CTHR - Earnings call transcript Q3 2021

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Operator

Good day, and welcome to the Charles & Colvard Third Quarter Fiscal Year 2021 Earnings Conference Call and Webcast. 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. statements made. as forward-looking the the identify is statement which speak of only date Expressions statements based risks forward-looking quantified subject of These are cannot and to and company's which control. a are are expectations beyond number predicted of be and our some largely uncertainties, or on our differ actual set from forth the in Future developments materially underlying statements. and contemplated forward-looking results could those by or accurate. no these risks prove and assurance be that of can will the light In to there be information forward-looking uncertainties, is PowerPoint at of supporting which available call deck, today's section Accompanying Relations in a the is slide the ir.charlesandcolvard.com/events. Investor website company's The company conclusion a session of at will the be hosting prepared remarks. Q&A Should you like to questions you'd submit, please and e-mail ir@charlesandcolvard.com. have event being recorded. this note is Please and Chief Officer. now Executive would to conference like over President I the turn to O'Connell, Don sir. Please go ahead

Don O'Connell

Charles In afternoon. you we're which over achieving we fiscal of fiscal excited from everyone. year Colvard's to We share. a results. prior meaningful million $X continues. $X.XX report with were to to revenue third $X.X share Welcome momentum QX going XXXX company's & million quarter in or I'm position margin deliver with XXXX, income a $XX.X able the of Today, increase position quarter. a that diluted gross our to million quarter XX% XX% from per cash ago our by a cash increased net is the XX%, Good

numbers our execution I'll this to our over of now for the continued of our call strategic look result call, the detail more Clint in discussing to is later forward the you. Pete I performance to strong during unwrap Our turn CFO, but initiatives. the

Clint Pete

fiscal summary of XXXX. provide I'll financials key Today, a for Don. QX Thanks,

comparisons retail we distributors. net XXXX or pure-play premium for increase and representing million our website of an sales net customers. international which for our jewelry transactional representing wholesale to total Loose XX-Q by the website the net our in total $X.X Net segment, XX% with we or net are totaled brick-and-mortar international sales of our QX and release quarter. otherwise. of of sales demand to that sales This $X.X jewelry demand XX%, totaled sales More increased detail ago for net unless other is traditional and and as percentage with moissaniteoutlet.com, customers year our from versus note this cross-border specified quarter our issued In of for increased transactional We'll sales increased which $X.X this charlesandcolvard.com increased increased ship consists our we XX%, retail charlesandcolvard.com direct-to-consumer file be totaled strong brick-and-mortar million quarter, increased an XX%. our domestic XX% online and for XX%, sales quarter afternoon while revenue. our million Additional to all quarter X% the for increase net Please start to segment total, online channels continue XX%. channel charlesandcolvard.com, evening. press jewel increase Finished due net trade sales. the that our can $X.X earnings Form the for expect XX%. outlets from on specifically, of Overall, XX% on see includes drop which sales million an Net or sales. for marketplaces found

from Asian we demand began the distributors of as from our Additionally, an increase saw rebound COVID-XX. they impacts in to

gross a negative quarter write-off gross ago year XX% $X.X a Moving The delivered margin material the inventory totaling which for XX%. led of legacy ago of included to we approximately margin quarter. year million on, a

million compared and to for increased G&A of of XXXX loss year million million per a QX per XX% loss We basic to $X decreased approximately QX or diluted total period. XX% a and ago diluted of representing For with $X.XX expenses net net million total and of income per X% Sales $X.XX year the share $X.X quarter. or $X.X XX% XXXX, operating for $X.XX share XX% compared share reported expenses the ago expenses $X.X sales marketing decreased to the in quarter. net in

Our weighted calculation shares were outstanding earnings average increase the shares March on million shares XXX,XXX stock XXXX the to of quarter used shares during dilutive to at diluted XX, stock XXXX. by XX.X XX This million approximately was in driven share with per XX, options June compared issuance as of of March along the XX, of the XXXX. exercises based related option stock outstanding price effect approximately at

a on of snapshot balance let's sheet. Now to our move

position capital quarter remained the to compared our June and XXXX. at XX, million million liquidity of we as year-end $XX.X last with ended solid, Our $XX.X total cash fiscal

was from compared year million to flow $X.X the million a quarter the negative operations cash Our $X.X quarter. ago for in

March from working Our increased capital $XX.X at XX, million. XXXX by $XX.X million XX June to

sources Oak Commercial of of credit $X other we access with liquidity, facility White terms Finance. In have million asset-based to continue to a

as the from we June $XX.X jewels $XX.X compared $XX.X to for net had conclusion, XXXX March funds five totaled Loose for sales to XXXX $X.X material did accessed or of perspective. $XX.X compared this our approximately January million our jewelry an million inventory million a million In of million. amendment income which As million turn and statement quarter maintain lease over XXXX of not accounting of back profitability extended XXXX. purposes This year, both Inventory a June headquarters corporate in years. a resulted of impact cash inventory In in an XX, right-of-use as increase sheet March impact for stock was $X.X With that facility. XX, required have compared additional $XX of XXXX. call our and as I'll Don. strong XX, this we we as Finished the we credit was million a June believe our XX, on growing to levels remeasurement on demand asset $X.X million lease have flows. of of not to requirements. XX, to Balance of liability

Don O'Connell

results These team's our a and Thanks goals. initiatives execute ability are on positive deliver strategic of our reflection Clint. and business to

ability furthering the make become meet decisions. capacity building the we growing our We important we expenses make allowing decreasing the we business, reporting Overall, the all demand, X%. to robust data-driven while our all to continue us operating to efficient more order Day of in areas expanded believe successfully strides measurable season. tools, Valentine's by in Operationally, during especially to flex

and significant to line period. to top over our that reflect, results on And February full our from by channel demand as the segment increased last the For beyond transactional XX, revenue website year. our holiday XX% charlesandcolvard.com example quarter growth XX% grew January period X same see we continue online

a Clint an corporate in business for lease the continuity. for initiatives headquarters rent increase As ongoing Included abatement lease $XXX,XXX areas we and negotiated scale January, stated to renewed sales approximately up expand digital also, and to the of our to improvements leasehold amendment, support and allowance building manufacturing we on $XXX,XXX. in our ensuring marketing capabilities. and and These will allow distribution improvements us functional video

continue for innovative Our roadmap. marketing an teams continue integral the play is success. to our This generate on development new role of and revenue in digital and creating our sources build new to to sales enhance our capitalize commerce to company. Merchandising opportunities product digital us and that digital positions technology functionality out

featuring our new as designs lab-grown Forever expanded the diamond Caydia offerings, moissanite Signature as During patented quarter, well to able on sizes. with and introduce shapes we One new additional Collection were gem

continue value Caydia Our our this XXXX. moissanite our product gain XX% pleased related believe were business business our our to and in XX% We year we're partners impacts. post over traditional COVID-XX of the XX% quarter cannibalization. revenue, increase fiscal see retail ago that the grew our experiencing distribution proves grew in over and expansion significant lab-grown by with We momentum a segment validates not line growth and diamond as QX brick-and-mortar to belief

the to our demand Our is Forever products. product strategy with brand and driving consumers One higher elevate for thus resonating

we in-store quarter. our program, Additionally, adding within XX jewelry nearly moissanite the expanded styles Macy's

moissanite partners. current marketing Also quarter, working. we year product believe and fueled online drop online from results revenue the support over during growth positive sales to retail was a with quarter our Based net on these strong increased their which ship our expanded is XX% in strategy our demand. Our assortments our segment channel growing ago website we transactional retailers remained the on with by largely

our continue traction in gain lines diamonds. to Forever and and lab-grown moissanite Caydia We product One building and brand elevating Charles & Colvard the

of live a their consumer. immersive buying more with and part in Our shopping us experiences as virtual videos live consultations bond journey create stronger be to This way. meaningful allows such a the

the US. business internal and Looking on to with demand. us real-time is forward a gaining build billion video customers Live $XX shopping stream capabilities educate important it's China out in and in engage now for popularity in and our our to

in We positioned our capitalize transformation other expect and order to increase be this market well share. on to to digital opportunities

Forever to Caydia We & with as will elevate Charles partners and expectations engage ensure. shareholders with we're our distribution One continue three moissanite trends the our offerings we We're not the and consumers to to and lab-grown moissanite product their the brand. opportunities meeting complacent. but and new operations of explore lab-grown support and Colvard past grow retail with diamonds sales we've experience Caydia over positive growth quarters the will experienced into proud they expand expand pipeline. diamonds meaningful

you like shareholder to brand be share it greater increase We further quest in over Garrett that to will turn market for questions. to I'd drive back capture and our diligent equity With value.

Operator

[Operator first Araya [ph] question Instructions] of Our comes Capital. Cole Cole from

Unidentified Analyst

today. Good afternoon, doing the gentlemen. conference question. Thank One you for call

by and you're release perspective year-over-year still what healthy shows sales spending grew less yet very but marketing money, you expenses you're declined generating XX% remarkably differently from As million $X.X growth? sales year-over-year. Could a your your marketing XX% explain your that doing press of

Don O'Connell

Araya. Yes. pointing for that Sure, out. Thanks

and QX the changed as what we've entire during strategically marketing speaking call methodology into transition it we strategy. So or to we been our QX and

expanded really for Moissanite team across to some from conjunction in our related more specific kind just We So the has buying lab-grown needs. ROI. marketing of funnel-type of our that those the to salaries can getting or products Also did us. a general decrease their critical In complete consumer measure diamond and that to and lower on to side of That's really predisposed for business that We've personnel also forth. marketing just consumers is the board. are for transformation with model. had focused spend or, so analytics on conversion-based where we example, lab-grown knowing mid a to the

the a meaningfully We kind direct into actually those were able So and search. of paid deploy dollars to that some little bit. to of helped cause

also We PESO is and shared marketing owned model strategy. which a adopted earned, paid,

brand the content through marketing team feel the our on is really targeting look exposure aesthetic of and kind team also just So the helped job content awareness our effectively building those a And PR firm doing further more changing consumers actually that in the media has of focusing marketing earned really cause. and shared and through converting. are the phenomenal

they're job a doing there. great So

and So be we look kind as spend capitalize to will able well to be into to able the to on expand increase now. top-line future growth too of

Unidentified Analyst

it. Got

confidence your even faster of terms you increasing in dollar sales growth doing success given as that the converts quarter its repeatability marketing marketing place in have So marketing do in have takes traction it your confidence sales? into have will materially you're what confidence spend you'd with in this and and enough that result

Don O'Connell

absolutely. expanded our offerings that as But to also add yes, short, we also well. too we In will that product

diamond to do now weren't gives overall lab-grown offer that able Prior the consumer able lab-grown space market on sides the opportunity choice. we that do does what that. we So keywords in towards to the lift that to the business to both the be house of of more buy kind that diamond us us a consumer for

cause also the effect and ability market our really So the helps and also TAM for our increases total that business.

Unidentified Analyst

Okay. question. And last

trying has you you De entered effectively there's and through go know do with compete Blue compete shelf Beers selling with has obviously room evidently De Lightbox on is than them? is and players, about about basis. space Nile. an their at multiple to As trying faster Beers for you they're How brand I Blue but know this even how investing maybe And large Lightbox? nice $XXX the Nile grow exclusive plus then to million money space amounts question like of hopefully do go

Don O'Connell

Well that's a tough question.

as De amount business, natural in well Beers, the It's De grown at lab way the they've as the too mine actually capital movement to speak XX,XXX look we that into tremendous pound that that gorilla to ventured are at Beers probably look right? really a space. the so of in we testament So and business spending

valuation capital who the had a $X.X of of raise at with $X.X So billion, overall then that entire validates billion. $XXX you're million And market. billion also $X.X a Diamond looking just recently Foundry or

of of So awareness gemstones that also further a elevates as overall whole. lab-grown kind the

was that. lab-grown with pleased diamonds on $X.X the estimates of we're space billion. The early So

believe what it we different a on there's So introduced more Lightbox colored product as your to that they're just to but they've specifically basics. to But relates diamonds in they're doing of and room. right of now plenty core answer question assortments, basic-type really actually colors we -- focusing their product --

after the is bridal product a from and going we that business is believe side the of Our to mix premium fashion grade gemstones. our

but come for what we us that that room with actually or that market of is do do grades They from to quality color and good us. come So wants believe on to them EF&G qualities market. differentiates are and consumer to of plenty specifically nice focused all do better. we're standards, They there's VSX premium goods. good They

Unidentified Analyst

congratulations you. best of Thank and luck. right. Well, All

Don O'Connell

We call. Thank very much, you Araya. appreciate the

Operator

next [Operator Richard Molinsky. question comes from Instructions] Our

Unidentified Analyst

Don, thoughts negative big give positive like months? things chains then the out from you for on that start momentum. congratulations. the Macy's came and it Are you their you've other And you could how could at think Internet does them about that next months other XX maybe success a Do with -- guys? X of to light? using Macy's? into lab-grown the first in with in because us looking the stores a also And that Pandora yesterday a doing you you with are affect possibly on had strictly get program diamonds the love you quarter. if I Great news your them

Don O'Connell

Yes. Richard, thanks for call. the

important conversation, fact as just company. of right now. not it saying years kind the move the it's lab-grown the of we've So, mindful a because for Absolutely, solidifies bringing of market. and a of mindful their what on let's really all be Pandora but address over news XX positive been It's we're only overall what the to earth to part,

and products. So, sourced ethically sustainable

and and responsible of giving the time, certainly product is moissanite which unique sustainable prior overall product And even a certainly, do So do sourced manufactured. And their for really they're and certainly about too business call model ethically our to them shift the recycled we we're like for too as critical metals Pandora for now totally all prior business. that share lab-grown right The very their well and foray. to It's believe excited is movement. have the us. it. it. It's and And but They Arya a and distinct was to that for and with as they different fashion creating I for diamonds they we we'll significant. the Certainly, believe market significant some us of capture about well, very significant us. I because really we're type entry all the completely greater plenty for it's referring that of room there's more excited and nice gift have awareness is

from too lot we're that going get as believe of lift a we So to well.

Unidentified Analyst

And that second sign we other with? Macy's possibly question is much. so you could retail like Thank just a Yes. up the

Don O'Connell

Yes.

you specific we're just now, Right expand and I of a ship be specific lab-grown bit bit It the kind could distribution of areas with want led you little over we've experienced the going there kind business. be little partners. growth I that a which multiple to get now into could diamonds right specifics It XX% If to motor. into in don't at of to Caydia sales drop but our our quarter. we're it's charlesandcolvard.com, pipeline. listened

quarter. quarter last was you holiday mind Now our

also XX% the they in increase meaningful in too space, believe in we too the business but call diamond a wanted as well. well XX% out I just diamond So as to moissanite is space, have lab-grown growth the

shortly, for that we'll expand about So the coming channels in Caydia be lab-grown quarters. the diamond to look different here we'll and talking

Unidentified Analyst

again. Thank Keep you so much. Appreciate job it. Great up.

Don O'Connell

you, sir. it. Thank Appreciate

Operator

comes question Edward next Our [ph]. from Gilmor

Unidentified Analyst

Don. the on Hi, quarter. Congrats

what's color in looking quick you. have inventory then to? question down a that as a to you Just And if I do target to number wondered a the little add Thank could get of on that kind you inventory also you're currently? position.

Don O'Connell

of but this question the lot, real get know a inventory You is really we critical. makeup the

actually our the between programs. in inventory program asset levels increasing increasing all our Macy's while while product all and/or our consignment our the So the have decreased, diamonds, position in-store offering lab-grown our with

So us. our heard you've businesses. industry. need are and we with for folks India critical And a those Those in understand to news support chain the we need world constraints to around also are the the of supply forth. affecting so Certainly, that lot

So that. able and team, what want this kind that forecasting we're I I need sales this sure to have operations make support ahead that it. of trajectory be I be they want be want on. teams my to growth and to of to to mindful pipeline of momentum

finished very So And we based and $XX probably finished are. on the finished inventory the have consistent of jewelry we largely What's… where million? percentages those is what jewelry. Clint? we composition side we're gems feel On our with

Clint Pete

Yes.

at million. Just $XX

Don O'Connell

finished at on important. think jewelry Right. $XX We're the which we side, right million that's

within time in the if Let's customers for we our either the that the support able to adequate mind with we as we drop that largest of inventory our need keep to the day execute. that sure to marketplaces ship need that customer And business to well to and able be portion very, of We stringent. base, need and Amazon certain to the cause. driving to the have order very SLAs a -- period they be ship make partners online as requirements are

that and raw the actually we've number stuff, as significantly. materials decreased far As gemstone

that. with So and with those real And are goods makeup pleased that. of the we're pleased we're real active really

there cycle gemstones our of as to cutting fastening our too Ed, too want a is related that to well. as and note also We well,

mindful going up market of we're start when have to that is go to. to holiday what we generally we the be build and So be given goods to now out to strategy mindful begin coming and for of the with we have which season to our to

to we're be moissaniteoutlet.com kind and label driven. where Keep pleased to look been really the We'll and down community. under in goods strategy we then or So spoke we of be and with is drive That we'll absolutely under our own disposition also any be direct-to-consumer to and non-performing website. inactive to inventory. its speaking quarter mindful moving which investor last which our throughout the it that is needs our mind, in also the moissaniteoutlet.com I've launched

through pushing through that we channel to critical business we'll the anticipate be So going level that's inventory of be to. to growth what the we can the maintain and channels to those business to that and able the of kind critical

Unidentified Analyst

Got on Thank congrats and team you quarter. and good a it. again you

Don O'Connell

I sir. Thanks, appreciate it.

Operator

Our comes of Paul PZDA. from next Zimnisky question

Paul Zimnisky

guys. Hi,

Just out lab diamond the one comparable bit growth a XX% moissanite. in in sales, cut the a that? What XX% quick and remarks. prepared the in on It little on was growth

Clint Pete

I That's say, diamonds actually in -- just comparable, the you the we late XXXX. lab-grown September mean, of launched

know the to talking about don't ago I or… if year comparable quarter you're So

Paul Zimnisky

Yes. said that that lab is in sales. diamond growth XX% saw growth Well, relative you What just you to?

Don O'Connell

Yes.

time, So is basically, the brands end had QX the and of it besides it and product we're the number. that into this overall We we're is. growth launched discuss percentage what we that sales trajectory. tail that just the then don't just market what getting disclosing comparing not we At to we're QX once

Paul Zimnisky

to tail up the was QX it So of end relative XX% XXXX?

Don O'Connell

as diamonds. LGD as the far tail of QX XXXX, end the to Relative

Paul Zimnisky

Okay.

one diamonds? you the And then and term? greater those of the priority other how talk the products two near the the the medium and moissanite maybe as growing in you you the can far a about, in a – primary little see investment if is than And as Okay. category bit

Don O'Connell

Yeah.

business question, learning XX business the or it in driving actually moissanite. making that a being years. purchase. We great didn't those, of they're they're are heard never have that's about and about the for to I the diamond about now kind making actually awareness building So website mean, we've certainly moissanite moissanite We've that been that more to know who and our it, we To it's investments. choice, strategic Paul. been believe

grow far trajectory our investments market space in and house working making the than And lab-grown moissanite, the One. the moissanite. straightforward we're and tremendous investments, diamond the As actually we're the that probably investments continuing towards our continue so Forever and opportunity as the the meaningful that. Certainly, diamond, which is to is our product more momentum in we in into believe

mean, we're you But probably lines spend business what between I now, can So significant speaks than the and the pace sides and consumer to for moissanite is is a both that sides. But higher that a marketing we'll higher capital growth at right again, growing see that we're level choose. seeing there read business. both diamond the towards deploying we're on letting

to the customer is I'll kind in tell choosing. where So of you, coming and that that quarters, able customer is what be

Paul Zimnisky

Got you much. very it. Thank

Don O'Connell

it, Thank you. Appreciate Paul.

Operator

Our from next comes Eric of Landry question Capital. BML

Eric Landry

Thanks. All right.

Don O'Connell

Eric. Hi,

Eric Landry

you for hi. – should So wait about could the, just say a couple margin Anything we down or points, basis the hundred the gross Q?

Don O'Connell

mean, I could No. it. talk about we sure

excited is certain certainly, about certain and that. some to a related business time Valentine's bit to margin were We're it's right? a still capitalize time really and things related the plan sales beautiful most do within little So on make some there of was And an tied that. for from to also Valentine's Day that XX% pretty we're that. related of Day we like impact impact to margin And we the have different to we delivering to to was the the We sales, event opportunity XX%. melts There creep did we that. had kind everything But melt. on forego and So had marketing to able right? from that and decisions strong, part,

Eric Landry

something Tied the with do to metals? the to melt

Don O'Connell

Yeah.

little about talk a let's that bit. So

that. about Sorry

Sometimes means. what that understand people don't

use and we bucket and into purposes. product you we a for from gemstones broken metals, all because new be bucket and of and as into gemstones of And returns, can product. far recycle we're intents company. even we're loose even we those And So or gemstones that those metals returns, those course to every either and able get dismount goes re-cut is. in that to to shops the And the that take a that that, actually or business, and get customers' compile stones, the it factories able able you fresh be to starts are to and those defective we recycled whatever as metals take comprised then

So production. we like to put some the associated back is recycle with it forth. to and metals those But shrinkage so there metals and those losses in

you So does little up clear that it a for bit?

Eric Landry

A little bit.

So it sounds like – there may be in a small sort element the of a of one-timer

Don O'Connell

You're right.

So business. has we do look those. while get we EPS we're and take profit more gets we to of we've be responsibly, want to believe meaningful that. And big, that a delivering All We got it material the to nice to So it's $X be believe it a don't nice a to or to too we the nice that. if There's where – strong times on it too periodically, actually able right? effect at great here big EPS, a want manage when to million.

Eric Landry

I got you.

termed a would event one-timer, gross knows that may bit be may without So who a of not the Correct? or may kind how – much. margin be higher little have that been

Don O'Connell

your But certainly conclusions. to you that's mean, addressed. can specific I what come to I

Eric Landry

Good.

Okay. Great.

and go it here's ask question can't that answer, anyways. a So now I'll ahead probably but you

Don O'Connell

Terrific.

Eric Landry

growth story, a while so growth or you take much share speak? mined you attribute be effect, diamonds Any do from I – very would just pent-up It you demand the say Anything of much could How I sort think of how and is – that anything What helpful. could you the it. charts. can't thoughts was growth secular complain a about that? off was fantastic. the to much to about mean, how

Don O'Connell

Sure.

we're some and that. the and effectiveness demand, pent-up believe sure for adding is that, the know There's there. culture the things I of From that, really changing stimulus business, doing brand the kind So, I'd to like the of out happening. COVID-wise marketing effect, secular a from like of diamonds overall the there right? There's product lab-grown of that. what it's strategy in shift

we've we watch us, why within that's the for on every of throttle in thing we confident the on that right? kind certainly are is on mix going And really business. kind our growth the accomplished. brand. certainly, foot important product we'll of and on So continue capitalizing as that. different, and more of business, what a product added focus But added the to and helps overall us positioning the that's the it's awareness really the single But keep to kind certainly, where we just offering drives And we're

Eric Landry

Okay.

growth have and Here's How one. you has last your the attributed be that think as just you much the designs designs that only else do the moissanite? grown to to – the lab can of and nobody opposed popularity

Don O'Connell

actually question. That's fantastic a Yes.

we've several So prior. been speaking and over it even about quarters

that and red our that and our and Our we actually market. consumer own are business. what to which the thread is brand patented patented within launch of a and Charles to Colvard brand the our equity theme a furthering collection, understands Signature proprietary Collection, we believe & designs it it's specific having significant is And who we bolstering bring impact

it's climbing but we the well value-add or and everything So we don't also a that, here. numbers to actually do percentages on as disclose it's

Eric Landry

it kicking. Great. And right. Keep keep All up. Thanks.

Don O'Connell

Thanks. Appreciate you, man.

Operator

Holdings. Our next Bumbershoot from Jason from comes question Ursaner

Jason Ursaner

Congratulations another strong on here. quarter

Don O'Connell

Jason. Hi, you How are doing?

Jason Ursaner

or PPP First that loan or you're forgiveness obviously when the question. The today had quarter. the that? still stands it talk expecting about it where end you Could through of on

Don O'Connell

that. I'll Sure. let Clint address

Clint Pete

not Thanks, for filed Jason. we today. currently our application Yes, forgiveness for have

applications lenders the fourth recently us -- the probably in quarter. could that taking we told start they'll Our

then be approval June the to process around able forgiveness of and that and SBA the Xst, expect process submit maybe We we'll the follow lender. with both

Jason Ursaner

Caydia, back go I just I guess to just then And need now. to Okay. clarity

moissanite grown lab period? top on initial rate in growth QX period the XX% fiscal all sequentially launch or So on what the you're saying QX so excluding the versus fiscal the holiday of grew

Don O'Connell

So it's versus QX.

So is specific. that

Caydia it's the grown But to specific within and QX moissanite QX the diamond So quarter. sales the versus this both lab the grew sales.

Jason Ursaner

on grew you So top of holiday the period?

Don O'Connell

grew QX. end the we diamonds launched lab on over XX% grown on ago quarter. the But we of only year So the moissanite the

whatever when launched we QX then reporting in sales into it or the So was we whatever those holiday there had were that days there program. launched eight generated basically where the from quarter QX of revenue went when because it nominal we was. And we end there, but at days we

and there to the sales we velocity stopped we of sales Caydia QX the then And generated out of gate right brand. and grown So at increase we actually of it of increase those of and We revenue. the used the those in XXXX. from QX lab kind continued sales And the numbers we the QX fiscal numbers of QX. XX% that's against end over just took then had where all we

Jason Ursaner

it. Fantastic. Got

vertically And with then lab very and I developing or grown in in that it diamonds, roots is just Caydia. more how branding technical aspect? -- sourcing versus moissanite, know grown piece? a you there's that of with or know-how is lab integrated company the with the Are so deep

Don O'Connell

Yes.

So bit. little let's talk about that a

the been I've over mean I So for industry decades. X.X in

it's nature So from in to the me. second world, diamond transfer of knowledge the

grown So now lab to diamonds grown and lab we only that's is Charles and really & and my do forte and diamonds. moissanite I then Colvard gems came then

diamonds diamond is diamond. a Caydia And is So our a for certainly diamond. me a lab grown

exactly marketing and and and everything So same the and strategy dialogue and plans is entire language designs and conversation same.

gemstones. Caydia others and the the of only premium between market Some we grades is to bring differentiators of

So that's gemstones GCAL really matter. important. for even Really or are the or all that IGI-certified GIA

confirmations is to important. bringing there mounted the from the collections continues we diamond to you'll the basically, to grown business. patented able us -- to we and others. Certainly, case do is and styling our that. signature, of third-party become Caydia the to business the critical Certainly, allow collection and road continues continue lab integrated to in signature delineation proprietary resident more experts as And third be vertically try So look out grow kind the that's a to

Jason Ursaner

of a making the from the In terms or it technology for expanding brand perspective? sales

Don O'Connell

expanding consumer perspective So a that the have capacity. is there If from the the brand progression. a is consumer given. is we natural buying, sales That's that

We infrastructure. have the

thing to place We this as have in big wants grow all elements grow. to it as

diamond could progression the this do could grow. the far We gemstones. So starts that more right? the do one and integrated on we that to with grown be actual diamonds at be, on we evolve moissanite vertically do the As as the fastening, time, actually not and as could business our think lab that cutting

Jason Ursaner

All right. Thanks. answers. Awesome. I appreciate the

Don O'Connell

it. Appreciate Great.

Operator

This our CEO closing the remarks. over back O'Connell, to and I to would turn question-and-answer like session. for conference President concludes Don

Don O'Connell

And we'll any happy certainly Clint get to one-on-one be of your you your the transparent or So team. calls. go to behalf support I enjoyed and to next you reach questions today. thank can that that We look request a and an But for if ir@charlesandcolvard.com or appointment myself we be want On time Charles call. time. Colvard have out to can answer you thanks want mind in and to as as the forward & we entire interest the CTHR. will We appreciate on to Keep for comments. again. continued

well. all You be

Operator

you The for conference has now concluded. Thank attending presentation. today's

You now disconnect. may

Charles & Colvard (CTHR) 9 May 212021 Q3 Earnings call transcript