Shares of Lifetime Brands Inc. fell sharply Thursday, triggering a short-sale circuit breaker on the company's stock, after the kitchenware provider posted a wider net loss for the first quarter.
The Garden City company attributed the net loss of $2.9 million, or 22 cents per diluted share, to expenses related to acquisitions. In the year-ago period Lifetime posted a net loss of $632,000, or 5 cents per share.
Investors, however, sold Lifetime's shares, which fell 13.35 percent to close at $16.55 Thursday.
The Securities and Exchange Commission's 4-year-old short-sale circuit breaker regulation, Rule 201, is triggered when a stock falls more than 10 percent from the previous day's close. The rule restricts short sales in a stock; in a short sale, an investor seeks to profit from a decline in a stock.
While Lifetime's net loss widened, the company's net sales climbed $19.7 million to $118.4 million, up from $98.7 million in the 2013 quarter.
Lifetime provides kitchenware and tableware under labels including Farberware, KitchenAid, Mikasa, Pfaltzgraff and Misto.
"I am very pleased with the company's progress during the quarter, which includes the results of the four businesses we acquired during the period," said Jeffrey Siegel, Lifetime's chairman and chief executive.
He said the acquisitions "necessitated significant nonrecurring acquisition expenses and a write-off of debt financing fees." Those expenses and others produced the decline in net results for the quarter.
Siegel reaffirmed the company's 2014 net sales guidance of about $600 million, including a 5 percent increase from organic growth and a gain of about 15 percent from acquisitions.
Siegel said the company would begin supplying kitchenware products to almost 400 Walmart stores in China in the year's second half. That was pushed back from the company's prior target of this month.
The SEC has said it designed Rule 201 to prevent short sellers from exploiting a declining market in a security and pushing it down further.
Short sellers borrow and then sell shares of a security in the hope that the price will fall. Should the price decline, short sellers can close their position by buying the shares at the lower price, returning them, and pocketing the difference.