Lifetime brands, inc. reports first quarter financial results
Garden city, n.y.--(business wire)--lifetime brands, inc. (nasdaqgs:lcut), a leading global provider of branded kitchenware, tableware and other products used in the home, today reported its financial results for the first quarter ended march 31, 2016. consolidated net sales were $110.9 million, as compared to consolidated net sales of $117.7 million for the corresponding period in 2015. in constant currency, which excludes the impact of foreign exchange fluctuations, consolidated net sales decreased 4.8%, as compared to consolidated net sales in the corresponding period in 2015. gross margin was $40.6 million, or 36.6%, as compared to $44.9 million, or 38.2%, for the corresponding period in 2015. loss from operations was $5.2 million, as compared to a loss of $2.2 million for the corresponding period in 2015. net loss was $4.3 million, or $0.31 per diluted share, as compared to a net loss of $2.1 million, or $0.15 per diluted share, in the corresponding period in 2015. adjusted net loss was $3.4 million, or $0.24 per diluted share, as compared to a loss of $1.9 million, or $0.14 per diluted share, in the corresponding period in 2015. consolidated ebitda was $0.3 million, as compared to $2.5 million for the corresponding 2015 period. equity in losses, net of taxes, was $150 thousand, as compared to equity in earnings, net of taxes of $288 thousand in the corresponding 2015 period. jeffrey siegel, lifetime's chairman and chief executive officer, commented, “while the quarter’s results were below those of last year’s first quarter; as always is the case for us, we expect our projected top line growth and margin improvement to come in the third and fourth quarters. “the sales decrease in the quarter primarily was attributable to an inventory rationalization strategy at a major u.s. retailer. while this had an unfavorable impact in the quarter; for the full year, we expect to be a net beneficiary based on an expansion of our assortment and increased store count. sales also declined in our international segment, primarily due to foreign currency translation. “during the quarter, we saw strong success with farberware colourworks®, a comprehensive line of kitchen tools, gadgets, cutlery and pantryware that features vibrant colors and contemporary styling. it is our first line specifically targeted toward millennials, and was influenced by the very successful colourworks® collection at our u.k. subsidiary kitchen craft. this is an excellent example of the synergies we can achieve through different geographical sides of lifetime’s business, which will become an increasingly important factor in our success this fall and in coming years. we also had great success with initial shipments of our patent pending edgekeepertm technology which enables a knife to be sharpened every time it is removed from its sheath. after testing, several major retailers have committed to rolling out this line this fall. “in april, we acquired the brands, product portfolio and certain other assets of wilton armetale, a long-established supplier of fine serveware and grillware to department stores and specialty stores in the u.s. and internationally. they are an excellent addition to our existing brands of fine serving accessories and we are pleased to add them to lifetime’s robust portfolio. “this year, we are taking decisive steps to enhance lifetime’s ability to achieve its ambitious growth plans. these include implementing the recommendations of the first phase of the comprehensive review of lifetime’s u.s. wholesale businesses that we began in the fourth quarter of 2015, with the assistance of a major international consulting firm, to make certain that we have the right structure to grow and prosper in today’s evolving retail market. “based on the study’s initial findings, we already have made several structural changes in our u.s. wholesale divisions. we also embarked on the study’s second phase, focused on specific actions to enhance the management of our product pipeline and brand portfolio and to rationalize skus and sg&a spending. the initial findings from the second phase of this review are coming in and we look forward to acting on the initiatives, which we expect will help us increase our efficiency, effectiveness and, most importantly, our profitability. “based on current trends, we expect 2016 consolidated net sales to increase approximately 3%, excluding any impact of foreign currencies, and gross margin to increase approximately 50 basis points.” conference call the company has scheduled a conference call for tuesday, may 10, 2016 at 11:00 a.m. et. the dial-in number for the conference call is (877) 740-3951 or (615) 247-0177 passcode #1794472. a live webcast of the conference call will be accessible through http://edge.media-server.com/m/p/ioqdxaqc/lan/en. for those who cannot listen to the live broadcast, an audio replay of the webcast will be available. non-gaap financial measures this earnings release contains non-gaap financial measures. 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. as required by sec rules, 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, and management believes that exclusion of certain items allows for more accurate comparison of the company’s operating performance. management uses this non-gaap information as an indicator of business performance. these non-gaap measures should be viewed as a supplement to, and not a substitute for, gaap measures of 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 leading global provider of kitchenware, tableware and other products used in the home. the company markets its products under well-known kitchenware brands, including farberware®, kitchenaid®, sabatier®, fred® & friends, kitchen craft®, kamenstein®, kizmos™, la cafetiÈre®, misto®, mossy oak®, reo®, savora™ and vasconia®; respected tableware and giftware brands, including mikasa®, pfaltzgraff®, creative tops®, empire silver™, gorham®, international® silver, kirk stieff®, towle® silversmiths, tuttle®, wallace®, v&a® and royal botanic gardens kew®; and valued home solutions brands, including bombay®, built ny®, debbie meyer® and design for living™. the company also provides exclusive private label products to leading retailers worldwide. the company’s corporate website is www.lifetimebrands.com. (in thousands - except per share data) (unaudited) (in thousands - except share data) preferred stock, $1.00 par value, shares authorized: 100 shares of series a (in thousands) (unaudited) changes in operating assets and liabilities (excluding the effects of business acquisitions) (in thousands) consolidated ebitda for the four quarters ended march 31, 2016 consolidated ebitda for the four quarters ended march 31, 2015 three months ended march 31, 2016 december 31, 2015 september 30, 2015 june 30, 2015 (in thousands) march 31, 2015 december 31, 2014 september 30, 2014 june 30, 2014 consolidated ebitda is a non-gaap measure that the company defines as net income (loss), adjusted to exclude undistributed equity in earnings (losses), income taxes, interest, losses on early retirement of debt, depreciation and amortization, stock compensation expense, intangible asset impairment, contingent consideration, acquisition related expenses and restructuring expenses, as shown in the tables above. (in thousands- except per share data) adjusted net loss in the three months ended march 31, 2016 excludes acquisition related expenses, restructuring expenses and the deferred tax for foreign currency translation for grupo vasconia. adjusted net loss in the three months ended march 31, 2015 excludes acquisition related expenses and financing expenses. constant currency: increase (decrease) increase (decrease) currency impact excluding currency including currency currency impact (1)"constant currency" is determined by applying the 2016 average exchange rates to the prior year local currency net sales amounts, with the difference between the change in "as reported" net sales and "constant currency" net sales, reported in the table as "currency impact". constant currency net sales growth excludes the impact of currency.
