Lifetime Q1 Loss Jumps; Sales Gain 20 Percent
GARDEN CITY, N.Y.-Although sales rose by a robust 20 percent, Lifetime Brands' first-quarter net loss reached $2.9 million, compared to a net loss of $632,000 in its first quarter of last year.
Net sales totaled $118.4 million in the quarter, which ended on March 31, and gross margin gained 63 basis points to finish at 37.4 percent. However, non-recurring expenses from four acquisitions in the quarter, along with an increase in other costs, boosted selling, general and administrative expenses by 33.4 percent in dollars and 288 basis points as a percentage of sales, to 28.9 percent.
In January, Lifetime acquired Thomas Plant (Birmingham) Ltd., which, trading under the Kitchen Craft name, supplies kitchenware products and accessories. In February, the company bought the intellectual property and certain assets of Built NY, a vendor of lunch boxes, wine bags and baby accessories; and acquired the intellectual property and certain assets of Empire Silver, which makes sterling silver and pewter gift items. In March, Lifetime purchased La Cafetiere, a supplier of products to brew coffee and serve coffee and tea.
Looking ahead, Jeffrey Siegel, Lifetime's chairman and CEO, said, "We expect the impact of the ongoing greater SG&A expenses to be mitigated by higher levels of sales during the second half of the year. Of these acquisitions, only Kitchen Craft recorded any significant revenues during the first quarter. However, we expect all four to be running smoothly in the second half of the year and to add over $75 million in net sales, and significantly to increase our net income and diluted earnings per share in 2014."
Siegel also said Lifetime continues to project sales gains of 5 percent organically and 15 percent from acquisitions for 2014 as a whole, which is what was stated on its last conference call to financial analysts.