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Lifetime Brands Announces Third Quarter Results (posted 11/12/08)

November 12, 2008
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Lifetime’s third quarter 2008 net sales totaled $140.6 million, compared to $143.5 million for the same period in 2007.

Lifetime Brands, Inc. recently announced results for the three months ended September 30, 2008. For the third quarter of 2008, Lifetime’s net sales totaled $140.6 million, compared to net sales of $143.5 million for the same period in 2007. Including $17.0 million in sales due to the June 2008 acquisition of the business and certain assets of Mikasa, Inc., net sales for the company’s wholesale segment increased slightly to $124.3 million from $123.2 million for the prior-year period.

Net sales for the company’s direct-to-consumer (DTC) segment were $16.4 million for the 2008 third quarter, compared to $20.3 million for the 2007 period. This decline was due primarily to the closing of 30 outlet retail stores in the first quarter of 2008. Comparable DTC segment store sales declined 5.0% for the quarter.

The company reported a net loss of $0.7 million, or $0.06 per diluted share, compared to net income of $6.8 million, or $0.47 per diluted share, for the third quarter of 2007. The company’s results for the 2008 third quarter included a charge of $4.6 million, which was primarily non-cash, or approximately $0.25 per diluted share, related to the closing of its remaining 53 outlet retail stores and related restructuring activity. Excluding this charge, the company’s net income would have been $2.3 million, or $0.19 per diluted share.

“Although the recent economic uncertainty and weak retail environment made the third quarter extremely challenging, Lifetime is weathering the storm and seizing opportunities to grow market share across all categories,” said Jeffrey Siegel, chairman, president and chief executive officer. “Our acquisition of Mikasa has turned out to be every bit as beneficial as we expected, providing us with many opportunities to strengthen our existing placement and open new doors. Our organic sales held up relatively well, with the shortfall in the third quarter primarily reflecting reduced sales to Canadian customers, who are now serviced through our Canadian strategic alliance, plus lower sales to certain retailers that are liquidating or in financial trouble, such as Linens ‘N Things, which historically accounted for approximately 3% of Lifetime’s sales. In 2009, we expect most, if not all, of these sales to be absorbed by other retailers who are customers of Lifetime.

“Our initiatives to reduce inventory and improve distribution efficiency continue to yield results, and the closing of our retail stores is proceeding smoothly. With all the stores expected to be closed by year-end, the DTC segment, which also includes the Internet and catalog business that we will continue to operate, should contribute to the company’s earnings in 2009. In the last four quarters, the DTC segment had approximately $8 million in pretax losses, excluding restructuring expenses. The elimination of these losses will boost profits substantially.”

For additional information, including an archive of a recent conference call discussing these results, visit www.lifetimebrands.com.

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