Lifetime Brands (LCUT) Q4 2011 earnings summary

Executive summary

• FY11 net sales rose 0.3% to $444.4M; net income was $14.1M versus $20.3M in FY10, which included a $2.5M extraordinary gain.

• Growth in Kitchenware and Tabletop was offset by declines in Home Solutions and Retail Direct; Creative Tops added $6.7M in post-acquisition sales.

Financial highlights

• FY11 operating income was $24.6M versus $29.8M in FY10; interest expense declined to $7.8M from $9.4M.

• FY11 net income was $14.1M and diluted EPS $1.12; FY10 reported net income of $20.3M and diluted EPS of $1.64 included the $2.5M extraordinary gain.

• Q4 FY11 net sales were $137.6M, operating income $10.0M, net income $5.4M and diluted EPS $0.43.

• Operating cash flow was $12.2M in FY11 versus $30.1M in FY10, primarily reflecting higher inventory, payments of payables and accrued expenses, and lower net income.

Outlook and guidance

• Liquidity from revolving-facility availability and operating cash flow was expected to fund operations for the next 12 months; alternative financing could be sought if conditions deteriorated.

• Planned 2012 introductions included ~4,200 new or redesigned U.S. products and 3,750 in the UK and other countries.