Lifetime Brands Achieves 40% Increase in Second-Quarter Net Sales; Net Income Rises to $1.3 Million; Company Updates Financial Outlook for 2005
WESTBURY, N.Y.--(BUSINESS WIRE)--Aug. 3, 2005--Lifetime Brands, Inc. (NASDAQ NM: LCUT), a leading designer, marketer and distributor of nationally branded consumer products for the home, today announced results for the second quarter ended June 30, 2005.
For the second quarter of 2005, net sales increased 40% to $46.2 million from $33.0 million for the same period of 2004. Not including approximately $2.3 million in net sales attributable to the Excel business Lifetime acquired in July 2004, second-quarter net sales in 2005 rose 33% to $43.9 million. The Company reported net income of $1.3 million compared to $203,000 for the second quarter of 2004. On a diluted per share basis, net income rose to $0.12 per share from $0.02 per share for the same period last year.
Net sales for the six months ended June 30, 2005 totaled $89.3 million compared to $70.2 million for the same period in 2004, representing a 27% increase. Not including approximately $4.1 million in net sales attributable to the Excel business, net sales for the first six months of 2005 rose more than 21% to $85.2 million. Net income for the 2005 period was $2.3 million, or $0.21 per diluted share, compared to $548,000, or $0.05 per diluted share, last year.
Jeffrey Siegel, Chairman, President and Chief Executive Officer, commented, "Lifetime Brands delivered another quarter of strong results, generating excellent growth in all of our major product categories. The gains in our cutlery category were particularly notable, reflecting both the successful introduction of new products under the Farberware(R) and KitchenAid(R) brands and increased placement with retailers. The growth initiatives we implemented in 2004, which included broadening our portfolio of brands, strengthening our overseas sourcing organization, and expanding the Company's infrastructure, also continued to have a positive impact on the Company's operations.
"In July, we closed our purchase of the business and certain assets of The Pfaltzgraff Co., one of America's leading designers and marketers of dinnerware and tabletop accessories. The acquisition of this premier national brand will greatly enhance the tabletop category of our business, an area Lifetime entered in July 2004 with the Excel acquisition. Equally exciting are the additional capabilities Pfaltzgraff's proven design staff brings to our product development capabilities, an area in which Lifetime already excels.
"The integration of the Pfaltzgraff business is proceeding as planned and we expect to complete the process by the end of the third quarter. We have estimated that the acquisition will contribute approximately $72 million in revenues in 2005 and will be nominally profitable for the year.
"As a result of these developments, our outlook for 2005 is more positive than ever. We now expect net sales to total approximately $290 million to $300 million, rather than $220 million to $230 million. We expect earnings per share to total approximately $1.05 to $1.15, rather than $0.95 to $1.15."
Lifetime has scheduled a conference call Wednesday, August 3, at 11:00 a.m. Eastern time to discuss second-quarter 2005 results and additional matters. The dial-in number for the call is (706) 634-1218. A replay of the call will also be available through Wednesday, August 10, and can be accessed by dialing (706) 645-9291, conference ID #8039496. 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.
Lifetime is a leading designer, marketer and distributor of kitchenware, cutlery & cutting boards, bakeware & cookware, pantryware & spices, tabletop and bath accessories, marketing its products under various trade names, including Farberware(R), KitchenAid(R), Pfaltzgraff(R), Cuisinart(R), Hoffritz(R), Sabatier(R), Nautica(R), DBK(TM)-Daniel Boulud Kitchen, Joseph Abboud Environments(R), Roshco(R), Baker's Advantage(R), Kamenstein(R), CasaModa(TM), Kathy Ireland(R), and :USE(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.
INCOME STATEMENT
(in 000's, except per share data)
Three Months Ended
June 30,
(Unaudited)
---------------------
%
2005 2004 Increase
---------- ---------- ---------
Net Sales $46,154 $33,029 39.7%
Cost of Sales 26,959 19,154 40.7%
Distribution Expenses 5,807 4,730 22.8%
SG&A 10,940 8,683 26.0%
---------- ----------
Income from Operations 2,448 462 429.9%
Interest Expense 291 141 106.4%
Other (Income) (13) (16)
---------- ----------
Income Before Taxes 2,170 337 543.9%
Tax Provision 825 134 515.4%
---------- ----------
Net Income $1,345 $203 562.8%
========== ==========
Diluted Earnings Per Share from Net
Income $0.12 $0.02
========== ==========
Weighted Average Shares 11,288 11,230
LIFETIME BRANDS, INC.
INCOME STATEMENT
(in 000's, except per share data)
Six Months Ended
June 30,
(Unaudited)
---------------------
%
2005 2004 Increase
---------- ---------- ---------
Net Sales $89,272 $70,158 27.2%
Cost of Sales 51,859 40,843 27.0%
Distribution Expenses 11,923 10,377 14.9%
SG&A 21,239 17,791 19.4%
---------- ----------
Income from Operations 4,251 1,147 270.6%
Interest Expense 490 268 82.8%
Other (Income) (26) (31)
---------- ----------
Income Before Taxes 3,787 910 316.2%
Tax Provision 1,439 362 297.6%
---------- ----------
Net Income $2,348 $548 328.4%
========== ==========
Diluted Earnings Per Share from Net
Income $0.21 $0.05
========== ==========
Weighted Average Shares 11,277 11,186
LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, June 30,
2005 2004
(Unaudited) (Unaudited)
------------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 105 $ 446
Accounts receivable, net 24,437 16,224
Merchandise inventories 67,517 55,827
Prepaid expenses and other current assets 9,903 7,946
------------------------
TOTAL CURRENT ASSETS 101,962 80,443
PROPERTY AND EQUIPMENT, net 21,149 19,634
INTANGIBLES, net 31,243 25,411
OTHER ASSETS 2,476 2,033
------------------------
TOTAL ASSETS $156,830 $127,521
========================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $ 21,300 $ 14,800
Accounts payable and trade acceptances 10,481 6,591
Other current liabilities 19,324 14,314
------------------------
TOTAL CURRENT LIABILITIES 51,105 35,705
DEFERRED RENT & OTHER LONG TERM LIABILITIES 1,996 1,718
DEFERRED INCOME TAX LIABILITIES 4,602 3,593
LONG TERM DEBT 5,000 -
STOCKHOLDERS' EQUITY 94,127 86,505
------------------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $156,830 $127,521
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CONTACT: Lifetime Brands, Inc.
Robert McNally, 516-683-6000
or
Investor Relations:
Lippert/Heilshorn & Associates, Inc.
Harriet Fried, 212-838-3777
hfried@lhai.com
SOURCE: Lifetime Brands, Inc.