The Lifetime Brands Expo Center in Garden City.

The Lifetime Brands Expo Center in Garden City. Credit: Newsday/Bill Davis

A local kitchenware provider whose net income fell 92 percent in the fourth quarter of last year says most of the decline was due to one-time charges.

Garden City-based Lifetime Brands Inc. also is attributing its sales declines to major retailers that carry its products.

“The fourth quarter shortfall was directly attributable to sales declines at two key retailers; one reflecting a storewide reduction of inventory weeks on hand and the other due to two 2016 promotions that were not repeated in 2017,” Jeffrey Siegel, Lifetime’s executive chairman, said in an earnings report released Thursday.

Lifetime Brands declined to name the retailers. Frank Camma, a senior equity research analyst at Manhattan-based Sidoti & Co. who covers the company, said the retailers were Walmart and Costco, Lifetime’s biggest customers.

Siegel said Lifetime’s sales also were affected after it opted not to fulfill orders because of credit concerns at two other retailers.

The fourth-quarter’s results led to a full-year performance that fell below expectations, he said.

Lifetime’s net sales were $182.8 million, a decrease of $10.7 million, or 5.6 percent, in the fourth quarter of 2017 compared with $193.5 million in the same period in the previous year.

Net income in the last quarter of 2017 was $1.3 million, or 8 cents per diluted share, a 92 percent decrease from the $14.7 million, or $1 per diluted share, in the same period in 2016.

Most of the net income decline was the result of the federal tax overhaul and a resulting non-cash tax expense, said Rob Kay, chief executive officer of Lifetime.

“Much of the decline is due to factors that will not repeat in the future,” he said.

Taking the one-time charges into account, Lifetime’s fourth-quarter adjusted net income was $7.1 million, compared to $14.9 million in the same quarter a year earlier, Camma said.

Lifetime markets its products under brands including Farberware, KitchenAid and Kitchen Craft. This month, Lifetime completed its acquisition of Filament Brands, a Seattle-based housewares company, in a deal that valued the firm at about $313 million.

Lifetime expects its financial picture to be better going forward, given its stronger brand portfolio with Filament, executives said during an analyst call Thursday.

“I am pleased to say that for 2018 we’ve already secured the largest order in the history of Lifetime Brands, which will be shipped later this year,” Siegel said during the call.

Because the housewares market is reliant on scale, and Filament opens Lifetime up to a new market with its commercial food service product sales, the acquisition puts Lifetime in a more competitive position, Camma said.

“I think it’s stronger today certainly with Filament than it was before. It’s not like it was a weak company to begin with. It’s just that they have more opportunities now,” he said.

Lifetime expects its acquisition of Filament to drive efficiencies, resulting in a cost-saving of $8.1 million.

For 2017, Lifetime’s net sales totaled $579.5 million, down $13.1 million, or 2.2 percent, compared with the previous year. Net income was $2.2 million, or 14 cents per diluted share, in 2017, compared with $15.7 million, or $1.08 per diluted share, in 2016.

Lifetime’s stock price fell by 12.3 percent to $12.50 in Thursday morning trading but closed at $12.70.

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