Lifetime Brands Announces Second Quarter 2009 Financial Results
Net sales for the three months ended
The Company reported a net loss of
Adjusted EBITDA, which the Company defines as earnings (loss) before
interest, taxes, depreciation, amortization, restructuring expenses and
stock option expense, as shown in the table below, was
Net sales for the Company’s wholesale segment in the second quarter of
2009 were
The decrease in comparable wholesale net sales was primarily
attributable to lower volume, due, in part, to the non-recurrence of
sales to Linens ‘N Things, which was liquidated in 2008, less inventory
reduction plan activity, the Company’s elimination of certain low-margin
business in the 2009 period and the planned effect of a change in the
Company’s relationship with
Net sales for the direct-to-consumer segment in the second quarter of
2009 were
“We continue to work closely with our retail partners to create customized sales programs tailored to today’s business climate. In addition, we think the current environment presents us with opportunities to expand our market share in all our product classifications. Consequently, we believe that we are well positioned to take advantage of the holiday shopping season.”
Second-Quarter 2009 Conference Call
Lifetime has scheduled a conference call for
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 "expect," "will," "may," "would," "could," "should," "project," "projected," "positioned" 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.
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LIFETIME BRANDS, INC. |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(In thousands, except per share data) |
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(unaudited) |
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Three Months Ended
June 30, |
Six Months Ended
June 30, |
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| 2009 | 2008 | 2009 | 2008 | ||||||||||||||||||
| (as adjusted) | (as adjusted) | ||||||||||||||||||||
| Net sales | $ | 85,334 | $ | 92,399 | $ | 175,548 | $ | 190,593 | |||||||||||||
| Cost of sales | 53,106 | 55,288 | 111,254 | 114,893 | |||||||||||||||||
| Distribution expenses | 9,502 | 12,766 | 20,550 | 26,156 | |||||||||||||||||
| Selling, general and administrative expenses | 21,955 | 31,183 | 45,522 | 62,286 | |||||||||||||||||
| Restructuring expenses | (663 | ) | 107 | 161 | 2,987 | ||||||||||||||||
| Income (loss) from operations | 1,434 | (6,945 | ) | (1,939 | ) | (15,729 | ) | ||||||||||||||
| Interest expense | (2,894 | ) | (2,655 | ) | (5,767 | ) | (5,336 | ) | |||||||||||||
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Loss before income taxes and equity in earnings |
(1,460 | ) | (9,600 | ) | (7,706 | ) | (21,065 | ) | |||||||||||||
| Income tax benefit (provision) | (281 | ) | 5,341 | (416 | ) | 10,192 | |||||||||||||||
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Equity in earnings of Grupo Vasconia, S.A.B., |
488 | 707 | 910 | 964 | |||||||||||||||||
| NET LOSS | $ | (1,253 | ) | $ | (3,552 | ) | $ | (7,212 | ) | $ | (9,909 | ) | |||||||||
| BASIC AND DILUTED LOSS PER COMMON SHARE | $ | (0.10 | ) | $ | (0.30 | ) | $ | (0.60 | ) | $ | (0.83 | ) | |||||||||
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LIFETIME BRANDS, INC. |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(In thousands, except share data) |
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| June 30, | December 31, | ||||||||||
| 2009 | 2008 | ||||||||||
| (unaudited) | (as adjusted) | ||||||||||
| ASSETS | |||||||||||
| CURRENT ASSETS | |||||||||||
| Cash and cash equivalents | $ | 3,830 | $ | 3,478 | |||||||
| Accounts receivable, less allowances of $13,210 at 2009 and $14,651 at 2008 | 49,056 | 67,562 | |||||||||
| Inventory | 122,943 | 141,612 | |||||||||
| Income taxes receivable | 226 | 11,597 | |||||||||
| Prepaid expenses and other current assets | 8,878 | 8,429 | |||||||||
| TOTAL CURRENT ASSETS | 184,933 | 232,678 | |||||||||
| PROPERTY AND EQUIPMENT, net | 47,298 | 49,908 | |||||||||
| INTANGIBLES, net | 38,007 | 38,420 | |||||||||
| INVESTMENT IN GRUPO VASCONIA, S.A.B. | 18,808 | 17,784 | |||||||||
| OTHER ASSETS | 4,061 | 2,991 | |||||||||
| TOTAL ASSETS | $ | 293,107 | $ | 341,781 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| CURRENT LIABILITIES | |||||||||||
| Bank borrowings | $ | 57,833 | $ | 89,300 | |||||||
| Accounts payable | 25,213 | 24,151 | |||||||||
| Accrued expenses | 22,337 | 36,530 | |||||||||
| TOTAL CURRENT LIABILITIES | 105,383 | 149,981 | |||||||||
| DEFERRED RENT & OTHER LONG-TERM LIABILITIES | 23,254 | 23,054 | |||||||||
| DEFERRED INCOME TAXES | 3,710 | 3,373 | |||||||||
| CONVERTIBLE NOTES | 69,166 | 67,864 | |||||||||
| STOCKHOLDERS’ EQUITY | |||||||||||
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Common stock, $0.01 par value, shares authorized: 25,000,000;
shares issued |
120 | 120 | |||||||||
| Paid-in capital | 128,437 | 127,497 | |||||||||
| Accumulated deficit | (28,730 | ) | (21,515 | ) | |||||||
| Accumulated other comprehensive loss | (8,233 | ) | (8,593 | ) | |||||||
| TOTAL STOCKHOLDERS’ EQUITY | 91,594 | 97,509 | |||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 293,107 | $ | 341,781 | |||||||
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LIFETIME BRANDS, INC. |
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Supplemental Information |
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Reconciliation of GAAP to Non-GAAP Operating Results |
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(In thousands) |
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(unaudited) |
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Three Months Ended |
Six Months Ended |
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| 2009 | 2008 | 2009 | 2008 | |||||||||||||||||
| Net loss as reported | $ | (1,253 | ) | $ | (3,552 | ) | $ | (7,212 | ) | $ | (9,909 | ) | ||||||||
| Add back: | ||||||||||||||||||||
| Provision for income taxes | 281 | (5,341 | ) | 416 | (10,192 | ) | ||||||||||||||
| Interest expense | 2,894 | 2,655 | 5,767 | 5,336 | ||||||||||||||||
| Depreciation and amortization | 2,485 | 2,756 | 5,087 | 5,331 | ||||||||||||||||
| Amortization of bank fees | 325 | 37 | 401 | 65 | ||||||||||||||||
| Restructuring expenses | (663 | ) | 107 | 161 | 2,987 | |||||||||||||||
| Stock option expense | 483 | 615 | 942 | 1,228 | ||||||||||||||||
| Adjusted EBITDA | $ | 4,552 | $ | (2,723 | ) | $ | 5,562 | $ | (5,154 | ) | ||||||||||
Source:
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