v3.25.2
SEGMENT INFORMATION AND GEOGRAPHIC DATA
9 Months Ended
Mar. 31, 2025
SEGMENT INFORMATION AND GEOGRAPHIC DATA [Abstract]  
SEGMENT INFORMATION AND GEOGRAPHIC DATA
3.
SEGMENT INFORMATION AND GEOGRAPHIC DATA

The Company reports segment information based on the “management” approach. The management approach designates the internal reporting used by management for making operating decisions and assessing performance as the source of the Company’s operating and reportable segments.

The Company manages its business through two operating and reportable segments based on its distribution channels to sell its product lines, loose jewels and finished jewelry: its “Online Channels” segment, which consists of e-commerce outlets including charlesandcolvard.com, moissaniteoutlet.com, charlesandcolvarddirect.com, madenetwork.com, third-party online marketplaces, drop-ship retail, and other pure-play, exclusively e-commerce outlets; and its “Traditional” segment, which consists of wholesale and retail customers, including its own Charles & Colvard Signature Showroom. The accounting policies of the Online Channels segment and Traditional segment are the same as those described in Note 2, “Basis of Presentation and Significant Accounting Policies” and in the Notes to the Consolidated Financial Statements in the 2024 Annual Report.

The Company evaluates the financial performance of its segments based on net sales and product line gross profit, or the excess of product line sales over product line cost of goods sold. The Company’s product line cost of goods sold is defined as product cost of goods sold and excludes certain indirect supporting expenses from the Company’s manufacturing and production control departments, comprising personnel costs, and allocations for depreciation, leases, utilities, and corporate overhead; freight; inventory write-downs; and other inventory adjustments, comprising costs of quality issues, and damaged goods.

Summary financial information by reportable segment is as follows:

   
Three Months Ended March 31, 2025
 
   
Online
Channels
   
Traditional
   
Total
 
Net sales
                 
Finished jewelry
 
$
2,376,826
   
$
1,552,102
   
$
3,928,928
 
Loose jewels
   
114,084
     
6,343
     
120,427
 
Total
 
$
2,490,910
   
$
1,558,445
   
$
4,049,355
 
                         
Product line cost of goods sold
                       
Finished jewelry
 
$
986,979
   
$
1,195,555
   
$
2,182,534
 
Loose jewels
   
44,858
     
4,211
     
49,069
 
Total
 
$
1,031,837
   
$
1,199,766
   
$
2,231,603
 
                         
Product line gross profit
                       
Finished jewelry
 
$
1,389,847
   
$
356,547
   
$
1,746,394
 
Loose jewels
   
69,226
     
2,132
     
71,358
 
Total
 
$
1,459,073
   
$
358,679
   
$
1,817,752
 
                         
Depreciation and amortization
 
$
94,189
   
$
122,464
   
$
216,653
 
                         
Capital expenditures
 
$
41,359
   
$
2,475
   
$
43,834
 

   
Three Months Ended March 31, 2024
 
   
Online
Channels
   
Traditional
   
Total
 
Net sales
                 
Finished jewelry
 
$
3,840,382
   
$
1,044,116
   
$
4,884,498
 
Loose jewels
   
219,828
     
157,640
     
377,468
 
Total
 
$
4,060,210
   
$
1,201,756
   
$
5,261,966
 
                         
Product line cost of goods sold
                       
Finished jewelry
 
$
1,980,096
   
$
737,957
   
$
2,718,053
 
Loose jewels
   
75,243
     
76,627
     
151,870
 
Total
 
$
2,055,339
   
$
814,584
   
$
2,869,923
 
                         
Product line gross profit
                       
Finished jewelry
 
$
1,860,286
   
$
306,159
   
$
2,166,445
 
Loose jewels
   
144,585
     
81,013
     
225,598
 
Total
 
$
2,004,871
   
$
387,172
   
$
2,392,043
 
                         
Depreciation and amortization
 
$
41,260
   
$
131,882
   
$
173,142
 
                         
Capital expenditures
 
$
142,756
   
$
85,198
   
$
227,954
 

   
Nine months Ended March 31, 2025
 
   
Online
Channels
   
Traditional
   
Total
 
Net sales
                 
Finished jewelry
 
$
8,228,051
   
$
2,934,998
   
$
11,163,049
 
Loose jewels
   
554,702
     
194,256
     
748,958
 
Total
 
$
8,782,753
   
$
3,129,254
   
$
11,912,007
 
                         
Product line cost of goods sold
                       
Finished jewelry
 
$
4,187,357
   
$
2,406,033
   
$
6,593,390
 
Loose jewels
   
248,853
     
85,352
     
334,205
 
Total
 
$
4,436,210
   
$
2,491,385
   
$
6,927,595
 
                         
Product line gross profit
                       
Finished jewelry
 
$
4,040,694
   
$
528,965
   
$
4,569,659
 
Loose jewels
   
305,849
     
108,904
     
414,753
 
Total
 
$
4,346,543
   
$
637,869
   
$
4,984,412
 
                         
Depreciation and amortization
 
$
281,199
   
$
370,010
   
$
651,209
 
                         
Capital expenditures
 
$
204,454
   
$
3,300
   
$
207,754
 

   
Nine months Ended March 31, 2024
 
   
Online
Channels
   
Traditional
   
Total
 
Net sales
                 
Finished jewelry
 
$
13,780,906
   
$
2,796,204
   
$
16,577,110
 
Loose jewels
   
850,208
     
693,311
     
1,543,519
 
Total
 
$
14,631,114
   
$
3,489,515
   
$
18,120,629
 
                         
Product line cost of goods sold
                       
Finished jewelry
 
$
6,948,411
   
$
1,647,325
   
$
8,595,736
 
Loose jewels
   
271,669
     
320,569
     
592,238
 
Total
 
$
7,220,080
   
$
1,967,894
   
$
9,187,974
 
                         
Product line gross profit
                       
Finished jewelry
 
$
6,832,495
   
$
1,148,879
   
$
7,981,374
 
Loose jewels
   
578,539
     
372,742
     
951,281
 
Total
 
$
7,411,034
   
$
1,521,621
   
$
8,932,655
 
                         
Depreciation and amortization
 
$
135,411
   
$
394,750
   
$
530,161
 
                         
Capital expenditures
 
$
442,460
   
$
280,796
   
$
723,256
 

The Company does not allocate any assets to the reportable segments, and, therefore, no asset information is reported to the chief operating decision maker or disclosed in the financial information for each segment.

A reconciliation of the Company’s product line cost of goods sold to cost of goods sold as reported in the condensed consolidated financial statements is as follows:

   
Three Months Ended March 31,
    Nine months Ended March 31,  
   
2025
   
2024
    2025     2024  
Product line cost of goods sold
 
$
2,231,603
   
$
2,869,923
    $ 6,927,595     $ 9,187,974  
Non-product line cost of goods sold: Manufacturing and production control expenses
   
401,395
     
672,373
      1,118,772       1,934,837  
Freight out
   
108,782
     
286,526
      392,750       828,990  
Other inventory adjustments
   
376,724
     
247,259
      36,058       182,734  
Cost of goods sold
 
$
3,118,504
   
$
4,076,081
    $ 8,475,175     $ 12,134,535  



A reconciliation of the Company’s consolidated product line gross profit to the Company’s consolidated net loss before income taxes is as follows:


   
Three Months Ended March 31,
    Nine months Ended March 31,
 
   
2025
   
2024
    2025
    2024  
Product line gross profit
 
$
1,817,752
   
$
2,392,043
    $ 4,984,412     $ 8,932,655  
Non-allocated cost of goods sold
   
(886,901
)
   
(1,206,158
)
    (1,547,580 )     (2,946,561 )
Sales and marketing
   
(1,524,954
)
   
(3,684,506
)
    (6,174,739 )     (10,702,796 )
General and administrative
   
(1,374,082
)
   
(1,199,511
)
    (3,907,913 )     (4,550,841 )
Other income (expense) net
   
(4,962
)
   
65,425
      2,630       229,474  
Loss before income taxes
 
$
(1,973,147
)
 
$
(3,632,707
)
  $ (6,643,190 )   $ (9,038,069 )

The Company recognizes sales by geographic area based on the country in which the customer is based. Sales to international end consumers made through the Company’s transactional websites, including charlesandcolvard.com, moissaniteoutlet.com, charlesandcolvarddirect.com and madeshopping.com, are included in international sales for financial reporting purposes. A portion of the Company’s Traditional segment sales made to international wholesale distributors represents products sold internationally that may be re-imported to U.S. retailers.

The following presents net sales data by geographic area:

   
Three Months Ended March 31,
    Nine months Ended March 31,  

 
2025
   
2024
    2025     2024  
Net sales
                       
United States
 
$
4,049,355
   
$
5,188,939
    $ 11,912,007     $ 17,700,626  
International
   
-
     
73,027
      -       420,003  
Total
 
$
4,049,355
   
$
5,261,966
    $ 11,912,007     $ 18,120,629