NEW YORK, Jan. 12, 2006 (PRIMEZONE) -- Lazare Kaplan International Inc. (AMEX:LKI - News) today announced financial results for the second quarter of fiscal 2006 ended November 30, 2005.

Net sales for the three months ended November 30, 2005 were $96.3 million, as compared to $93.2 million in the comparable prior year period. For the six months ended November 30, 2005 net sales were $235.1 million, an increase of $63.6 million or 37% over the comparable prior year period.

Gross margin during the three months ended November 30, 2005 was $6.1 million compared to $8.1 million in the prior year period. Gross margin for the six months ended November 30, 2005 was $15.0 million compared to $18.0 million in the prior year period.

The decrease in overall gross margin for the three and six months ended November 30, 2005 reflects a decrease in rough and polished diamond gross margins together with a shift in sales mix with a higher percentage of revenue derived from rough diamond trading than in the comparable prior year periods.

Net income / (loss) for the three and six month periods ended November 30, 2005 was ($0.4) million or ($0.05) per fully diluted share and $0.5 million, or $0.06 per fully diluted share, respectively, compared to $1.1 million or $0.12 per fully diluted share and $3.6 million, or $0.41 per fully diluted share in the comparable prior year periods. Fully diluted earnings per share for the three and six month periods ended November 30, 2005 are based on the weighted average number of shares outstanding of 8,327,060 and 8,782,278, respectively compared to 8,636,227 and 8,642,850 in the comparable prior year periods.

Lazare Kaplan International Inc. sells its diamonds and jewelry products through a worldwide distribution network. The Company is noted for its ideal cut diamonds which it markets internationally under the brand name, Lazare Diamonds(r).

Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties which may cause the Company's actual results in future periods to differ materially from forecasted results. Those risks include a softening of retailer or consumer acceptance of or demand for the Company's products, pricing pressures, adequate supply of rough diamonds and other competitive factors. These and other risks are more fully described in the Company's filings with the Securities and Exchange Commission. The information contained in this press release is accurate only as of the date issued. Investors should not assume that the statements made in these documents remain operative at a later time. Lazare Kaplan International Inc. undertakes no obligation to update any information contained in this news release.

               (Financial table to Follow)

 CONSOLIDATED STATEMENTS OF OPERATIONS
 --------------------------------------------------------------------
 (In thousands, except per share and per share data)


 November 30,             Three Months Ended        Six Months Ended
 (unaudited)               2005        2004         2005         2004
 --------------------------------------------  ----------------------
 Net sales            $    96,275   $  93,201  $  235,131  $  171,508
 Cost of Sales             90,221      85,135     220,095     153,551
 --------------------------------------------  ----------------------
                            6,054       8,066      15,036      17,957
 --------------------------------------------  ----------------------
 Selling, general
  and administrative
  expenses                  6,429       5,746      13,116      11,392
 Interest expense,
  net of interest
  income                      341         654       1,244       1,099
 --------------------------------------------  ----------------------
                            6,770       6,400      14,360      12,491
 --------------------------------------------  ----------------------
 Income / (loss)
  before income
  taxes                      (716)      1,666         676       5,466
 Income tax
  provision /
  (benefit)                  (309)        605         175       1,898

 --------------------------------------------  ----------------------
 NET INCOME /
  (LOSS)               $     (407)  $   1,061   $     501   $   3,568
 ============================================  ======================

 EARNINGS /
 (LOSS) PER SHARE
 ============================================  ======================
 Basic earnings /
  (loss) per share     $    (0.05)  $    0.13   $    0.06   $    0.42
 ============================================  ======================
 Average number of
  shares outstanding
  during the period     8,327,060   8,472,241   8,348,798   8,482,670
 ============================================  ======================
 Diluted earnings /
  (loss) per share     $    (0.05)  $    0.12   $    0.06   $    0.41
 ============================================  ======================
 Average number of
  shares outstanding
  during the period
  assuming dilution     8,327,060   8,636,227   8,782,278   8,642,850
 ============================================  ======================