Lifetime Brands Announces Results for 2006
Net Sales Rise to $457.4 MM; Net Income Increases to $15.5 MM Reaffirms Financial Guidance
GARDEN CITY, N.Y.--(BUSINESS WIRE)--March 6, 2007--Lifetime Brands, Inc. (Nasdaq: LCUT), a leading designer, developer and marketer of nationally branded consumer products for the home, today announced results for the year ended December 31, 2006.
Net sales for the twelve months ended December 31, 2006 totaled $457.4 million, compared to $307.9 million for the same period in 2005, representing a 48.6% increase.
The Company reported net income for 2006 of $15.5 million, or $1.13 per diluted share, compared to net income of $14.1 million, or $1.23 per diluted share, for 2005. The 2006 year included a charge to earnings of approximately $0.06 per diluted share for stock option expense.
For the fourth quarter of 2006, Lifetime's net sales totaled $157.3 million, an increase of 26.4%, compared to net sales of $124.4 million for the same period in 2005. The Company reported net income of $9.5 million, or $0.62 per diluted share, for the fourth quarter of 2006 compared to net income of $7.2 million, or $0.60 per diluted share, for the 2005 period.
Jeffrey Siegel, Chairman, President and Chief Executive Officer, commented, "2006 was a year of transition and significant growth for Lifetime.
"Net revenue from our wholesale businesses, which accounted for approximately 82% of net revenues, grew by approximately 55% over the prior year.
"Organic growth in our wholesale businesses was approximately 14%. This measure excludes net revenues for both 2005 and 2006 attributable to the wholesale businesses we acquired from The Pfaltzgraff Company, Salton, Inc. and Syratech Corporation.
"Our wholesale food prep business, comprising our kitchenware, cutlery & cutting boards, bakeware, cookware and pantryware lines, performed extremely well, benefiting from new products and expanded retail placement.
"Wholesale tabletop also recorded substantial increases, reflecting a full year's net revenues from the Pfaltzgraff and Salton dinnerware and glassware businesses we acquired in 2005, and eight months' net revenues from the flatware and other tabletop businesses we acquired from Syratech in 2006.
"2006 was also the first year in which we recorded net revenues from the wholesale home decor sector, reflecting the wall and garden decor, non-electric lighting and picture frame businesses we acquired from Syratech.
"Despite the strong overall gains we made in our wholesale businesses during 2006, we were disappointed by their performance in the fourth quarter. Although net revenues and income from operations for the quarter exceeded the prior year's levels, both were impacted by the cautious stance many retailers took with respect to the holiday selling season. I am pleased to note that business strengthened in the closing weeks of December, and we ended the year on a positive note.
"As previously forecast, our Direct to Consumer division was unprofitable for the year. The new management team we installed in the third quarter is aggressively working on a turnaround, the results of which should begin to be reflected in the second half of 2007.
"Overall, we believe Lifetime is well-positioned to grow in 2007. As a result of our traditional strengths - including our portfolio of powerful brands, outstanding innovation capabilities, advanced product sourcing and strong retail placement - we continue to expect net sales to increase to $540 - $575 million and diluted earnings per share to increase to $1.40 - $1.70. We expect to achieve these goals through organic growth, although, as previously stated, our fragmented industry also offers many promising acquisition opportunities."
Lifetime has scheduled a conference call Tuesday, March 6, at 11:00 a.m. Eastern time to discuss fourth-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 Monday, March 12, 2007 and can be accessed by dialing (706) 645-9291, conference ID #8771130. 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 Brands is a leading designer, developer and marketer of kitchenware, cutlery & cutting boards, bakeware & cookware, pantryware & spices, tabletop, home decor, picture frames and bath accessories. The Company markets its products under some of the country's best known brands, including Farberware(R), KitchenAid(R), Pfaltzgraff(R), Cuisinart(R), Block(R) China and Crystal, Calvin Klein(R), CasaModa(R), Cuisine de France(R), Hoffritz(R), International Silver(R), Joseph Abboud(R), Kamenstein(R), Melannco(R), Nautica(R), Pedrini(R), Rochard(R), Roshco(R), Sabatier(R), Sasaki(R), Towle(R) Silversmiths, Tuttle(R), Wallace(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
December 31,
(Unaudited)
-------------------
2006 2005 % Increase
--------- --------- ----------
Net Sales $157,274 $124,380 26.4%
Cost of Sales 91,414 72,862 25.5%
Distribution Expenses 14,804 11,766 25.8%
SG&A 33,769 27,046 24.9%
--------- ---------
Income from Operations 17,287 12,706 36.1%
Interest Expense 1,909 1,087 75.6%
Other Expense (Income) (12) (33)
--------- ---------
Income Before Taxes 15,390 11,652 32.1%
Tax Provision 5,931 4,427 34.0%
--------- ---------
Net Income $9,459 $7,225 30.9%
========= =========
Diluted Earnings Per Share from Net
Income $0.62 $0.60
========= =========
Weighted Average Shares 16,311 12,110
LIFETIME BRANDS, INC.
INCOME STATEMENT
(in 000's, except per share data)
Twelve Months Ended
December 31,
(Audited)
-------------------
2006 2005 % Increase
--------- --------- ----------
Net Sales $457,400 $307,897 48.6%
Cost of Sales 265,749 178,295 49.1%
Distribution Expenses 49,729 34,538 44.0%
SG&A 112,122 69,891 60.4%
--------- ---------
Income from Operations 29,800 25,173 18.4%
Interest Expense 4,576 2,489 83.9%
Other Expense (Income) (31) (72)
--------- ---------
Income Before Taxes 25,255 22,756 11.0%
Tax Provision 9,723 8,647 12.4%
--------- ---------
Net Income $15,532 $14,109 10.1%
========= =========
Diluted Earnings Per Share from Net
Income $1.13 $1.23
========= =========
Weighted Average Shares 14,852 11,506
LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, December 31,
2006 2005
-------------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 700 $ 786
Accounts receivable, net 60,516 49,158
Merchandise inventories 155,350 91,953
Prepaid expenses and other current assets 15,664 13,853
-------------------------
TOTAL CURRENT ASSETS 232,230 155,750
PROPERTY AND EQUIPMENT, net 47,185 23,989
INTANGIBLES, net 64,558 40,264
OTHER ASSETS 5,367 2,645
-------------------------
TOTAL ASSETS $ 349,340 $ 222,648
=========================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $ 21,500 $ 14,500
Accounts payable and trade acceptances 15,585 17,397
Other current liabilities 53,239 38,010
-------------------------
TOTAL CURRENT LIABILITIES 90,324 69,907
DEFERRED RENT & OTHER LONG TERM LIABILITIES 5,522 2,287
DEFERRED INCOME TAX LIABILITIES 6,204 4,967
LONG TERM DEBT 5,000 5,000
CONVERTIBLE NOTES 75,000 -
STOCKHOLDERS' EQUITY 167,290 140,487
-------------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 349,340 $ 222,648
=========================
CONTACT: Lifetime Brands, Inc.
Christian G. Kasper, 617-568-8148
Senior Vice President
chris.kasper@lifetimebrands.com
or
Investor Relations:
Lippert/Heilshorn & Associates, Inc.
Harriet Fried, 212-838-3777
hfried@lhai.com
SOURCE: Lifetime Brands, Inc.