Lifetime Brands, Inc. recently reported its financial results for the second quarter ended June 30, 2016. Consolidated net sales were $118.1 million, compared to consolidated net sales of $120.9 million in the corresponding period in 2015. In constant currency, which excludes the impact of foreign exchange fluctuations, consolidated net sales decreased 1.4%, compared to the same period of 2015. Gross margin was $43.0 million (36.4%), compared to $43.5 million (36%) for the corresponding period in 2015. Consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) was $5.2 million, compared to $4.4 million for the corresponding 2015 period. 

Loss from operations was $0.3 million, compared to a loss of $1 million for the corresponding period in 2015. Net loss was $1.2 million, compared to a net loss of $1.7 million in the 2015 quarter. Adjusted net income was $0.1 million, compared to adjusted net loss of $0.6 million in the second quarter of 2015. 

Consolidated net sales for the first six months of 2016 were $229 million, compared to consolidated net sales of $238.6 million for the corresponding period in 2015. In constant currency, consolidated net sales decreased 3.1%. Gross margin was $83.5 million (36.5%), compared to $88.4 million (37.1%) for the 2015 first half. Loss from operations was $5.5 million, compared to a loss of $3.2 million, for the corresponding period in 2015. Net loss was $5.5 million, compared to a loss of $3.8 million in the prior year’s first half. Adjusted net loss was $3.3 million, compared to a loss of $2.5 million in the 2015 period. Consolidated EBITDA was $5.5 million, compared to $6.9 million for the corresponding 2015 period. Equity in losses, net of taxes, was $0.1 million, compared to equity in earnings, net of taxes, of $0.3 million in the 2015 first half. 

“As we previously have noted, Lifetime’s business is heavily weighted to the second half of the year,” said Jeffrey Siegel, chairman and CEO. “Our results for this quarter generally were in line with our expectations. Consolidated net sales decreased modestly, reflecting the timing of shipments. This decrease was offset by an increase in our overall gross margin percentage and by lower distribution and SG&A expenses, resulting in positive adjusted net income, as compared to adjusted net loss in the corresponding period in 2015. Consolidated EBITDA increased to $5.2 million, as compared to $4.4 million in the prior year’s quarter. 

“We have now commenced the implementation phase of the restructuring plan that we initiated earlier this year with the assistance of a major international consulting firm to right size Lifetime’s SG&A expense base, realign our operating structure and improve the efficiency of our operating activities, and are confident that we are on track to achieve significant efficiencies that will be reflected in our operating results beginning in 2017. 

“It is too early to assess the effects of the ‘Brexit’ referendum on our UK subsidiaries, Creative Tops and Kitchen Craft, the net sales of which represent approximately 19% of Lifetime’s consolidated net sales. Through this year, we expect any such effects to be modest, as Creative Tops and Kitchen Craft were able to hedge their anticipated U.S. dollar purchases through the end of 2016. Moreover, by relying on Lifetime’s global sourcing infrastructure, Creative Tops and Kitchen Craft should be able to source products on better terms than their smaller competitors. Longer term, a prolonged decline in the value of the British pound would increase the cost of imports into the UK and could negatively affect the translation of financial results into U.S. dollars. 

“As of now, we foresee a healthy holiday shopping season and expect top line growth in the second half of the year.” 

For more information, visit www.lifetimebrands.com.