Lifetime Brands, Inc. Reports Second Quarter 2013 Results
Increases Sales Guidance for 2013
Appoints John Koegel as Lead Director
GARDEN CITY, N.Y.--(BUSINESS WIRE)-- Lifetime Brands, Inc. (NasdaqGS: LCUT), a leading global provider of branded kitchenware, tabletop and other products used in the home, today reported its financial results for the second quarter ended June 30, 2013.
Second Quarter Financial Highlights:
Consolidated net sales were $97.0 million, an increase of $2.1 million, or 2.2%, as compared to consolidated net sales of $94.9 million for the corresponding period in 2012. Consolidated net sales included $3.9 million of net sales from Fred® & Friends, which was acquired in December 2012.
Gross margin was $36.4 million, or 37.5%, as compared to $35.4 million, or 37.3%, for the corresponding period in 2012.
Net loss was $0.6 million, or $0.04 per diluted share, in the 2013 period, as compared to net income of $0.6 million, or $0.04 per diluted share, in the 2012 period. Adjusted net loss was $1.1 million, or $0.08 per diluted share, in the 2013 period, as compared to adjusted net income of $1.0 million, or $0.08 per diluted share, in the 2012 period.
Consolidated EBITDA was $4.3 million, as compared to $5.6 million for the corresponding 2012 period.
Six Months Financial Highlights:
Consolidated net sales were $195.6 million, a decrease of $8.4 million, or 4.1%, as compared to net sales of $204.0 million for the corresponding period in 2012. Consolidated net sales included $7.3 million of net sales from Fred® & Friends.
Gross margin for the six months ended June 30, 2013 was $72.7 million, or 37.1%, as compared to $75.8 million, or 37.2%, for the corresponding period in 2012.
Net loss was $1.2 million, or $0.09 per diluted share, in the 2013 period, as compared to net income of $1.9 million, or $0.15 per diluted share, in the 2012 period. Adjusted net loss was $1.7 million, or $0.13 per diluted share, in the 2013 period, as compared to adjusted net income of $2.4 million, or $0.19 per diluted share, in the 2012 period.
Consolidated EBITDA was $7.4 million, as compared to $11.8 million for the corresponding 2012 period.
Jeffrey Siegel, Lifetime's Chairman and Chief Executive Officer commented,
"As I previously have noted, comparing quarterly results with prior periods can be misleading, as our sales in any one period, especially in the first half of the year, can be heavily influenced by the timing of promotions and the roll-out of new programs.
"Our outlook for the third and fourth quarters remains positive, based on our healthy order flow, which is being driven by increased retail placement, roll-outs of new products and programs, strong promotional activity, the inclusion of Fred® & Friends and the improving U.S. economy. For the full year, we now expect net sales to increase by 5% to 7%."
The Company also announced that its Board of Directors appointed John Koegel to the newly-created position of Lead Director. Mr. Koegel has served as a Director since 2008 and will continue to serve as Chairman of the Nominating and Governance Committee and as member of the Compensation Committee and the Strategic Planning Committee. Mr. Siegel commented, "Jack's extensive retailing background, broad industry experience and leadership skills provide the Board of Directors and the Company with valuable strategic vision and counsel."
Stock Repurchase Program
On April 30, 2013, Lifetime's Board of Directors authorized the repurchase of up to $10.0 million of the Company's common stock. The repurchase authorization permits the Company to effect the repurchases from time to time through open market purchases and privately negotiated transactions. During the three months ended June 30, 2013, the Company repurchased 245,575 shares at a total cost of $3.2 million.
On August 2, 2013, the Board of Directors declared a quarterly dividend of $0.03125 per share payable on November 15, 2013 to shareholders of record on November 1, 2013.
The Company has scheduled a conference call for Thursday, August 8, 2013 at 11:00 a.m. ET. The dial-in number for the conference call is (866) 953-6857 or (617) 399-3481, passcode #24588973. A replay of the call will also be available through Sunday, August 11, 2013 and can be accessed by dialing (888) 286-8010 or (617) 801-6888, conference ID #54899351. A live webcast of the conference call will be broadcast in the Investor Relations section of the Company's web site, www.lifetimebrands.com. For those who cannot listen to the live broadcast, an audio replay of the call will also be available on the site.
Non-GAAP Financial Measures
This earnings release contains non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a company's historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statements of income, balance sheets, or statements of cash flows of the Company; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. Pursuant to the requirements of Regulation G, the Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures. These non-GAAP measures are provided because management of the Company uses these financial measures in evaluating the Company's on-going financial results and trends. Management uses this non-GAAP information as an indicator of business performance.
In this press release, the use of the words "believe," "could," "expect," "may," "positioned," "project," "projected," "should," "will," "would" or similar expressions is intended to identify forward-looking statements that represent the Company's current judgment about possible future events. The Company believes these judgments are reasonable, but these statements are not guarantees of any events or financial results, and actual results may differ materially due to a variety of important factors. Such factors might include, among others, the Company's ability to comply with the requirements of its credit agreements; the availability of funding under such credit agreements; the Company's ability to maintain adequate liquidity and financing sources and an appropriate level of debt; changes in general economic conditions which could affect customer payment practices or consumer spending; the impact of changes in general economic conditions on the Company's customers; changes in demand for the Company's products; shortages of and price volatility for certain commodities; significant changes in the competitive environment and the effect of competition on the Company's markets, including on the Company's pricing policies, financing sources and an appropriate level of debt.
Lifetime Brands, Inc.
Lifetime Brands is a leading global provider of kitchenware, tabletop and other products used in the home. The Company markets its products under such well-known kitchenware brands as Farberware®, KitchenAid®, CasaMōda®, Cuisine de France®, Fred®, Guy Fieri®, Hoffritz®, Kizmos™, Misto®, Pedrini®, Roshco®, Sabatier®, Savora™ and Vasconia®; respected tabletop brands such as Mikasa®, Pfaltzgraff®, Creative Tops®, Gorham®, International® Silver, Kirk Stieff®, Sasaki®, Towle® Silversmiths, Tuttle®, Wallace®, V&A® and Royal Botanic Gardens Kew®; and home solutions brands, including Elements®, Melannco®, Kamenstein® and Design for Living™. The Company also provides exclusive private label products to leading retailers worldwide.
The Company's corporate website is www.lifetimebrands.com.
LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands - except per share data)
Three Months Ended
Six Months Ended
Cost of sales
Selling, general and administrative expenses
Income (loss) from operations
Loss on early retirement of debt
Income (loss) before income taxes and equity in earnings
Income tax benefit (provision)
Equity in earnings, net of taxes
NET INCOME (LOSS)
BASIC INCOME (LOSS) PER COMMON SHARE
DILUTED INCOME (LOSS) PER COMMON SHARE
LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands - except share data)
Cash and cash equivalents
Accounts receivable, less allowances of $3,718 at June 30, 2013 and
$3,996 at December 31, 2012
Prepaid expenses and other current assets
Deferred income taxes
TOTAL CURRENT ASSETS
PROPERTY AND EQUIPMENT, net
INTANGIBLE ASSETS, net
LIABILITIES AND STOCKHOLDERS' EQUITY
Revolving Credit Facility
Current maturity of Senior Secured Term Loan
Income taxes payable
TOTAL CURRENT LIABILITIES
DEFERRED RENT & OTHER LONG-TERM LIABILITIES
DEFERRED INCOME TAXES
REVOLVING CREDIT FACILITY
SENIOR SECURED TERM LOAN
Preferred stock, $.01 par value, shares authorized: 100 shares of Series A
and 2,000,000 shares of Series B; none issued and outstanding
Common stock, $.01 par value, shares authorized: 25,000,000; shares
issued and outstanding: 12,695,257 at June 30, 2013 and 12,754,467 at
December 31, 2012
Accumulated other comprehensive loss