Lifetime Brands Reports EPS of $0.40 for Third Quarter of 2009
http://www.businesswire.com/news/home/20091105005531/en
GARDEN CITY, N.Y.--(Business Wire)--
Lifetime Brands, Inc. (NASDAQ: LCUT), North America's leading resource for
nationally branded kitchenware, tabletop and home décor products, today
announced its results for the three months ended September 30, 2009.
Net income for the quarter was $4.9 million, as compared to a net loss of $1.1
million in the same period last year. Diluted income per common share was $0.40,
as compared to a loss of $0.09 per common share in the 2008 quarter.
Adjusted EBITDA, a non-GAAP measure, which the Company defines as net income
(loss) before interest, taxes, depreciation, amortization, restructuring
expenses and stock option expense, as shown in the table below, was $12.3
million for the 2009 quarter, as compared to $11.5 million in the 2008 period.
For the nine months ended September 30, 2009, Adjusted EBITDA was $17.9 million,
as compared to $6.4 million in 2008.
Net sales for the quarter were $111.4 million, as compared to $140.6 million in
2008.
Net wholesale sales were $106.3 million, a decrease of $18.0 million, as
compared to net wholesale sales of $124.3 million in 2008. Approximately
one-half of the decrease reflects, in the 2009 quarter, the absence of sales to
Linens `N Things, the non-recurrence of sales of excess inventory in connection
with our June 2008 purchase of Mikasa and the discontinuance of certain
low-margin sales to a direct response retailer.
Net sales for the Company's Direct to Consumer business during the quarter were
$5.1 million, consisting only of net sales from its e-commerce websites and mail
order catalogs. Direct to Consumer sales in the corresponding 2008 quarter were
$6.5 million, excluding $9.9 million in net sales from the Company`s retail
outlet stores that were closed in 2008.
Jeffrey Siegel, Chairman, Chief Executive Officer and President, commented, "I
am pleased to report that Lifetime's strong market position, driven by its
premier brands and its commitment to innovation, enabled the Company to perform
well notwithstanding the weak economy.
"Throughout the year, retailers sharply trimmed inventories, which now are the
lowest in memory. This has had a negative effect on sales, as inventory
replenishment generally was at rates below those of retail sell-throughs. While
it appears that the sell-down of retail inventories has now run its course, I
believe retailers will continue carefully to manage their inventories in a
conservative manner for the foreseeable future.
"Despite these challenges, Lifetime achieved new placements in all categories
and significantly increased its market share in several product areas, including
dinnerware, picture frames and its newest category, water bottles and thermal
coffee mugs.
"Grupo Vasconia SAB posted a strong quarter. Net sales and net income, in
Mexican Pesos, were up more than 30% and 118%, respectively. These gains were
driven by strong increases in sales of kitchen and tabletop products across all
distribution channels. Sales of aluminum blanks and other commodity products
produced by its mill operations decreased, reflecting both lower demand and
lower world aluminum prices. For the quarter, Lifetime`s equity in Grupo
Vasconia`s earnings, net of taxes, increased to $727 thousand, as compared to
$390 thousand in 2008, notwithstanding a weaker Mexican Peso in the 2009 period.
"Reflecting the success of our ongoing restructuring activities, Selling,
General and Administrative Expense ("SG&A") decreased by $9.4 million, a
reduction of 28.9%, as compared to the same quarter in 2008. As a percentage of
net sales, SG&A was 20.7%, as compared to 23.1% for the same period last year.
"The initiative to reduce and rationalize inventory levels, which began in 2007,
continued to produce the desired results. Inventory at September 30, 2009 was
$126.5 million, as compared to $141.6 million at December 31, 2008, a decrease
of 10.7%, and $170.6 million at September 30, 2008, a decrease of 25.8%. This
initiative is ongoing and I expect to see continuing progress in the fourth
quarter and throughout 2010.
"Lower inventory levels, combined with improved operating results, enabled the
Company to reduce its bank borrowings, which, at September 30, 2009, were $65.3
million, a reduction of $52.8 million, as compared to September 30, 2008, and of
$26.1 million, as compared to December 31, 2008.
"Despite some recent positive economic news, the retail environment remains
challenging, especially as retailers continue to trim their selections and focus
on maintaining leaner inventory levels. On the other hand, I believe these
conditions will benefit those suppliers that quickly can adapt to new
circumstances and can provide retailers with innovative new products at those
price points at which consumers are most comfortable. Consequently, I believe
Lifetime is well positioned for the Holiday Season and for 2010."
Third-Quarter 2009 Conference Call
Lifetime has scheduled a conference call for Thursday, November 5, 2009 at 11:00
a.m. ET to discuss its third-quarter 2009 results. The dial-in number for the
call is 706-679-7464; the conference ID is #37259599. A live webcast of the call
will be broadcast at the Company`s web site, www.lifetimebrands.com.
A replay of the call will also be available through November 12, 2009 and can be
accessed by dialing 706-645-9291, conference ID #37259599. 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 maintaining and
evaluating the Company's on-going financial results and trends. Management uses
this non-GAAP information as an indicator of business performance
Forward-Looking Statements
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 agreement; the
availability of funding under that credit agreement; 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 North America`s leading resource for nationally branded
kitchenware, tabletopand home décor products. The Company markets its products
under many of the industry`s best known brands, including Farberware,
KitchenAid, Pfaltzgraff, Mikasa, Cuisinart, Calvin Klein, CasaMōda, Gorham,
Hoffritz, International Silver, Kirk Stieff, Nautica, Pedrini, Roshco, Sabatier,
Sasaki, Towle Silversmiths, Tuttle, Wallace and Vasconia. Lifetime`s products
are distributed through most major retailers in North America.
LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Net sales $ 111,422 $ 140,624 $ 286,970 $ 331,217
Cost of sales 69,778 86,096 181,032 200,989
Distribution expenses 10,313 14,104 30,863 40,260
Selling, general and administrative expenses 23,061 32,464 68,583 94,750
Restructuring expenses 671 4,595 832 7,582
Income (loss) from operations 7,599 3,365 5,660 (12,364 )
Interest expense (3,294 ) (2,870 ) (9,061 ) (8,206 )
Income (loss) before income taxes and equity in earnings of Grupo Vasconia, S.A.B. 4,305 495 (3,401 ) (20,570 )
Income tax benefit (provision) (153 ) (1,936 ) (569 ) 8,256
Equity in earnings of Grupo Vasconia, S.A.B., net of taxes 727 390 1,637 1,354
NET INCOME (LOSS) $ 4,879 $ (1,051 ) $ (2,333 ) $ (10,960 )
BASIC INCOME (LOSS) PER COMMON SHARE $ 0.41 $ (0.09 ) $ (0.19 ) $ (0.92 )
DILUTED INCOME (LOSS) PER COMMON SHARE $ 0.40 $ (0.09 ) $ (0.19 ) $ (0.92 )
LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
September 30, December 31,
2009 2008
(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 899 $ 3,478
Accounts receivable, less allowances of $11,371 at 2009 and $14,651 at 2008 71,915 67,562
Inventory 126,455 141,612
Income taxes receivable 226 11,597
Prepaid expenses and other current assets 8,203 8,429
TOTAL CURRENT ASSETS 207,698 232,678
PROPERTY AND EQUIPMENT, net 45,065 49,908
INTANGIBLES, net 37,824 38,420
INVESTMENT IN GRUPO VASCONIA, S.A.B. 19,231 17,784
OTHER ASSETS 3,565 2,991
TOTAL ASSETS $ 313,383 $ 341,781
LIABILITIES AND STOCKHOLDERS` EQUITY
CURRENT LIABILITIES
Bank borrowings $ 62,863 $ 89,300
Accounts payable 27,819 24,151
Accrued expenses 28,571 36,530
Deferred income tax liabilities 436 -
Income taxes payable 127 -
TOTAL CURRENT LIABILITIES 119,816 149,981
DEFERRED RENT & OTHER LONG-TERM LIABILITIES 23,259 23,054
DEFERRED INCOME TAXES 3,841 3,373
CONVERTIBLE NOTES 69,840 67,864
STOCKHOLDERS` EQUITY
Common stock, $0.01 par value, shares authorized: 25,000,000; shares issued and outstanding: 12,023,059 in 2009 and 11,989,724 in 2008 120 120
Paid-in capital 128,983 127,497
Accumulated deficit (23,850 ) (21,515 )
Accumulated other comprehensive loss (8,626 ) (8,593 )
TOTAL STOCKHOLDERS` EQUITY 96,627 97,509
TOTAL LIABILITIES AND STOCKHOLDERS` EQUITY $ 313,383 $ 341,781
LIFETIME BRANDS, INC.
Supplemental Information
Reconciliation of GAAP to Non-GAAP Operating Results
(In thousands)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
(in thousands)
Net income (loss) reported $ 4,879 $ (1,051 ) $ (2,333 ) $ (10,960 )
Add back:
Provision (benefit) for income taxes 153 1,936 569 (8,256 )
Interest expense 3,294 2,870 9,061 8,206
Depreciation and amortization 2,445 2,512 7,532 7,843
Amortization of bank fees 325 45 726 110
Restructuring expenses 671 4,595 832 7,582
Stock option expense 547 615 1,488 1,843
Adjusted EBITDA $ 12,314 $ 11,522 $ 17,875 $ 6,368
Lifetime Brands, Inc.
Laurence Winoker, 516-203-3590
Chief Financial Officer
investor.relations@lifetimebrands.com
or
Lippert/Heilshorn & Assoc.
Harriet Fried, 212-838-3777
Vice President
hfried@lhai.com
Copyright Business Wire 2009
