Lifetime Brands (LCUT) Q4 2012 earnings summary

Executive summary

• FY12 net sales rose 9.5% to $486.8M, while net income increased to $20.9M from $14.1M; growth included a full-year contribution from Creative Tops.

• Product development remained a priority: 3,600+ new or redesigned products launched in 2012, with 4,000+ planned for 2013.

Financial highlights

• FY12 gross margin was $176.8M, or 36.3%, versus $162.4M, or 36.5%, in 2011; operating income was $27.3M versus $24.6M.

• FY12 diluted EPS was $1.64 versus $1.12; Q4 net income was $15.2M versus $5.4M, and Q4 diluted EPS was $1.19 versus $0.43.

• Interest expense fell to $5.9M from $7.8M; the 2012 effective tax rate was 25.9%, including a $2.3M non-cash benefit for a prior-year deferred tax liability adjustment.

Outlook and guidance

• Plans called for 4,000+ new or redesigned products in 2013, following 3,600+ launches or redesigns in 2012.

• Liquidity from operations and availability under the revolving facility were expected to fund operations for the next 12 months.