Lifetime Brands Second-Quarter Sales Rise to $84.1 Million; Company Reaffirms Sales and Earnings Guidance for 2006
WESTBURY, N.Y.--(BUSINESS WIRE)--Aug. 3, 2006--Lifetime Brands, Inc. (Nasdaq: LCUT), a leading designer, developer and marketer of nationally branded consumer products for the home, today announced results for the three months ended June 30, 2006.
For the second quarter of 2006, Lifetime's net sales totaled $84.1 million, an increase of 82.1%, compared to net sales of $46.2 million for the same period in 2005. Excluding approximately $33.8 million in net sales attributable to the Syratech, Pfaltzgraff and Salton businesses Lifetime acquired in the past year, and the net sales in the second quarter of 2005 of the Farberware Outlet stores the Company closed since June 30, 2005, net sales for the 2006 quarter rose 11.3% to $50.3 million. The Company reported a net loss of $1.5 million, or $0.11 per diluted share, compared to net income of $1.3 million, or $0.12 per diluted share, for the second quarter of 2005. The 2006 period included a loss of approximately $0.02 per diluted share from stock option expense.
As previously announced, the three acquisitions Lifetime completed in 2005 and 2006 altered the seasonality of the Company's business by heavily weighting Lifetime's sales and operating profits to the second half of the year, resulting in negative quarter-to-quarter comparisons for the first two quarters of 2006. The loss for the second quarter of 2006 is at the bottom of the range of earnings guidance provided on June 21, 2006, which estimated a loss of $0.11 to $0.16 per diluted share.
Net sales for the six months ended June 30, 2006 totaled $158.5 million compared to $89.3 million for the same period in 2005, representing a 77.5% increase. Excluding approximately $53.0 million in net sales attributable to the Syratech, Pfaltzgraff and Salton businesses and the net sales for the 2005 period of the closed Farberware Outlet stores, net sales for the six months rose 19.9% to $105.5 million. The net loss for the 2006 period was $0.6 million, or $0.05 per diluted share, compared to net income of $2.3 million, or $0.21 per diluted share, for the first half of 2005.
Jeffrey Siegel, Chairman, President and Chief Executive Officer, commented, "Lifetime's results to date in 2006 are consistent with our plan, and our outlook for the full year remains excellent. Based on the information we receive from our largest retail customers, our products are continuing to experience strong sell through to consumers.
"Each of our major product categories performed as expected during the first half of the year, reflecting the exceptional portfolio of brands we have assembled, our outstanding new product development skills and our in-depth sourcing capabilities. Our kitchenware category was an especially important source of growth. Our Farberware(R) and KitchenAid(R) kitchen tools and gadgets, which include the line of KitchenAid(R) sinkware we introduced in December 2005, turned in an impressive performance.
"Other highlights of the quarter included the completion of our acquisition of the business and certain assets of Syratech Corporation, which has greatly expanded Lifetime's presence in luxury tabletop. We recently finished the process of integrating Lifetime's overseas offices with Syratech's, further strengthening our sourcing capabilities. In June, the Company completed the sale of $75 million principal amount of 4.75% Convertible Senior Notes due 2011 pursuant to Rule 144A under the Securities Act of 1933, as amended. Demand for the securities was very strong, allowing us to increase the size of the offering by $25 million over the amount we initially announced. In July, we announced that we had signed an agreement to acquire certain assets comprising the WearEver(R) cookware and bakeware businesses of Global Home Products LLC. The closing of that transaction is subject to a number of conditions, including completion of an auction process and bankruptcy court approval."
Mr. Siegel concluded, "We are very pleased with the way Lifetime's business has developed in 2006 and are confident that we are on track with our plan for the year. Excluding any impact of the proposed WearEver transaction, we continue to expect the Company's 2006 net sales to total approximately $480 million to $500 million and earnings per share to total $1.50 to $1.70, including stock option expense of approximately $0.06 per share. This compares to net sales of $307.9 million and earnings per share of $1.23 in 2005."
Lifetime has scheduled a conference call Thursday, August 3, at 11:00 a.m. Eastern time to discuss second-quarter 2006 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 Thursday, August 10 and can be accessed by dialing (706) 645-9291, conference ID #3004041. 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, developer and marketer of kitchenware, cutlery & cutting boards, bakeware & cookware, pantryware & spices, tabletop, home decor, picture frames and bath accessories, marketing its products under various trade names, including Farberware(R), KitchenAid(R), Pfaltzgraff(R), Calvin Klein(R), Cuisinart(R), Hoffritz(R), Sabatier(R), Nautica(R), Joseph Abboud Environments(R), Roshco(R), Baker's Advantage(R), Kamenstein(R), CasaModa(TM), :USE(R), Pedrini(R), International Silver(R), Towle(R), Tuttle(R), Wallace(R), Melannco(R), Rochard(R) and Kenneth Cole Reaction(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)
-----------------
% Increase
2006 2005 (Decrease)
-------- -------- -----------
Net Sales $84,051 $46,154 82.1%
Cost of Sales 47,836 26,959 77.4%
Distribution Expenses 11,257 5,807 93.9%
SG&A 26,549 10,940 142.7%
-------- --------
Income (Loss) from Operations (1,591) 2,448
Interest Expense 827 291
Other Expense (Income) 32 (13)
-------- --------
Income (Loss) Before Taxes (2,450) 2,170
Tax Provision (Benefit) (943) 825
-------- --------
Net Income (Loss) $(1,507) $1,345
======== ========
Diluted Earnings (Loss) Per Share from
Net Income $(0.11) $0.12
======== ========
Weighted Average Shares 13,324 11,288
LIFETIME BRANDS, INC.
INCOME STATEMENT
(in 000's, except per share data)
Six Months Ended
June 30,
(Unaudited)
------------------
% Increase
2006 2005 (Decrease)
--------- -------- -----------
Net Sales $158,472 $89,272 77.5%
Cost of Sales 89,343 51,859 72.3%
Distribution Expenses 21,849 11,923 83.3%
SG&A 47,119 21,239 121.9%
--------- --------
Income (Loss) from Operations 161 4,251
Interest Expense 1,133 490
Other Expense (Income) 31 (26)
--------- --------
Income (Loss) Before Taxes (1,003) 3,787
Tax Provision (Benefit) (392) 1,439
--------- --------
Net Income (Loss) $(611) $2,348
========= ========
Diluted Earnings Per Share from Net
Income (Loss) $(0.05) $0.21
========= ========
Weighted Average Shares 13,137 11,277
LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in 000's)
June 30, June 30,
2006 2005
--------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $168 $105
Accounts receivable, net 37,421 24,437
Inventories 137,081 67,517
Prepaid expenses and other current assets 15,673 9,903
--------------------
TOTAL CURRENT ASSETS 190,343 101,962
PROPERTY AND EQUIPMENT, net 33,789 21,149
INTANGIBLES, net 64,953 31,243
OTHER ASSETS 5,588 2,476
--------------------
TOTAL ASSETS $294,673 $156,830
====================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $7,700 $21,300
Accounts payable and trade acceptances 12,851 10,481
Other current liabilities 32,123 19,324
--------------------
TOTAL CURRENT LIABILITIES 52,674 51,105
DEFERRED RENT & OTHER LONG TERM LIABILITIES 4,882 1,996
DEFERRED INCOME TAX LIABILITIES 5,331 4,602
LONG TERM DEBT 5,000 5,000
CONVERTIBLE NOTES 75,000 -
STOCKHOLDERS' EQUITY 151,786 94,127
--------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $294,673 $156,830
====================
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.