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Management’s Business Operations
& Financial Review
- Integration of our rough planning software (the Advisor™) and our quality control faceting software (the Instructor™) with our light performance
grading technology, so as to allow manufacturers to incorporate light performance (i.e., brilliance, fire and sparkle) into their manufacturing criteria;
- Enhancement of the Sarine Light™ and Sarine Loupe™ platforms adding unique abilities to identify key characteristics of the polished diamond; and
- Roll out the Allegro™ system, a high-speed and high-accuracy machine for the processing of preformed (i.e., the initial suggested location of the table
has been manually identified) gemstones (not diamonds) directly into fully shaped (unfinished) gems, with minimal unnecessary weight loss and no
human error.
• Focus the Group’s marketing efforts on:
- The continued drive of our Galaxy™ family of products and services integrated with our rough stone planning products and their extension into smaller
stone sizes;
- The promotion of our revolutionary DiaMension™Axiom and its unique abilities to redefine the Cut and Symmetry grading of polished diamonds;
- The commercialisation of the Group’s new products and services which cater to the polished diamond trade, by leveraging the combined features of
the Sarine Light™, Sarine Loupe™, Sarine Profile™ and DAS for the wholesale, online and retail diamond trade; and
- The expansion into the non-diamond gemstone industry.
Performance Indicators
Non-financial Indicators
We use the following non-financial indicators to assess our Group’s performance year-on-year and against our competition’s performance:
RELATED ACTIVITY
TARGET CLIENT
Technological leadership
Our technological leadership, as measured by the innovation embodied in our new and enhanced products and services,
as well as by our existing and pending patents worldwide, remains strong. No other company in our field holds a larger
market share or broader portfolio of products and intellectual property for the rough and polished diamond industry.
Estimated market share
Given the synergy between the Group’s rough diamond planning systems and our unique Galaxy™ family of inclusion
mapping products and services, we have definite indications that we have not only managed to retain a dominating
market share in 2014, but have actually increased same in all our markets, by converting users of non-Sarine systems to
our products and services.*
Product & service offerings
During the year in review we announced and released new products and enhancements for existing products, across all
our product lines, which were overall favourably received in the market. We have plans to continue this strategy into 2015
and beyond, with the emphasis being on the continued dominance of the rough diamond inclusion scanning and planning
processes for the manufacturing industry, the setting of new standards for polished diamond Cut and Symmetry grading at
gem labs and throughout the trade, and the leveraging of the combined features of our light performance and multi-tiered
imaging technologies, along with the forthcoming unique abilities to identify key characteristics of the polished diamond,
to establish a significant market presence in the polished diamond trade.
Brand strength
Our brand strength allows us to command premium prices for our products in a competitive market. Our brand strength
also allows us to leverage our distribution channels to market and sell complementary products to our existing customers,
as well as to seek out new ones. We believe our brand continued to strengthen during the year in review. We intend to
continue strengthening our brand in 2015, with the broadened commercialisation of our light performance and multi-
tiered imaging technologies, along with the forthcoming unique abilities to identify key characteristics of the polished
diamond, which will boost consumer recognition of our brand.
*Note:The fact that all other players in our industry are privately-held companies hampers our ability to collect and collate accurate sales data; additionally, no well-known international analysts
regularly cover our market for technological tools for the diamond industry, making accurate assessments hard to substantiate.
Financial Indicators
We use the following financial indicators to assess our Group’s performance year-on-year:
RELATED ACTIVITY
TARGET CLIENT
Revenues
Revenues for FY2014 increased by 14.9% to a record US$ 87.8 million, as compared to US$ 76.4 million for FY2013.
These record revenues stemmed primarily from continued Galaxy™ family penetration and accelerated usage from a
broader installed base in 2014 along with increased sales of our other rough-diamond planning and processing products.
It is noteworthy that this record performance was achieved despite the challenging industry fundamentals that evolved in
the last four months of the fiscal year – minimal manufacturer margins associated with disproportionately increased rough
diamond prices and eroded polished diamond prices (due to higher polished inventory levels on the back of restrained
demand from markets ex-U.S. and pipeline skewing due to extended certification times and reduced working capital
credit lines available to our customers. Galaxy™ penetration continues to grow, with deliveries in FY2014 of a record 48
Galaxy™ family systems to customers and service centres, despite a challenging second half of the year.As of 31 December
2014, the Group had an installed base of 190 Galaxy™ family systems. Group recurring revenue (including Galaxy™-
related, Quazer™ services, annual maintenance contracts, etc.) constituted over 35% of overall FY 2014 revenues.
Sarine Technologies Ltd. • Annual Report
2014
