Net Sales Flat for Lifetime Brands in 2015
Lifetime Brands, Inc. recently reported its financial results for the fourth quarter and year ended December 31, 2015. Consolidated net sales were $185.9 million in the fourth quarter of 2015, a decrease of 2%, or $4.1 million, compared to the same period of 2014. In constant currency, which excludes the impact of foreign exchange fluctuations, consolidated net sales decreased 1.2%, compared to 2014. Gross margin in the 2015 fourth quarter was $69.0 million, or 37.1%, compared to $69.8 million, or 36.7%, in 2014. Income from operations was $17.6 million, compared to $18.3 million in 2014. Net income was $11.0 million, or $0.77 per diluted share, compared to $9.3 million, or $0.66 per diluted share, in the 2014 quarter. Adjusted net income was $10.8 million, or $0.75 per diluted share, in the fourth quarter of 2015, compared to $9.4 million, or $0.66 per diluted share, in 2014. Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) was $23.9 million, equal to 12.9% of consolidated net sales, in the fourth quarter of 2015, compared to $20.9 million, or 11.0% of consolidated net sales for the corresponding 2014 period. Equity in earnings, net of taxes, was $0.7 million in the last quarter of 2015, compared to equity in losses of $1.1 million in 2014.
Consolidated net sales were $587.7 million for the year ending on December 31, 2015, an increase of $1.7 million, or 0.3%, compared to $586 million in 2014. In constant currency, consolidated net sales increased 2.3%. Gross margin was $214.4 million, or 36.5%, in 2015, compared to $212.9 million, or 36.3%, in 2014. Income from operations was $24.2 million, compared to $21.4 million in the prior year. Net income was $12.3 million, or $0.86 per diluted share, in 2015, compared to $1.5 million, or $0.11 per diluted share, in 2014. Adjusted 2015 net income was $14.2 million, or $1.00 per diluted share, compared to $10.3 million, or $0.73 per diluted share, in 2014. Consolidated EBITDA was $44.9 million, as compared to $42.5 million in 2014. Equity in earnings, net of taxes, was $0.6 million for 2015, compared to equity in losses, net of taxes, of $6.5 million.
In 2015, net sales in the company’s U.S. wholesale segment grew by 3.9%. Sales of kitchenware, tableware and home solutions products all rose, with a particularly strong increase in home décor product category. Kitchenware reportedly benefited from strong increases in cutlery and the expansion of the Farberware® brand. Tableware sales also rose, reflecting good reception of several new programs for dinnerware and flatware.
The strength in the company’s U.S. operations was offset by currency challenges in the UK, where the businesses were adversely affected by weakness of the British pound relative to the dollar, which on a relative basis increased cost of goods (sourced in dollars), and by weakness of the euro relative to the pound, which hurt export sales. Nevertheless, improved operating margins produced a 5.5% increase in consolidated EBITDA, which grew to $44.9 million.
The company has recently begun an in-depth review of its U.S. wholesale businesses. The study reportedly will include evaluations of the divisional organization structure, product pipeline and brand management, as well as SKU rationalization and SG&A spending.
“So far this year, we have shown our line-up of new products for 2016 at the Birmingham Spring Fair, at Ambiente in Frankfurt and, just this week, in Chicago at the International Home + Housewares Show,” said Jeffrey Siegel, chairman and CEO. “I am very pleased to report that the reaction to our new products was overwhelmingly positive. To succeed with today’s consumers, housewares manufacturers need to deliver improved performance, expanded function and great design. The wide array of new products we offered clearly showed that Lifetime is leading this effort, keeping ahead of the curve on the ever-evolving kitchenware industry.
“While we believe that our strong position with major retailers in the U.S. and the UK, our expanding footprint with independent retailers worldwide and the breadth of new product offerings should enable us to grow at an accelerated pace, we are mindful of the risks posed by the possibility of some weakness in the U.S. retail sector, continued foreign exchange challenges, and economic uncertainty in some key international markets. Consequently, at this point in the year, we expect low- to mid-single-digit overall sales growth for 2016.”
For more information, visit www.lifetimebrands.com.