September 2006 NASDAQ:HOTJ . 2 Safe Harbor Statement We make forward-looking statements in this...
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Transcript of September 2006 NASDAQ:HOTJ . 2 Safe Harbor Statement We make forward-looking statements in this...
September 2006NASDAQ:HOTJwww.hotj.com
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Safe Harbor StatementSafe Harbor Statement
We make forward-looking statements in this presentation which represent our expectations or beliefs about future events and financial performance. Forward-looking statements are identifiable by words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “will,” “may” and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. Forward-looking statements are subject to known and unknown risks and uncertainties, including those described in the Company’s filings with the Securities and Exchange Commission. In addition, actual results could differ materially from those suggested by the forward-looking statements, and therefore you should not place undue reliance on the forward-looking statements.
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Who We AreWho We Are
Designs and markets branded jewelry in growing market
Exclusive jewelry licensees of Dame Elizabeth Taylor and Kathy Ireland. Jewelry brands include:• Elizabeth®
• House of Taylor Jewelry®
• Kathy Ireland Jewelry® Exclusively for House of Taylor Jewelry
Provides independent fine jewelry retailers worldwide with unique branding vehicle
Established, long-term supply relationships
Founded May 2005 by entities controlled by Dame Elizabeth Taylor and Kathy Ireland, and members of the Abramov family
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A Unique GemA Unique Gem
Beautiful, high quality jewelry
International recognition of Dame Elizabeth Taylor
Experienced management team
Branding power of Kathy Ireland
Worldwide
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World-Renowned Elizabeth TaylorWorld-Renowned Elizabeth Taylor
Academy Award-winning actress synonymous with jewelry
Successful marketer of fragrances• Legendary fragrances, White
Diamonds, Passion and Gardenia are historic in their successes
Respected activist and philanthropist
Owner of one of world’s largest and most valuable private jewelry collections
Virtually unmatched branding power worldwide
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Branding Power of Kathy IrelandBranding Power of Kathy Ireland
$1 billion-plus annual retail sales of Kathy Ireland-branded consumer products
Kathy Ireland’s exclusive products and specialty brands are in more than 50,000 retail doors worldwide
Exceptionally strong brand recognition with women 18-49 with annual income above $50,000
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Experienced Management TeamExperienced Management Team
Jack Abramov – President & CEO • Seventeen years jewelry industry
experience including manufacturing and diamond sourcing. Co-founded Techline Jewelry Inc.
Monty Abramov – EVP, Design Director• Twelve years creative jewelry
design experience. Utilizing innovative CAD technology, launched “Original Diamond Handbag Collection,” “Players Club” and “Flower Power.”
Pauline Schneider – CFO• Previously VP Finance for PRB
Gas Transportation Inc., where she saw company through early financing, IPO and two acquisitions.
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Recent Operational MilestonesRecent Operational Milestones
Robust inventory of 600-plus newly designed jewelry pieces ranging from entry level to premium and couture
Established relationships with nearly 135 independent retail organizations representing about 175 retail doors
Recruited and trained sales force with deep industry knowledge and existing retailer relationships
Completed product packaging, retail point-of-purchase displays, co-op advertising programs
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Expanding Retail Door PenetrationExpanding Retail Door Penetration
Retail Door Penetration
CA
NVIA
MN
OK
CO
MI
MT
WA
GA
FL
NH
ME
NY
OHIN
KYVA
NJPA
MD
DC
DE
OR
ID
WY
KS
NE
SD
ND
UT
AZNM
TX
AR
MO
LA
MSAL
TN
SC
NC
WVIL
WI MARICT
VT
HI
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Retail Brand StrategyRetail Brand Strategy
Offer jewelry lines representing two of the world’s top branding personalities
Multi-brand product lines include exquisite collections from entry level to one-of a kind couture pieces
Reach entire spectrum of consumers by using different brands covering various price points
Provide retailers strong branding opportunity as they face competition from other non-core retail jewelry channels
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The BrandsThe Brands
Includes one of a kind pieces• Classic• Elegant• Collectible
$3,000 to $1 million+
Frequently purchased, traditional jewelry• Rings• Pendants• Earrings• Bracelets
$3,000 to $25,000
Designs aligned with• Style Guides• Specialty brands
− acafe− Jardin du Jour− Quilts of Gees
Bend
$200 to $3,500
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Product CategoriesProduct Categories
Diamonds Colored Stones Pearls Bridal Gold Silver Watches Men’s
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Retail Marketing SupportRetail Marketing Support
Point-of-purchase display elements
Branded packaging
Use of Dame Elizabeth and Kathy Ireland images
Consumer advertising
Co-op program
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Retail Partnership PlansRetail Partnership Plans
Elizabeth Couture Partnership• Initial buy-in of
$100,000 with annual commitment of $200,000
Prestige Partnership• Initial buy-in of
$32,500 with annual commitment of $65,000
Platinum Partnership• Initial buy-in of
$50,000 with annual commitment of $100,000
Couture Partnership• Annual commitment
of $165,000+
Cherished Friends Partnership• Initial buy-in of
$12,500 with annual commitment of $25,000
Family Circle Partnership• Initial buy-in of
$25,000 with annual commitment of $50,000
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Notable Retail RelationshipsNotable Retail Relationships
*
*Participating in Christie’s October 11 auction
atMandalay Bay, Las Vegas
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Consumer Jewelry MarketConsumer Jewelry Market
$60 billion industry in U.S. alone
Diamond jewelry sales in U.S. rose 7% in 2005• 10th consecutive year of increased sales • Represented more than 50% of worldwide sales
Favorable Demographics• Jewelry consumer predominately female, age 25-54 with annual
income in excess of $50,000
Women’s inflation adjusted full-time earnings increased 17% over the past 15 years
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Growth StrategiesGrowth Strategies
Selectively expand multi-channel network• Elizabeth
− Limited number in each major metro market
• House of Taylor Jewelry− Upper tier retailers focusing on leading brands
• Kathy Ireland Jewelry Exclusively for House of Taylor Jewelry− Broad range of independent local, regional and national retailers
Secure additional supplier relationships
Maintain significant presence at major trade shows
Rollout specialty product brands from Kathy Ireland family of brands• Distribute through established Kathy Ireland retail channels
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OwnershipOwnership
Total common shares outstandingas of June 30, 2006: 39,385,153
Executive Officers and Directors 19%
Interplanet Productions, Limited 36%• Controlled by Dame Elizabeth Taylor
Sandbox Jewelry, LLC 18%• Controlled by Kathy Ireland
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Financial OverviewFinancial Overview
For the three months ended June 30, 2006, net sales increased to $2.5 million from $809,000 a year ago and increased from $1.4 million in the immediately preceding first quarter of 2006
For the first half of 2006, net sales rose to $3.8 million from $1.9 million in the comparable prior-year period
At June 30, 2006, company had cash and cash equivalents of $7.3 million and working capital of $11.5 million, compared with $3.1 million and $4.7 million, respectively, at December 31, 2005
Issued $11.66 million of convertible notes May 2006
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Investment HighlightsInvestment Highlights
Start-up company with existing infrastructure, global brand recognition and talented team • Early stage of lifecycle with significant room to grow
Distinctively positioned in lucrative, highly-fragmented marketplace estimated to be $60 billion in the U.S. alone and growing
Powerful brand portfolio
Proven management team with decades of experience designing and bringing fine jewelry to market
Branded jewelry becoming an ever growing trend
Unique value in brands, products and retail plan
Major ownership by Licensors
September 2006NASDAQ:HOTJwww.hotj.com