Charles & Colvard, Ltd. (NASDAQ:CTHR) Q4 2023 Earnings Call Transcript

Don O’Connell: That’s a great question. So in our history, we’ve accumulated a pretty solid amount of inventory through a supply agreement that we had with our strategic partner. And if anybody has been tracking or following the company over the years, we’ve maintained a significant silicon carbide or moissanite inventory. We’re pretty comfortable that we have ample inventory to support our overall business, and as I said earlier, for the foreseeable future. That inventory has down – has recently come down a little bit through this write-down that we just did. But it’s a much different business than the diamond business. So from the lab-grown diamond business, there’s so much material that’s in the market readily available with our strategic alliances and partnerships and relationships in the vendor community, we’re able to buy more and just in time.

Now that’s not to say that there wasn’t some of that material bundled up in the write-down, and that was large in part due to our early entry to market of getting into lab-grown space which we believe was a great move for the company, and now we offer the choice to that consumer. But the difficult scenario there was the market really pushed down and the pricing pressure was intense on the lab-grown side, from the early days to where it is today. So we believe that with this consideration that we just did in the write-down, we’re in a great position as far as on the diamond inventory and then purchasing just in time our needs. And then the moissanite, we’ll continue to kind of look at that and weigh that, but we have a lot of options there.

But if you look at our consumption of material, if anyone wants to look back from our supply agreement, year-to-date – not year-to-date, but for the full year, we purchased $1.8 million worth of material, which you can kind of understand what the consumption was. So we didn’t feel that we needed any more material. We had plenty of material. We’re servicing all of our customers, all of the needs, and we believe that Forever One, is the pinnacle and it will continue to be so for the foreseeable future and beyond.

Operator: [Operator Instructions] I would like to turn the conference back over to Don O’Connell for any closing remarks.

Don O’Connell: Thank you, Sarah. I’d like to thank you and everyone else for your attention and continued belief in our company. We look forward to sharing our progress and achievements with you in the future.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.