Lifetime Brands, Inc. recently reported its financial results for the fourth quarter and year ended December 31, 2014. Consolidated fourth quarter 2014 net sales were $190.0 million, an increase of $25.1 million, or 15.2%, compared to consolidated net sales of $164.9 million for the corresponding period in 2013. Consolidated net sales in the 2014 quarter, included $22.8 million of net sales from Kitchen Craft and other acquisitions that were completed in 2014.
Net income was $9.3 million in the 2014 fourth quarter, compared to $9.4 million in the corresponding period in 2013. Adjusted net income was $8.3 million in the 2014 quarter, compared to adjusted net income of $10.0 million in the corresponding period in 2013.
Consolidated net sales for the full year 2014 were $586.0 million, an increase of $83.3 million, or 16.6%, , compared to consolidated net sales of $502.7 million for 2013. Net income was $1.5 million vs. $9.3 million in 2013.
“For 2014, despite a continuation of the tough retail environment and a mixed holiday selling season, Lifetime delivered consolidated net sales of $586.0 million and EBITDA of $42.5 million, reflecting the success of our acquisition strategy and international expansion,” said Jeffrey Siegel, chairman and CEO. “Consolidated net sales increased by $83.3 million, or 16.6%, as compared to consolidated net sales of $502.7 million in 2013. Consolidated net sales included $76.7 million of net sales from Kitchen Craft and other acquisitions that were completed in 2014.
“Net sales for the U.S. wholesale segment in 2014 were $441.3 million, a decrease of 0.6%, compared to net sales of $444.2 million in 2013. Sales of kitchenware products declined, due to a decrease in cutlery sales under the Cuisinart brand in the current year and decreased sales volume in cookware and novelty kitchenware, offset by increased sales of tableware and home solutions products, including sales of the Company’s Built NY® division, which we acquired in 2014.
“Outside the U.S., wholesale net sales increased by $86.3 million to $125.2 million. Of the increase, $71.9 million represents sales from Kitchen Craft and La Cafetière, which were acquired during the year. The balance of the increase was due to higher sales of tableware products as the impact of higher duties on ceramic products imposed by the European Union in 2013 normalized.
“I am pleased to note that Grupo Vasconia, our partner company in Mexico, recorded improvement in both its kitchenware and commercial aluminum businesses. In Brazil, our partner company GS Internacional is making strides in transforming itself into a leader in the mass market and recently was appointed category advisor for kitchenware, cutlery and cutting boards at one of Brazil’s largest mass-market retailers.
“Our home décor products category has experienced a decline in sales and profit in recent years. We have made some progress in restructuring that business by re-branding a portion of our home décor products under the Mikasa® and Pfaltzgraff® trade names and, more recently, through the acquisition of the Bombay® license for decorative accessories.
“As we move through the early part of 2015, we see many economic trends that we believe will benefit the housewares business overall and our business in particular this year. Among these are:
•Low oil prices, which should increase the purchasing power of consumers, as well as result in lower raw material costs, especially for plastic resins, an important material for Lifetime
•Continued decrease in the U.S. unemployment rate, which will also provide more disposable income for consumers
•An excess supply of certain steels in China, which is enabling us to book some products at lower cost
•The strong U.S. dollar, which, in effect, lowers the prices Lifetime pays for certain goods, notably crystal, which we source in eastern Europe and which is priced in euros
•The return of levels of new household formation to pre-recession levels of approximately one million per year
“We believe current trends favor large and financially stable manufacturers and suppliers with multiple brands targeted to various age groups, advanced design capabilities and internal drop-ship distribution capabilities. We believe that these manufacturers and suppliers increasingly will be called upon to act as long-term partners by large retailers. Accordingly, we expect a solid year in 2015. We foresee sales increasing by 3-6%.”