Good day, ladies and gentlemen, and welcome to the Q4 2012 conference call. My name is Stephanie and I will be your operator for today. [Operator Instructions] As a reminder, this conference call is being recorded for replay purposes. And now, I'd like to hand the conference over to Harriet Fried of LHA. Please proceed, ma'am.

Good morning, everyone, and thank you for joining Lifetime Brands' Conference Call. With us today from management are Jeff Siegel, Chairman, President and Chief Executive Officer; and Larry Winoker, Senior Vice President and Chief Financial Officer. Before we begin, I'll read the Safe Harbor statement under the Private Securities Litigation Reform Act of 1995. The statements that are about to be made in this conference call that are not historical facts are forward-looking statements and involve risks and uncertainties including: the company's ability to comply with the requirements of its credit agreements; the availability of funding under those credit agreements; the company’s ability to maintain adequate liquidity and financing sources and an appropriate level of debt; changes in general economic conditions, which could affect customer payment practices or consuming -- consumer spending; changes in demand for the company's products; shortages of and price volatility for certain commodities; the effect of competition on the company's markets; and other risks detailed in Lifetime's filings with the Securities and Exchange Commission. The company undertakes no obligation to update these forward-looking statements. The company's earnings release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the SEC. Included in this morning's release is a reconciliation of these non-GAAP financial measures to the comparable financial measures calculated in accordance with GAAP. With that introduction, I'd like turn the call over to Mr. Siegel. Please go ahead, Jeff.

Thanks, Harriet. Good morning and thank you for joining us to discuss our fourth quarter and full year 2012 results. Joining me on today's call is our CFO, Larry Winoker. If you've had a chance to review the earnings release we issued this morning, you will have noticed that our fourth quarter and full year financial statements contained a fair bit of noise due to a bargain purchase gain in Grupo Vasconia, a reduction of the company's deferred tax liability and other nonoperating items. Payable at the end of the earnings release provides a bridge between the $1.64 diluted earnings per share that we reported on a GAAP basis and the $1.26 adjusted earnings per share that we think more accurately reflects the company's performance in 2012. Larry will provide greater detail on the principal nonoperating items during his remarks. Looking at the year, you'll also note that our business and financial results varied significantly from quarter-to-quarter. These fluctuations in part reflect the timing of seasonal promotions and annual planogram changes, which are part of a normal retail calendar. Quarter-to-quarter shifts also are the results of the impact of shipments for certain large retailers, such as Costco and Sam's Club, that do not follow predictable cycles. The best I can say it, these fluctuations are part of our business and one should look at our business on an annual basis and not be too surprised if 1 or 2 quarters are out of line with published forecasts. That said, 2012 ended on a very strong note. For the quarter, consolidated net sales were $155 million, up 12.5% on an actual basis and 8.6% on an organic basis. Our Kitchenware business was especially strong, posting a 25% increase over the prior year's fourth quarter and a 19% gain for the year.…

Thank you, Jeff. As we reported earlier this morning, net income for the fourth quarter of 2012 was $15.2 million or $1.19 per diluted share, as compared to $5.4 million or $0.43 per diluted share in the 2011 period. Adjusted net income was $8.7 million or $0.67 per diluted share in the 2012 period, as compared to $6.5 million or $0.52 per diluted share in the 2011 period. Adjusted net income is a non-GAAP measure that is reconciled to net income in our earnings release. Income from operations was $14.5 million in the 2012 quarter, compared to $10 million in 2011. Consolidated EBITDA, also a non-GAAP measure that is defined and reconciled to net income in our earnings release, was $17.9 million for the current quarter and $14.3 million for the 2011 quarter. Consolidated EBITDA was $41.2 million for the full year of 2012 versus $38.1 million last year. For our wholesale segment, net sales in the 2012 quarter increased 13.6% to $146.6 million. This was primarily due to an increase in the company's Kitchenware product category due to successful new programs and the introduction of new innovative styles and designs, including the new Guy Fieri lines of cookware products. This is partially offset by decreases in both Tabletop and home solutions products categories due to general weakness in the home category at retail, including the adverse effect of JCPenney's new pricing strategy and certain sales programs in 2011 not repeated in 2012. Wholesale segment gross margin was 34.4% in the 2012 quarter compared to 34.8% in 2011. In our U.S. wholesale business, gross margin was 35.1%, an increase of 40 basis points from 34.7% last year. Total gross margin percent declined reflecting lower gross margin percentages for Creative Tops, which has historically averaged approximately 30%. Wholesale distribution expense as…

[Operator Instructions] The first question that we have is from Lee Giordano from Imperial Capital.

This is Robin [ph] for Lee. Can you talk about your gross margin expectations going forward? We're still seeing some pressure on that line item. Maybe talk about if we're going to see some expansion in the first quarter and into 2013?

Well, I'll just comment on the historical. As I mentioned, there was a diminution because of Creative Tops, which historically has lower gross margins than the U.S. business and we have them in now for the full year. But other than that, our gross margins, in fact, for the full year in the U.S. business actually increased; increased for the quarter and increased by about 30 basis points for the full year. As we said, going forward we're anticipating that to be, in 2013, certainly in line with what we had for the full year of 2012.

And on the Fred & Friends acquisition, can you guys talk about maybe incremental revenue that we saw in the quarter from that and then possibly going forward? And maybe, what kind of margins those kind of products carry?

Well, for the quarter it was very small volume. We closed on it about the 20th of the month, the 20th of December. So there was nothing really there. For 2013 -- their margins tend to be higher than our margins but the volume is small so it's not going to have a major effect on Lifetime's overall margins, not until we build the volume of that business, which will take us at least a year to really get it ramped up.

And then you guys said Guy Fieri seems to be doing well. You're introducing a bunch of new products. How is that being received by consumers so far?

So far so good. It's done well at retail. That's why we're expanding on it. We added the cutlery category, which should be a very strong one for us because it's something we really know well. And the line is selling. He's quite a personality. There was a huge crowd at the Houseware Show and consumers watch him all the time. He's the #1 rated show on Food Network.

[Operator Instructions] We have another question from Lee Giordano from Imperial Capital.

Can you give us your general view on the overall retail environment? We're seeing the payroll taxes, higher gas prices, delayed tax returns, everything is pointing negative but it seems that consumers are still going out and spending. What are you guys seeing from retailers and their buying patterns?

Yes. At the Housewares Show there was certainly a lot of talk about the 3 points that you just mentioned affecting business but the overall attitude is very good. I mean, the retailers -- pretty much universally, the retailers we dealt with at the show thought that 2013 was going to be, overall, stronger than 2012, though they all expected a slow start, especially the first 2 months of the year. But other than that -- which are not very important months for them, for the most part. But after that, they do expect to have a better retail year than 2012, which was a good thing to see.

And then I guess, quickly, just on the housekeeping front. Can you give us the average diluted share count for the quarter? Fourth quarter?

It's 12.8 million.

There are no more questions at the moment.

Okay. Well, if there are no more questions then I'd like to thank everyone for joining us for today's update. I'm glad you could share with our -- in our good news and our strong prospects for 2013. This year, we're going to continue our initiatives to build our key brands both domestically and internationally, increase our market share and make strategic investments. I look forward to keeping you informed about these initiatives on our next call. Thank you.

I'd like -- thank you, ladies and gentlemen. That concludes the presentation for your call. You may now disconnect and have a good day.