Blue Nile said Tuesday that net sales increased 21.2 percent to $136.1 million for the fourth quarter, led by a 30 percent increase in bridal jewelry sales. Operating income for the period, ended December 30, 2012, totaled $7.1 million, representing an operating margin of 5.2 percent of net sales. Net income totaled $4.9 million, or $0.39 per diluted share. Non-GAAP adjusted EBITDA for the quarter totaled $9.1 million. For the full year, the online diamond and fine jewelry retailer reported that net sales increased by 14.9 percent to $400 million. Operating income for the full year was $12.3 million, compared to $16.9 million in the prior year. Net income for the year was $8.4 million and earnings per diluted share totaled $0.63. Non-GAAP adjusted EBITDA for 2012 was $20.6 million. Harvey Kanter, Blue Nile president and CEO of the Seattle-based company, noted that non-engagement jewelry sales for the holidays did not meet expectations but growth for the fourth quarter was still greater than 5 percent. Net cash provided by operating activities totaled $34.4 million for the year compared to $15.4 million for the prior year. Non-GAAP free cash flow for the year was $31.9 million compared to $10.1 million for the prior year. In its outlook, Blue Nile said it expects net sales to be between $94 million and $100 million with earnings per diluted share projected at $0.05 to $0.08. For the 2013 fiscal it expects net sales to be between $440 million and $470 million and earnings per diluted share are projected at $0.75 to $0.85. “The fourth quarter caps off a great year of growth at Blue Nile, building upon our sequential growth while posting greater profitability versus the prior year. Investments we made in 2012 paid off with the highest annual levels of revenue growth and customer acquisition in five years, exceptional strength in engagement sales in the U.S., and a return to strong growth internationally,” said Harvey Kanter, Blue Nile president and CEO. “While we fell short of our expected sales of non-engagement jewelry during the holiday season, in part due to a weaker environment for consumer discretionary spending, we gained valuable insight that will guide the evolution of our product mix. We believe that our strategy to accelerate this part of our business is on track.” The company also announced it has entered into an agreement with U.S. Bank National Association for borrowing under a $35 million revolving credit facility maturing in 2014.
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