The Morrisville company blamed declining sales for a loss of $1.1 million, or 6 cents per share. That was down sharply from net income of $529,000, or 3 cents per share, during the same period last year.

The report comes just a few days after the abrupt resignation of its chief executive officer, Bob Thomas.

The company has struggled in the past year as consumer spending slowed, hurting sales of jewelry.

In May it laid off 10 employees. Then it got into a legal fight with one of its former top customers.

Net sales for the quarter were $3.6 million, compared to $7.6 million during the same quarter a year ago.

Charles & Colvard are hosting a conference call for investors and analysts which began at 4:45 p.m. today. The call will be broadcast live over the Internet at www.moissanite.com, under the "Investor Relations" tab.

The company's stock closed Thursday at 86 cents, down 6 cents. The stock is down 80 percent in the past year.