Lifetime Brands Reports Improved First Quarter Results

Lifetime Brands, Inc. today announced first quarter 2010 results that included net income of $729 thousand compared to a net loss of $6.0 million for the first quarter of 2009.
The company reported net sales for the first quarter of $88.7 million, compared to $90.2 million for the first quarter of 2009. Wholesale segment net sales were $82.1 million, as compared to $83.6 million, a decreased of $1.5 million. In the 2009 period, the company recorded $3.4 million of non-recurring net sales attributable to the going-out-of-business sale of a customer that was liquidated in 2009. Excluding these non-recurring net sales, the company’s net sales increased by $1.9 million, as compared to the 2009 period. Direct-to-consumer segment net sales for the first quarter of 2010 were $6.6 million, unchanged from net sales of $6.6 million in the first quarter of 2009.
For the three months ended March 31, 2010, gross margin as a percentage of net sales for the wholesale segment increased by 400 basis points to 37.0%, as compared to 33.0% for the 2009 period. Gross margin in the 2010 quarter benefited from a more favorable product mix, the absence of the non-recurring net sales, lower royalty expense and lower freight costs than in the 2009 period. Gross margin for the direct-to-consumer segment decreased slightly, from 67.4% to 66.6%, reflecting a higher level of promotions in the 2010 period.
Adjusted EBITDA for the first quarter of 2010 was $5.7 million, as compared to $588 thousand in the 2009 period. Trailing twelve months Adjusted EBITDA through March 31, 2010 was $37.2 million. Adjusted EBITDA is a non-GAAP measure, which the Company defines as net income (loss) before interest, taxes, depreciation and amortization, restructuring expenses, goodwill and intangible asset impairment and stock compensation expense, as shown in the table below.
“We are pleased to deliver a profitable first quarter,” said Jeffrey Siegel, chairman, CEO and president of Lifetime Brands. “Following our strategy of offering trusted brands and outstanding design at significant values, we grew our Mikasa brand in all tabletop categories and re-energized the Pfaltzgraff brand in casual dinnerware, while our new Design for Living line of water bottles and thermal mugs continued to grow.