Lifetime Hoan Reports Fourth Quarter 2004 Results
WESTBURY, N.Y.--(BUSINESS WIRE)--March 1, 2005--LIFETIME HOAN CORPORATION (NASDAQ NM: LCUT), a leading designer, marketer and distributor of housewares, today announced results for the fourth quarter and full year ended December 31, 2004.
For the fourth quarter of 2004, net sales totaled $68.1 million compared to $62.1 million for the same period of the prior year. The Company reported net income of $5.3 million compared to $5.4 million for the fourth quarter of 2003. On a diluted per share basis, net income was $0.47 per share compared to $0.49 per share in 2003.
Net sales for the twelve months ended December 31, 2004 totaled $189.5 million compared to $160.4 million for the same period in 2003, an increase of 18%. Net income for the period was $8.5 million compared to $8.4 million last year. On a diluted per share basis, net income was $0.75 per share compared to $0.78 per share in 2003.
Jeffrey Siegel, Chairman, President and Chief Executive Officer, commented, "In the fourth quarter, Lifetime's net sales rose by 10%, but our results were nonetheless below our expectations for the period. The shortfall was primarily the result of two factors. First, an important roll-out with a major customer of our new line of KitchenAid(R) cutlery extended into the first two weeks of January, rather than being completed in December 2004, as we had expected. In addition, sales of our new models of S'Mores Makers did not reach the levels we had anticipated. Our original model, introduced in 2003, was an extremely popular gift item during the holiday season and was a significant contributor to the 31% sales increase we achieved in the fourth quarter of 2003. Though our sales for the fourth quarter of 2004 increased 10%, our SG&A increased 28%, due primarily to augmenting several key areas of our Company in anticipation of growth in 2005, as well as an increase in personnel for the Excel tabletop division that we acquired in July 2004.
"Our outlook for 2005 is very positive. An important source of growth will be the expanded placement for our KitchenAid(R) products that we recently obtained with one of our major customers. Overall, demand for our KitchenAid(R) products, including the innovative lines of KitchenAid(R) cutlery we launched late last year, remains very strong and will be a primary growth driver in 2005.
"We also expect to realize significant revenue increases across all our product lines, including contributions from the new tabletop and cookware categories we added in July 2004 through our acquisition of Excel Importing Corp. New product introductions will continue to play a significant role in our growth initiatives, primarily in the second half of the year. We will be bringing to market new lines of Sabatier(R) branded cutlery, which, combined with our offerings under the KitchenAid(R) and Cuisinart(R) brands, should enable us to increase our presence in the upper-end of the cutlery market. We also expect to see growth from the exciting new line of bath accessories our new :USE division has developed, as we continue to expand our product line beyond the kitchen into other areas of the home.
"As a result of the wide-ranging growth we expect in our many product lines, we estimate that Lifetime's net sales will total approximately $220 million to $230 million in 2005. For the year, we expect earnings per share to total approximately $0.95 to $1.15."
Lifetime Hoan noted that fourth quarter 2004 sales attributable to the :USE(R) - Tools for Civilization(R), Gemco Ware and Excel businesses the Company recently acquired totaled $5.7 million.
Lifetime Hoan has scheduled a conference call Tuesday, March 1, at 11:00 a.m. Eastern time to discuss fourth-quarter and full-year 2004 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 Tuesday, November 10, and can be accessed by dialing (706) 645-9291, conference ID #4389418. A live webcast of the call will be broadcast at the Company's web site, www.lifetime.hoan.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), Cuisinart(R), Hoffritz(R), Sabatier(R), DBK-Daniel Boulud Kitchen(TM), Joseph Abboud Environments(R), Roshco(R), Baker's Advantage(R), Kamenstein(R), CasaModa(TM), Hoan(R), Gemco(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 HOAN CORPORATION
INCOME STATEMENT
(in 000's, except per share data)
Three Months Ended
December 31,
(Unaudited)
------------------------ %Increase
2004 2003 (Decrease)
------------ ----------- ------------
Net Sales $68,059 $62,053 9.7%
Cost of Sales 40,100 36,936 8.6%
Distribution Expenses 6,426 6,241 3.0%
SG&A 12,378 9,706 27.5%
------------ -----------
Income from Operations 9,155 9,170 (0.2%)
Interest Expense 299 243 23.0%
Other Income (15) (17) (11.8%)
------------ -----------
Income Before Taxes 8,871 8,944 (0.8%)
Tax Provision 3,531 3,536 (0.2%)
------------ -----------
Net Income $5,340 $5,408 (1.3%)
============ ===========
Diluted Earnings Per Share from
Net Income $0.47 $0.49
============ ===========
Weighted Average Shares 11,250 11,036
Twelve Months Ended
December 31,
--------------------- %Increase
2004 2003 (Decrease)
----------- --------- ------------
Net Sales $189,458 $160,355 18.1%
Cost of Sales 111,497 92,918 20.0%
Distribution Expenses 22,830 21,031 8.6%
SG&A 40,282 31,761 26.8%
----------- ---------
Income from Operations 14,849 14,645 1.4%
Interest Expense 835 724 15.3%
Other Income (60) (68) (11.8%)
----------- ---------
Income Before Taxes 14,074 13,989 0.6%
Tax Provision 5,602 5,574 0.5%
----------- ---------
Net Income $8,472 $8,415 0.7%
=========== =========
Diluted Earnings Per Share from Net
Income $0.75 $0.78
=========== =========
Weighted Average Shares 11,226 10,754
LIFETIME HOAN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, December 31,
2004 2003
------------- ------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,741 $ 1,175
Accounts receivable, net 34,083 31,977
Merchandise inventories 58,934 49,294
Prepaid expenses and other current assets 7,785 5,838
------------ ------------
TOTAL CURRENT ASSETS 102,543 88,284
PROPERTY AND EQUIPMENT, net 20,003 20,563
INTANGIBLES, net 31,484 25,675
OTHER ASSETS 2,305 2,214
------------ ------------
TOTAL ASSETS $ 156,335 $ 136,736
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $ 19,400 $ 16,800
Accounts payable and trade acceptances 7,892 8,405
Other current liabilities 25,621 21,769
------------ ------------
TOTAL CURRENT LIABILITIES 52,913 46,974
DEFERRED RENT & OTHER LONG TERM LIABILITIES 2,072 1,593
DEFERRED INCOME TAX LIABILITIES 3,412 2,088
LONG-TERM BORROWINGS 5,000 -
STOCKHOLDERS' EQUITY 92,938 86,081
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 156,335 $ 136,736
============ ============
CONTACT: Lifetime Hoan Corporation
Robert McNally, 516-683-6000
or
Lippert/Heilshorn & Associates, Inc.
Investor Relations:
Harriet Fried, 212-838-3777
hfried@lhai.com
SOURCE: Lifetime Hoan Corporation