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Lifetime Reduces Operating Loss for First Quarter 2009 (posted 5/13/09)

May 13, 2009
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Lifetime Brands, Inc. recently announced financial results for the quarter ended March 31, 2009. Net sales for the 2009 quarter totaled $90.2 million, compared to net sales of $98.2 million for the same period in 2008. For the quarter, the company reported a net loss of $6.0 million, or $0.50 per diluted share, compared to a net loss of $6.4 million, or $0.53 per diluted share, for the first quarter of 2008. The company recorded tax expense of $135,000 in the 2009 period, compared to a tax benefit of $4.9 million in the 2008 period.

The company’s results for the first quarter of 2009 and 2008 include pre-tax charges of $0.8 million, or $0.04 per diluted share, and $2.9 million, or $0.14 per diluted share, respectively, attributable primarily to the closing of the company’s retail stores. The results for each of the 2009 and 2008 quarters also includes pre-tax charges of $0.6 million or $0.03 per diluted share, consisting of additional non-cash interest expense as a result of the required retrospective adoption of FASB Staff Position APB 14-1.

Net sales for the company’s wholesale segment in the first quarter of 2009 were $83.6 million, an increase of $3.2 million, or 4.0%, compared to net sales of $80.4 million for the 2008 period. Excluding Mikasa net wholesale sales of $8.3 million, net wholesale sales were $75.3 million for the quarter ended March 31, 2009, a decrease of 6.3% compared to the 2008 period.

Net sales for the direct-to-consumer segment in the first quarter of 2009 were $6.6 million compared to $17.8 million for the 2008 period. On December 31, 2008, the company ceased operating its retail stores. The company’s direct-to-consumer segment now consists solely of its Pfaltzgraff® website and mail order catalog and its Mikasa® website, which was acquired in June 2008. On a comparable basis, excluding the net sales from the Mikasa 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 $5.8 million in 2009 compared to $6.2 million in 2008. The decrease was primarily due to a decline in shipping revenue in 2009 as a result of a free shipping promotion.

“We are pleased with our results for the three months ended March 31, 2009,” said Jeffrey Siegel, chairman, president and chief executive officer. “Despite the challenging economic environment, the company’s operating loss in the period was approximately $5.4 million less in 2009 than in the corresponding period in 2008. Excluding restructuring expenses, the loss from operations, was $2.5 million in the 2009 period, compared to $5.9 million in 2008, a decrease of 57%. This decrease reflects the closing of our retail stores, the consolidation of our West Coast distribution centers, and other measures we have taken to lower SG&A.

“The reported year-over-year decrease of $5.1 million in net wholesale sales after excluding net sales attributable to Mikasa primarily reflects the non-recurrence of $3.0 million of net sales to Linens ‘n Things in the 2008 first quarter and $1.0 million of net wholesale sales to certain Canadian accounts that, since May 2008, have been serviced by our alliance partner, Accent-Fairchild Group. To a lesser extent, the decrease also reflects net sales of certain products under the Mikasa brand that otherwise would have been made under one or more of our other brands.

“Our emphasis on product design has always set Lifetime apart from our competition. We are working closely with our retail partners to create customized programs that are tailored for today’s business climate, while remaining trend-right. We also have created brand extensions, including Gourmet Basics by Mikasa™, M by Mikasa™ and Pfaltzgraff Everyday®, which offer trusted brands and outstanding design at significant values.

“We believe Lifetime is well-positioned for the year. In particular, we believe the current environment presents us with opportunities to expand our market share in each of our product classifications.”

For additional details, visit www.lifetimebrands.com.

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