Lifetime Brands (LCUT) Q4 2003 earnings summary

Executive summary

• FY2003 net sales rose 22.2% YoY to $160.4M; income from continuing operations increased to $8.4M, or $0.78 diluted EPS.

• Operating margin improved to 9.1% from 5.3%, aided largely by labor savings from the Robbinsville automated distribution center.

Financial highlights

• Net sales were $160.355M versus $131.219M in 2002; operating income was $14.645M versus $6.896M.

• Income from continuing operations was $8.415M versus $3.551M; diluted EPS from continuing operations was $0.78 versus $0.34.

• Fourth-quarter 2003 net sales were $62.053M and net income was $5.408M; diluted EPS was $0.49.

• Cost of sales rose to $92.9M, with its share of sales increasing to 57.9% from 55.7%, reflecting product mix, royalties and direct-import sales.

Outlook and guidance

• 2004 expected to be another strong year, supported by new products, expanding KitchenAid lines, CasaModa products and Farberware and Cuisinart launches.

• Planned 2004 capital expenditures were $3.0M, expected to be funded from operations, cash and, if needed, revolving-credit borrowings.

• Four additional product-development professionals were planned, following a 2003 design staff expansion to 33; a Global Sourcing SVP was added in Shanghai.