Lifetime Brands Reports EPS of $0.40 for Third Quarter of 2009
Net income for the quarter was
Adjusted EBITDA, a non-GAAP measure, which the Company defines as net
income (loss) before interest, taxes, depreciation, amortization,
restructuring expenses and stock option expense, as shown in the table
below, was
Net sales for the quarter were
Net wholesale sales were
Net sales for the Company's Direct to Consumer business during the
quarter were
“Throughout the year, retailers sharply trimmed inventories, which now are the lowest in memory. This has had a negative effect on sales, as inventory replenishment generally was at rates below those of retail sell-throughs. While it appears that the sell-down of retail inventories has now run its course, I believe retailers will continue carefully to manage their inventories in a conservative manner for the foreseeable future.
“Despite these challenges, Lifetime achieved new placements in all categories and significantly increased its market share in several product areas, including dinnerware, picture frames and its newest category, water bottles and thermal coffee mugs.
“Grupo Vasconia SAB posted a strong quarter. Net sales and net income,
in Mexican Pesos, were up more than 30% and 118%, respectively. These
gains were driven by strong increases in sales of kitchen and tabletop
products across all distribution channels. Sales of aluminum blanks and
other commodity products produced by its mill operations decreased,
reflecting both lower demand and lower world aluminum prices. For the
quarter, Lifetime’s equity in Grupo Vasconia’s earnings, net of taxes,
increased to
"Reflecting the success of our ongoing restructuring activities,
Selling, General and Administrative Expense (“SG&A”) decreased by
"The initiative to reduce and rationalize inventory levels, which began
in 2007, continued to produce the desired results. Inventory at
“Lower inventory levels, combined with improved operating results,
enabled the Company to reduce its bank borrowings, which, at
“Despite some recent positive economic news, the retail environment remains challenging, especially as retailers continue to trim their selections and focus on maintaining leaner inventory levels. On the other hand, I believe these conditions will benefit those suppliers that quickly can adapt to new circumstances and can provide retailers with innovative new products at those price points at which consumers are most comfortable. Consequently, I believe Lifetime is well positioned for the Holiday Season and for 2010.”
Third-Quarter 2009 Conference Call
Lifetime has scheduled a conference call for
A replay of the call will also be available through
Non-GAAP Financial Measures
This earnings release contains non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a company's historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statements of income, balance sheets, or statements of cash flows of the Company; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. Pursuant to the requirements of Regulation G, the Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures. These non-GAAP measures are provided because management of the Company uses these financial measures in maintaining and evaluating the Company's on-going financial results and trends. Management uses this non-GAAP information as an indicator of business performance
Forward-Looking Statements
In this press release, the use of the words “believe,” "could," "expect," "may," "positioned," "project," "projected," "should," "will," "would" or similar expressions is intended to identify forward-looking statements that represent the Company’s current judgment about possible future events. The Company believes these judgments are reasonable, but these statements are not guarantees of any events or financial results, and actual results may differ materially due to a variety of important factors. Such factors might include, among others, the Company’s ability to comply with the requirements of its credit agreement; the availability of funding under that credit agreement; the Company’s ability to maintain adequate liquidity and financing sources and an appropriate level of debt; changes in general economic conditions which could affect customer payment practices or consumer spending; the impact of changes in general economic conditions on the Company’s customers; changes in demand for the Company’s products; shortages of and price volatility for certain commodities; significant changes in the competitive environment and the effect of competition on the Company’s markets, including on the Company’s pricing policies, financing sources and an appropriate level of debt.
| LIFETIME BRANDS, INC. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
|
(In thousands, except per share data) |
||||||||||||||||
|
(unaudited) |
||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| Net sales | $ | 111,422 | $ | 140,624 | $ | 286,970 | $ | 331,217 | ||||||||
| Cost of sales | 69,778 | 86,096 | 181,032 | 200,989 | ||||||||||||
| Distribution expenses | 10,313 | 14,104 | 30,863 | 40,260 | ||||||||||||
| Selling, general and administrative expenses | 23,061 | 32,464 | 68,583 | 94,750 | ||||||||||||
| Restructuring expenses | 671 | 4,595 | 832 | 7,582 | ||||||||||||
| Income (loss) from operations | 7,599 | 3,365 | 5,660 | (12,364 | ) | |||||||||||
| Interest expense | (3,294 | ) | (2,870 | ) | (9,061 | ) | (8,206 | ) | ||||||||
| Income (loss) before income taxes and equity in earnings of Grupo Vasconia, S.A.B. | 4,305 | 495 | (3,401 | ) | (20,570 | ) | ||||||||||
| Income tax benefit (provision) | (153 | ) | (1,936 | ) | (569 | ) | 8,256 | |||||||||
| Equity in earnings of Grupo Vasconia, S.A.B., net of taxes | 727 | 390 | 1,637 | 1,354 | ||||||||||||
| NET INCOME (LOSS) | $ | 4,879 | $ | (1,051 | ) | $ | (2,333 | ) | $ | (10,960 | ) | |||||
| BASIC INCOME (LOSS) PER COMMON SHARE | $ | 0.41 | $ | (0.09 | ) | $ | (0.19 | ) | $ | (0.92 | ) | |||||
| DILUTED INCOME (LOSS) PER COMMON SHARE | $ | 0.40 | $ | (0.09 | ) | $ | (0.19 | ) | $ | (0.92 | ) | |||||
| LIFETIME BRANDS, INC. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
|
(In thousands, except share data) |
||||||||
| September 30, | December 31, | |||||||
| 2009 | 2008 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 899 | $ | 3,478 | ||||
| Accounts receivable, less allowances of $11,371 at 2009 and $14,651 at 2008 | 71,915 | 67,562 | ||||||
| Inventory | 126,455 | 141,612 | ||||||
| Income taxes receivable | 226 | 11,597 | ||||||
| Prepaid expenses and other current assets | 8,203 | 8,429 | ||||||
| TOTAL CURRENT ASSETS | 207,698 | 232,678 | ||||||
| PROPERTY AND EQUIPMENT, net | 45,065 | 49,908 | ||||||
| INTANGIBLES, net | 37,824 | 38,420 | ||||||
| INVESTMENT IN GRUPO VASCONIA, S.A.B. | 19,231 | 17,784 | ||||||
| OTHER ASSETS | 3,565 | 2,991 | ||||||
| TOTAL ASSETS | $ | 313,383 | $ | 341,781 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Bank borrowings | $ | 62,863 | $ | 89,300 | ||||
| Accounts payable | 27,819 | 24,151 | ||||||
| Accrued expenses | 28,571 | 36,530 | ||||||
| Deferred income tax liabilities | 436 | ― | ||||||
| Income taxes payable | 127 | ― | ||||||
| TOTAL CURRENT LIABILITIES | 119,816 | 149,981 | ||||||
| DEFERRED RENT & OTHER LONG-TERM LIABILITIES | 23,259 | 23,054 | ||||||
| DEFERRED INCOME TAXES | 3,841 | 3,373 | ||||||
| CONVERTIBLE NOTES | 69,840 | 67,864 | ||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Common stock, $0.01 par value, shares authorized: 25,000,000; shares issued and outstanding: 12,023,059 in 2009 and 11,989,724 in 2008 | 120 | 120 | ||||||
| Paid-in capital | 128,983 | 127,497 | ||||||
| Accumulated deficit | (23,850 | ) | (21,515 | ) | ||||
| Accumulated other comprehensive loss | (8,626 | ) | (8,593 | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY | 96,627 | 97,509 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 313,383 | $ | 341,781 | ||||
| LIFETIME BRANDS, INC. | |||||||||||||||
| Supplemental Information | |||||||||||||||
| Reconciliation of GAAP to Non-GAAP Operating Results | |||||||||||||||
|
(In thousands) |
|||||||||||||||
|
(unaudited) |
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| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||||||||
| (in thousands) | |||||||||||||||
| Net income (loss) reported | $ | 4,879 | $ | (1,051 | ) | $ | (2,333 | ) | $ | (10,960 | ) | ||||
| Add back: | |||||||||||||||
| Provision (benefit) for income taxes | 153 | 1,936 | 569 | (8,256 | ) | ||||||||||
| Interest expense | 3,294 | 2,870 | 9,061 | 8,206 | |||||||||||
| Depreciation and amortization | 2,445 | 2,512 | 7,532 | 7,843 | |||||||||||
| Amortization of bank fees | 325 | 45 | 726 | 110 | |||||||||||
| Restructuring expenses | 671 | 4,595 | 832 | 7,582 | |||||||||||
| Stock option expense | 547 | 615 | 1,488 | 1,843 | |||||||||||
| Adjusted EBITDA | $ | 12,314 | $ | 11,522 | $ | 17,875 | $ | 6,368 | |||||||
Source:
Lifetime Brands, Inc.
Laurence Winoker, 516-203-3590
Chief
Financial Officer
investor.relations@lifetimebrands.com
or
Lippert/Heilshorn
& Assoc.
Harriet Fried, 212-838-3777
Vice President
hfried@lhai.com