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New CEO, chairman for Charles and Colvard

February 06, 2009

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Moissanite-maker Charles and Colvard has entered into a management services agreement in an effort to turn around the company, increase sales, decrease operational costs, improve marketing and increase shareholder value.

Morrisville, N.C.--For the second time in five months, Moissanite maker Charles and Colvard Ltd. is making a myriad of changes at the top in an effort to turn around the flailing business.

The company announced on Friday that its board of directors has appointed Richard A. Bird, a current director of the company, as its new chief executive officer, and has elected George R. Cattermole, also a current director of the company, as chairman of the board of directors, according to a media release issued on Friday.

Charles and Colvard also let go three executive officers: Dennis M. Reed, president and chief marketing officer; Carl A. Mielke, senior vice president of sales; and Steven Abate, vice president of operations.

In addition, according to the release, Charles and Colvard has entered into a management services agreement with Bird's company, Bird Capital Group Inc.

The services being provided by Bird Capital, which include the leadership of Bird himself, are intended to lead a turnaround of the company, increasing sales, decreasing operational costs, improving marketing and increasing shareholder value.

Cattermole said these "extraordinarily" challenging times require companies to make difficult decisions, find innovative solutions and take aggressive, unprecedented action.

"For the past eight months, our board of directors has identified, evaluated and debated a variety of different business models and strategies that would put our company back on a growth path toward realizing our economic potential. We are confident that we have made the right choice and look forward to working with Mr. Bird, our employees, and Bird Capital Group to provide unique value to our customers, partners and shareholders," Cattermole said in the release.

Bird echoed these thoughts:

"The company's business position has been severely weakened over the last two years, and the company's marketing positioning of its products and resulting market penetration have obviously been unsuccessful, as shareholders are painfully aware," he said. "But, as both a shareholder myself and a consumer of the company's products for several years, I continue to be enthusiastic about the potential for the company and its shareholders. Since becoming a director in May of 2008, I have become more aware of the need for dramatic change in the management of the company and the marketing of its products. I am committing myself to working substantively and diligently for improved shareholder value."

The past year has been a rocky one for the Morrisville, N.C.-based maker of Moissanite, a lab-created gem that resembles a diamond.

In November, the company reported its third-quarter sales were down 37 percent.

In October, the company reorganized its management and, at that time, executives and other workers agreed to accept a reduced salary for three months.

In August, the company announced it was expecting to close its Hong Kong office by the end of September.

Also in August, Charles and Colvard received notice from the Nasdaq Stock Market Inc. that it faced possible delisting if it's stock didn't rise, and that to avoid delisting, the company's stock must trade at $1.00 or more per share for a minimum of 10 consecutive business days before Feb. 17, 2009.

On Friday, a Charles and Colvard spokesperson told National Jeweler that the Feb. 17 delisting deadline for all companies has been extended until April 19.
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