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Lifetime Announces Improving 2nd Qtr Financials (posted 8/17/09)

August 17, 2009
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On a pre-tax basis, the loss for the second quarter was $1.0 million in 2009, compared to a loss of $8.9 million in the 2008 quarter.

Lifetime Brands, Inc. recently announced its financial results for the second quarter ended June 30, 2009. Net sales for the 2009 second quarter totaled $85.3 million, compared to net sales of $92.4 million for the same period in 2008. On a comparable basis, excluding 2008 net sales of the company’s retail stores, which were closed in December 2008, and adjusting 2009 net sales of Mikasa®, which was acquired on June 6, 2008, to reflect net sales only for the period after June 6, 2009, the same post-acquisition period as 2008, net sales for the quarter were $78.4 million in 2009, compared to $85.2 million in 2008.

The company reported a net loss of $1.3 million, or $0.10 per diluted share for the 2009 period, compared to a net loss of $3.6 million, or $0.30 per diluted share, for the 2008 quarter. On a pre-tax basis, the loss for the quarter was $1.0 million in 2009, compared to a loss of $8.9 million in 2008. Net sales for the company’s wholesale segment in the second quarter of 2009 were $80.9 million, an increase of 1.3%, compared to net sales of $79.9 million for the 2008 quarter. On a comparable basis, adjusting 2009 net sales of Mikasa®, which was acquired on June 6, 2008, to reflect net sales only for the period after June 6, 2009, the same post-acquisition period as 2008, the wholesale segment’s net sales were $74.6 million in 2009, a decrease of $5.3 million or 6.6% compared to the 2008 period.

The decrease in comparable wholesale net sales was primarily attributable to lower volume, due, in part, to the non-recurrence of sales to Linens ‘N Things, which was liquidated in 2008; less inventory reduction plan activity; the company’s elimination of certain low-margin business in the 2009 period; and the planned effect of a change in the company’s relationship with Accent-Fairchild Group, a Canadian company that previously had served as the company’s distributor in Canada and now operates a portion of its business as Lifetime Brands Canada. The company’s share of the operating profit of Lifetime Brands Canada is included in net sales.

Net sales for the direct-to-consumer segment in the second quarter of 2009 were $4.4 million, compared to $12.5 million for the 2008 period. In 2009, the company’s direct-to-consumer segment reflects the results of the Pfaltzgraff® Internet website and mail order catalog and the Mikasa® Internet website. On a comparable basis, excluding the net sales from the Mikasa® Internet website in 2009 and the net sales generated by the company’s retail stores in 2008, net sales for the direct-to-consumer segment were $3.8 million in the second quarter of 2009, compared to $5.3 million in the 2008 period.

“The substantial year-over-year improvement in our adjusted EBITDA is a clear indication that the steps we have taken to restructure our business have borne fruit,” said Jeffrey Siegel, chairman, president and CEO. “Our improved operating results, combined with the success of our ongoing inventory reduction efforts, enabled us to reduce our bank borrowings by $38.0 million, compared to June 30, 2008, and by $31.5 million, compared to December 31, 2008.

“We continue to work closely with our retail partners to create customized sales programs tailored to today’s business climate. In addition, we think the current environment presents us with opportunities to expand our market share in all our product classifications. Consequently, we believe that we are well-positioned to take advantage of the holiday shopping season.”

Additional details, including a replay of a recent conference call discussing these results, are available at www.lifetimebrands.com.

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