Lifetime Hoan Announces Third Quarter 2002 Results
Net sales for the quarter totaled $32.2 million compared to $34.4 million in the third quarter of 2001. Income from continuing operations totaled $1.2 million, or $0.12 per share, for the third quarter of 2002 compared to income from continuing operations of $1.2 million, or $0.12 per share, for last year's corresponding period.
Jeffrey Siegel, president and chief executive officer, commented, "Lifetime's quarter-to-quarter sales comparisons were impacted by a major customer's decision to defer a $2 million promotion from the third quarter of 2002 to the fourth quarter. Our third quarter sales were also negatively affected by the tentative retail environment and an overall, heightened focus by our retail customer base on increasing inventory turns by reducing their inventory stock levels.
"The retail sell-through of Lifetime's products remains strong, especially for Farberware(R), which is still our most important brand and sales driver. We are continuing to expand the number of SKUs in our Kitchenaid(R) line of utensils and are highly confident that we will experience significant new placement in 2003."
Mr. Siegel continued, "The roll-out of our new line of KitchenAid(R) bakeware is scheduled to take place later this quarter. We will also begin making initial shipments of our new line of premium quality Cuisinart(R) kitchen cutlery. Early reaction from retailers has been extremely positive, and we expect the upper-end retailers we have targeted to accept the line for placement in their stores."
As previously announced, Lifetime sold its 51% interest in the businesses of each of Prestige Italiana, Spa. and Prestige Haushaltswaren GmbH (together, the "Prestige Companies") and in conjunction with the sale recorded a $534,000 net loss in the third quarter. The loss on sale, together with the losses from the Prestige Companies' operations for all periods presented, are reflected as discontinued operations on the Company's income statement. Lifetime's net income for the quarter after the loss for discontinued operations was $515,000 versus $1,026,000 in the third quarter of 2001. Diluted earnings per share, calculated on the same basis, were $0.05 per share compared to $0.10 in the third quarter of last year.
Separately, the Company announced that its Board of Directors declared a regular quarterly cash dividend of $0.0625 per share, payable on November 20, 2002 to shareholders of record on November 14, 2002.
Lifetime Hoan Corporation is a leading designer, marketer and distributor of household cutlery, kitchenware, cutting boards, pantryware and bakeware, marketing its products under various trade names including Farberware(R) and Hoffritz(R). Through the use of various brand names, Lifetime Hoan's products are distributed through almost every major retailer in the U.S.
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 HOAN CORPORATION
INCOME STATEMENT (unaudited)
(in 000's, except per share data)
Three Months Ended
September 30,
--------------------
% Increase
2002 2001 (Decrease)
-------- -------- ----------
Net Sales $32,235 $34,381 (6.2%)
Cost of Sales 17,612 19,101 (7.8%)
--------- --------
Gross Profit 14,623 15,280 (4.3%)
SG&A 12,320 12,931 (4.7%)
Interest Expense 239 309 (22.7%)
Other (Income) (18) (34) (47.1%)
-------- --------
Income Before Taxes 2,082 2,074 0.4%
Tax Provision 854 838 1.9%
-------- -------
Income from Continuing Operations 1,228 1,236 (0.6%)
(Loss) from Discontinued
Operations, net of tax (151) (210)
(Loss) on Disposal of
Discontinued Operations,
net of income tax benefit of $225 (534) -
-------- --------
Net Income $543 $1,026 (47.1%)
======== ========
Diluted Earnings Per
Share from Continuing Operations $0.12 $ 0.12 0.0%
======== ========
Weighted Average Shares 10,536 10,549
Diluted Earnings
Per Share from Net Income $0.05 $ 0.10 (50.0%)
======== ========
Weighted Average Shares 10,536 10,549
Nine Months Ended
September 30,
--------------------
% Increase
2002 2001 (Decrease)
-------- -------- ----------
Net Sales $83,703 $88,685 (5.6%)
Cost of Sales 45,199 48,955 (7.7%)
-------- --------
Gross Profit 38,504 39,730 (3.1%)
SG&A 36,628 35,247 3.9%
Interest Expense 687 732 (6.1%)
Other (Income) (47) (65) (27.7%)
-------- --------
Income Before Taxes 1,236 3,816 (67.6%)
Tax Provision 471 1,543 (69.5%)
-------- --------
Income from Continuing Operations 765 2,273 (66.3%)
(Loss) from Discontinued
Operations, net of tax (495) (403)
(Loss) on Disposal of
Discontinued Operations,
net of income tax benefit of $225 (534) -
-------- --------
Net (Loss) Income ($264) $1,870 (114.1%)
======== ========
Diluted Earnings Per
Share from Continuing Operations $0.07 $ 0.22 (68.2%)
======== ========
Weighted Average Shares 10,534 10,548
Diluted (Loss) Earnings
Per Share from Net Income ($0.03) $ 0.18 (116.7%)
======== ========
Weighted Average Shares 10,534 10,548
LIFETIME HOAN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, December 31,
2002 2001
------------ ------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 25 $ 5,021
Accounts receivable, net 18,440 18,696
Merchandise inventories 53,226 39,681
Prepaid expenses
and other current assets 4,990 4,643
Current assets,
discontinued operations 1,243 5,959
-------- --------
TOTAL CURRENT ASSETS 77,924 74,000
PROPERTY AND EQUIPMENT, net 21,059 22,111
INTANGIBLES, net 24,050 24,342
OTHER ASSETS 2,174 2,106
OTHER ASSETS, DISCONTINUED OPERATIONS - 811
-------- --------
TOTAL ASSETS $125,207 $123,370
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $27,600 $ 22,847
Accounts payable and trade acceptances 5,833 3,946
Other current liabilities 15,507 15,233
Other current liabilities,
discontinued operations - 2,899
-------- --------
TOTAL CURRENT LIABILITIES 48,940 44,925
MINORITY INTEREST,
DISCONTINUED OPERATIONS - 384
STOCKHOLDERS' EQUITY 76,267 78,061
-------- --------
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY $125,207 $123,370
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CONTACT:
Lifetime Hoan Corporation, Westbury
Robert McNally, 516/683-6000
or
Fore Investor Relations:
Lippert/Heilshorn & Associates, Inc., New York
Harriet Fried, 212/838-3777
hfried@lhai.com