Lifetime Brands Announces Third Quarter 2007 Results
GARDEN CITY, N.Y.--(BUSINESS WIRE)--Nov. 6, 2007--Lifetime Brands, Inc. (Nasdaq: LCUT), North America's leading resource for nationally branded kitchenware, tabletop and home decor products, today announced results for the three months ended September 30, 2007.
For the third quarter of 2007, Lifetime's net sales totaled $143.5 million, as compared to net sales of $141.7 million for the same period in 2006. The Company reported net income of $6.8 million, or $0.47 per diluted share, compared to net income of $6.7 million, or $0.45 per diluted share, for the third quarter of 2006.
Jeffrey Siegel, Chairman, President and Chief Executive Officer, commented, "Most people are familiar with the impact that recent economic uncertainty and continued high energy costs had on consumer spending in the third quarter. These factors prompted most retailers to take a very conservative stance with respect to their inventory levels across all product categories. As a result, our sales in the 2007 third quarter increased only slightly over those of last year's period. The softness in sales occurred even though we achieved our key operational and competitive objectives of expanding product placement, increasing shelf space and winning key industry programs.
"In our wholesale segment, our new programs at Macy's (Martha Stewart Collection(R)) and Kohl's (The Food Network(R)) have been performing well. Our cutlery business continued to stand-out, reflecting increased placement of our key brands. We are also pleased with the growth in our home decor business, acquired in 2006 through our acquisition of Syratech Corporation. This growth validates Lifetime's strategy of expanding into complementary product categories and then leveraging our product development and sourcing strengths, as well as our strong customer relationships, to drive growth across our brands and customer base. During the quarter we completed the integration of the Gorham(R) sterling silver business, while our acquisition of a 29.99% interest in Ekco, S.A.B., one of Mexico's leading housewares companies, remains on track and is expected to close by year-end.
"The performance of our Direct to Consumer ('DTC') segment improved considerably, driven by the elimination of excess promotional discounts, closing of certain unprofitable stores and a better in-stock performance. We continue to expect to reduce the losses in this business substantially in 2007 and are taking steps to expand the Internet/catalog channel. At the same time, we continue to evaluate the long-term viability of the factory outlet store model and its strategic importance to the Company."
Mr. Siegel concluded, "Lifetime's market position for the holiday shopping season is very strong and we are in an excellent position to benefit if it develops more favorably than some analysts expect. Nevertheless, considering the cautious approach many retailers are taking, we are scaling back our financial projections for the fourth quarter and the full year 2007. We currently anticipate net sales for the year to be between $500 and $515 million, as compared to net sales of $457 million in 2006. Based on this forecast, we expect diluted earnings per share for 2007 to be between $1.10 and $1.20, as compared to diluted earnings per share of $1.14 in 2006. This forecast includes approximately $0.15 per diluted share attributable to the sale of our former headquarters building, which is scheduled to close this month.
"Our balance sheet position and liquidity remains very strong, and we are seeing the benefits of our inventory reduction program.
"While the current environment is indeed challenging, we remain highly confident that we are well-positioned to achieve our long-term strategic objective of building Lifetime's position as the leading resource for nationally branded kitchenware, tabletop and home decor products in North America."
As of September 30, 2007, Lifetime had repurchased on the open market 763,565 shares of common stock for a total purchase price of $15.1 million under the $20 million share buyback program the Company announced in August 2007.
Lifetime has scheduled a conference call for Tuesday, November 6 at 11:00 a.m. ET to discuss third quarter 2007 results. The dial-in number for the call is (706) 634-1218. A replay of the call will also be available through Tuesday, November 13, 2007 and can be accessed by dialing (706) 645-9291, conference ID #19925562. A live webcast of the call will be broadcast at 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.
About Lifetime Brands, Inc.
Lifetime Brands is North America's leading designer, developer and marketer of kitchenware, cutlery & cutting boards, bakeware & cookware, pantryware & spices, tabletop, home decor, picture frames and bath accessories. The Company markets its products under some of the industry's best known brands, including KitchenAid(R), Farberware(R), Pfaltzgraff(R), Cuisinart(R), Block(R) China and Crystal, Calvin Klein(R), CasaModa(R), Cuisine de France(R), Gorham(R), Hoffritz(R), International(R) Silver, Joseph Abboud(TM), Kamenstein(R), Kirk Stieff(R), Lisa Jenks(R), Melannco(R), Nautica(R), Pedrini(R), Roshco(R), Sabatier(R), Sasaki(R), Towle(R) Silversmiths, Tuttle(R), Wallace(R), :USE(R) and Vasconia(R). Lifetime's products are distributed through almost every major retailer in the United States.
The information herein contains certain forward-looking statements including statements concerning the Company's future prospects. These statements involve risks and uncertainties, including risks relating to general economic conditions and risks relating to the Company's operations, such as the risk of loss of major customers and risks relating to changes in demand for the Company's products, as detailed from time to time in the Company's filings with the Securities and Exchange Commission.
LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(unaudited)
Three months ended Nine months ended
September 30, September 30,
------------------ -----------------
2007 2006 2007 2006
-------- --------- -------- --------
Net sales $143,470 $141,654 $338,628 $300,126
Cost of sales 84,534 84,261 197,537 174,293
Distribution expenses 13,068 13,721 38,100 34,925
Selling, general and
administrative expenses 32,116 31,280 91,541 78,355
-------- --------- -------- --------
Income from operations 13,752 12,392 11,450 12,553
Interest expense 2,578 1,535 5,659 2,668
Other expense (income), net 121 (11) 121 20
-------- --------- -------- --------
Income before income taxes 11,053 10,868 5,670 9,865
Income tax provision 4,258 4,184 2,184 3,792
-------- --------- -------- --------
NET INCOME $ 6,795 $ 6,684 $ 3,486 $ 6,073
======== ========= ======== ========
BASIC INCOME PER COMMON SHARE $ 0.52 $ 0.50 $ 0.26 $ 0.46
======== ========= ======== ========
DILUTED INCOME PER COMMON SHARE $ 0.47 $ 0.45 $ 0.26 $ 0.45
======== ========= ======== ========
LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
September 30, December 31,
2007 2006
------------- ---------------
(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 764 $ 150
Accounts receivable, less allowances
of $12,707 at 2007 and $12,097 at
2006 81,545 60,516
Inventory 179,661 155,350
Deferred income taxes 9,123 8,519
Prepaid expenses and other current
assets 8,086 7,098
Building held for sale 5,073 --
------------- ---------------
TOTAL CURRENT ASSETS 284,252 231,633
PROPERTY AND EQUIPMENT, net 47,456 42,722
GOODWILL 27,114 20,951
OTHER INTANGIBLES, net 36,062 42,391
OTHER ASSETS 4,404 5,367
------------- ---------------
TOTAL ASSETS $399,288 $343,064
============= ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank borrowings - short-term $ 86,000 $ 21,500
Accounts payable 9,962 15,585
Accrued expenses 40,996 45,743
Income taxes payable 2,430 6,899
------------- ---------------
TOTAL CURRENT LIABILITIES 139,388 89,727
DEFERRED RENT & OTHER LONG-TERM
LIABILITIES 5,550 5,522
DEFERRED INCOME TAX LIABILITIES 7,190 6,204
BANK BORROWINGS - LONG-TERM 22,500 5,000
CONVERTIBLE NOTES 75,000 75,000
STOCKHOLDERS' EQUITY
Common stock, $.01 par value, shares
authorized: 25,000,000; shares issued
and outstanding: 12,561,213 in 2007
and 13,283,313 in 2006 126 133
Paid-in capital 113,323 111,165
Retained earnings 36,133 50,235
Accumulated other comprehensive income 78 78
------------- ---------------
TOTAL STOCKHOLDERS' EQUITY 149,660 161,611
------------- ---------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $399,288 $343,064
============= ===============
CONTACT: Lifetime Brands, Inc.
Christian G. Kasper, 617-568-8148
Senior Vice President
chris.kasper@lifetimebrands.com
or
Investor Relations:
Lippert/Heilshorn & Associates, Inc.
Harriet Fried, 212-838-3777
hfried@lhai.com
SOURCE: Lifetime Brands, Inc.