Lifetime Brands (LCUT) Q4 2014 earnings summary

Executive summary

• FY14 net sales rose 16.6% to $586.0M, largely reflecting acquisitions; EBITDA was $42.5M, while GAAP net income fell to $1.5M.

• Acquired Kitchen Craft, La Cafetière and Built NY expanded international reach and the product portfolio; FY15 sales growth guidance was 3%–6%.

Financial highlights

• Net sales were $586.0M vs. $502.7M in 2013; gross margin was $212.9M, or 36.3%, vs. $187.3M, or 37.2%.

• Operating income was $21.4M vs. $28.2M; net income was $1.5M vs. $9.3M; diluted EPS was $0.11 vs. $0.71.

• Adjusted net income was $9.2M and adjusted diluted EPS was $0.66; adjusted results exclude specified impairment, investment, financing, acquisition, restructuring and contingent-consideration items.

• EBITDA was $42.5M vs. $43.5M; FY14 included $3.4M intangible impairment and a $4.2M contingent-consideration credit.

Outlook and guidance

• FY15 consolidated sales expected to increase 3%–6%.

• Lower oil prices reduced resin spot prices by more than 25% in a few months; margin benefit was expected as inventory turned over in 2015.

• Management cited lower oil and steel costs, a strong U.S. dollar, improving employment and household formation as potential tailwinds.