Harry Winston announces results

Harry Winston Diamond Corporation reported fourth quarter and annual results for the period ending January 31, 2008. Fourth quarter sales increased 22% to $188.2 million with consolidated earnings from operations of $59.1 million, a 59% increase over the comparable quarter of the prior year. As a result, net earnings grew to $90.4 million or $1.55 per share, compared to $27.3 million or $0.47 per share for the fourth quarter of the prior year.

Net earnings for the fourth quarter were impacted by a $22.3 million foreign exchange gain or $0.38 per share related principally to an unrealized non-cash gain on future income taxes payable as compared to a foreign exchange gain of $9.8 million or $0.17 per share in the comparable quarter of the prior year. Also impacting the fourth quarter are a future income tax recovery of $22.4 million or $0.38 per share and an after-tax gain of $8.0 million or $0.14 per share pertaining to an insurance settlement.

Annual sales grew 22% to $679.3 million with consolidated earnings from operations increasing 48% to $217.7 million for fiscal 2008. The Company posted net earnings of $106.4 million or $1.82 per share for fiscal 2008 compared to net earnings of $104.3 million, or $1.79 earnings per share, in the prior year. Net earnings for the year were reduced by a net $43.4 million foreign exchange loss, or $0.74 per share, related primarily to an unrealized non-cash loss on future income taxes, compared to a net $8.8 million foreign exchange gain, or $0.15 per share, in the prior year. The loss is a result of the 17% strengthening of the Canadian dollar relative to the US dollar during the year.

We are pleased with our progress this past year in building an increasingly profitable business. Our two premium assets, at the most profitable poles of the diamond business, inform each other with respect to pricing and polished diamond supply. This enables rough diamond sales from the mine to be priced quickly and accurately against market changes. It also connects the jewelry and watch business directly to the diamond polishers that are the mine’s customers making a more efficient supply chain, said Robert Gannicott, Chairman and Chief Executive Officer.

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