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Q2 2008 Aber Diamond Corporation Earnings Conference Call - Final.

Article Excerpt
Original Source: FD (FAIR DISCLOSURE) WIRE

NANCY MURRAY, VP IR AND COMMUNICATIONS, ABER DIAMOND CORPORATION: Good morning and thank you for joining us on Aber Diamond Corporation's Second Quarter Fiscal 2008 Results Webcast for the three-month period ended July 31, 2007.

We delivered record sales for the quarter of $173 million, a 24% increase driven by a 15% increase in rough diamond sales, and a 41% increase in retail sales over the comparable period of the prior year.

Our earnings from operations increased 27% to $56 million from $44 million last year.

The agenda for the call today includes Alice Murphy, our CFO, who will provide the financial highlights from the second quarter, followed by Bob Gannicott, our Chairman and CEO, who will give you an overview of the developments of the Diavik Mine.

Following Bob, Tom O'Neill, our President and CEO of Harry Winston will discuss our retail business.

As you know, we will be making forward-looking comments today, including our financial outlook; the principal risks that could cause our future results to differ materially from our current expectations are detailed in our OSC and SEC filings.

And now I'd like to hand the call over to Alice.

ALICE MURPHY, CFO, ABER DIAMOND CORPORATION: Thank you, Nancy.

Record consolidated sales and continued strong margins were key operational drivers to our Q2 results. Sales increases of 24% for the quarter and 21% for the first 6 months as compared to the prior year reflect the robust growth of both our mining and retail operating segments. Our mining segment posted a significant $(14) million year-over-year sales increase in the quarter, with an average of $35 million per sale as compared to an average of $30 million per sale for the comparable quarter of the prior year. These improved sales were driven by a combination of higher volume, improved quality distribution, and a strong sales market, all contributing to a robust sales environment.

Similarly, our retail operations have continued to deliver very gratifying sales increases, posting $20 million quarter-over-quarter higher sales. Retail revenue for the quarter was $68 million over 15 locations, as compared to $48 million in Q2 '07 over 12 locations.

Our consolidated gross margin of 52.8% for the quarter reflects continuing strong contributions from both our operating segments. Mining and retail margins came in at...

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