Lifetime Brands, Inc. : Reports First Quarter 2012 Results
05/03/2012| 07:05am US/Eastern
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Lifetime Brands, Inc. (NasdaqGS: LCUT), a global provider of branded
products used to prepare, serve and consume foods in the home, today
reported its financial results for the quarter ended March 31, 2012.
First Quarter Highlights:
Net Sales increased 18.7% to $109.0 million.
Organic Net Sales increased 6.4% to $97.7 million.
Gross Margin increased 70 basis points to 37.1%.
EBITDA increased 128.8% to $6.2 million.
Net Income increased to $1.344 million, as compared to a loss of $949
thousand for the same period in 2011.
Diluted Income per Common Share increased to $0.11, as compared to
($0.08) per diluted share in last year's quarter.
"Lifetime's financial results for the quarter provided a strong and an
encouraging start to the year," said Jeffrey Siegel, Chairman, President
and Chief Executive Officer. "Our performance in the quarter was driven
by our core U.S. wholesale businesses, kitchenware and tabletop, which
recorded an 11.1% increase in Net Sales, all of which was organic. These
gains were primarily attributable to new programs with our key retailer
partners.
"Outside the United States, Creative Tops, which we acquired in November
2011, Lifetime Brands Canada and our investee partner companies in
Mexico, Canada, Brazil and China all performed to expectation."
On March 6, 2012, the Board of Directors declared a quarterly dividend
of $0.025 per share payable on May 15, 2012 to shareholders of record on
May 1, 2012.
Conference Call
The Company has scheduled a conference call for Thursday, May 3, 2012 at
11:00 a.m. ET. The dial-in number for the conference call is (866)
788-0539, passcode #85646002. A replay of the call will also be
available through May 10, 2012 and can be accessed by dialing (888)
286-8010 or (617) 801-6888, conference ID #94198135. A live webcast of
the conference call will be broadcast in the Investor Relations section
of 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 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 agreements; the
availability of funding under such credit agreements; 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 a provider of kitchenware, tabletop and other
products used in the home. The Company markets its products under such
well-known kitchenware brands as Farberware®, KitchenAid®, CasaM?da®,
Cuisinart®, Cuisine de France®, Guy Fieri®, Hoffritz®, Kizmos™, Misto®,
Pedrini®, Roshco®, Sabatier®, Savora™ and Vasconia®; respected tabletop
brands such as Mikasa®, Pfaltzgraff®, Creative Tops®, Calvin Klein®,
Gorham®, International® Silver, Kirk Stieff®, Nautica®, Sasaki®, Towle®
Silversmiths, Tuttle®, Wallace®, V&A® and Royal Botanic Gardens Kew®;
and home solutions brands, including Elements®, Melannco®, Kamenstein®
and Design for Living™.
Income (loss) before income taxes and equity in earnings
1,534
(2,002
)
Income tax benefit (provision)
(588
)
588
Equity in earnings, net of taxes
398
465
NET INCOME (LOSS)
$
1,344
$
(949
)
BASIC INCOME (LOSS) PER COMMON SHARE
$
0.11
$
(0.08
)
DILUTED INCOME (LOSS) PER COMMON SHARE
$
0.11
$
(0.08
)
Cash dividends declared per common share
$
0.050
$
0.025
LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands - except share data)
(unaudited)
March 31,
December 31,
2012
2011
(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
4,867
$
2,972
Accounts receivable, less allowances of $5,051 at March 31, 2012
and $4,602 at December 31, 2011
72,902
77,749
Inventory
113,653
110,337
Prepaid expenses and other current assets
5,286
5,264
Income taxes receivable
327
-
Deferred income taxes
2,568
2,475
TOTAL CURRENT ASSETS
199,603
198,797
PROPERTY AND EQUIPMENT, net
33,025
34,324
INVESTMENTS
36,380
34,515
INTANGIBLE ASSETS, net
46,537
46,937
OTHER ASSETS
3,742
4,172
TOTAL ASSETS
$
319,287
$
318,745
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Revolving Credit Facility
$
15,000
$
15,000
Accounts payable
23,534
18,985
Accrued expenses
29,562
33,877
Income taxes payable
70
2,100
TOTAL CURRENT LIABILITIES
68,166
69,962
DEFERRED RENT & OTHER LONG-TERM LIABILITIES
14,450
14,598
DEFERRED INCOME TAXES
5,427
5,385
REVOLVING CREDIT FACILITY
41,545
42,625
TERM LOAN
40,000
40,000
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value, shares authorized: 100 shares of
Series A and 2,000,000 shares of Series B; none issued and
outstanding
-
-
Common stock, $.01 par value, shares authorized: 25,000,000;
shares issued and outstanding: 12,438,393 at March 31, 2012 and
12,430,893 at December 31, 2011
124
124
Paid-in capital
138,186
137,467
Retained earnings
15,189
14,465
Accumulated other comprehensive loss
(3,800
)
(5,881
)
TOTAL STOCKHOLDERS' EQUITY
149,699
146,175
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
319,287
$
318,745
LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Three Months Ended
March 31,
2012
2011
OPERATING ACTIVITIES
Net income (loss)
$
1,344
$
(949
)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Provision for doubtful accounts
(25
)
(16
)
Depreciation and amortization
2,207
1,995
Amortization of debt discount
-
229
Deferred rent
(84
)
(3
)
Stock compensation expense
698
748
Undistributed equity earnings
(398
)
(465
)
Changes in operating assets and liabilities (excluding the effects
of business acquisitions)
Accounts receivable
4,872
11,847
Inventory
(3,316
)
(3,969
)
Prepaid expenses, other current assets and other assets
410
(52
)
Accounts payable, accrued expenses and other liabilities
(55
)
(7,242
)
Income taxes receivable
-
(745
)
Income taxes payable
(2,356
)
(5,036
)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
3,297
(3,658
)
INVESTING ACTIVITIES
Purchases of property and equipment
(475
)
(1,047
)
NET CASH USED IN INVESTING ACTIVITIES
(475
)
(1,047
)
FINANCING ACTIVITIES
Proceeds (repayments) of bank borrowings, net
(1,080
)
2,900
Proceeds from the exercise of stock options
22
9
Excess tax benefits from exercise of stock options
-
6
Payment of capital lease obligations
-
(27
)
Cash dividend paid
(311
)
-
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
(1,369
)
2,888
Effect of foreign exchange on cash
442
-
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
1,895
(1,817
)
Cash and cash equivalents at beginning of year
2,972
3,351
CASH AND CASH EQUIVALENTS AT END OF YEAR
$
4,867
$
1,534
LIFETIME BRANDS, INC.
Supplemental Information
(In thousands)
Consolidated EBITDA for the four quarters ended
March 31, 2012
Three months ended March 31, 2012
$
6,222
Three months ended December 31, 2011
14,342
Three months ended September 30, 2011
13,524
Three months ended June 30, 2011
7,512
Total for the four quarters
$
41,600
Consolidated EBITDA for the four quarters ended
March 31, 2011
Three months ended March 31, 2011
$
2,720
Three months ended December 31, 2010
17,544
Three months ended September 30, 2010
13,529
Three months ended June 30, 2010
6,117
Total for the four quarters
$
39,910
Reconciliation of GAAP to Non-GAAP Operating Results
Three Months Ended
March 31,
2012
December 31,
2011
September 30,
2011
June 30,
2011
Net income as reported
$
1,344
$
5,419
$
7,533
$
2,063
Subtract out:
Undistributed equity earnings
(398
)
(925
)
(1,113
)
(393
)
Add back:
Income tax provision (benefit)
588
3,513
2,089
1,108
Interest expense
1,698
1,951
1,789
2,039
Depreciation and amortization
2,207
2,336
2,046
2,020
Stock compensation expense
698
690
682
675
Permitted acquisition related expenses
85
1,358
498
-
Consolidated EBITDA
$
6,222
$
14,342
$
13,524
$
7,512
LIFETIME BRANDS, INC.
Supplemental Information
(In thousands)
Reconciliation of GAAP to Non-GAAP Operating Results (continued)
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