Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

 

 

 

Item 2.02.   Results of Operation and Financial Condition.

 

On August 6, 2009, Lifetime Brands, Inc. (the “Company”) issued a press release announcing the Company’s results for the three months ended June 30, 2009. A copy of the Company’s press release is attached as Exhibit 99.1.

 

The press release attached as Exhibit 99.1 contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles. To supplement the Company’s results of operations presented in accordance with GAAP, the Company is presenting non-GAAP information regarding earnings (loss) before interest, taxes, depreciation, amortization, restructuring expenses and stock option expense.

 

These non-GAAP measures are provided to enhance the user’s overall understanding of the Company’s current financial performance. Specifically, the Company believes the non-GAAP results provide useful information to both management and investors by excluding certain items that may not be indicative of the Company’s core operating results. These measures should be considered in addition to results prepared in accordance with GAAP, but are not a substitute for or superior to GAAP results. The non-GAAP measures included in the attached press release have been reconciled to the equivalent GAAP measure.

 

Item 9.01.   Financial Statements and Exhibits.

 

 

 

 

Signature

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

 

 

 

 

 

LIFETIME BRANDS ANNOUNCES SECOND QUARTER 2009 FINANCIAL RESULTS

 

Company Reports Significant Increases in Adjusted EBITDA

 

Garden City, NY, August 6, 2009 -- Lifetime Brands, Inc. (NASDAQ: LCUT), North America's leading resource for nationally branded kitchenware, tabletop and home décor products, today announced financial results for the second quarter ended June 30, 2009.

 

Net sales for the three months ended June 30, 2009, totaled $85.3 million, as compared to net sales of $92.4 million for the same period in 2008. On a comparable basis, excluding 2008 net sales of the Company’s retail stores, which were closed in December 2008, and adjusting 2009 net sales of Mikasa®, which was acquired on June 6, 2008, to reflect net sales only for the period after June 6, 2009, the same post-acquisition period as 2008, net sales for the quarter were $78.4 million in 2009, as compared to $85.2 million in 2008.

 

The Company reported a net loss of $1.3 million, or $0.10 per diluted share for the 2009 period, compared to a net loss of $3.6 million, or $0.30 per diluted share, for the 2008 quarter. On a pre-tax basis, the loss for the quarter was $1.0 million in 2009, as compared to a loss of $8.9 million in 2008.

 

Adjusted EBITDA, which the Company defines as earnings (loss) before interest, taxes, depreciation, amortization, restructuring expenses and stock option expense, as shown in the table below, was $4.6 million for the 2009 quarter, as compared to $(2.7) million in the 2008 period. For the six months ended June 30, 2009, Adjusted EBITDA was $5.6 million, as compared to $(5.2) million in the 2008 period.

 

Net sales for the Company’s wholesale segment in the second quarter of 2009 were $80.9 million, an increase of 1.3%, compared to net sales of $79.9 million for the 2008 quarter. On a comparable basis, adjusting 2009 net sales of Mikasa®, which was acquired on June 6, 2008, to reflect net sales only for the period after June 6, 2009, the same post-acquisition period as 2008, the wholesale segment’s net sales were $74.6 million in 2009, a decrease of $5.3 million or 6.6% compared to the 2008 period.

 

The decrease in comparable wholesale net sales was primarily attributable to lower volume, due, in part, to the non-recurrence of sales to Linens ‘N Things, which was liquidated in 2008, less inventory reduction plan activity, the Company’s elimination of certain low-margin business in the 2009 period and the planned effect of a change in the Company’s relationship with Accent-Fairchild Group, a Canadian company that previously had served as the Company’s distributor in Canada and now operates a portion of its business as Lifetime Brands Canada. The Company’s share of the operating profit of Lifetime Brands Canada is included in net sales.

 

 

Net sales for the direct-to-consumer segment in the second quarter of 2009 were $4.4 million compared to $12.5 million for the 2008 period. In 2009, the Company’s direct-to-consumer segment reflects the results of the Pfaltzgraff® Internet website and mail order catalog and the Mikasa® Internet website. On a comparable basis, excluding the net sales from the Mikasa® Internet website in 2009 and the net sales generated by the Company’s retail stores in 2008, net sales for the direct-to-consumer segment were $3.8 million in the second quarter of 2009 compared to $5.3 million in the 2008 period.

 

Jeffrey Siegel, Chairman, President and Chief Executive Officer, commented, “The substantial year-over-year improvement in our Adjusted EBITDA is a clear indication that the steps we have taken to restructure our business have borne fruit. Our improved operating results, combined with the success of our on-going inventory reduction efforts, enabled us to reduce our bank borrowings by $38.0 million, as compared to June 30, 2008, and by $31.5 million, as compared to December 31, 2008.

 

“We continue to work closely with our retail partners to create customized sales programs tailored to today’s business climate. In addition, we think the current environment presents us with opportunities to expand our market share in all our product classifications. Consequently, we believe that we are well positioned to take advantage of the holiday shopping season.”

 

Second-Quarter 2009 Conference Call

 

Lifetime has scheduled a conference call for Thursday, August 6, 2009 at 11:00 a.m. ET to discuss its second-quarter 2009 results. The dial-in number for the call is 706-679-7464. A replay of the call will also be available through August 13, 2009 and can be accessed by dialing 706-645-9291, conference ID #22137796. 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.

 

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 "expect," "will," "may," "would," "could," "should," "project," "projected," "positioned" 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.

 

Lifetime Brands is North America’s leading resource for nationally branded kitchenware, tabletop and home décor products. The Company markets its products under many of the industry’s best known brands, including Farberware®, KitchenAid®, Pfaltzgraff®, Mikasa®, Cuisinart®, Calvin Klein®, CasaModa®, Gorham®, Hoffritz®, International® Silver, Kirk Stieff®, Nautica®, Pedrini®, Roshco®, Sabatier®, Sasaki®, Towle® Silversmiths, Tuttle®, Wallace® and Vasconia®. Lifetime’s products are distributed through most major retailers in North America.

 

Contacts:

 

 

 

 

LIFETIME BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(unaudited)

 

 

	Three Months Ended June 30,						Six Months Ended June 30,
	2009			2008			2009			2008
					(as adjusted)						(as adjusted)
Net sales		$85,334			$92,399			$175,548			$190,593
Cost of sales		53,106			55,288			111,254			114,893
Distribution expenses		9,502			12,766			20,550			26,156
Selling, general and administrative expenses		21,955			31,183			45,522			62,286
Restructuring expenses		(663	)		107			161			2,987
Income (loss) from operations		1,434			(6,945	)		(1,939	)		(15,729	)
Interest expense		(2,894	)		(2,655	)		(5,767	)		(5,336	)
Loss before income taxes and equity in earnings of Grupo Vasconia, S.A.B.		(1,460	)		(9,600	)		(7,706	)		(21,065	)
Income tax benefit (provision)		(281	)		5,341			(416	)		10,192
Equity in earnings of Grupo Vasconia, S.A.B., net of taxes		488			707			910			964
NET LOSS		$ (1,253	)		$ (3,552	)		$   (7,212	)		$  (9,909	)
BASIC AND DILUTED LOSS PER COMMON SHARE		$   (0.10	)		$   (0.30	)		$     (0.60	)		$    (0.83	)

 

 

 

LIFETIME BRANDS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

 

 

 

 

 

 

LIFETIME BRANDS, INC.

Supplemental Information

Reconciliation of GAAP to Non-GAAP Operating Results

(In thousands)

(unaudited)