Good day, ladies and gentlemen, and welcome to the Second Quarter Lifetime Brands Earnings Conference Call. My name is Dave, I'll be your operator for today. [Operator Instructions] As a reminder, the call is being recorded for replay purposes. Now I'd like to hand the call over to Harriet Fried of LHA. Please proceed, ma'am.

Good morning, everyone, and thank you for joining Lifetime Brands' second quarter 2013 conference call. With us today from management are Jeff Siegel, Chairman 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 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 [Audio Gap] payment practices or 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 would like to turn the call over to Mr. Siegel. Please go ahead, Jeff.

Thanks, Harriet. Good morning, and thank you for joining us to discuss our second quarter results as well as our strategic initiatives and outlook for the second half of 2013. With me on today's call is our CFO Larry Winoker. As we've discussed in past calls, Lifetime's business and financial results vary significantly from quarter-to-quarter. Especially in the first half of the year, our results can be heavily influenced by the timing of promotions and the rollout of new programs and comparing them with prior periods can be misleading. In addition, quarter-to-quarter shifts can result from the impact of shipments to certain large retailers, such as Costco and Sam's Club, that don't follow predictable cycles. These fluctuations aren't easy to predict or model, but they are an ongoing aspect of our business and they certainly impacted us in the first half of 2013. That said, notwithstanding the small net loss we reported for the second quarter and the 6 months, our outlook for Lifetime's all-important third and fourth quarters has improved since we last talked, and this morning, we raised our sales guidance for 2013. Based on the rollout of new programs and promotions currently underway, the success we're achieving with Fred & Friends, which we acquired in December, and the improved outlook for the U.S. economy, we now foresee net sales increasing by 5% to 7% rather than 4% to 6% for the year as a whole. Before we go over the numbers for the quarter, I'd like to review certain major initiatives that will have an important influence on our year and our future. Through Lifetime Next, the strategic plan that lays out our company's path for the next 5 years, we've identified 3 pillars for Lifetime's growth. One is quality. This is foundational. Without quality everything else…

Thanks, Jeff. As we reported earlier this morning, net loss for the second quarter 2013 was $568,000, $0.04 per diluted share, as compared to net income of $559,000, $0.04 per diluted share in 2012. Adjusted net loss for the quarter was $1.1 million, $0.08 per share, as compared to adjusted net income of $1 million, $0.08 per diluted share, in 2012. A table which reconciles this non-GAAP measure to report results was included in this morning's release. Income from operations was $300,000 for the 2013 quarter, which excludes planned restructuring expenses related to Fred & Friends, which compares to $2.2 million in 2012. Consolidated EBITDA, a non-GAAP measure that is reconciled to our GAAP results in the release, was $4.3 million for the current quarter and $5.6 million in the period in 2012. Consolidated EBITDA for the trailing 4 quarters ended 2013 period was $36.8 million, compared to $39.7 million in 2012. For our Wholesale segment. Net sales in the current quarter increased 2.4% to $93.3 million. The increase reflects an increase in Kitchenware sales, partially offset by a decrease in Tabletop. Kitchenware's increase is due to the inclusion of the Fred & Friends business, as well as successful new cutlery programs. The Tabletop decrease is partially attributable to the impact of the introduction and initial sell-in of certain new Dinnerware and Flatware programs in 2012, as compared to replenishment product revenue in the 2013 period. Wholesale segment gross margin increased to 36.1% from 36% in 2012 due to the inclusion of Fred & Friends. Wholesale distribution expense as a percentage of sales shipped from our U.S. warehouses was approximately 10.3% and 10.4% in the 2013 and 2012 quarters respectively. This improvement resulted in continuing improved labor management. Wholesale selling and general administrative expenses were $21 million in the second…

[Operator Instructions] Please standby for your first question which comes from the line of Lee Giordano at Imperial Capital.

[indiscernible] businesses -- what's been the performance at Creative Tops relative to your expectations? And maybe kind of talk about some of the other regions as well.

Yes. Clear Tops was faced earlier this year, and it continues to face, severely increased duties on ceramic items, which is their main business, ceramics from China. As is every other U.K. importer of ceramics from China. It had a pretty severe impact on the first 6 months of the year, though it's certainly improving there at a very rapid rate. It took a while for the retailers and the consumers to accept the higher cost of products, which was up about 20% more than before, so it was a substantial increase in costs. But their business is improving and I don't think they'll make back what they lost in the first half of the year but they're getting better. Business in Mexico was impacted by a loss of one promotion in the spring, a very large promotion, and also their aluminum business has been impacted by some dumping as well, not from China, but dumping from Greece and Turkey, believe it or not. But that's hopefully going to stabilize in the fall, as well. And business in Canada is good, it's going along -- very well.

Great. And just a question on some of the guidance, equity and earnings of $1 million to $1.5 million, does that include or exclude the tax recovery that was in the numbers this quarter?

Yes, that includes recovery.

There are no further questions at the moment. [Operator Instructions] As there are no further questions, I would now like to turn the call back to Mr. Jeff Siegel for closing remarks.

Thanks for joining us today. As you've heard, Lifetime's strategy is centered on delivering quality and innovation in everything we do and the developing brands that we can use to grow worldwide. As we continue -- and at the same time, we continue to pursue acquisitions, like Fred & Friends, that will add new products, new categories and new profitability to the company. We're enthusiastic about Lifetime's outlook for the second half of 2013, and we look forward to giving you an update again in the fall. Thank you.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.