Lifetime Hoan Reports Second Quarter 2004 Results; Updates Guidance to Reflect Excel Acquisition
WESTBURY, N.Y.--(BUSINESS WIRE)--July 28, 2004--Lifetime Hoan Corporation (NASDAQ NM: LCUT), a leading designer, marketer and distributor of housewares, today announced results for the second quarter and six months ended June 30, 2004.
For the second quarter of 2004, net sales totaled $33.0 million compared to $30.0 million for the same period of the prior year. The Company reported net income of $203,000, or $0.02 per diluted share, compared to $724,000, or $0.07 per diluted share, for the second quarter of 2003.
Net sales for the six months ended June 30, 2004 totaled $70.2 million compared to $54.2 million for the same period in 2003, representing a 29.4% increase. Net income for the period was $548,000, or $0.05 per diluted share, compared to $120,000, or $0.01 per diluted share, last year.
Jeffrey Siegel, president and chief executive officer, commented, "Lifetime's second quarter sales were negatively impacted by several events, including a shift in the start-up of a number of new sales programs from the second to the third quarter, primarily as a result of the overall slowdown in retail sales that took place in June. In addition, new measures instituted by some of our major customers to improve inventory turns and lower their in-stock position also impacted our results."
"We have strengthened Lifetime's infrastructure - including our product development capabilities, overseas sourcing presence, and sales/marketing team - to accommodate the growth we expect in the second half of 2004, which is traditionally our strongest selling season, and in 2005 and beyond. Although the added cost of this infrastructure impacted our quarter-to-quarter earnings comparison, we believe these initiatives will have a very positive impact on Lifetime's long-term growth."
Mr. Siegel continued, "Our KitchenAid(R) programs continue to be a driving force in the company's growth, helping us achieve excellent distribution across all channels of trade. Our line of all-silicone bakeware products has been selling especially well and has become the leading brand in its category. In addition, we are on schedule to begin shipping our KitchenAid branded kitchen cutlery in the third quarter. To date, industry reaction has been excellent, and we expect to have another major success with this additional business opportunity under the KitchenAid brand.
"An exciting at-home entertaining product we will also ship in the third quarter is our new Smokeless Tabletop Griller(TM), designed to capitalize on the growing interest of consumers in 'low-carb' cooking. The griller, which enables family and friends to cook their main course together around the table, has received excellent reception from retailers.
"On July 23, 2004, we announced Lifetime's acquisition of the business and certain assets of Excel Importing Corp., which designs, markets and distributes a wide array of high quality cutlery, tabletop, cookware and barware products. We believe Excel's powerful brands and strong customer relationships will be a great addition for Lifetime and expect the acquisition to be accretive to earnings in 2005.
"As a result of the acquisition of Excel, we have reviewed our forecast and refined our guidance for 2004. We are raising our net sales guidance for the year to approximately $202 - 212 million from $195 - $205 million. Due to the added operating expenses we expect to incur until we fully integrate this acquisition, we are lowering our earnings per share estimate to approximately $0.95 - $1.10 from $0.98 - $1.13."
Lifetime Hoan noted that second-quarter 2004 sales attributable to the :USE(R) - Tools for Civilization(R) and Gemco Ware, Inc. businesses the Company acquired in the fourth quarter of 2003 totaled $2.0 million.
Separately, the Company announced that its Board of Directors declared a regular quarterly cash dividend of $0.0625 per share, payable on August 20, 2004 to shareholders of record on August 4, 2004.
Lifetime Hoan has scheduled a conference call Wednesday, July 28, at 11:00 a.m. Eastern time to discuss second-quarter-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 Wednesday, August 4, and can be accessed by dialing (706) 645-9291, conference ID #8889975. 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 household cutlery, kitchenware, cutting boards, pantryware and bakeware, marketing its products under various trade names including Farberware(R), KitchenAid(R), Cuisinart(R), Hoffritz(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
June 30,
(Unaudited)
------------------ % Increase
2004 2003 (Decrease)
-------- -------- ----------
Net Sales $33,029 $29,950 10.3%
Cost of Sales 19,154 17,003 12.7%
Distribution Expenses 4,264 4,302 (0.9%)
SG&A 9,149 7,268 25.9%
-------- --------
Income from Operations 462 1,377 (66.4%)
Interest Expense 141 180 (21.7%)
Other Income (16) (18) (11.1%)
-------- --------
Income Before Taxes 337 1,215 (72.3%)
Tax Provision 134 491 (72.7%)
-------- --------
Net Income $203 $724 (72.0%)
======== ========
Diluted Earnings Per Share from
Net Income $0.02 $0.07
======== ========
Weighted Average Shares 11,230 10,637
Lifetime Hoan Corporation
Income Statement
(in 000's, except per share data)
Six Months Ended
June 30,
(Unaudited)
----------------- % Increase
2004 2003 (Decrease)
-------- -------- ----------
Net Sales $70,158 $54,234 29.4%
Cost of Sales 40,843 30,430 34.2%
Distribution Expenses 9,445 8,756 7.9%
SG&A 18,723 14,589 28.4%
-------- --------
Income from Operations 1,147 459 149.9%
Interest Expense 268 292 (8.2%)
Other Income (31) (35) (11.4%)
-------- --------
Income Before Taxes 910 202 350.5%
Tax Provision 362 82 341.6%
-------- --------
Net Income $548 $120 356.6%
======== ========
Diluted Earnings Per Share from
Net Income $0.05 $0.01
======== ========
Weighted Average Shares 11,186 10,599
Lifetime Hoan Corporation
Condensed Consolidated Balance Sheets
(in thousands)
June 30, June 30,
2004 2003
(Unaudited)(Unaudited)
----------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $446 $132
Accounts receivable, net 16,224 17,512
Merchandise inventories 55,827 46,564
Prepaid expenses and other current assets 7,567 5,883
----------------------
TOTAL CURRENT ASSETS 80,064 70,091
PROPERTY AND EQUIPMENT, net 19,634 19,939
INTANGIBLES, net 25,411 23,757
OTHER ASSETS 2,033 2,090
----------------------
TOTAL ASSETS $127,142 $115,877
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $14,800 $15,500
Accounts payable and trade acceptances 6,591 6,331
Other current liabilities 14,314 14,603
----------------------
TOTAL CURRENT LIABILITIES 35,705 36,434
DEFERRED RENT & OTHER LONG TERM LIABILITIES 1,718 638
DEFERRED INCOME TAX LIABILITIES 3,214 1,640
STOCKHOLDERS' EQUITY 86,505 77,165
----------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $127,142 $115,877
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CONTACT: Lifetime Hoan
Robert McNally, 516-683-6000
or
Investor Relations:
Lippert/Heilshorn & Associates, Inc.
Harriet Fried, 212-838-3777
hfried@lhai.com
SOURCE: Lifetime Hoan