Lifetime Brands (LCUT) Q4 2013 earnings summary

Executive summary

• FY13 net sales reached a record $502.7M; operating income was a record $28.2M and EBITDA a record $43.5M, while net income fell to $9.3M from $20.9M.

• Q4 net sales rose to $164.9M from $154.8M; operating income was $16.6M vs. $14.5M, while net income declined to $9.4M from $15.2M.

Financial highlights

• FY13 net sales increased 3.3% to $502.7M; gross margin was $187.3M, or 37.2%, vs. $176.8M, or 36.3%, in FY12.

• FY13 operating income was $28.2M vs. $27.3M; GAAP net income was $9.3M vs. $20.9M and diluted EPS was $0.71 vs. $1.64.

• Adjusted FY13 net income was $14.5M and adjusted diluted EPS was $1.11; adjusted results exclude restructuring, the Vasconia investment write-down and other items.

• FY13 EBITDA was $43.5M vs. $41.2M in FY12; operating cash flow increased to $35.8M from $22.7M.

Outlook and guidance

• 2014 growth prospects were tied to an improving U.S. economy, extensive new product launches and acquisitions; acquired businesses were expected to add over $75M in net sales and raise net income and diluted EPS.

• More than 4,000 new or redesigned products were planned for 2014, following over 3,500 launches in 2013.

• Creative Tops sales improved in Q4 as European customers adjusted to higher prices tied to EU ceramic duties; continued improvement was expected in 2014.