Good day, ladies and gentlemen, and welcome to the Lifetime Brands Inc. Third Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call maybe recorded. I would now like to turn the conference call over to Harriet Fried of LHA. Please go ahead.

Good morning, everyone, and thank you for joining Lifetime Brands' 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 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 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, the impact of foreign exchange fluctuations 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 to turn the call over to Mr. Siegel. Please go ahead, Jeff.

Thank you, Harriet. Good morning everyone and thank you for joining us today to discuss our third quarter 2016 results. We’re pleased to have entered the second half of the year which seasonally is always our strongest. We're off to a very good start and in fact, we achieved record third quarter revenue, record adjusted net income, and record EBITDA. We did this despite an uncertain economic climate in the U.S. and also unfavorable exchange rate fluctuations, which impacted the results of our U.K. subsidiaries as well as our profit companies in Canada and Mexico. Our record third quarter results reflect several major initiatives we have underway that will -- that are finally beginning to favorably affect the fundamental way we do business. Since I expect each of these to benefit us even more dramatically in the future, I'll run through these first before turning to the details of the quarter. First is the acquisitions that we've already completed this year. We're focusing on acquiring companies with strong brands that are in the same business as -- and adjacent categories or with deep penetration in this specific category to support our growth. Since April, we have acquired five brands, all in categories where Lifetime is already well-established. With this improvement in our bidding approach, I'm careful not to add to our SG&A. In fact for all the acquisitions we've done this year, we've brought on staff a total of only two people. We're rapidly integration each for the acquisitions and expect them to all be accretive beginning in the fourth quarter and add even more so in 2017 and beyond as we achieve lower prices from existing factories or by moving production to our lower core spenders. To give you a quick rundown, our first acquisition in April was Wilton…

Thanks Jeff. As we reported this morning, net income for the third quarter 2016 was $6.5 million, or $0.44 per diluted share compared to net income of $5.1 million, or $0.36 per diluted share in the 2015 period. Adjusted net income for the quarter was $7.5 million, or $0.51 per diluted share, compared to $5.9 million, $0.41 per diluted share in 2015. The difference between net income and adjusted net income for the 2016 period primarily reflects a non-cash charge of $1.3 million, approximately $800,000 net of tax or $0.05 per diluted share recorded in this quarter to correct an error and accumulated depreciation balance related to leasehold improvements for one of our U.S. brands. Table which reconciles this non-GAAP measure to reported result was included in this morning's release. Income from operations was $10.8 million for the 2016 quarter compared to $9.8 million for 2015. Consolidated EBITDA non-GAAP measure that is reconciled to our GAAP results in the release was $16.7 million for the current quarter and $14.1 million last year. Consolidated EBITDA was $46 million 12 months ended September 2016 and $41.9 million for the same period last year. Now, looking at our U.S. Wholesale segment, net sales in the quarter increased $9 million or 6.9% to $139.6 million. The increase reflects an increase in tableware and home solutions products categories, partially offset by decline in the kitchenware product category. U.S. Wholesale segment gross margin was 33.8% in 2016 quarter compared to 34.3% in 2015. The decrease reflects the change in product mix and a shift in product category growth. As I mentioned in the current quarter, the company identified and corrected an error in accumulated depreciation balance relate to certain leasehold improvements. Accordingly, distribution expense in 2016 included $1.3 million of additional depreciation expense to properly reflect…

[Operator Instructions] Our first question comes from Frank Camma with Sidoti. Your line is open.

Good morning guys. Congratulations on the quarter.

Thanks.

Hey, could you talk about the sales from the incremental acquisitions, just so we can get there -- true organic growth number?

Yes. Nothing obviously from Copco because it’s the current--

Right.

There's fairly small Focus Product brands we started -- we acquired in September -- middle of September, so its small. It's in the range of something about 7 -- less than $1 million, $750,000.

Okay.

And its full [ph] now also for the Wilton Armetale period [ph]. So, it doesn’t really move in up as much.

Okay.

Of course, obviously, we'll see in the fourth quarter, we will have almost an entire quarter for Copco and we will have absolutely entire quarter for Focus. We're feeling good about them -- their results.

Okay. And can you talk about the accounts receivable, it looks like a little of a spike beyond what I had modelled. Is there a timing issue there, any color on that?

Yes, this is actually -- two things; one is -- couple of timing issues, one is the timing of when we make sales in the quarter. If we make them in early -- obviously in August versus the time that it has impact. We book them sometime in July, we collect in September. The other thing is back in 2014, our collections were lower at the end of the year than they typically were, so we had some significant -- or higher than normal cash collections in 2015. And the third factor and I -- we've talked about this, I think, Frank, you know this is that Walmart has gone to all its vendors and adjusted terms, goes back almost a year now, others got extended a bit and that has affected the balance at the end of September. So, all of this is timing, most of its good because volumes are -- as far as I can tell you, there's no concern about it, so to all the healthiest customers that we sell to.

Okay, great. Yes, I remember that now. And the -- as far as the inventory, I mean you were not really not seeing a commodity pressures anyway, but you're finally starting to see I guess the benefits of that, right, but probably a little bit, you offset from maybe some of these newer -- some of these product mix might be lower margins, I just wondered if you could talk about that or the FX impact?

Well, the new acquisitions that we made this year, we're working on reducing, of course, and improving margins, but initially the margins were lower than our normal margins. But there's still decent but they are lower than our normal margins, but we should get them normalized into the same margins that Lifetime makes certainly. It will probably take six months because you have cycle through the inventory, but we'll certainly get that done. In general, as you know commodity prices have been fine, they haven’t been going up at all and we're starting to see some benefit in individual product lines from actions that we took earlier in the year. So, our margins in some areas are going up. So, we have a mix of -- the mix sometimes changes as far as customers and also there's -- in some quarters, we have more direct shipments from the orient directly to customers that bypass our warehouse and we work on a little bit lower margin because doesn’t [ph] go through our warehouse.

Right.

So, just changes a bit by quarter, but we don't see any pressure on prices right there.

Okay. And my last question is Jeff, you had mentioned that you were -- sounds like you -- sound like a pretty active holiday season, is that what you're hearing -- is that consistent with what you're hearing with from the retailers?

In general, retail is not robust, but we've gotten some significant new placement and we expect our business to be strong. I think -- personally, I think the retailers will have just a fair season, they are not going to have certainly -- I don't think they will have a terrible season, I don't think they will have a great season; they will have a fair season. There is quite a shift as everyone knows in business to online business, both from the brick-and-motor retailers and the pure play online retailers. So, that's something that we are making sure that we don't lose add [ph] on and we're in the forefront of making sure that we get a more than -- at least our share, maybe more than our share of business that has shift towards the internet. We've proven that we could do it in the U.K., which is more advanced than the U.S. and internet penetration and we believe we have the right resources, the team, and the understanding of that to do the same in the U.S. going forward.

Okay. Thanks guys.

Thanks Frank.

Thank you. [Operator Instructions] I'm showing no further questions. I'd like to turn the call back to Jeff Siegel for closing remarks.

Thank you for joining us today. As you've heard we have a multitude of assets underway at Lifetime to expand our array of products and brands and to drive growth and efficiency. We're optimistic of that -- our results for the holiday period and look forward to giving you an update after the fourth quarter. Thank you.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program and you may all disconnect. Everyone, have a great day.