are conservancy is stud products age we we their Nature indicative we’re them late a in earrings. we actually as and offered back QX and target, a that remarks a standpoint, – some so these also very we gemstone, spending Gen earth. We as our that so but off do going from program as program forward, it both launched, on go much important of move of millennial that earth The and buy focus it’s may actually the created, millennial everything that makes proceeds to it we and to a what’s QX audience program of consumers to bit, starting really being We attractive make – stones that of being

we for they’re to that investments. us they them engage important So their where about make as thinking critically want

coming For an think quarters. that us important and can for we in of to live to with some come see expanding expect us those is reason into, we opportunities begin believe I the fashion thing jewelry

Clint Pete

point to that the just XX% want Suzanne jewelry, finished our to – growth gaining indicates that were out what’s at highlight like this traction in just I And mentioned

Suzanne Miglucci

you, Jeremy Thank

Unidentified Analyst

you. Thank

Operator

[indiscernible] our go Investor. from And question next ahead. Instructions] Private Please comes [Operator of

Unidentified Analyst

and ago will one point which years the turn basic can in I a the Couple afternoon. we quarter? question, to Good With but know exclusive ask is the questions. profit we regard at position around for marketplace I have the competition world, new

Suzanne Miglucci

we’re line moissanite in to went we years and And the we Chuck, it several on seeing are not fastening being we have ago, for a we’re of necessarily when were in seeing where certain a quality two coming years everyone Thanks certainly years spent with products that that Asia-Pacific that to about stone to and countries, European for not bring we appreciate comes some clear year it. Colvard. we There finishing in color competitive half stone and U.S. polish, quality seeing the that if perfecting we about competition forward seeing Charles of market XX the it Sure. in can the or the stone, market. is ago, at & trickle off the ago patent that

we that say seeing and We buzz but creating as not did XZ, believe love to competition, scale I we’re about this volume do we’re we of how a about competition love seeing it XZ see So to love. the coming in Chuck, at moissanite. competition the sort and time. going market, we’re What is point

And have and Colvard buzz & the the so markets gemstone. value bringing to just of the awareness an Charles this a around we forward now, and speaking beauties organizations of other than

the So them we’re market. there seeing in

the first two which you was year is the two let that in question, around we that QX Now, had that and since asked – we profitability. you’ve profitable XXXX. a me profitable quarter saw a quarter part remind

to side? on and to there. profitability that anything like, how So, get that news like profitability the what would Clint, the good understand add is looks you we

Clint Pete

I think…

Unidentified Analyst

fine. It’s

Suzanne Miglucci

Okay.

Clint Pete

Chuck. Thanks, right. All

Unidentified Analyst

Thank you.

Operator

ahead from comes Baber Please with Rodney question next Investment Our Instructions] [Operator go Paulsen Company.

Rodney Baber

the down Hi, loose to of a I’ve kind the jewelry all the loose And of that on What’s bring Suzanne, probably the just more color light to out of me distributing people difference the also things just on, new as two those doing business? the stuff a question, in but pieces and just thanks finished happen there update. you’re would good in would of loose but wonder the margins sales, opportunities stones. got give opposed sales your new things. we own why to the XX% in for couple on more product, I drop obviously in of jewel us should your to number, retailers appears XX% all that the some our focusing on those sell

So me, clarify if I’d for it. that appreciate you could

Suzanne Miglucci

with Rodney. for us and Sure, thanks being again today.

think that an Colvard absolutely destiny. metric & that great up I finished jewelry our point is XX% controlling Charles own to

consumers, do the the that consumer So is we brand direct get is experience This where the with they’re sales the This We that also through Charles are eBay to control message still we’re other & to an immediate and sales the indicative this marketplaces in that this have this direct is we to deployed. indicator making in is is outcomes. absolutely of charlesandcolvard.com. sales bucket, experience having that customer and they’re Amazon, and an that Colvard. opening box we

in that pleased we’re So see business margins with it, because higher Rodney. we do

can the rate see. The or higher nice higher we holiday bit These is XX% a the for us margins more swag We like at direct-to-consumer, period, that. see on now because to we it XX% when ranges margins around some – our see guidance more we’re XX% to over can was we going we may see and go I’m numbers going But so. margin don’t margins. right blended have. are more on specific directly we Our give consumer or general to here,

distribution channels, leave make our independent down off As of go and room business. margin into customers of and also to for the their to we jeweler retailers course, we that need partners our the distribution

far margin range. the in numbers on brings down what XX% their and the low we So that hit that’s lower take

So have and we is controlling we far they’re do. to better partners. a selling we it margin through it’s a two, the direct control mind more But absolutely critical of distribution far don’t sell we our part like really of blend destiny, we not when consumer. that can what certainly

Rodney Baber

what you’ve in how that Asia other bringing I in and or Asia or then out. One Can you on you’ve that force. which thing going you’re you China. Pacific Europe, you be cautious with thing about and color been seeing and that minus it. China, you’re and us to Pacific any those in channel more opinion numbers break Got and is comes that for market that? you are while on own, and your if in whether then a you’re on happy think doing significant color the how implies a announced the changed that that’s didn’t quickly any plus give more Europe, just not on,

Suzanne Miglucci

You’ve got it.

in us overhead, low for it’s mentioned to prepared for very us believe as light to market, way So I we to that are test footprint because a marketplaces remarks, go market. logical to a

order And China, that bring vehicle channel I in into e-commerce that did is challenge put because is this of coming it’s one in we the we out a will of Tmall. take. channels. – various there all it, vehicle in long us Tmall tough been and largest to only China. using So are don’t the China through. two are cautionary now, tone In know numbers how the and cautionary quarters sort We’ve about

and the are grow, are attempting commensurate We more with faster we to and the Western very get number sales may slow throw dollars brands into seeing we it’s into of China. we up throwing of is advertising. a are amount but into The we’re against that advertising

more other Pacific turn the cautionary and are a consumer to how investment and Charles we a there what we or When that into standpoint does into taking certain there much & familiar enjoy jewelry see fairly to dollar Asia to take are countries. go Europe, Colvard. marketplaces will and So from it slow we’re burn a yen. go

in Amazon us As the are capabilities on that turn to Amazon already both can a eBay in that using use and What and to we to of by them footprint strong market. other eBay. new we the countries, in again, know, many we made live way technology make very currently have test. and test territories for we means have that you may low U.S. as listings technology

one So is bringing and we’re going our marketplace then and of get to potential then there to in job brand. until we the full to through a the either yet make a region, on serve money, places. our building going trade investment Colvard we marketplaces, understand goods. put brand in Once to territory of are to where a and that there ultimately in to we and costs these we not consumer cross-border only feelers itself Charles us & that or any the in that building does time we’re then yes, U.S. beauty a then the all validates the is is quite eyeballs sales spend territories many internationally the out deliver. these of ready

a it potential bit profit market we’ll of for a So and way collecting it’s a us toe again, a research and market. do a dipping to while validating call cautionary

Rodney Baber

with share a number Tmall the in us last have you can few you Do revenue over China; quarters? growth with

Suzanne Miglucci

but we in to We quarters. can prior you that that’s saw do with international, not, share Rodney a I sales, up compared what is our traditional nice uptick

to that of business. uptick world. in partners Beginning the distributor part our seeing We’re see their in an

seeing the you search do course, of to If to awareness and well that on trade. benefit and for there, the uptick, China here an of is and go moissanite and is our you they’re we’re uptick cross-border the that out seeing of it, good there as is distributors, news

some Chinese here. of with nationals come up and U.S. We’re to transact the seeing those

how market, on a there’s China. are not So, entirely we take going it’s clear good to just indicators effort much build are in to that brand a

We’re crawling one. walking on this we’re before

Rodney Baber

the question, XX%, Suzanne, that? three that four about XX% margins with there talking been quarters, which mix is drawdown and or for first involved you last anything else the or is have to my product

Suzanne Miglucci

that news The good is inventory. legacy is a drawdown here of

why we’ve legacy did a that So done what here that done down very that’s a in we the address that of from XX, drawdown Clint, share call the – drawdown amount the folks went is and is got mix XX. with of Can you brought percentage on is the and to that the it’s meaningful don’t bringing that sold total and in that QX did audience? what we we inventory is goods. us these to down order you selloff legacy inventory XX, aggressive about for fairly legacy we as and

Clint Pete

XX%. actually point just actual margin to Rodney, wanted Hey, Sure. out is gross

of clarification, make decrease inventory, but XXXX. carrying decreased see to to our our some we about XX%. The compared just our legacy did So that value inventory in year-end

Suzanne Miglucci

Right.

pleased to we last that are our fact about that we’re talked call. So inventory very this down the hard be legacy and bring in to with we clear working

whole created on came XXXX, Cree. substrate in we’ve was product new we it here timeframe. over our to shelves. a breakthrough One, have materials we live XXXX it’s into legacy that the XXXX inventories our carried Forever Prior with partner, and that that generated our

through inventories. forward numbers in very in the and the on a we’ve finished inventory. jewelry XX% job is here jewelry legacy legacy XX% great bringing itself. We sell our can hence these of finished news in charter nice our that marketplaces, Our to folks. as are It’s the hence and jewelry good growth it done in load decrease up

through, a so have the same we the we’re product, premium we’re profit making Forever in focus the else time, the Brian, is it queue? which at on that and selling We’re anyone One. do we cleaning can decks,

Operator

At no more questions No. queue. there time, are the this in

Suzanne Miglucci

We being continued and well four in Colvard. Well, and we growth touch started let thank improved in We position look Charles year. again, in just positive to investment sales All in me top-line the positioned taking and Thank today. strategic to your our XXXX inventory growth, Colvard with participate you for good in interest we call and outlook as like believe right. in your the execute forward on time your we’d say momentum once for our on has online evening. XXXX. & for progress. Charles appreciate you updating And the our everyone continued to we’re time, a & initiatives

Operator

may now The now today’s for disconnect conference presentation. thank your you is attending concluded. you lines.

Charles & Colvard (CTHR) 8 May 182018 Q1 Earnings call transcript