Lifetime brands reports record second quarter 2011 results
Garden city, n.y.--(business wire)--lifetime brands, inc. (nasdaqgs: lcut), north america's leading resource for nationally branded kitchenware, tabletop, home dÉcor, and lifestyle products today reported its financial results for the three months ended june 30, 2011. consolidated net sales for the three months ended june 30, 2011 increased 4.0% to $90.4 million, as compared to consolidated net sales of $86.9 million for the corresponding period in 2010. net sales for the wholesale segment increased 5.9%, or $4.8 million, to $86.3 million in the second quarter of 2011. net sales for the retail direct segment were $1.3 million, as compared to $4.1 million, in the second quarter of 2011. the decline in direct-to-consumer sales reflected reduced promotional activity in the 2011 quarter, as compared to the corresponding quarter in the prior year, as well as the company’s decision to terminate its print consumer catalog. gross margin as a percentage of net sales for the wholesale segment declined to 36.2% in the second quarter of 2011 from 37.2% in the corresponding period in 2010. the decrease in the company’s gross margin percentage was primarily attributable to changes in product mix. gross margin for the retail direct segment was 68.0% in the second quarter of 2011 as compared to 66.8% for the corresponding period in 2010. the increase in the gross margin for the retail direct segment was the result of reduced promotional activities. income from operations for the three months ended june 30, 2011 was $4.4 million, as compared to $2.5 million for the corresponding period in 2010. the increase in income from operations reflected lower distribution expense and a reduction in selling, general and administrative expenses in the 2011 period, as compared to the corresponding period in 2010. interest expense for the three months ended june 30, 2011 declined to $2.0 million from $2.6 million in 2010, which reflected both lower average borrowings and lower interest rates. on july 15, 2011, the company retired the $24.1 million aggregate principal amount of its convertible notes. consolidated net income for the second quarter of 2011 was $2.1 million, or $0.17 per diluted share, as compared to a net loss of $1.0 million, or $0.08 per diluted share, for the second quarter of 2010. jeffrey siegel, chairman, president and chief executive officer, said, "the net income we are reporting this morning is a second quarter record for lifetime brands. despite the challenging business environment, we are on target to achieve top line growth and increased profitability for the full year. our solid operating results and further strengthened financial position give us better flexibility to profitably grow our company in the future.” consolidated ebitda for the three months ended june 30, 2011 was $7.5 million, as compared to $6.1 million for the corresponding period in 2010. consolidated ebitda for the trailing four quarters ended june 30, 2011, was $41.3 million as compared to $39.0 million for the trailing four quarters ended june 30, 2010. ebitda is a non-gaap measure that the company defines as net income, adjusted to exclude undistributed equity earnings, an extraordinary item, income taxes, interest, depreciation and amortization, restructuring expenses, stock compensation expense and loss on early retirement of debt, as shown in the table below. on may 16, 2011, the board of directors declared a quarterly dividend of $0.025 per share payable on august 16, 2011, to shareholders of record on august 2, 2011. conference call lifetime has scheduled a conference call for monday, august 8, 2011 at 11:00 a.m. et to discuss its second quarter 2011 results. the dial-in number for the conference call is (617) 786-2964, conference id #46883510. a live webcast of the conference call will be broadcast in the investor relations section of the company’s website, www.lifetimebrands.com. a replay of the call will also be available through august 15, 2011 and can be accessed by dialing (617) 801-6888, conference id #54391056. for those who cannot listen to the live broadcast, an audio replay of the call will also be available on the company’s website. 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 north america’s leading resource for nationally branded kitchenware, tabletop, home dÉcor and lifestyle products. the company markets its products under such well-known kitchenware brands as farberware®, kitchenaid®, casamŌda®, cuisinart®, cuisine de france®, hoffritz®, kamenstein®, kizmos™, misto®, pedrini®, roshco®, sabatier® and vasconia®; respected tabletop brands such as mikasa®, pfaltzgraff®, calvin klein®, gorham®, international® silver, kirk stieff®, nautica®, sasaki®, towle® silversmiths, tuttle®, and wallace®; and leading home dÉcor and lifestyle brands, including design for living™, elements® and melannco®. the company’s website is www.lifetimebrands.com. lifetime brands, inc. consolidated statements of operations (in thousands - except per share data) (unaudited) june 30, june 30, - - - - lifetime brands, inc. consolidated balance sheets (in thousands - except share data) 2011 december 31, 2010 accounts receivable, less allowances of $5,504 at june 30, 2011 and $12,611 at december 31, 2010 - - liabilities and stockholders’ equity current liabilities $ - - - preferred stock, $.01 par value, shares authorized: 100 shares of series a and 2,000,000 shares of series b; none issued and outstanding - - common stock, $.01 par value, shares authorized: 25,000,000; shares issued and outstanding: 12,082,943 at june 30, 2011 and 12,064,543 at december 31, 2010 lifetime brands, inc. condensed consolidated statements of cash flows (in thousands - unaudited) - - - - - - - - - consolidated ebitda – four quarters ended june 30, 2010 reconciliation of gaap to non-gaap operating results june 30, 2011 march 31, 2011 december 31, 2010 september 30, 2010 undistributed equity earnings - - - june 30, 2010 march 31, 2010 december 31, 2009 september 30, 2009 undistributed equity earnings - - - - -
