Lifetime Brands (LCUT) Q4 2002 earnings summary

Executive summary

• 2002 began with shipment disruption during the Robbinsville distribution-center startup, then accelerated to the strongest fourth quarter in the business’s history; management expected momentum to continue in 2003.

• Results reflected a difficult retail environment, lower sales, European divestiture costs and warehouse transition expenses, alongside new premium product launches and progress toward warehouse savings.

Financial highlights

• FY 2002 net sales were $131.2M, down 2.8% YoY; income from continuing operations was $3.6M, or $0.34 diluted EPS, versus $3.6M and $0.34 in 2001.

• Operating income was $6.9M versus $7.0M; net income was $2.2M versus $2.9M, including a $1.3M discontinued-operations loss in 2002.

• Q4 net sales were $47.5M and income from continuing operations was $2.8M; net income was $2.5M after discontinued-operation charges.

• Cash provided by operating activities was $6.8M; year-end stockholders’ equity was $78.3M, equivalent to $7.41 book value per share.

Outlook and guidance

• Management expected warehouse labor savings to be substantial in 2003 and anticipated continued momentum after the strong Q4 finish.

• Planned 2003 capital expenditures were $2.0M, expected to be funded by operations, cash and, if needed, revolving-credit borrowings.

• CasaModa barware and Farberware ceramic bakeware were expected to begin shipping in Q3 2003; continued Cuisinart cutlery rollout and further KitchenAid barbecue items were planned.