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Harry Winston Diamond Corporation Reports Fiscal 2013 Third Quarter Results

TORONTO, December 10, 2012 /PRNewswire/ --

Harry Winston Diamond Corporation (TSX: HW) (NYSE:HWD) (the "Company") today announced its third quarter Fiscal 2013 results for the quarter ending October 31, 2012.

Robert Gannicott, Chairman and Chief Executive Officer stated, " This has been a quarter of solid progress on many fronts for us. Our luxury brand business has demonstrated strong growth in its bridal jewelry sales, with the higher margins and broader base that this implies, while the Diavik Project has successfully switched fully to underground ore production. Although the underground mine is still tuning its operating procedures, it has already reached and exceeded its planned underground production rate. The rough diamond market has recovered its poise as optimism returns in  America , still the world's largest consumer of diamond jewelry."

The Company is pleased to announce the appointment of Chuck Strahl to its Board of Directors.  Mr. Gannicott added, "We welcome Chuck Strahl to our board of directors. Chuck recently retired from almost 18 years in federal politics having served as both Minister of Transport and Minister of Aboriginal Affairs and Northern Development. His experience and interest in northern development is a welcome addition to the board."

Third Quarter Highlights:

Consolidated

  • Consolidated sales increased 51% to $180.4 million for the third quarter compared to $119.7 million for the comparable quarter of the prior year.  Operating profit was $10.3 million compared to an operating loss of $2.0 million in the comparable quarter of the prior year.  (Included in the prior year's operating loss was a $13.0 million paste plant de-recognition charge for the mining segment.)  EBITDA increased 64% to $34.8 million compared to $21.2 million in the comparable quarter of the prior year.
  • Consolidated net profit attributable to shareholders for the third quarter was $3.4 million or $0.04 per share compared to net loss attributable to shareholders of $4.7 million or $0.06 per share in the comparable quarter of the prior year.  Included in the prior year period net loss was a $8.4 million (or $0.10 per share) after-tax paste plant de-recognition charge.

Mining Segment

  • Rough diamond sales increased 134% to $84.8 million, versus $36.2 million in the comparable quarter of the prior year. The increase in sales resulted from a 286% increase in volume of carats sold during the quarter. The Company sold approximately 0.88 million carats at an average price of $96 per carat versus approximately 0.23 million carats at an average price of $159 per carat in the comparable quarter of the prior year.
  • The 39% decrease in the Company's achieved average rough diamond prices during the third quarter resulted primarily from the sale of a higher portion of smaller size diamonds due to an improved market for these goods.  Had the Company sold only the last production shipped in the third quarter, the estimated achieved price would have been approximately $123 per carat based on the prices achieved in the October 2012 sale.
  • Rough diamond production for the calendar quarter ended September 30, 2012 was 0.77 million carats (40% basis), which was consistent with the comparable period of the prior year.

Luxury Brand Segment

  • Luxury brand segment sales increased 14% (17% at constant exchange rates) to $95.6 million compared to $83.5 million in the comparable quarter of the prior year.  The total number of units sold increased by 8% over the comparable quarter of the prior year.
  • Operating profit for the luxury brand segment increased 265% to $5.3 million in the third quarter compared to $1.5 million in the comparable quarter of the prior year.
  • On November 7, 2012, the luxury brand segment amended its senior secured revolving credit facility to add an additional $40 million of capacity, increasing the total facility to $300 million.  The facility has a maturity date of August 30, 2017.

Fiscal 2013 Third Quarter Financial Summary

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