Harry Winston Diamond Corporation Announces Fourth Quarter and Fiscal 2008 Results

TORONTO, April 7 – Harry Winston Diamond Corporation (TSX: HW, NYSE: HWD) today reported fourth quarter and annual results for the period ending January 31, 2008. Fourth quarter sales increased 22% to $188.2 million with consolidated earnings from operations of $59.1 million, a 59% increase over the comparable quarter of the prior year. As a result, net earnings grew to $90.4 million or $1.55 per share, compared to $27.3 million or $0.47 per share for the fourth quarter of the prior year.Net earnings for the fourth quarter were impacted by a $22.3 million foreign exchange gain or $0.38 per share related principally to an unrealized non-cash gain on future income taxes payable as compared to a foreign exchange gain of $9.8 million or $0.17 per share in the comparable quarter of the prior year. Also impacting the fourth quarter are a future income tax recovery of $22.4 million or $0.38 per share and an after-tax gain of $8.0 million or $0.14 per share pertaining to an insurance settlement.

Annual sales grew 22% to $679.3 million with consolidated earnings from operations increasing 48% to $217.7 million for fiscal 2008. The Company posted net earnings of $106.4 million or $1.82 per share for fiscal 2008 compared to net earnings of $104.3 million, or $1.79 earnings per share, in the prior year. Net earnings for the year were reduced by a net $43.4 million foreign exchange loss, or $0.74 per share, related primarily to an unrealized non-cash loss on future income taxes, compared to a net $8.8 million foreign exchange gain, or $0.15 per share, in the prior year. The loss is a result of the 17% strengthening of the Canadian dollar relative to the US dollar during the year.

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