Attached files
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| 8-K - CURRENT REPORT - LIFETIME BRANDS, INC | f8k-05032012.htm |
Exhibit 99.1
Lifetime Brands, Inc. Reports First Quarter 2012 Results
GARDEN CITY, NY, May 3, 2012 – Lifetime Brands, Inc. (NasdaqGS: LCUT), a global provider of branded products used to prepare, serve and consume foods in the home, today reported its financial results for the quarter ended March 31, 2012.
First Quarter Highlights:
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Net Sales increased 18.7% to $109.0 million.
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Organic Net Sales increased 6.4% to $97.7 million.
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Gross Margin increased 70 basis points to 37.1%.
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EBITDA increased 128.8% to $6.2 million.
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Net Income increased to $1.344 million, as compared to a loss of $949 thousand for the same period in 2011.
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Diluted Income per Common Share increased to $0.11, as compared to ($0.08) per diluted share in last year’s quarter.
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“Lifetime’s financial results for the quarter provided a strong and an encouraging start to the year,” said Jeffrey Siegel, Chairman, President and Chief Executive Officer. “Our performance in the quarter was driven by our core U.S. wholesale businesses, kitchenware and tabletop, which recorded an 11.1% increase in Net Sales, all of which was organic. These gains were primarily attributable to new programs with our key retailer partners.
“Outside the United States, Creative Tops, which we acquired in November 2011, Lifetime Brands Canada and our investee partner companies in Mexico, Canada, Brazil and China all performed to expectation.”
On March 6, 2012, the Board of Directors declared a quarterly dividend of $0.025 per share payable on May 15, 2012 to shareholders of record on May 1, 2012.
Conference Call
The Company has scheduled a conference call for Thursday, May 3, 2012 at 11:00 a.m. ET. The dial-in number for the conference call is (866) 788-0539, passcode #85646002. A replay of the call will also be available through May 10, 2012 and can be accessed by dialing (888) 286-8010 or (617) 801-6888, conference ID #85646002. A live webcast of the conference call will be broadcast in the Investor Relations section of the Company’s web site, www.lifetimebrands.com. For those who cannot listen to the live broadcast, an audio replay of the call will also be available on the site.
Non-GAAP Financial Measures
This earnings release contains non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a company's historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly
comparable measure calculated and presented in accordance with GAAP in the statements of income, balance sheets, or statements of cash flows of the Company; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. Pursuant to the requirements of Regulation G, the Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures. These non-GAAP measures are provided because management of the Company uses these financial measures in evaluating the Company's on-going financial results and trends. Management uses this non-GAAP information as an indicator of business performance.
Forward-Looking Statements
In this press release, the use of the words “believe,” "could," "expect," "may," "positioned," "project," "projected," "should," "will," "would" or similar expressions is intended to identify forward-looking statements that represent the Company’s current judgment about possible future events. The Company believes these judgments are reasonable, but these statements are not guarantees of any events or financial results, and actual results may differ materially due to a variety of important factors. Such factors might include, among others, the Company’s ability to comply with the requirements of its credit agreements; the availability of funding under such credit agreements; the Company’s ability to maintain adequate liquidity and financing sources and an appropriate level of debt; changes in general economic conditions which could affect customer payment practices or consumer spending; the impact of changes in general economic conditions on the Company’s customers; changes in demand for the Company’s products; shortages of and price volatility for certain commodities; significant changes in the competitive environment and the effect of competition on the Company’s markets, including on the Company’s pricing policies, financing sources and an appropriate level of debt.
Lifetime Brands, Inc.
Lifetime Brands is a provider of kitchenware, tabletop and other products used in the home. The Company markets its products under such well-known kitchenware brands as Farberware®, KitchenAid®, CasaMōda®, Cuisinart®, Cuisine de France®, Guy Fieri®, Hoffritz®, Kizmos™, Misto®, Pedrini®, Roshco®, Sabatier®, Savora™ and Vasconia®; respected tabletop brands such as Mikasa®, Pfaltzgraff®, Creative Tops®, Calvin Klein®, Gorham®, International® Silver, Kirk Stieff®, Nautica®, Sasaki®, Towle® Silversmiths, Tuttle®, Wallace®, V&A® and Royal Botanic Gardens Kew®; and home solutions brands, including Elements®, Melannco®, Kamenstein® and Design for Living™.
The Company’s corporate website is www.lifetimebrands.com.
Contacts:
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Lifetime Brands, Inc.
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Lippert/Heilshorn & Assoc.
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Laurence Winoker, Chief Financial Officer
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Harriet Fried, SVP
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516-203-3590
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212-838-3777
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investor.relations@lifetimebrands.com
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hfried@lhai.com
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LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands - except per share data)
(unaudited)
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Three Months Ended
March 31,
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2012
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2011
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Net sales
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$ | 109,041 | $ | 91,773 | ||||
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Cost of sales
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68,581 | 58,383 | ||||||
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Gross margin
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40,460 | 33,390 | ||||||
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Distribution expenses
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11,744 | 10,940 | ||||||
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Selling, general and administrative expenses
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25,484 | 22,473 | ||||||
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Income (loss) from operations
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3,232 | (23 | ) | |||||
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Interest expense
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(1,698 | ) | (1,979 | ) | ||||
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Income (loss) before income taxes and equity in earnings
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1,534 | (2,002 | ) | |||||
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Income tax benefit (provision)
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(588 | ) | 588 | |||||
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Equity in earnings, net of taxes
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398 | 465 | ||||||
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NET INCOME (LOSS)
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$ | 1,344 | $ | (949 | ) | |||
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BASIC INCOME (LOSS) PER COMMON SHARE
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$ | 0.11 | $ | (0.08 | ) | |||
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DILUTED INCOME (LOSS) PER COMMON SHARE
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$ | 0.11 | $ | (0.08 | ) | |||
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Cash dividends declared per common share
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$ | 0.050 | $ | 0.025 | ||||
LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands - except share data)
(unaudited)
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March 31,
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December 31,
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2012
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2011
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(unaudited)
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ASSETS
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CURRENT ASSETS
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Cash and cash equivalents
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$ | 4,867 | $ | 2,972 | ||||
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Accounts receivable, less allowances of $5,051 at March 31, 2012 and $4,602 at December 31, 2011
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72,902 | 77,749 | ||||||
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Inventory
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113,653 | 110,337 | ||||||
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Prepaid expenses and other current assets
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5,286 | 5,264 | ||||||
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Income taxes receivable
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327 | - | ||||||
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Deferred income taxes
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2,568 | 2,475 | ||||||
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TOTAL CURRENT ASSETS
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199,603 | 198,797 | ||||||
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PROPERTY AND EQUIPMENT, net
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33,025 | 34,324 | ||||||
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INVESTMENTS
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36,380 | 34,515 | ||||||
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INTANGIBLE ASSETS, net
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46,537 | 46,937 | ||||||
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OTHER ASSETS
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3,742 | 4,172 | ||||||
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TOTAL ASSETS
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$ | 319,287 | $ | 318,745 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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CURRENT LIABILITIES
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Revolving Credit Facility
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$ | 15,000 | $ | 15,000 | ||||
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Accounts payable
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23,534 | 18,985 | ||||||
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Accrued expenses
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29,562 | 33,877 | ||||||
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Income taxes payable
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70 | 2,100 | ||||||
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TOTAL CURRENT LIABILITIES
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68,166 | 69,962 | ||||||
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DEFERRED RENT & OTHER LONG-TERM LIABILITIES
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14,450 | 14,598 | ||||||
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DEFERRED INCOME TAXES
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5,427 | 5,385 | ||||||
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REVOLVING CREDIT FACILITY
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41,545 | 42,625 | ||||||
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TERM LOAN
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40,000 | 40,000 | ||||||
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STOCKHOLDERS’ EQUITY
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Preferred stock, $.01 par value, shares authorized: 100 shares of Series A
and 2,000,000 shares of Series B; none issued and outstanding |
- | - | ||||||
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Common stock, $.01 par value, shares authorized: 25,000,000; shares
issued and outstanding: 12,438,393 at March 31, 2012 and 12,430,893 at December 31, 2011 |
124 | 124 | ||||||
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Paid-in capital
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138,186 | 137,467 | ||||||
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Retained earnings
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15,189 | 14,465 | ||||||
| (3,800 | ) | (5,881 | ) | |||||
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TOTAL STOCKHOLDERS’ EQUITY
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149,699 | 146,175 | ||||||
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
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$ | 319,287 | $ | 318,745 | ||||
LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
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Three Months Ended
March 31,
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2012
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2011
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OPERATING ACTIVITIES
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Net income (loss)
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$ | 1,344 | $ | (949 | ) | |||
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Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
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Provision for doubtful accounts
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(25 | ) | (16 | ) | ||||
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Depreciation and amortization
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2,207 | 1,995 | ||||||
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Amortization of debt discount
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- | 229 | ||||||
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Deferred rent
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(84 | ) | (3 | ) | ||||
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Stock compensation expense
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698 | 748 | ||||||
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Undistributed equity earnings
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(398 | ) | (465 | ) | ||||
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Changes in operating assets and liabilities (excluding the effects of business acquisitions)
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Accounts receivable
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4,872 | 11,847 | ||||||
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Inventory
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(3,316 | ) | (3,969 | ) | ||||
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Prepaid expenses, other current assets and other assets
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410 | (52 | ) | |||||
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Accounts payable, accrued expenses and other liabilities
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(55 | ) | (7,242 | ) | ||||
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Income taxes receivable
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- | (745 | ) | |||||
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Income taxes payable
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(2,356 | ) | (5,036 | ) | ||||
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NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
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3,297 | (3,658 | ) | |||||
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INVESTING ACTIVITIES
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Purchases of property and equipment
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(475 | ) | (1,047 | ) | ||||
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NET CASH USED IN INVESTING ACTIVITIES
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(475 | ) | (1,047 | ) | ||||
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FINANCING ACTIVITIES
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Proceeds (repayments) of bank borrowings, net
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(1,080 | ) | 2,900 | |||||
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Proceeds from the exercise of stock options
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22 | 9 | ||||||
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Excess tax benefits from exercise of stock options
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- | 6 | ||||||
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Payment of capital lease obligations
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- | (27 | ) | |||||
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Cash dividend paid
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(311 | ) | - | |||||
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NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
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(1,369 | ) | 2,888 | |||||
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Effect of foreign exchange on cash
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442 | - | ||||||
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INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
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1,895 | (1,817 | ) | |||||
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Cash and cash equivalents at beginning of year
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2,972 | 3,351 | ||||||
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CASH AND CASH EQUIVALENTS AT END OF YEAR
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$ | 4,867 | $ | 1,534 | ||||
LIFETIME BRANDS, INC.
Supplemental Information
(In thousands)
Reconciliation of GAAP to Non-GAAP Operating Results
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Consolidated EBITDA for the four quarters ended
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March 31, 2012
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Three months ended March 31, 2012
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$ | 6,222 | ||
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Three months ended December 31, 2011
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14,342 | |||
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Three months ended September 30, 2011
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13,524 | |||
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Three months ended June 30, 2011
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7,512 | |||
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Total for the four quarters
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$ | 41,600 | ||
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Consolidated EBITDA for the four quarters ended
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March 31, 2011
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Three months ended March 31, 2011
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$ | 2,720 | ||
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Three months ended December 31, 2010
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17,544 | |||
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Three months ended September 30, 2010
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13,529 | |||
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Three months ended June 30, 2010
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6,117 | |||
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Total for the four quarters
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$ | 39,910 | ||
LIFETIME BRANDS, INC.
Supplemental Information
(In thousands)
Reconciliation of GAAP to Non-GAAP Operating Results (continued)
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Three Months Ended
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March 31,
2012
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December 31,
2011 |
September 30,
2011
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June 30,
2011
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Net income as reported
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$ | 1,344 | $ | 5,419 | $ | 7,533 | $ | 2,063 | ||||||||
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Subtract out:
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Undistributed equity earnings
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(398 | ) | (925 | ) | (1,113 | ) | (393 | ) | ||||||||
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Add back:
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Income tax provision (benefit)
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588 | 3,513 | 2,089 | 1,108 | ||||||||||||
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Interest expense
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1,698 | 1,951 | 1,789 | 2,039 | ||||||||||||
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Depreciation and amortization
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2,207 | 2,336 | 2,046 | 2,020 | ||||||||||||
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Stock compensation expense
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698 | 690 | 682 | 675 | ||||||||||||
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Permitted acquisition related expenses
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85 | 1,358 | 498 | - | ||||||||||||
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Consolidated EBITDA
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$ | 6,222 | $ | 14,342 | $ | 13,524 | $ | 7,512 | ||||||||
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Three Months Ended
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March 31,
2011
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December 31,
2010 |
September 30,
2010
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June 30,
2010
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Net income (loss) as reported
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$ | (949 | ) | $ | 13,928 | $ | 6,585 | $ | (981 | ) | ||||||
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Subtract out:
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Undistributed equity earnings
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(465 | ) | (733 | ) | (836 | ) | (82 | ) | ||||||||
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Extraordinary item, net of taxes
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- | (2,477 | ) | - | - | |||||||||||
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Add back:
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Income tax provision (benefit)
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(588 | ) | 1,600 | 2,390 | 573 | |||||||||||
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Interest expense
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1,979 | 2,188 | 2,090 | 2,644 | ||||||||||||
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Depreciation and amortization
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1,995 | 2,292 | 2,518 | 2,458 | ||||||||||||
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Stock compensation expense
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748 | 746 | 782 | 741 | ||||||||||||
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Loss on early retirement of debt
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- | - | - | 764 | ||||||||||||
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Consolidated EBITDA
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$ | 2,720 | $ | 17,544 | $ | 13,529 | $ | 6,117 | ||||||||