LIFETIME HOAN CORP - 10-K Annual Report

Back to GetFilings.com

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

[X] Annual Report Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
[No Fee Required]
For the fiscal year ended December 31, 2002
or
[ ] Transition Report Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
[No Fee Required]

For the transition period from to

Commission file number 1-19254
Lifetime Hoan Corporation
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or
organization)

11-2682486
(I.R.S. Employer Identification No.)

One Merrick Avenue, Westbury, New York 11590
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code:
(516) 683-6000

Securities registered pursuant to Section 12(b) of the
Act: None

Securities registered pursuant to Section 12(g) of the
Act:

Common Stock, par value $.01 per share
(Title of Class)

Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter
periods that the registrant was required to file such
reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No

Indicate by check mark if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to
this Form 10-K [ ].

Indicate by check mark whether the registrant is an
accelerated filer (as defined by Rule 12b-2 of the
Act).
Yes No X

The aggregate market value of 6,071,000 shares of the
voting stock held by non-affiliates of the registrant
as of June 30, 2002 was approximately $43,286,000.
Directors, executive officers, and trusts controlled
by said individuals are considered affiliates for the
purpose of this calculation, and should not
necessarily be considered affiliates for any other
purpose.

The number of shares of Common Stock, par value $.01
per share, outstanding as of February 28, 2003 was
10,560,704.

DOCUMENTS INCORPORATED BY REFERENCE
See Part III hereof with respect to incorporation by
reference from the registrant's definitive proxy
statement to be filed pursuant to Regulation 14A
under the Securities Exchange Act of 1934 and the
Exhibit Index hereto.

LIFETIME HOAN CORPORATION

FORM 10-K

TABLE OF CONTENTS

PART I
1. Business 3
2. Properties 11
3. Legal Proceedings 11
4. Submission of Matters to a Vote of Security Holders 11

PART II
5. Market for the Registrant's Common Stock and Related
Stockholder Matters 12
6. Selected Financial Data 13
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 14
7A. Quantitative and Qualitative Disclosures about
Market Risk 18
8. Financial Statements and Supplementary Data 19
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 19

PART III
10. Directors and Executive Officers of the Registrant 20
11. Executive Compensation 21
12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters 21
13. Certain Relationships and Related Transactions 21
14. Controls and Procedures 21

PART IV
15. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K 22
Exhibit Index 22
Index to Financial Statements and Financial Statement
Schedule F-1

Signatures

Certifications

2

PART I

ITEM 1. BUSINESS

General

Forward Looking Statements: This Annual Report on Form
10-K contains certain forward-looking statements within
the meaning of the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995,
including statements concerning the Company's products,
results of operations and prospects. These forward-
looking statements involve risks and uncertainties,
including risks relating to general economic and business
conditions, as well as changes which could affect
customer payment practices or consumer spending; industry
trends; the loss of major customers; changes in demand
for the Company's products; the timing of orders received
from customers; cost and availability of raw materials;
increases in costs relating to the manufacture and
transportation of products; dependence on foreign sources
of supply and foreign manufacturing; and the seasonal
nature of the business as detailed elsewhere in this
Annual Report on Form 10-K and from time to time in the
Company's other filings with the Securities and Exchange
Commission. Such statements are based on management's
current expectations and are subject to a number of
factors and uncertainties which could cause actual
results to differ materially from those described in the
forward-looking statements.

The Company is required to file its annual reports on
Forms 10-K and quarterly reports on Forms 10-Q, and other
reports and documents as required from time to time with
the United States Securities and Exchange Commission (the
"SEC"). The public may read and copy any materials which
we file with the SEC at the SEC's Public Reference Room
at 450 Fifth Street, NW, Washington, DC 20549. Such
information may be obtained on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-
0330. The SEC also maintains an Internet site that
contains reports, proxy and information statements, and
other information regarding the Company's electronic
filings with the SEC at http://www.sec.gov. The Company
also maintains a website at http://www.lifetime.hoan.com
where users can access the Company's electronic filings
free of charge.

Lifetime Hoan Corporation designs, markets and
distributes a broad range of household cutlery, kitchen
tools and gadgets, cutting boards, pantryware and
bakeware products. The Company has developed a strong
consumer franchise by promoting and marketing innovative
products under both owned and licensed trade names.
Owned trade names include Hoffritz(R), Roshco(R), Baker's
Advantage(R), Kamenstein(R), Casa Moda(TM), Hoan(R),
Tristar(R) and Old Homestead(R). Licensed trade names include
Farberware(R), KitchenAid(R), Cuisinart(R) and various
names under license from The Pillsbury Company. The
Farberware(R) trade name is used pursuant to a 200 year
royalty-free license. As used herein, unless the context
requires otherwise, the terms "Company" and "Lifetime"
mean Lifetime Hoan Corporation and its subsidiaries.

Sales growth is stimulated by expanding product offerings
and penetrating various channels of distribution, both
domestically and to a lesser extent internationally. In
addition, the Company has entered into the following
acquisitions and agreements since 1995:

Hoffritz(R)

In 1995, the Company acquired the Hoffritz(R)trademarks
and brand name. The Company uses the name on
various products including cutlery, scissors, personal
care implements, kitchen tools, bakeware, barware and
barbecue accessories. The Company believes that Hoffritz(R)
is a well-known, respected name with a history of
quality. The acquisition of the brand name has enabled
the Company to sell products at higher price points than
the rest of the Company's products. Since acquiring the
brand name, the Company has continuously designed and
developed new items each year and currently sells
approximately 600 types of items under the Hoffritz brand
name. The Company markets these products primarily
through major department stores and high end specialty
stores nationwide.

3

Farberware(R)

In 1996, the Company entered into an agreement to
acquire certain assets of Farberware, Inc.
("Farberware"). Under the terms of the acquisition
agreement the Company acquired a 200 year, royalty-free,
exclusive right to use the Farberware(R) name in connection
with the product lines covered by its then existing
license agreements, which included kitchen cutlery
products (excluding flatware) and kitchen tools such as
spatulas, barbecue forks and kitchen "gadgets" (but
excluding appliances), plus certain limited additional
products. The Company also acquired 50 Farberware retail
outlet stores as part of the acquisition agreement. In
addition, rights to license the Farberware(R) name for use
by third parties in certain product categories are held
by a joint venture, owned equally by the Company and
Farberware Licensing Corporation.

Meyer Agreement

In 1997, the Company entered into an agreement with Meyer
Corporation, regarding the operation of the Company's
Farberware(R) retail outlet stores. Pursuant to the
agreement, the Company continues to own and operate the
Farberware(R) retail outlet stores, which the Company
acquired in 1996, and Meyer Corporation, the licensed
manufacturer of Farberware(R) branded cookware products,
assumes responsibility for merchandising and stocking
cookware products in the stores. Meyer Corporation
receives all revenue from sales of Farberware(R) cookware,
currently occupies 50% of the space in each store and
reimburses the Company for 50% of the operating expenses
of the stores. In fiscal years 2000 and 2001, the
Company and Meyer Corporation each occupied 40% of the
space in the outlet stores, as Salton, Inc. was
responsible for the other 20% of the space. See
paragraph below entitled "Salton Agreement".

Roshco Acquisition

In 1998, the Company acquired all of the
outstanding common stock of Roshco, Inc. ("Roshco"), a
privately-held bakeware and baking-related products
distributor, located in Chicago, Illinois. Roshco
markets its bakeware and baking-related products under
the Roshco(R) and Baker's Advantage(R) trade names. The
purchase price consisted of an initial cash payment of
$5.0 million and notes payable of $1.5 million. The
Company paid off these notes with $500,000 payments in
each of 2001, 2000 and 1999. The Company was also
obligated to make additional payments based on the annual
sales volume for bakeware and baking-related products for
a period of two years. In 1999 and 2000, the Company paid
approximately $416,000 and $543,000, respectively, to
fulfill its obligation to make any such additional
payments. The Company also assumed bank debt of $2.6
million that was paid on the acquisition date.

4

Kamenstein Acquisition

Effective September 1, 2000, the Company acquired the
assets and certain liabilities of M. Kamenstein, Inc.
("Kamenstein"), a privately-held 107-year old housewares
company, whose products include pantryware, teakettles,
and home organization accessories. Kamenstein's revenues
were approximately $21.0 million for the twelve month
period ended August 31, 2000. In acquiring Kamenstein,
the Company assumed bank debt and other indebtedness of
approximately $10.0 million. The Company is obligated to
make contingent payments based on the annual gross profit
earned on the sales of the business for a period of 3
years.

KitchenAid Agreement

On October 16, 2000, the Company entered into a licensing
agreement with KitchenAid, a division of the Whirlpool
Corporation. This agreement allows the Company to
design, manufacture and market an extensive range of
kitchen utensils, barbecue items, and pantryware products
under the KitchenAid(R) brand name. On January 1, 2002,
the licensing agreement between the Company and
KitchenAid, was amended, expanding the covered products
to include bakeware and baking related products.
Shipments of products under the KitchenAid(R) name began
in the second quarter of 2001.

Cuisinart Agreement

On March 19, 2002, the Company entered into a licensing
agreement with Conair Corporation. This agreement allows
the Company to design, manufacture and market a wide
variety of kitchen cutlery products under the Cuisinart(R)
brand name. Shipments of products under the Cuisinart(R)
name began in the fourth quarter of 2002.

Salton Agreement

In January 2000, the Company entered into an agreement
with Salton Inc. regarding the operation of the Company's
Farberware(R) retail outlet stores. Pursuant to the
agreement, the Company continued to own and operate the
Farberware(R) retail outlet stores, which the Company
acquired in 1996, and Salton Inc., the licensed
manufacturer of Farberware(R) branded electric products,
assumed responsibility for merchandising and stocking
electric products in the stores. Salton Inc. received all
revenue from sales of Farberware(R) electric products,
occupied 20% of the space in each store and reimbursed
the Company for 20% of the operating expenses
attributable to the stores. Salton, Inc. terminated the
agreement effective December 31, 2001. Effective January
1, 2002, a new agreement was entered into under which the
additional 20% of space in each store is co-managed by
the Company and Meyer.

Prestige Acquisition and Disposition

In September 1999, the Company acquired 51% of the
capital stock of Prestige Italiana, Spa. ("Prestige
Italy") and Prestige Haushaltswaren GmbH ("Prestige
Germany" and together with Prestige Italy, the "Prestige
Companies") for approximately $1.3 million in cash.
Effective September 27, 2002, the Company sold its
interest in Prestige Italiana, Spa and, together with its
minority interest shareholder, caused Prestige
Haushaltswaren GmbH to sell all of its receivables and
inventory to a European housewares distributor. As a
result the Company received approximately $1.0 million in
cash. The sale resulted in a net loss of approximately
$811,000 which included the write-off of goodwill of
approximately $540,000. For 2000, 2001 and 2002, the
Company has reclassified its financial statements to
classify the operations of the Prestige Companies as
discontinued operations.

The Prestige Companies marketed and distributed kitchen
tools, gadgets, cutlery and bakeware under the Prestige(R)
trade name in Italy and Germany.

5

Products

The Company designs, markets and distributes a broad
range 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), Kamenstein(R), Hoan(R) and Baker's
Advantage(R).

Cutlery

The Company markets and distributes household cutlery
under a variety of trade names including Farberware(R),
Cuisinart(R), Hoffritz(R) and Tristar(R). Cutlery is sold
individually, in blister packages, boxed sets and in sets
fitted into wooden counter blocks, resin carousels and
stainless carousels.

Kitchen Tools and Gadgets

The Company sells over 4,000 kitchen tools and gadget
items under various trade names including Farberware(R),
Hoffritz(R), KitchenAid(R), Hoan(R) and Smart Choice. The
kitchenware items are manufactured to the Company's
specifications outside the United States and are
generally shipped fully assembled. These items are
typically packaged on a card, which can be mounted for
sale on racks at the retailers' premises for maximum
display visibility. Products include the following:

Kitchen Tools and Gadgets

Food preparation and serving tools such as metal, plastic
and wooden spoons, spatulas, serving forks, graters,
strainers, ladles, shears, vegetable and fruit knives,
juicers, pizza cutters, pie servers, and slicers.

Barbecue accessories, in sets and individual pieces,
featuring such items as spatulas, tongs, forks, skewers,
hamburger and fish grills, brushes, corn holders, food
umbrellas, and nut and lobster crackers.

Impulse Purchase Products

J-Hook and Clip Strip merchandising systems are
distributed by the Company to create additional selling
space for this line in stores. The line consists of a
variety of quality, novelty items designed to trigger
impulse buying. This line is targeted towards
supermarkets and mass merchants.

6

Cutting Boards
The Company designs and markets a full range of cutting
boards made of polyethylene, wood, glass and acrylic.
These products are distributed under several trade names
including Farberware(R), KitchenAid(R) and Hoffritz(R). All
cutting boards are imported. Boards are also packaged
with cutlery items and kitchen gadgets.

Bakeware
The Company designs, markets and distributes a variety of
bakeware and baking related products. Trade names that
these products are sold under include Hoffritz(R),
KitchenAid(R), Baker's Advantage(R), Roshco(R) and under a
license from Pillsbury, one of America's best known
brands of baking accessories, on such items as pastry
brushes, spatulas, whisks, spoon and cup sets, cookie
cutters, mixing spoons and magnets.

This product line includes baking, measuring, and
rangetop products such as cookie sheets, muffin, cake and
pie pans, drip pans, bake, roast and loaf pans, scraper
sets, whisks, cutters, rolling pins, baking shells,
baking cups, measuring devices, thermometers, timers,
pizza stones, fondues, woks, ceramics and coasters.
These items are manufactured to the Company's
specifications outside the United States and are
generally shipped fully assembled.

Pantryware
In September 2000 with the acquisition of Kamenstein, the
Company began to design, market and distribute
pantryware, teakettles, spice racks and home organization
accessories. Products are distributed under the trade
names Kamenstein(R), MKI(R), Farberware(R), Norman Rockwell(R),
Gracie Knight(R), Warren Kimble(R) and Debbie Mumm(R).

These product lines include bread boxes, mug holders,
paper towel dispensers, spice carousels, mail caddy's,
enamel teakettles, stainless steel teakettles, storage
and organization products and hardwood message centers.
These items are manufactured to the Company's
specifications outside the United States and are
generally shipped fully assembled. The spices in the
spice carousels are filled domestically in Kamenstein's
Massachusetts warehouse.

New Products

The Company has a design and development department
consisting of 24 employees who create new products,
packaging and merchandising concepts. In excess of 600
items were developed or remodeled in 2002, including the
following:

KitchenAid: Expansion of over 80 new items in the
Company's premium line of culinary tools, gadgets, and
cutting boards. Most significantly were the digital
timer, multi-chopper, multi-slicer, rotary grater,
silicone cookware "grabbers", innovative patented
silicone spatulas, full line of barbecue equipment, a
wide array of gift sets at key price points, and a full
assortment of cutting boards with non-slip corners.

Cutlery and Cutting Boards: Introduction of 3 lines of
Cuisinart(R) branded cutlery, an Ultra-Edge series,
featuring the finest quality cutlery steel available,
with a unique handle design. Combined, the lines offer
over 70 items of open stock, wood presentation box gift
sets, and knife block sets. Continued expansion of the
Farberware(R) brand to include the 200CX line of stainless
and the Contour series with a wire and wood block, plus
carving sets and steak sets in wood presentation gift
boxes. Also a new Eurostar line that includes open stock
and cutlery carousels, new black and stainless steel
carousel designs for many lines, 6-piece cutting board
and cutlery sets in both Farberware(R) Professional and
Farberware(R) Pro Stainless, Tristar(R) 15-piece and 21-
piece block sets, 23-piece sets in Farberware(R) Pro Forged
and Farberware(R) Pro Stainless, and steak and carving sets
in pine storage cases in Farberware(R) Pro Forged. Also,
the introduction of Polypropylene cutting boards with non-
slip corners as well as glass cutting boards with non-
slip corners.

Gadgets: Completion of the entire redesign of all
Farberware(R) lines, as well as, the introduction of 25 new
items in Farberware(R) Professional, and a new line of over
20 items of Farberware(R) Soft Handle.

7

Bakeware: Introduction of 18 items of premium quality,
heavy duty KitchenAid(R) bakeware, featuring a
revolutionary patented "Slider" cookie sheet in 3 sizes
and Create `N Present baking pans. Expansion of Roshco(R)
ceramic bakeware, including large piece-count sets,
Roshco(R) glass-bottom springform pan, Roshco(R) fondues and
roasters, and many specialty items such as shaped fluted
tube pans and copper cookie cutter sets.

Kamenstein: 2 new lines of wood pantryware in both
natural and black wood finishes, new line of Soho-style
pantryware, expansion of the Chromeworks line,
introduction of "Scribe", a wire based line of
pantryware, 2 new Noveltea(R) teakettles, the American as
Apple Pie series, 2 new lines, Savannah and Fruit, under
the Cheri Blum(R) license, a new Debbie Mumm(R) collection of
Lavender Tea Garden, and 3 collections of Pfaltzgraff
branded pantry ware, French Quarter, Naturewood, and
Orleans. In all, over 100 new products were introduced
in Kamenstein in 2002.

Casa Moda(TM): Creation of a new division that will
encompass barware, serveware, and entertaining. The
first offerings will be a line of barware in 6 colors to
include such items as ice buckets, cocktail shakers and
wine coolers, as well as, innovative stainless steel ice
buckets and bar and wine accessories like wine racks and
corkscrews. There will also be a full array of hostess
and serving items, such as cheese boards, chip and dip
sets, serving trays, and drinkware, using combinations of
wood, ceramic, marble, glass, and steel.

8

Sources of Supply

The Company sources its products from approximately 48
manufacturers located primarily in the People's Republic
of China, and to a smaller extent in the United States,
Thailand, Malaysia, Indonesia, Taiwan, and Italy. A
majority of the Company's cutlery was purchased from
three suppliers in 2002 who accounted for 58%, 20%, and
10% of the total purchases, respectively, and from five
suppliers in 2001 who accounted for 28%, 21%, 14%, 11%
and 10% of the total purchases, respectively. A majority
of the Company's pantryware was purchased from three
suppliers in 2002 that accounted for 37%, 19%, and 13% of
the total purchases, respectively, and from four
suppliers in 2001 that accounted for 23%, 19%, 17%, and
16% of the total purchases, respectively. An
interruption of supply from any of these manufacturers
could have an adverse impact on the Company's ability to
fill orders on a timely basis. However, the Company
believes other manufacturers with whom the Company does
business would be able to increase production to fulfill
the Company's requirements.

The Company's policy is to maintain several months supply
of inventory and, accordingly, it orders products
substantially in advance of anticipated time of sale to
its customers. While the Company does not have any long-
term formal arrangements with any of its suppliers, in
certain instances, particularly in the manufacture of
cutlery, the Company places firm commitments for products
several months in advance of receipt of firm orders from
customers. Lifetime's arrangements with most
manufacturers allow for flexibility in modifying the
quantity, composition and delivery dates of each order.
All purchase orders are in United States dollars.

Marketing

The Company markets its product lines directly through
its own sales force and through a network of independent
sales representatives. The Company's products are sold
primarily in the United States to approximately 800
customers including national retailers, department store
chains, mass merchant retail and discount stores,
supermarket chains, warehouse clubs, direct marketing
companies and specialty chains and through other channels
of distribution. During the years ended December 31,
2002, 2001 and 2000, Wal-Mart Stores, Inc. accounted for
approximately 20%, 18% and 12% of net sales,
respectively. No other customer accounted for 10% or
more of the Company's net sales during 2002, 2001 and
2000.

Competition

The markets for household cutlery, kitchenware, cutting
boards, pantryware and bakeware are highly competitive
and include numerous domestic and foreign competitors,
some of which are larger than the Company. The primary
competitive factors in selling such products to retailers
are consumer brand name recognition, quality, packaging,
breadth of product line, distribution capability, prompt
delivery and price to the consumer.

9

Patents and Trademarks

The Company uses a number of owned trademarks, primarily
Hoffritz(R), Baker's Advantage(R), Roshco(R), Kamenstein(R),
Tristar(R) and Hoan(R), as well as Farberware(R) which is
licensed under a 200 year royalty-free agreement, which
the Company considers significant to its competitive
position. Some of these trademarks are registered in the
United States and others have become distinctive marks as
to which the Company has acquired common law rights. The
Company also has licensed trademarks from The Pillsbury
Company, KitchenAid which is a division of the Whirlpool
Corporation and Cuisinart which is a division of Conair
Corporation, which the Company uses in its business. The
Company also owns several design and utility patents
expiring from 2003 to 2017 on the overall design of some
of its products. The Company also acquired patents,
trademarks and copyrights as part of the Hoffritz(R),
Roshco and Kamenstein acquisitions that expire from 2003
to 2022. The Company believes that the expiration of any
of its patents would not have a material adverse effect
on its business.

Seasonality

Although the Company sells its products throughout the
year, the Company has traditionally had higher net sales
during its third and fourth quarters. The following
table sets forth the quarterly net sales from continuing
operations for the years ended December 31, 2002, 2001
and 2000:

Net Sales (in thousands)

Backlog

The Company receives projections on a seasonal basis from
its principal customers; however, firm purchase orders
are most frequently placed on an as needed basis. The
Company's experience has been that while there may be
some modifications of customers' projections, the Company
is able, with some degree of certainty, to predict its
product needs.

The Company's backlog at December 31, 2002 and 2001 was
$7,555,000 and $8,368,000, respectively. The Company
expects to fill the 2002 backlog during 2003. The
Company does not believe that backlog is indicative of
its future results of operations or prospects. Although
the Company seeks commitments from customers well in
advance of shipment dates, actual confirmed orders are
typically not received until close to the required
shipment dates.

Employees

As of December 31, 2002, Lifetime had 657 full-time
employees, of whom 5 were employed in an executive
capacity, 80 in sales, marketing, design or product
development, 63 in financial, administrative or clerical
capacities, 249 in warehouse or distribution capacities
and 260 were outlet store personnel. None of the
Company's employees are represented by a labor union. The
Company considers its employee relations to be good.

10

ITEM 2. PROPERTIES

The following table describes the facilities at which the
Company operates its business:

In addition to the properties listed above, the Company's
Outlet Store subsidiary leases approximately 58 stores in
retail outlet centers located in 24 states throughout the
United States. The square footage of the stores range
from approximately 2,000 square feet to 5,500 square
feet. The terms of these leases range from month-to-
month to five years with expiration dates beginning in
January 2003 and extending through April 2008.

ITEM 3. LEGAL PROCEEDINGS

The Company is, from time to time, a party to litigation
arising in the normal course of its business. The
Company believes that there are currently no material
legal proceedings the outcome of which would have a
material adverse effect on the Company's consolidated
financial position or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS

Not applicable.

11

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND
RELATED STOCKHOLDER MATTERS

The Company's Common Stock is traded under the symbol
"LCUT" on The Nasdaq National Market ("Nasdaq") and has
been since its initial public offering in June 1991. The
Board of Directors of the Company has authorized a
repurchase of up to 3,000,000 of its outstanding shares
of common stock in the open market. Through December 31,
2002, a total of 2,128,000 shares of common stock had
been repurchased and retired at a cost of approximately
$15,235,000.

The following table sets forth the high and low sales
prices for the Common Stock of the Company for the fiscal
periods indicated as reported by Nasdaq.

At December 31, 2002, the Company estimates that there
were approximately 700 beneficial holders of the Common
Stock of the Company.

The Company is authorized to issue 2,000,000 shares of
Series B Preferred Stock, none of which is outstanding.

The Company paid quarterly cash dividends of $0.0625 per
share, or a total annual cash dividend of $0.25 per
share, on its Common Stock in each of 2002 and 2001. The
Board of Directors currently intends to continue to pay
quarterly cash dividends of $0.0625 per share of Common
Stock for the foreseeable future, although the Board may
in its discretion determine to modify or eliminate such
dividends at any time.

The following table summarizes the Company's equity
compensation plans as of December 31, 2002:

12

ITEM 6. SELECTED FINANCIAL DATA

The selected consolidated income statement data for the
years ended December 31, 2002, 2001 and 2000, and the
consolidated balance sheet data as of December 31, 2002
and 2001, have been derived from the Company's audited
consolidated financial statements included elsewhere in
this Annual Report on Form 10-K. The selected
consolidated income statement data for the years ended
December 31, 1999 and 1998, and the selected consolidated
balance sheet data as of December 31, 2000, 1999 and
1998, are derived from the Company's audited consolidated
financial statements which are not included in this
Annual Report on Form 10-K.

13

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS
General
The following discussion should be read in conjunction
with the consolidated financial statements for the
Company and notes thereto set forth in item 8.

Critical Accounting Policies and Estimates
Management's Discussion and Analysis of Financial
Condition and Results of Operations discusses the
Company's consolidated financial statements, which have
been prepared in accordance with accounting principles
generally accepted in the United States. The preparation
of these financial statements requires management to make
estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues
and expenses during the reporting period. On an on-going
basis, management evaluates its estimates and judgements,
including those related to inventories. Management bases
its estimates and judgements on historical experience and
on various other factors that are believed to be
reasonable under the circumstances, the results of which
form the basis for making judgements about the carrying
values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ
from these estimates under different assumptions or
conditions.

Merchandise inventories, principally finished goods, are
priced by the lower of cost (first-in, first-out basis)
or market method. Reserves for excess or obsolete
inventory reflected in the Company's consolidated balance
sheets at December 31, 2002 and 2001 are determined to be
adequate by the Company's management; however, there can
be no assurance that these reserves will prove to be
adequate over time to provide for ultimate losses in
connection with the Company's inventory. The Company's
management periodically reviews and analyzes inventory
reserves based on a number of factors including, but not
limited to, future product demand of items and estimated
profitability of merchandise.

Effective January 1, 2002, the Company adopted Statement
of Financial Accounting Standard ("SFAS") No. 141,
"Business Combinations" and SFAS No. 142, "Goodwill and
Other Intangible Assets". SFAS No. 141 requires all
business combinations initiated after June 30, 2001 to be
accounted for using the purchase method. Under SFAS No.
142, goodwill and intangible assets with indefinite lives
are no longer amortized but are reviewed at least
annually for impairment. In 2002, the Company completed
its initial assessment, as of January 1, 2002, of the
assets impacted by the adoption of SFAS No. 142, and its
annual assessment as of December 31, 2002. Based upon
such reviews, no impairment to the carrying value of
goodwill was identified, and the Company ceased
amortizing goodwill effective January 1, 2002.

The following table sets forth income statement data of
the Company as a percentage of net sales for the periods
indicated below.

14

2002 COMPARED TO 2001

Net Sales

Net sales in 2002 were $131.2 million, a decrease of
approximately $3.8 million, or 2.8% lower than 2001. The
lower sales volume was primarily the result of decreased
sales in the Kamenstein business due to lost sales to
customers that were no longer in business in 2002 as
compared to 2001 and a major fall promotion that did not
perform as projected. Sales were also lower in the
Company's traditional or core business as first quarter
2002 shipments were negatively impacted by issues related
to the January 2002 startup of the Company's new
automated warehouse in Robbinsville, New Jersey, offset
by increased sales in the Company's Farberware Outlet
stores.

Cost of Sales

Cost of sales for 2002 was $73.1 million, a decrease of
approximately $2.5 million, or 3.3% lower than 2001.
Cost of sales as a percentage of net sales decreased to
55.7% in 2002 from 56.0% in 2001, due primarily to higher
gross margins generated by the Company's Kamenstein
business, the result of better sourcing of products from
suppliers and changes in product mix.

Distribution Expenses

Distribution expenses were $21.4 million for 2002 as
compared to $21.2 million for 2001. These expenses
included relocation charges, duplicate rent and other
costs associated with the Company's move into its
Robbinsville, New Jersey warehouse amounting to $2.2
million in 2002 and $2.9 million in 2001. Excluding
these moving related costs, distribution expenses were
4.9% higher in 2002 as compared to 2001 due to higher
depreciation expense related to capital expenditures for
the new automated warehouse system and related equipment
and higher freight out costs, partially offset by lower
payroll costs.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for 2002
were $29.8 million, a decrease of $1.5 million, or 4.7%,
from 2001. The decrease in selling, general and
administrative expenses is primarily attributable to less
bad debt expense and decreased selling costs on lower
sales volume.

15

2001 COMPARED TO 2000

Net Sales

Net sales in 2001 were $135.1 million, an increase of
approximately $13.9 million, or 11.5% higher than 2000.
The sales increase was primarily attributable to the M.
Kamenstein, Inc. business, acquired in September 2000,
which contributed $21.6 million to net sales during the
full year in 2001 as compared to $7.6 million for the
last four months in 2000.

Cost of Sales

Cost of sales for 2001 was $75.6 million, an increase of
approximately $5.4 million, or 7.7% higher than 2000.
Cost of sales as a percentage of net sales decreased to
56.0% from 57.9%. The increase in cost of sales was
primarily the result of adding a full year of sales in
2001 for the M. Kamenstein, Inc. business acquired in
September 2000 as compared to the last four months of
2000. The improvement in the cost of sales-to-sales
relationship was attributed to higher cost of sales in
2000, which included the impact of a $4.0 million charge
due to an inventory shortfall revealed during the 2000
year-end physical inventory.

Distribution Expenses

Distribution expenses were $21.2 million for 2001, or
34.5% higher than 2000. Distribution expenses in 2001
included $2.9 million of relocation charges and duplicate
rent and other expenses associated with the Company's
move into its new New Jersey warehouse. Excluding these
moving related costs, distribution expenses in 2001
increased by $2.5 million, or 15.8% over 2000. The
increased costs were primarily attributable to the added
distribution expenses of the M. Kamenstein, Inc. business
for an entire year in 2001 as compared to only four
months in 2000 and higher fourth quarter warehouse
operating expenses in the Company's traditional or core
business.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for 2001
were $31.3 million, an increase of $3.6 million, or 13.0%
over 2000. The increase in selling, general and
administrative expenses was primarily attributable to the
added selling, general and administrative expenses of the
M. Kamenstein, Inc. business for an entire year in 2001
as compared to only four months in 2000 and higher
operational payroll and payroll related expenses for the
year 2001 as compared to 2000.

Interest Expense

Interest expense for 2001 was $1.0 million, an increase
of $285,000 from 2000. This increase was attributable to
a higher level of borrowings throughout 2001 under the
Company's lines of credit, offset in part by lower rates
of interest in 2001.

16

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2002, the Company had cash and cash
equivalents of $62,000, a decrease of $5.0 million from
the prior year, borrowings decreased from the prior year
by $8.6 million to $14.2 million at December 31, 2002,
working capital was $31.4 million, an increase of $2.3
million from December 31, 2001, and the current ratio was
1.94 to 1. The increase in working capital primarily
resulted from an increase in merchandise inventories and
a decrease in accounts payable and trade acceptances.

Cash provided by operating activities was approximately
$6.8 million, primarily resulting from net income before
depreciation, amortization, provisions for losses on
accounts receivable and other non-cash charges, offset
partially by net changes in other working capital items.
Cash used in investing activities was approximately
$822,000, which was primarily the result of the purchase
of fixed assets offset by cash received from the disposal
of the Prestige Companies. Cash used in financing
activities was approximately $11.0 million, primarily
resulting from the payment of short term borrowings and
cash dividends paid.

Capital expenditures were $1.8 million in 2002 and $13.3
million in 2001. Approximately $11.4 million of the 2001
capital expenditures were for equipment and leasehold
improvements for the Company's new warehouse facility in
New Jersey. Total planned capital expenditures for 2003
are estimated at $2.0 million. These expenditures are
expected to be funded from current operations, cash and
cash equivalents and, if necessary, borrowings under the
revolving credit agreement.

As of December 31, 2002, the Company's contractual
obligations were as follows (in thousands of dollars):

The Company has a $40 million three-year, secured,
reducing revolving credit facility under an agreement
(the "Agreement") with a group of banks. The Agreement
is secured by all of the assets of the Company and
reduces to $35 million at December 31, 2003 and through
the maturity date. Under the terms of the Agreement, the
Company is required to satisfy certain financial
covenants, including limitations on indebtedness and sale
of assets; a minimum fixed charge ratio; and net worth
maintenance. Borrowings under the Agreement have
different interest rate options that are based on either
an alternate base rate, LIBOR rate, or a lender's cost of
funds rate. As of December 31, 2002, the Company had $2.5
million of letters of credit and trade acceptances
outstanding and $14.2 million of borrowings under
the Agreement and, as a result, the availability under
the Agreement was $23.3 million. Interest rates on
borrowings at December 31, 2002 ranged from 4.125% to
4.75%.

17

Products are sold to retailers primarily on 30-day credit
terms, and to distributors primarily on 60-day credit
terms. As of December 31, 2002, the Company had an
aggregate of $2.1 million of accounts receivable
outstanding in excess of 60 days or approximately 7.7% of
gross receivables, and had inventory of $41.3 million.

The Company believes that its cash and cash equivalents
plus internally generated funds and its credit
arrangements will be sufficient to finance its operations
for the next twelve months.

The results of operations of the Company for the periods
discussed have not been significantly affected by
inflation or foreign currency fluctuations. The Company
negotiates all of its purchase orders with its foreign
manufacturers in United States dollars. Thus,
notwithstanding any fluctuations in foreign currencies,
the Company's cost for a purchase order is generally not
subject to change after the time the order is placed.
However, the weakening of the United States dollar
against local currencies could lead certain manufacturers
to increase their United States dollar prices for
products. The Company believes it would be able to
compensate for any such price increase.

Item 7A. Quantitative and Qualitative Disclosures About
Market Risk

Market risk represents the risk of loss that may impact
the consolidated financial position, results of
operations or cash flows of the Company. The Company is
exposed to market risk associated with changes in
interest rates. The Company's revolving credit facility
bears interest at variable rates and, therefore, the
Company is subject to increases and decreases in interest
expense on its variable rate debt resulting from
fluctuations in interest rates. There have been no
changes in interest rates that would have a material
impact on the consolidated financial position, results of
operations or cash flows of the Company for the year
ended December 31, 2002.

18

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Company's Consolidated Financial Statements as of and
for year ended December 31, 2002 are included herein
commencing on page F-1.

The following is a summary of the unaudited quarterly
results of operations for the years ended December 31,
2002 and 2001.

The unaudited quarterly results of operations shown above
have been adjusted to present the results of operations
of the Prestige Companies (sold in September 2002) as
discontinued operations.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

19
PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth certain information
concerning the Executive Officers and Directors of the
Company:

Mr. Siegel has been continuously employed by the
Company as its President since 1999. In 2000, Mr. Siegel
became the Chief Executive Officer of the Company. In
2001, Mr. Siegel became the Chairman of the Board of
Directors. Prior thereto Mr. Siegel was Executive Vice
President of the Company since 1967.

Mr. Cohen was first elected a Director in 1998 and has
been continuously employed by the Company in his present
capacity since 1999. Prior thereto Mr.Cohen was a Vice
President - National Sales Manager for the Company since
1991.

Mr. Miller was named Executive Vice President in 2002.
Prior thereto Mr. Miller was a Senior Vice President -
Sales for the Company since 2000. Prior thereto, Mr.
Miller was Vice President - National Sales Manager for
the Company since 1985.

Mr. Reichenbach was named Executive Vice President in
2002. Prior thereto Mr. Reichenbach was President of the
Cutlery Division for the Company since 2001. Prior
thereto, Mr. Reichenbach was Senior Vice President -
General Merchandise Manager for Linen's N Things since
1998.

Mr. Phillips has been continuously employed by the
Company in his present capacity since 1981.

Mr. McNally has been continuously employed by the
Company in his present capacity since 1997.

Mr. Shiftan has been a consultant to the Company since
2002. Prior thereto, Mr. Shiftan had served as Deputy
Executive Director of The Port Authority of New York &
New Jersey from 1998 to 2002. Mr. Shiftan is also a
director of Rumson Fair Haven Bank & Trust Co., the
shares of which are traded on the NASDAQ Bulletin Board
(RFHB.OB).
20

Mr. Bernstein has been a member of the Certified Public
Accounting firm, Cole, Samsel & Bernstein LLC (and its
predecessors), for approximately fifty years.

Mr. Florence has been Chairman of the Board of
Syratech, Inc., a consumer products company, since 1986.
Mr. Florence was Chief Executive Officer and President of
Syratech, Inc. from 1986 to 2001.

Jeffrey Siegel and Craig Phillips are cousins.

Bruce Cohen and Evan Miller are brothers-in-law.

The Board of Directors has an audit committee, whose
two members (Messrs. Bernstein and Florence) are
independent directors.

The directors and officers of the Company are elected
annually by the stockholders and Board of Directors of
the Company, respectively. Directors serve until the next
annual meeting of the stockholders or until their
successors have been elected and qualified or until their
earlier resignation or removal. Officers are elected at
the first Board of Directors meeting following the annual
stockholders meeting and serve at the pleasure of the
Board of Directors.

Directors who are not employees of the Company receive
a retainer of $10,000 per year, and an additional fee of
$1,000 for each Board meeting attended, plus
reimbursement of reasonable out-of-pocket expenses.
Directors who are employees of the Company do not receive
compensation for serving as directors or attending
meetings. The Company has entered into indemnification
agreements with the directors and officers of the
Company.

ITEM 11. EXECUTIVE COMPENSATION

This information is hereby incorporated by reference, to
appear under the caption "Executive Compensation" in the
Company's definitive Proxy Statement for its 2003 Annual
Meeting of Stockholders.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

This information is hereby incorporated by reference, to
appear under the caption "Principal Stockholders" in the
Company's definitive Proxy Statement for its 2003 Annual
Meeting of Stockholders.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

This information is hereby incorporated by reference, to
appear under the caption "Certain Transactions" in the
Company's definitive Proxy Statement for its 2003 Annual
Meeting of Stockholders.

ITEM 14. CONTROLS AND PROCEDURES

The Chief Executive Officer and the Chief Financial
Officer of the Company (its principal executive officer
and principal financial officer, respectively) have
concluded, based on their evaluation as of a date within
90 days prior to the date of the filing of this Annual
Report on Form 10-K, that the Company's controls and
procedures are effective to ensure that information
required to be disclosed by the Company in the reports
filed by it under the Securities and Exchange Act of
1934, as amended, is recorded, processed, summarized and
reported within the time periods specified in the SEC's
rules and forms, and include controls and procedures
designed to ensure that information required to be
disclosed by the Company in such reports is accumulated
and communicated to the Company's management, including
the Chief Executive Officer and Chief Financial Officer
of the Company, as appropriate to allow timely decisions
regarding required disclosure.

There were no significant changes in the Company's
internal controls or in other factors that could
significantly affect these controls subsequent to the
date of such evaluation.
21

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K

(a) (1) and (2) - see list of Financial Statements and
Financial Statement Schedule on F-1.

(b) Reports on Form 8-K in the fourth quarter of 2002.

None.

(c) Exhibits*:

Exhibit
No. Description

3.1 Restated Certificate of Incorporation of the Company
(incorporated herein by reference to Exhibit 3[a] to
Form S-1 [No. 33-40154] of Lifetime Hoan
Corporation).

3.2 Amendment dated June 9, 1994 to the Restated
Certificate of Incorporation of the Company (incorporated
herein by reference to the December 31, 1994 Form 10-K
[No. 1-19254] of Lifetime Hoan Corporation).

3.3 By-Laws of the Company (incorporated herein by
reference to Exhibit 3[b] to Form S-1 [No. 33-40154]
of Lifetime Hoan Corporation).

10.1 Loan Agreement dated as of May 11, 1988 with Bank of
New York, as amended (incorporated by reference to
Exhibit 10[d] to Form S-1 [No. 33-40154] of Lifetime
Hoan Corporation).

10.2 Amendment No. 6 dated as of March 5, 1992 between
Lifetime Hoan Corporation and The Bank of New York
(incorporated by reference to the December 31, 1991
Form 10-K [No. 1-19254] of Lifetime Hoan
Corporation).

10.3 Stock Option Plan for key employees of Lifetime Hoan
Corporation, as amended June 9, 1994 (incorporated
by reference to the December 31, 1994 Form 10-K [No.
1-19254] of Lifetime Hoan Corporation).

10.4 Promissory notes dated December 17, 1985 of Milton
L. Cohen, Jeffrey Siegel, Craig Phillips and Robert
Phillips, as amended (incorporated by reference to
Exhibit 10[f] to Form S-1 [No. 33-40154] of Lifetime
Hoan Corporation).

10.5 Lease to Dayton, New Jersey premises dated August
20, 1987 and amendment between the Company and Isaac
Heller (incorporated by reference to Exhibit 10[h]
to Form S-1 [No. 33-40154] of Lifetime Hoan
Corporation).

10.6 License Agreement dated December 14, 1989 between
the Company and Farberware, Inc. (incorporated by
reference to Exhibit 10[j] to Form S-1 [No. 33-
40154] of Lifetime Hoan Corporation).

10.7 License Agreement dated as of April 19, 1991 between
the Company and The Pillsbury Company (incorporated
by reference to Exhibit 10[m] to Form S-1 [No. 33-
40154] of Lifetime Hoan Corporation).

22

10.8 Real Estate Sales Agreement dated October 28, 1993
between the Company and The Olsten Corporation
(incorporated by reference to the December 31, 1993
Form 10-K [No. 1-19254] of Lifetime Hoan
Corporation).

10.9 Amendment to the Real Estate Sales Agreement dated
September 26, 1994 between the Company and The
Olsten Corporation. (incorporated by reference to
the December 31, 1995 Form 10-K [No. 1-19254] of
Lifetime Hoan Corporation).

10.10 Lease to additional Dayton, New Jersey premises
dated December 7, 1994. (incorporated by reference
to the December 31, 1995 Form 10-K [No. 1-19254] of
Lifetime Hoan Corporation).

10.11 License Agreement dated December 21, 1995
between the Company and The Walt Disney Company.

10.12 Memorandum of purchase dated September 18, 1995
between the Company and Alco Capital Group, Inc.
(incorporated by reference to the September 30, 1995
Form 10-Q [No. 1-19254] of Lifetime Hoan
Corporation).

10.13 Registration Rights Agreement dated September 18,
1995 between the Company and Alco Capital Group,
Inc. (incorporated by reference to the September 30,
1995 Form 10-Q [No. 1-19254] of Lifetime Hoan
Corporation).

10.14 Amendment No. 1 dated September 26, 1995 to the
Lease for the additional Dayton, New Jersey
premises. (incorporated by reference to the
September 30, 1995 Form 10-Q [No. 1-19254] of
Lifetime Hoan Corporation).

10.15 Form of Extension Agreement dated as of
December 15, 1995 between Milton L. Cohen and
Lifetime Hoan Corporation (incorporated by reference
to the January 8, 1996 Form 8-K [No. 1-19254] of
Lifetime Hoan Corporation).

10.16 Form of Extension Agreement dated as of
December 15, 1995 between Jeffrey Siegel and
Lifetime Hoan Corporation (incorporated by reference
to the January 8, 1996 Form 8-K [No. 1-19254] of
Lifetime Hoan Corporation).

10.17 Form of Extension Agreement dated as of
December 15, 1995 between Craig Phillips and
Lifetime Hoan Corporation (incorporated by reference
to the January 8, 1996 Form 8-K [No. 1-19254] of
Lifetime Hoan Corporation).

10.18 Asset Purchase Agreement by and between
Farberware, Inc., Far-b Acquisition Corp., Syratech
Corporation and Lifetime Hoan Corporation, dated
February 2, 1996.

10.19 Joint Venture Agreement by and among Syratech
Corporation, Lifetime Hoan Corporation and Far-b
Acquisition Corp., dated February 2, 1996.

10.20 Employment Agreement dated April 7, 1996 with
Milton L. Cohen (incorporated by reference to the
March 31, 1996 10-Q).

10.21 Employment Agreement dated April 7, 1996 with
Jeffrey Siegel (incorporated by reference to the
March 31, 1996 10-Q).

10.22 Employment Agreement dated April 7, 1996 with
Craig Phillips (incorporated by reference to the
March 31, 1996 10-Q).

10.23 Lifetime Hoan 1996 Incentive Stock Option Plan
(incorporated by reference to the March 31, 1996 10-Q).

23

10.24 Lifetime Hoan 1996 Incentive Bonus Compensation
Plan (incorporated by reference to the March 31,
1996 10-Q).

10.25 Meyer Operating Agreement dated July 1, 1997
between Lifetime Hoan Corporation and Meyer
Corporation and Amendment to Agreement dated July 1,
1998.

10.26 Jeffrey Siegel Employment Agreement Amendment
No. 1, dated June 6, 1997

10.27 Milton L. Cohen Employment Agreement Amendment
No. 1, dated June 6, 1997

10.28 Stock Purchase Agreement between Lifetime Hoan
Corporation and Roshco, Inc. dated August 10, 1998.

10.29 Stock Purchase Agreement between Lifetime Hoan
Corporation and Meyer International Holdings Limited
and Prestige Italiana, SPA dated September 2, 1999.

10.30 Stock Purchase Agreement between Lifetime Hoan
Corporation and Meyer International Holdings Limited
and Prestige Haushaltswaren GmbH, dated September 2,
1999.

10.31 Asset Purchase Agreement between MK Acquisition
Corp., a wholly owned subsidiary of Lifetime Hoan
Corporation, and M. Kamenstein, Inc., dated September 28,
2000.

10.32 Employment Agreement dated April 6, 2001
between Jeffrey Siegel and Lifetime Hoan Corporation.

10.33 Consulting Agreement dated April 7, 2001
between Milton L. Cohen and Lifetime Hoan Corporation.

10.34 Credit Facility Agreement between Lifetime Hoan
Corporation and The Bank of New York, HSBC Bank USA,
Citibank, N.A., Wells Fargo Bank, N.A., and Bank
Leumi USA, dated November 9, 2001.

10.35 Stock Sale Agreement of Prestige Italiana, SPA,
between Lifetime Hoan Corporation, Meyer
International Holdings Limited and Meyer Prestige
Holdings Ltd and Meyer Prestige GmbH, dated October
11, 2002.

10.36 Consulting Agreement dated October 1, 2002 between
Lifetime Hoan Corporation and Ronald Shiftan.

21 Subsidiaries of the registrant

23 Consent of Ernst & Young LLP.

99.1 Certification by Jeffrey Siegel, Chief Executive
Officer and Robert McNally, Chief Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.

*The Company will furnish a copy of any of the exhibits
listed above upon payment of $5.00 per exhibit to cover
the cost of the Company furnishing the exhibits.

(d) Financial Statement Schedules - the response to this
portion of Item 14 is submitted as a separate section of
this report.

24

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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 Hoan Corporation

/s/ Jeffrey Siegel
Jeffrey Siegel
Chairman of the Board
of Directors, Chief
Executive Officer,
President and Director

Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the
capacities and on the dates indicated.

Signature Title Date

/s/ Jeffrey Siegel
Jeffrey Siegel Chairman of the Board of March 28, 2003
Directors, Chief Executive
Officer, President and
Director

/s/ Craig Phillips
Craig Phillips Vice-President - Distribution, March 28, 2003
Secretary and Director

/s/ Robert McNally
Robert McNally Vice-President - Finance March 28, 2003
and Treasurer
(Principal Financial and
Accounting Officer)

/s/ Bruce Cohen
Bruce Cohen Executive Vice-President March 28, 2003
and Director

/s/ Ronald Shiftan
Ronald Shiftan Director March 28, 2003

/s/ Howard Bernstein
Howard Bernstein Director March 28, 2003

/s/ Leonard Florence
Leonard Florence Director March 28, 2003

CERTIFICATIONS

I, Jeffrey Siegel, certify that:

1. I have reviewed this annual report on Form 10-K of
Lifetime Hoan Corporation ("the registrant");

2. Based on my knowledge, this annual report does not
contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements
made, in light of the circumstances under which such
statements were made, not misleading with respect to the
period covered by this annual report:

3. Based on my knowledge, the financial statements, and
other financial information included in this annual
report, fairly present in all material respects the
financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented
in this annual report;

4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and we have:

a. designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries, is
made known to us by others within those entities,
particularly during the period in which this annual
report is being prepared;
b. evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date within 90
days prior to the filing date of this annual report (the
"Evaluation Date"); and
c. presented in this annual report our conclusions
about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation
Date;

5. The registrant's other certifying officers and I
have disclosed, based on our most recent evaluation, to
the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing
the equivalent functions):
a. all significant deficiencies in the design or
operation of internal controls which could adversely
affect the registrant's ability to record, process,
summarize and report financial data and have identified
for the registrant's auditors any material weaknesses in
internal controls; and
b. any fraud, whether or not material, that involves
management or other employees who have a significant role
in the registrant's internal controls; and

6. The registrant's other certifying officers and I
have indicated in this annual report whether or not there
were significant changes in internal controls or in other
factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation,
including any corrective actions with regard to
significant deficiencies and material weaknesses.

Date: March 28, 2003

__/s/ Jeffrey Siegel______________
Jeffrey Siegel
President and Chief Executive Officer

CERTIFICATIONS

I, Robert McNally, certify that:

1. I have reviewed this annual report on Form 10-K of
Lifetime Hoan Corporation ("the registrant");

2. Based on my knowledge, this annual report does not
contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements
made, in light of the circumstances under which such
statements were made, not misleading with respect to the
period covered by this quarterly report:

3. Based on my knowledge, the financial statements, and
other financial information included in this annual
report, fairly present in all material respects the
financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented
in this annual report;

4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and we have:

a. designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries, is
made known to us by others within those entities,
particularly during the period in which this annual
report is being prepared;
b. evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date within 90
days prior to the filing date of this annual report (the
"Evaluation Date"); and
c. presented in this annual report our conclusions
about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation
Date;

5. The registrant's other certifying officers and I
have disclosed, based on our most recent evaluation,
to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing
the equivalent functions):
a. All significant deficiencies in the design or
operation of internal controls which could adversely
affect the registrant's ability to record, process,
summarize and report financial data and have identified
for the registrant's auditors any material weaknesses in
internal controls; and
b. Any fraud, whether or not material, that involves
management or other employees who have a significant role
in the registrant's internal controls; and

6. The registrant's other certifying officers and I
have indicated in this annual report whether or not there
were significant changes in internal controls or in other
factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation,
including any corrective actions with regard to
significant deficiencies and material weaknesses.

Date: March 28, 2003

___/s/ Robert McNally___________
Robert McNally
Vice President and Chief Financial
Officer

FORM 10-K - ITEM 15(a)(1) and (2)
LIFETIME HOAN CORPORATION

INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT
SCHEDULE

The following Financial Statements and Schedule of
Lifetime Hoan Corporation are included in Item 8.

Report of Independent Auditors F-2
Consolidated Balance Sheets as of December 31, 2002 and 2001 F-3
Consolidated Statements of Income for the
Years ended December 31, 2002, 2001 and 2000 F-4
Consolidated Statements of Stockholders' Equity for the
Years ended December 31, 2002, 2001 and 2000 F-5
Consolidated Statements of Cash Flows for the
Years ended December 31, 2002, 2001 and 2000 F-6
Notes to Consolidated Financial Statements F-7

The following financial statement schedule of Lifetime Hoan Corporation
is included in Item 15 (d);

Schedule II - Valuation and qualifying accounts S-1

All other schedules in the applicable accounting regulation of the Securities
and Exchange Commission are not required under the related instructions or
are inapplicable, and therefore have been omitted.

F-1

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Stockholders
Lifetime Hoan Corporation

We have audited the accompanying consolidated balance
sheets of Lifetime Hoan Corporation as of December 31,
2002 and 2001 and the related consolidated statements of
income, stockholders' equity, and cash flows for each of
the three years in the period ended December 31, 2002.
Our audits also included the financial statement schedule
listed in the Index at Item 15(a). These consolidated
financial statements and schedule are the responsibility
of the Company's management. Our responsibility is to
express an opinion on these consolidated financial
statements and schedule based on our audits.

We conducted our audits in accordance with auditing
standards generally accepted in the United States. Those
standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting
principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to
above present fairly, in all material respects, the
consolidated financial position of Lifetime Hoan
Corporation at December 31, 2002 and 2001, and the
consolidated results of its operations and its cash flows
for each of the three years in the period ended December
31, 2002, in conformity with accounting principles
generally accepted in the United States. Also, in our
opinion, the related financial statement schedule, when
considered in relation to the basic financial statements
taken as a whole, presents fairly in all material
respects the information set forth therein.

As discussed in Note A to the consolidated financial
statements, effective January 1, 2002, the Company
changed its method of accounting for goodwill.

Ernst & Young LLP

Melville, New York
February 26, 2003

F-2

LIFETIME HOAN CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

See notes to consolidated financial statements.

F-3

LIFETIME HOAN CORPORATION

CONSOLIDATED STATEMENTS OF INCOME
(in thousands - except per share data)

See notes to consolidated financial statements.

F-4

LIFETIME HOAN CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands)

See notes to consolidated financial statements.
F-5

LIFETIME HOAN CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

See notes to consolidated financial statements.
F-6
LIFETIME HOAN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2002

NOTE A - SIGNIFICANT ACCOUNTING POLICIES

Organization and Business: The accompanying consolidated financial
statements include the accounts of Lifetime Hoan Corporation ("Lifetime")
and its wholly-owned subsidiaries, Outlet Retail Stores, Inc. ("Outlets"),
Roshco, Inc. ("Roshco") and M. Kamenstein Corp. ("Kamenstein"),
collectively, the "Company". Effective September 27, 2002, the Company
sold its 51% owned and controlled subsidiaries, Prestige Italiana, Spa.
("Prestige Italy") and Prestige Haushaltswaren GmbH ("Prestige Germany" and
together with Prestige Italy, the "Prestige Companies"). Accordingly, the
Company has classified the Prestige Companies business as discontinued
operations. Significant intercompany accounts and transactions have been
eliminated in consolidation.

The Company is engaged in the design, marketing and distribution of
household cutlery, kitchenware, cutting boards, pantryware and bakeware,
marketing its products under a number of trade names, some of which are
licensed. The Company sells its products primarily to retailers throughout
the United States.

The Company also operates approximately 58 retail outlet stores in 24
states under the Farberware(R) name. Under an agreement with the Meyer
Corporation, Meyer Corporation receives all revenue from sales of
Farberware(R) cookware, occupies 50% of the space in each store and reimburses
the Company for 50% of the operating expenses of the stores.

The significant accounting policies used in the preparation of the
consolidated financial statements of the Company are as follows:

Revenue Recognition: Revenue is recognized upon the shipment of
merchandise. Related freight-out costs are included in distribution
expenses and amounted to $2.7 million, $2.3 million, and $2.2 million for
2002, 2001 and 2000, respectively.

Distribution Expenses: Distribution expenses primarily consist of
freight-out, warehousing expenses, and handling costs of products sold. These
expenses include relocation charges, duplicate rent and other costs associated
with the Company's move into it's Robbinsville, New Jersey warehouse,
amounting to $2.2 million in 2002 and $2.9 million in 2001.

Inventories: Merchandise inventories, principally finished goods, are
priced by the lower of cost (first-in, first-out basis) or market method.
Reserves for excess or obsolete inventory reflected in the Company's
consolidated balance sheets at December 31, 2002 and 2001 are considered
adequate by the Company's management; however, there can be no assurance
that these reserves will prove to be adequate over time to provide for
ultimate losses in connection with the Company's inventory.

Accounts Receivable: The Company is required to estimate the
collectibility of its accounts receivable. A considerable amount of
judgment is required in assessing the ultimate realization of these
receivables including the current credit-worthiness of each customer. The
Company maintains allowances for doubtful accounts for estimated losses
resulting from the inability of its customers to make required payments. If
the financial conditions of the Company's customers were to deteriorate,
resulting in an impairment of their ability to make payments, additional
allowances may be required.

Property and Equipment: Property and equipment is stated at cost.
Property and equipment other than leasehold improvements is being
depreciated by the straight-line method over the estimated useful lives of
the assets. Building and improvements are being depreciated over 30 years
and machinery, furniture, and equipment over 5 to 10 years. Leasehold
improvements are depreciated over the term of the lease or the estimated
useful lives of the improvements, whichever is shorter.

Cash Equivalents: The Company considers highly liquid instruments with a
maturity of three months or less when purchased to be cash equivalents.

Use of Estimates: The preparation of financial statements in conformity
with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results
could differ from those estimates.

Fair Value of Financial Instruments: The carrying amounts of the
Company's financial instruments approximate their fair values because of
the short-term nature of these items.

F-7

LIFETIME HOAN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE A - SIGNIFICANT ACCOUNTING POLICIES (continued)

Goodwill and Other Intangible Assets: Effective January 1, 2002, the
Company adopted Statement of Financial Accounting Standard ("SFAS") No.
141, "Business Combinations" and SFAS No. 142, "Goodwill and Other
Intangible Assets". SFAS No. 141 requires all business combinations
initiated after June 30, 2001 to be accounted for using the purchase
method. Under SFAS No. 142, goodwill and intangible assets with indefinite
lives are no longer amortized but are reviewed at least annually for
impairment. In 2002, the Company completed its initial assessment, as of
January 1, 2002, of the assets impacted by the adoption of SFAS No. 142,
and its annual assessment as of December 31, 2002. Based upon such
reviews, no impairment to the carrying value of goodwill was identified,
and the Company ceased amortizing goodwill effective January 1, 2002. Had
this standard been applied for the year ended December 31, 2001, net income
would have been increased by $343,000 and basic and diluted earnings per
share would have been $0.31 and for the year ended December 31, 2000, net
income would have been increased by $287,000 and basic and diluted earnings
per share would have been $0.34.

Other intangibles consist of a royalty-free license, trademarks and
brand names acquired pursuant to two acquisitions and are being amortized
by the straight-line method over 30 years. Accumulated amortization at
December 31, 2002 and 2001 was $2.7 million and $2.3 million, respectively.
Amortization expense with respect to these intangible assets for each of
five succeeding fiscal years is estimated to be $390,000.

Amortization expense for the years ended December 31, 2002, December 31,
2001 and December 31, 2000 was $390,000, $961,000 and $868,000,
respectively.

Long-Lived Assets: Effective January 1, 2002, the Company adopted SFAS
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets
("SFAS No. 144"), which supersedes SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be disposed
of." The primary objectives of SFAS No. 144 are to develop one accounting
model based on the framework established in SFAS No. 121 for long-lived
assets to be disposed of by sale, and to address significant implementation
issues. The adoption of this statement did not have an impact on the
Company's consolidated results of operations or financial position. The
Company accounted for the disposal of the Prestige Companies in accordance
with SFAS No. 144.

Income Taxes: Income taxes have been provided using the liability
method.

Earnings Per Share: Basic earnings per share has been computed by
dividing net income by the weighted average number of common shares
outstanding of 10,516,000 in 2002, 10,492,000 in 2001 and 10,995,000 in
2000. Diluted earnings per share has been computed by dividing net income
by the weighted average number of common shares outstanding, including the
dilutive effects of stock options, of 10,541,000 in 2002, 10,537,000 in
2001 and 11,079,000 in 2000.

F-8

LIFETIME HOAN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE A - SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounting for Stock Option Plan: At December 31, 2002, the Company has
a stock option plan, which is more fully described in Note D. The Company
accounts for the plan under the recognition and measurement principles of
APB Opinion No. 25, "Accounting for Stock Issued to Employees", and related
Interpretations. No stock-based employee compensation cost is reflected in
net income, as all options granted under those plans had an exercise price
equal to the market values of the underlying common stock on the date of
grant. The following table illustrates the effect on net income and
earnings per share if the Company had applied the fair value recognition
provisions of Statement of Financial Accounting Standards ("SFAS") No. 123,
"Accounting for Stock-Based Compensation" to stock-based employee
compensation.

New Accounting Pronouncements: In June 2001, the FASB issued SFAS No.
143, "Accounting for Asset Retirement Obligations", which addresses the
financial accounting and reporting for obligations associated with the
retirement of long-lived assets and the associated retirement costs. The
Company has adopted SFAS No. 143 as of January 1, 2002. The adoption of
SFAS No. 143 did not have a material impact on the Company's consolidated
financial statements.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities". This pronouncement is
effective for exit or disposal activities that are initiated after December
31, 2002, and requires these costs to be recognized when the liability is
incurred and not at project initiation. The Company does not expect this
statement to have a material impact on its consolidated financial
statements.

Reclassifications: Certain 2001 and 2000 balances have been
reclassified to conform with the 2002 presentation.

NOTE B - ACQUISITIONS, DISPOSALS AND LICENSES

Kamenstein Acquisition: In September 2000, the Company acquired certain
assets and certain liabilities of M. Kamenstein, Inc. ("Kamenstein"), a
privately-held 107-year old housewares company whose products include
pantryware, teakettles, and home organization accessories. Kamenstein's
revenues were approximately $21.0 million for the twelve month period ended
August 31, 2000. In acquiring Kamenstein, the Company assumed bank debt
and other indebtedness of approximately $10.0 million. The Company is
obligated to make contingent payments in the future based on the annual
gross profit achieved by the Kamenstein business for a 3 -year period.
This acquisition was accounted for using the purchase method and
accordingly the Company recorded goodwill of $6.1 million. Operations of
the acquired entity have been included since the date of acquisition.

The table below reflects unaudited pro forma combined results of the
Company as if the acquisition had taken place at the beginning of fiscal
2000. The pro forma financial information is not necessarily indicative of
the operating results that may occur in the future or that would have
occurred had the acquisition of Kamenstein been affected on the dates
indicated.

F-9

LIFETIME HOAN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE B - ACQUISITIONS DISPOSALS AND LICENSES (continued)

Prestige Acquisition and Disposition: In September 1999, the Company
acquired 51% of the capital stock and controlling interest in each of
Prestige Italy and Prestige Germany. The Company paid approximately $1.3
million for its majority interests in the Prestige Companies. This
acquisition was accounted for using the purchase method and the Company
recorded goodwill of $586,000. Effective September 27, 2002, the Company
sold its 51% controlling interest in Prestige Italiana, Spa and, together
with its minority interest shareholder, caused Prestige Haushaltswaren GmbH
(combined, "the Prestige Companies") to sell all of its receivables and
inventory to a European housewares distributor. As a result the Company
received approximately $1.0 million in cash on October 21, 2002. The sale
resulted in a net loss of approximately $811,000 that includes the write-
off of goodwill of approximately $540,000. Accordingly, the Company has
classified the Prestige Companies business as discontinued operations. For
2000 and 2001, the Company has reclassified its financial statements to
reflect the discontinued operations of the Prestige Companies. Net sales
of the Prestige Companies included in loss from discontinued operations
were $6.4 million, $8.5 million and $8.3 million for 2002, 2001 and 2000,
respectively.

Cuisinart License Agreement: On March 19, 2002, the Company entered
into a licensing agreement with Conair Corporation. This agreement allows
the Company to design, manufacture and market a wide variety of cutlery
products under the Cuisinart(R) brand name. Shipments of products under the
Cuisinart(R) name began in the fourth quarter of 2002.

KitchenAid License Agreement: In October 2000, the Company entered into
a licensing agreement with KitchenAid, a division of the Whirlpool
Corporation. This agreement allows the Company to design, manufacture and
market an extensive range of kitchen utensils, barbecue items and
pantryware products under the KitchenAid(R) brand name. On January 1, 2002,
the licensing agreement between the Company and KitchenAid, was amended,
expanding the covered products to include bakeware and baking related
products. Shipments of products under the agreement began in the second
quarter of 2001.

NOTE C -CREDIT FACILITIES

On November 9, 2001, the Company entered into a $45 million three-year,
secured, reducing revolving credit agreement (the "Agreement") with a group
of banks and, in conjunction therewith, canceled its $40 million short-term
line of credit. The Credit Facility reduced to $40 million at December 31,
2002 in accordance with the terms of the agreement and will further reduce
to $35 million at December 31, 2003, and through the maturity date. The
Credit Facility is secured by all of the assets of the Company and the
Company is required to satisfy certain financial covenants, including
limitations on indebtedness and sale of assets; a minimum fixed charge
ratio; and net worth maintenance. Borrowings under the Agreement have
different interest rate options that are based upon either an alternate
base rate, LIBOR, or a lender's cost of funds rate. As of December 31, 2002
and 2001, the Company had $2.5 million of letters of credit and trade
acceptances outstanding and $14.2 million and $20.0 million of
borrowings under the Agreement, respectively, and, as a result, the
availability under the Agreement at December 31, 2002 and 2001 was $23.3
million and $22.5 million, respectively. Interest rates on borrowings at
December 31, 2002 ranged from 4.125% to 4.75%, while interest rates on
borrowings at December 31, 2001 ranged from 3.875% to 3.9375%.

At September 30, 2002, the Company was in violation of the leverage
ratio covenant. The Company obtained a waiver for the covenant violation
and, as of December 31, 2002, the Company was in compliance with all
financial covenants.

In addition to the Agreement, the Prestige Companies had three lines of
credit with three separate banks for a total available credit facility of
$3.4 million. As of December 31, 2001, the Prestige Companies had
borrowings of approximately $2.8 million against these three lines.
Interest rates on these lines of credit at December 31, 2001 ranged from
5.85% to 8.25%.

The Company paid interest of approximately $1.0 million, $1.3 million
and $913,000 during the years ended December 31, 2002, 2001 and 2000,
respectively.

NOTE D - CAPITAL STOCK

Cash Dividends: The Company paid regular quarterly cash dividends of
$0.0625 per share on its Common Stock, or a total annual cash dividend of
$0.25 per share, in 2002, 2001 and 2000. The Board of Directors currently
intends to maintain a quarterly cash dividend of $0.0625 per share of
Common Stock for the foreseeable future, although the Board may in its
discretion determine to modify or eliminate such dividend at any time.
F-10

LIFETIME HOAN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE D - CAPITAL STOCK (continued)

Common Stock Repurchase and Retirement: In December 1999, the Board of
Directors of the Company authorized the repurchase of up to 1,000,000 of
the outstanding shares of Common Stock in the open market. In 2000, the
Board of Directors increased the authorized amount of Common Stock that
could be bought back from 1,000,000 shares to 3,000,000 shares. Through
December 31, 2002, 2,128,000 shares were repurchased for approximately
$15.2 million (none in 2002).

Preferred Stock: The Company is authorized to issue 2,000,000 shares of
Series B Preferred Stock, none of which is outstanding.

Stock Option Plans: In June 2000, the stockholders of the Company
approved the Long-Term Incentive Plan (the "Plan"), which replaced all
other Company stock option plans, whereby options to purchase up to
1,750,000 shares of common stock may be granted to key employees of the
Company, including directors and officers. The Plan authorizes the Board
of Directors of the Company to issue incentive stock options as defined in
Section 422A (b) of the Internal Revenue Code and stock options that do not
conform to the requirements of that Section of the Code. Options expire
over a range of ten years from the date of the grant and vest over a range
of up to five years, from the date of grant.

As of December 31, 2002, approximately 725,000 shares were available
for grant under the Company's stock option plans and all options granted
through December 31, 2002 under the plan have exercise prices equal to the
market value of the Company's stock on the date of grant.

The weighted average fair values of options granted during the years
ended December 31, 2002, 2001 and 2000 were $0.16, $0.27 and $0.64,
respectively. The fair value for these options was estimated at the date
of grant using a Black-Scholes option pricing model with the following
weighted-average assumptions: risk-free interest rates of 3.47%, 4.55% and
6.01% for 2002, 2001 and 2000, respectively; 4.33% dividend yield in 2002,
4.25% dividend yield in 2001 and 3.67% dividend yield in 2000; volatility
factor of the expected market price of the Company's common stock of 0.06
in 2002, 0.07 in 2001 and 0.45 in 2000; and a weighted-average expected
life of the options of 6.0, 4.7 and 5.0 years in 2002, 2001 and 2000,
respectively.

The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options, which have no vesting
restrictions and are fully transferable. In addition, option valuation
models require the input of highly subjective assumptions including the
expected stock price volatility. Because the Company's employee stock
options have characteristics significantly different from those of traded
options, and because changes in the subjective input assumptions can
materially affect the fair value estimate, in management's opinion, the
existing models do not necessarily provide a reliable single measure of the
fair value of its employee stock options.

F-11

LIFETIME HOAN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE D - CAPITAL STOCK (continued)

A summary of the Company's stock option activity and related information
for the years ended December 31 follows:

The following table summarizes information about employees' stock
options outstanding at December 31, 2002:

At December 31, 2001 and 2000, there were 680,858 and 865,239 options
exercisable, respectively, at weighted-average exercise prices per share of
$7.20 and $7.39, respectively.

In connection with the grant of certain options in prior years, the
Company recorded, and amortized, deferred compensation. As of December 31,
2001, such deferred compensation had been fully amortized.

In connection with the exercise of options under a stock option plan
which has since expired, the Company received cash of $255,968 and notes in
the amount of $908,000 in 1985. The notes bear interest at 9% and are due
no later than December 31, 2005. During 2001, a note from Milton L. Cohen,
a director of the Company in the amount of $422,000 was canceled. During
2001, a new note was received from Milton L. Cohen in the amount of
$855,000, which consolidated all amounts due to the Company.

F-12
LIFETIME HOAN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE E - INCOME TAXES

Pre-tax income from continuing operations for the years ended December
31, 2002, 2001 and 2000 was $6.0 million, $6.1 million and $6.9 million,
respectively.

The provision for income taxes consists of (in thousands):

Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amount of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes.
Significant components of the Company's net deferred tax assets are as
follows (in thousands):

While management believes that the Company's deferred tax asset will be
realized based on its generation of taxable income in recent years and its
future projected taxable income, the substantial restrictions on and time
periods required to realize certain of the Company's NOL's made it
appropriate to record a valuation allowance against a portion of those
NOL's. A valuation allowance had been provided against all of the
Company's foreign net operating loss carryforwards. Accordingly, the
Company had provided a total valuation allowance $226,000 as of December
31, 2001.

The provision for income taxes differs from the amounts computed by
applying the applicable federal statutory rates as follows (in thousands):

The Company received income tax refunds (net of payments) of
approximately $328,000 and $218,000 during the years ended December 2002
and 2001, respectively. The Company paid income taxes of approximately
$5.0 million during the year ended 2000.
F-13

LIFETIME HOAN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE F - COMMITMENTS

Operating Leases: The Company has lease agreements for its warehouses,
showroom facilities, sales offices and outlet stores which expire through
2016. These leases provide for, among other matters, annual base rent
escalations and additional rent for real estate taxes and other costs.

Future minimum payments under non cancelable operating leases are as
follows (in thousands):

Under an agreement with Meyer Corporation regarding the operation of the
Company's Farberware(R) retail outlet stores, the Company is reimbursed for
use of floor space in its outlet stores. Meyer Corporation receives all
revenue from sales of Farberware(R) cookware, currently occupies 50% of the
space in each store and reimburses the Company for 50% of the operating
expenses of the stores. In fiscal years 2001 and 2000, the Company and
Meyer Corporation each occupied 40% of the space in the outlet stores, as
Salton, Inc. was responsible for the other 20% of the space. In 2002,
2001 and 2000, Meyer Corporation reimbursed the Company approximately $1.7
million, $1.3 million and $1.5 million, respectively, for operating lease
expense. Salton Inc. reimbursed in 2001 and 2000 approximately $668,000
and $731,000, respectively, for operating lease expense to the Company.
Salton, Inc. terminated its agreement effective December 31, 2001.

Rental and related expenses under the operating leases were
approximately $7.1 million, $7.6 million and $5.9 million for the years
ended December 31, 2002, 2001 and 2000, respectively. Amounts for 2002,
2001 and 2000 are prior to the Meyer Corporation and Salton Inc.
reimbursements described above.

Royalties: The Company has royalty licensing agreements that require
payments of royalties on sales of licensed products which expire through
December 31, 2007. Future minimum royalties payable under these agreements
are as follows (in thousands):

F-14

LIFETIME HOAN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE F - COMMITMENTS (continued)

Legal Proceedings: The Company is, from time to time, a party to
litigation arising in the normal course of its business. The Company
believes that there are currently no material legal proceedings the outcome
of which would have a material adverse effect on the Company's consolidated
financial position or results of operations.

Employment Agreements: Effective as of April 6, 2001, Mr. Jeffrey
Siegel entered into a new employment agreement with the Company that
provides that the Company will employ him as its President, Chief Executive
Officer and Chairman of the Board for a term commencing on April 6, 2001,
and continuing until April 6, 2006 and thereafter for additional
consecutive one year periods unless terminated by either the Company or Mr.
Siegel as provided in the agreement. The agreement provides for an annual
salary of $700,000 with annual increments based on changes in the Consumer
Price Index and for the payment to him of bonuses pursuant to the Company's
Incentive Bonus Compensation Plan. The agreement also provides for, among
other things, certain standard fringe benefit arrangements, such as
disability benefits, insurance and an accountable expense allowance. The
agreement further provides that if the Company is merged or otherwise
consolidated with any other organization or substantially all of the assets
of the Company are sold or control of the Company has changed (the transfer
of 50% or more of the outstanding stock of the Company) which is followed
by: (i) the termination of his employment agreement, other than for cause;
(ii) the diminution of his duties or change in executive position; (iii)
the diminution of his compensation (other than a general reduction to all
employees); or (iv) the relocation of his principal place of employment to
other than the New York Metropolitan Area, the Company would be obligated
to pay to Mr. Siegel or his estate the base salary required pursuant to the
employment agreement for the balance of the term. The employment agreement
also contains restrictive covenants preventing Mr. Siegel from competing
with the Company for a period of five years from the earlier of the
termination of Mr. Siegel's employment (other than a termination by the
Company without cause) or the expiration of his employment agreement.

Incentive Bonus Compensation Plan: In April 1996, the Board of
Directors adopted and in June 1996, the stockholders approved an incentive
bonus compensation plan ("1996 Bonus Plan"). The 1996 Bonus Plan provided
for the award of a bonus, with respect to each of the ten fiscal years of
the Company beginning with the 1996 fiscal year, to each of the then
President and the Executive Vice President of the Company. The bonus
payable to each executive was an amount equal to 3.5% of pretax income,
before any provision for executive compensation, stock options exercised
during the year under the Company's stock option plans and extraordinary
items. In June 2000, the stockholders of the Company approved the adoption
of an incentive bonus compensation plan ("2000 Bonus Plan"), which provides
for the award of a bonus, to designated Senior Executive Officers based on
a predetermined financial performance measurement. For 2002 and 2001,
the Chief Executive Officer was the only designated officer and for 2000,
the then Chief Executive Officer and then President were both designated
officers. In each year the amount of the bonus payment was equal to 3.5%
of pretax income, before any provision for executive compensation, stock
options exercised during the year under the Company's stock option plans,
extraordinary items and non-recurring charges. During the years ended
December 31, 2002, 2001 and 2000, the Company recorded annual compensation
expense of approximately $323,000, $346,000, and $600,000, respectively,
pursuant to the bonus plans.

In February 2001, the Board of Directors declared special bonuses for
Milton L. Cohen and Jeffrey Siegel aggregating approximately $850,000 which
were charged to operations for the year ended December 31, 2000.

In April 2001, the Company paid Mr. Milton L. Cohen a bonus of $178,500
for the period January 1, 2001 through April 6, 2001.

In March 2002, the Company awarded Mr. Jeffrey Siegel a special bonus of
$129,600.

F-15

LIFETIME HOAN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTE G - RELATED PARTY TRANSACTIONS

Effective April 6, 2001, Milton L. Cohen, then a director of the
Company, and the Company entered into a 5-year consulting agreement with an
annual fee of $440,800.

As of December 31, 2002 and December 31, 2001, Milton L. Cohen owed the
Company approximately $579,000 and $739,000, respectively. Milton L. Cohen
remits $48,404 quarterly, inclusive of interest and principal, and the loan
matures on March 31, 2006. The loan due from Milton L. Cohen is included
within other assets in the accompanying balance sheets.

As of December 31, 2002 and December 31, 2001, Jeffrey Siegel owed the
Company approximately $439,000 and $659,000, respectively, which, for each
year, included $344,000 of an outstanding loan related to the exercise of
stock options under a stock option plan which has since expired.
Approximately $95,000 and $315,000 of the amounts due from Jeffrey Siegel
are included in other current assets in the accompanying balance sheets at
December 31, 2002 and 2001, respectively.

As of December 31, 2002 and December 31, 2001, Craig Phillips, a vice
president of the Company, owed the Company approximately $135,000 for an
outstanding loan related to the exercise of stock options under a stock
option plan which has since expired.

Notes receivable totaling $479,000 and $486,000 related to the exercise
of stock options under a stock option plan which has since expired are
included within total stockholders' equity in the accompanying balance
sheets at December 31, 2002 and 2001, respectively.

On October 1, 2002 the Company entered into a consulting agreement with
Ronald Shiftan, a director of the Company. The term of the consulting
agreement is a period of one year commencing October 1, 2002, which
automatically renews for additional one year periods unless either party
terminates the agreement by providing written notice of such termination to
the other party thereto at least thirty days prior to the expiration of the
initial or additional term then in effect. The compensation to be paid to
Mr. Shiftan under the consulting agreement is at a rate of $30,000 per
month.

NOTE H - RETIREMENT PLAN

The Company maintains a defined contribution retirement plan ("the
Plan") for eligible employees under Section 401(k) of the Internal Revenue
Code. Participants can make voluntary contributions up to a maximum of 15%
of their respective salaries. The Company made matching contributions to
the Plan of approximately $220,000, $178,000 and $50,000 in 2002, 2001 and
2000, respectively.

NOTE I - CONCENTRATION OF CREDIT RISK

The Company maintains cash and cash equivalents with various financial
institutions.

Concentrations of credit risk with respect to trade accounts receivable
are limited due to the large number of entities comprising the Company's
customer base and their dispersion across the United States. The Company's
accounts receivable are not collateralized. The Company periodically
reviews the status of its accounts receivable and, where considered
necessary, establishes an allowance for doubtful accounts.

During the years ended December 31, 2002, 2001 and 2000, Wal-Mart
Stores, Inc. accounted for approximately 20%, 18% and 12% of net sales,
respectively. No other customer accounted for 10% or more of the Company's
net sales during 2002, 2001 and 2000.
F-16

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

LIFETIME HOAN CORPORATION

NOTE J - OTHER
Property and Equipment:
Property and equipment consist of (in thousands):

Depreciation expense for the years ended December 31, 2002, 2001 and 2000
was $3.1 million, $2.7 million and $2.6 million, respectively.

Accrued Expenses:

Accrued expenses consist of (in thousands):

Sources of Supply: The Company sources its products from
approximately 48 manufacturers located primarily in People's Republic of
China, and to a smaller extent in the United States, Thailand, Malaysia,
Indonesia, Taiwan, and Italy. A majority of its cutlery was purchased from
three suppliers in 2002 who accounted for 58%, 20%, and 10% of the total
purchases, respectively, and from five suppliers in 2001 who accounted for
28%, 21%, 14%, 11% and 10% of the total purchases, respectively. A
majority of its pantryware was purchased from three suppliers in 2002 who
accounted for 37%, 19% and 13%, respectively, of the total purchases and
from four suppliers in 2001 who accounted for 23%, 19%, 17% and 16%,
respectively. An interruption of supply from any of these manufacturers
could have an adverse impact on the Company's ability to fill orders on a
timely basis. However, the Company believes other manufacturers with whom
the Company does business would be able to increase production to fulfill
the Company's requirements.

Inventory: During the three-month period ended December 31, 2000,
the Company recorded a charge relating to an inventory shortfall of
approximately $4.0 million (which reduced earnings by $0.23 and $0.22 per
basic and per diluted common share for the fourth quarter and for the year
ended December 31, 2000, respectively) which is included in cost of goods
sold.

F-17

LIFETIME HOAN CORPORATION

Schedule II - Valuation and Qualifying Accounts

Lifetime Hoan Corporation

(in thousands)

(a) Uncollectible accounts written off, net of recoveries.
(b) Allowances granted.
(c) Charged to net sales.

S-1

Exhibit 21. Subsidiaries of the Registrant

Outlet Retail Stores, Inc.
Incorporated in the state of Delaware

Roshco, Inc.
Incorporated in the state of Illinois

M. Kamenstein Corp.
Incorporated in the state of Delaware

Consent of Ernst & Young LLPIndependent Auditors Exhibit 23

We consent to the incorporation by reference in the Registration
Statement (Form S-8 No. 33-51774) pertaining to the Lifetime Hoan
Corporation 1991 Stock Option Plan, of our report dated February 26,
2003, with respect to the consolidated financial statements and
schedule of Lifetime Hoan Corporation included in the Annual Report
(Form 10-K) for the year ended December 31, 2002.

Ernst & Young LLP

Melville, New York
March 28, 2003

EXHIBIT 99.1

Certification by Jeffrey Siegel, Chief Executive Officer and Robert
McNally, Chief Financial Officer
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.

I, Jeffrey Siegel, Chief Executive Officer, and I, Robert
McNally, Chief Financial Officer, of Lifetime Hoan Corporation, a
Delaware corporation (the "Company"), each hereby certifies that:

(1) the Company's Annual Report on Form 10-K for the annual period
ended December 31, 2002 (the "Report") fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act
of 1934, as amended; and
(2) the information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.

/s/ Jeffrey Siegel /s/ Robert McNally
Jeffrey Siegel Robert McNally
Chief Executive Officer Chief Financial Officer

Date: March 28, 2003 Date: March 28,2003