Lifetime Brands, Inc. (NasdaqGS: LCUT), a leading global designer,
developer and marketer of a broad range of branded consumer
products used in the home, today reported its financial results for
the quarter ended September 30, 2023.
Rob Kay, Lifetime’s Chief Executive Officer, commented, “We
delivered strong third quarter performance driven by the continued
rebound of our core U.S. business and supported by our ongoing
focus on actions to drive growth and profitability in a dynamic
operating environment. As recovery in our core U.S. business
accelerates and retailer purchasing behavior continues to
normalize, we expect to see sustained positive trends in shipment
and ordering activity. Though international end markets remain
under pressure, the traction we are gaining through the continued
execution of our strategy gives us confidence in our ability to
drive growth and profitability in the future.”
Mr. Kay continued, “Based on our third quarter results and
positive forward momentum as we enter the fourth quarter, we are
raising the low end of our full year 2023 guidance. We now expect
net sales in the range of $670 to $690 million and adjusted EBITDA
in the range of $52 to $55 million. With a leading portfolio of
brands, an increasingly resilient and disciplined business model,
and a strong financial foundation, we are well-positioned to
bolster our strong market share position and unlock value for our
shareholders.
In October, the Company launched the syndication of an Amendment
& Extension of our Term Loan B due 2025 through an extended
maturity of August 2027. The Company has received the required
commitments from lenders and expects the closing to occur
shortly.”
Third Quarter Financial
Highlights:
Consolidated net sales for the three months ended
September 30, 2023 were $191.7 million, representing an
increase of $5.1 million, or 2.7%, as compared to net sales of
$186.6 million for the corresponding period in 2022. In constant
currency, a non-GAAP financial measure, which excludes the impact
of foreign exchange fluctuations and was determined by applying
2023 average rates to 2022 local currency amounts, consolidated net
sales increased by $4.1 million, or 2.2%, as compared to
consolidated net sales in the corresponding period in 2022. A table
reconciling this non-GAAP financial measure to consolidated net
sales, as reported, is included below.
Gross margin for the three months ended September 30, 2023
was $71.0 million, or 37.0%, as compared to $67.8 million, or
36.4%, for the corresponding period in 2022.
Income from operations was $13.6 million, as compared to $7.6
million for the corresponding period in 2022.
Adjusted income from operations(1) was $17.7 million, as
compared to $16.8 million for the corresponding period in 2022.
Net income was $4.2 million, or $0.20 per diluted share, as
compared to net loss of $(6.4) million, or $(0.30) per diluted
share, in the corresponding period in 2022.
Adjusted net income(1) was $7.7 million, or $0.36 per diluted
share, as compared to adjusted net income(1) of $6.2 million, or
$0.29 per diluted share, in the corresponding period in 2022.
(1) A table reconciling this non-GAAP financial measure to its
most comparable GAAP financial measure, as reported, is included
below.
Nine Months Financial
Highlights:
Consolidated net sales for the nine months ended
September 30, 2023 were $483.5 million, a decrease of $37.1
million, or 7.1%, as compared to net sales of $520.6 million for
the corresponding period in 2022. In constant currency, a non-GAAP
financial measure, which excludes the impact of foreign exchange
fluctuations and was determined by applying 2023 average rates to
2022 local currency amounts, consolidated net sales decreased by
$36.2 million, or 7.0%, as compared to consolidated net sales in
the corresponding period in 2022. A table reconciling this non-GAAP
financial measure to consolidated net sales, as reported, is
included below.
Gross margin for the nine months ended September 30, 2023
was $180.8 million, or 37.4%, as compared to $186.1 million, or
35.7%, for the corresponding period in 2022.
Income from operations was $16.2 million, as compared to $11.5
million for the corresponding period in 2022.
Adjusted income from operations(1) was $29.5 million, as
compared to $31.2 million for the corresponding period in 2022.
Net loss was $(11.1) million, or $(0.52) per diluted share, as
compared to net loss of $(9.4) million, or $(0.44) per
diluted share, in the corresponding period in 2022. Net loss for
the current period includes a non-cash impairment charge of $6.8
million related to the Company’s equity investment in Grupo
Vasconia, as compared to $6.2 million for the corresponding period
in 2022.
Adjusted net income(1) was $4.7 million, or $0.22 per diluted
share, as compared to adjusted net income(1) of $10.1 million, or
$0.46 per diluted share, in the corresponding period in 2022.
Adjusted EBITDA(1) was $55.5 million for the trailing twelve
months ended September 30, 2023. Pro forma adjusted EBITDA(1)
was $55.8 million for the trailing twelve months ended
September 30, 2023.
Lifetime continues to take actions to further strengthen its
financial position and is highly focused on expense controls and
improving inventory turns. At September 30, 2023, the
Company’s liquidity was $198.8 million, which is comprised of cash
on hand, available borrowings under the credit facility, and
availability under the Receivables Purchase Agreement.
On October 25, 2023, the Company launched the syndication
of an Amendment & Extension of the Company’s existing Term Loan
B facility due 2025 through an extended maturity of August 2027.
The Company has received the required commitments from the lenders
and expects the closing of such Term Loan B facility in the fourth
quarter of 2023.
(1) A table reconciling this non-GAAP financial measure to its
most comparable GAAP financial measure, as reported, is included
below.
Full Year 2023 Guidance Update
For the full year ending December 31, 2023, the Company is
providing updated financial guidance as follows: |
|
|
Net sales |
$670 to
$690 million |
Income from operations |
$26.2 to
$29.2 million |
Adjusted
income from operations |
$43.5 to
$46.5 million |
Net
loss(1) |
$(7.2) to
$(6.0) million |
Adjusted net income |
$11.1 to
$12.3 million |
Diluted loss
per common share(1) |
$(0.33) to
$(0.28) per share |
Adjusted diluted income per common share |
$0.51 to
$0.56 per share |
Weighted-average diluted shares |
21.8
million |
Adjusted EBITDA |
$52 to $55
million |
|
|
(1) Net loss and diluted loss per common share guidance does not
include an estimate for extinguishment of debt loss that may be
recognized in connection with the extension of the Company's Term
Loan B facility. |
|
|
Tables reconciling non-GAAP financial measures to GAAP financial
measures, as reported, are included below.
Dividend
On November 7, 2023, the Board of Directors declared a
quarterly dividend of $0.0425 per share payable on
February 15, 2024 to stockholders of record on
February 1, 2024.
Conference Call
The Company has scheduled a conference call for Thursday,
November 9, 2023 at 11:00 a.m. (Eastern Time). The dial-in number
for the conference call is (877) 524-8416 (U.S.) or +1 (412)
902-1028 (International).
A live webcast of the conference call will be accessible
through:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=karwksyB
For those who cannot listen to the live broadcast, an audio
replay of the webcast will be available until May 7, 2024.
Non-GAAP Financial Measures
This earnings release contains non-GAAP financial
measures, including constant currency net sales, adjusted (loss)
income from operations, adjusted net loss, adjusted net income,
adjusted diluted income per common share, adjusted EBITDA, adjusted
EBITDA, before limitation, pro forma adjusted EBITDA, before
limitation, and pro forma adjusted EBITDA.
A non-GAAP financial measure is a numerical measure of a
company’s historical or future financial performance, financial
position or cash flows that excludes amounts, or is subject to
adjustments that have the effect of excluding amounts, that are
included in the most directly comparable measure calculated and
presented in accordance with GAAP in the statements of income,
balance sheets, or statements of cash flows of a company; or,
includes amounts, or is subject to adjustments that have the effect
of including amounts, that are excluded from the most directly
comparable measure so calculated and presented.
These non-GAAP financial measures are provided because
the Company's management uses these financial measures in
evaluating the Company’s on-going financial results and
trends, and management believes that exclusion of certain items
allows for more accurate period-to-period comparison of the
Company’s operating performance by investors and analysts.
Management uses these non-GAAP financial measures as
indicators of business
performance. These non-GAAP financial measures
should be viewed as a supplement to, and not a substitute for, GAAP
financial measures of performance. As required by SEC rules, the
Company has provided reconciliations of
the non-GAAP financial measures to the most directly
comparable GAAP financial measures.
Forward-Looking Statements
In this press release, the use of the words “advance” “believe,”
“continue,” “could,” “deliver,” “drive,” “enable,” “expect,”
“gain,” “goal,” “grow,” “intend,” “maintain,” “manage,” “may,”
“outlook,” “plan,” “positioned,” “project,” “projected,” “should,”
“take,” “target,” “unlock,” “will,” “would”, or similar expressions
is intended to identify forward-looking statements. Such statements
include all statements regarding the growth of the Company, our
financial guidance, our ability to navigate the current environment
and advance our strategy, our commitment to increasing investments
in future growth initiatives, our initiatives to create value, our
efforts to mitigate geopolitical factors and tariffs, our current
and projected financial and operating performance, results, and
profitability and all guidance related thereto, including
forecasted exchange rates and effective tax rates, as well as our
continued growth and success, future plans and intentions regarding
the Company and its consolidated subsidiaries. Such statements
represent the Company’s current judgments, estimates, and
assumptions about possible future events. The Company believes
these judgments, estimates, and assumptions are reasonable, but
these statements are not guarantees of any events or financial or
operational results, and actual results may differ materially due
to a variety of important factors. Such factors might include,
among others, the Company’s ability to comply with the requirements
of its credit agreements; the availability of funding under such
credit agreements; the Company’s ability to maintain adequate
liquidity and financing sources and an appropriate level of debt,
as well as to deleverage its balance sheet; the possibility of
impairments to the Company’s goodwill; the possibility of
impairments to the Company’s intangible assets; the Company's
ability to drive future growth and profitability from its European
operations; changes in U.S. or foreign trade or tax law and policy;
changes in general economic conditions that could affect customer
purchasing practices or consumer spending; the impact of changes in
general economic conditions on the Company’s customers; customer
ordering behavior; the performance of our newer products; expenses
and other challenges relating to the integration of any future
acquisitions; changes in demand for the Company’s products; changes
in the Company’s management team; the significant influence of the
Company’s largest stockholder; fluctuations in foreign exchange
rates; changes in U.S. trade policy or the trade policies of
nations in which we or our suppliers do business; uncertainty
regarding the long-term ramifications of the U.K.’s exit from the
European Union; shortages of and price volatility for certain
commodities; global health epidemics, such as the COVID-19
pandemic; social unrest, including related protests and
disturbances; the emergence or continuation of geopolitical
conflicts including: the conflict in Ukraine, the conflict in
Israel and surrounding areas, the possible expansion of such
conflicts and the potential geopolitical consequences;
macroeconomic conditions, including inflationary impacts and
disruptions to the global supply chain; increase in supply chain
costs; the imposition of tariffs and other trade policies and/or
economic sanctions implemented by the U.S. and other governments;
our ability to successfully integrate acquired businesses,
including our recent acquisition of S'well; our ability to achieve
projected synergies with respect to the S'well business; our
expectations regarding the future level of demand for our products;
our ability to execute on the goals and strategies set forth in our
five-year plan; and significant changes in the competitive
environment and the effect of competition on the Company’s markets,
including on the Company’s pricing policies, financing sources and
ability to maintain an appropriate level of debt. The Company
undertakes no obligation to update these forward-looking statements
other than as required by law.
Lifetime Brands, Inc.
Lifetime Brands is a leading global designer, developer and
marketer of a broad range of branded consumer products used in the
home. The Company markets its products under well-known kitchenware
brands, including Farberware®, KitchenAid®, Sabatier®, Amco
Houseworks®, Chef’n® Chicago™ Metallic, Copco®, Fred® &
Friends, Houdini™, KitchenCraft®, Kamenstein®, La Cafetière®,
MasterClass®, Misto®, Swing-A-Way®, Taylor® Kitchen, and Rabbit®;
respected tableware and giftware brands, including Mikasa®,
Pfaltzgraff®, Fitz and Floyd®, Empire Silver™, Gorham®,
International® Silver, Towle® Silversmiths, Wallace®, Wilton
Armetale®, V&A®, Royal Botanic Gardens Kew® and Year &
Day®; and valued home solutions brands, including BUILT NY®,
S’well®, Taylor® Bath, Taylor® Kitchen, Taylor® Weather and Planet
Box®. The Company also provides exclusive private label products to
leading retailers worldwide.
The Company’s corporate website
is www.lifetimebrands.com.
Contacts:
Lifetime Brands, Inc.
Laurence Winoker, Chief Financial
Officer516-203-3590investor.relations@lifetimebrands.com
or
Joele Frank, Wilkinson Brimmer Katcher
Ed Trissel / T.J. O'Sullivan / Carly King212-355-4449
LIFETIME
BRANDS,
INC. |
CONDENSED
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(in thousands—except
per share data) |
(unaudited) |
|
Three Months
Ended |
|
Nine Months
Ended |
September 30, |
|
September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net
sales |
$ |
191,669 |
|
|
$ |
186,590 |
|
|
$ |
483,540 |
|
|
$ |
520,621 |
|
Cost of
sales |
|
120,718 |
|
|
|
118,757 |
|
|
|
302,756 |
|
|
|
334,553 |
|
Gross
margin |
|
70,951 |
|
|
|
67,833 |
|
|
|
180,784 |
|
|
|
186,068 |
|
Distribution
expenses |
|
17,125 |
|
|
|
18,641 |
|
|
|
49,742 |
|
|
|
55,239 |
|
Selling,
general and administrative expenses |
|
40,214 |
|
|
|
36,462 |
|
|
|
113,984 |
|
|
|
114,208 |
|
Restructuring expenses |
|
- |
|
|
|
- |
|
|
|
856 |
|
|
|
- |
|
Wallace
facility remediation expense |
|
- |
|
|
|
5,140 |
|
|
|
- |
|
|
|
5,140 |
|
Income from
operations |
|
13,612 |
|
|
|
7,590 |
|
|
|
16,202 |
|
|
|
11,481 |
|
Interest
expense |
|
(5,246 |
) |
|
|
(4,581 |
) |
|
|
(16,110 |
) |
|
|
(12,080 |
) |
Mark to
market (loss) gain on interest rate derivatives |
|
(98 |
) |
|
|
637 |
|
|
|
(135 |
) |
|
|
1,990 |
|
Gain on
early retirement of debt |
|
- |
|
|
|
- |
|
|
|
1,520 |
|
|
|
- |
|
Income
before income taxes and equity in losses |
|
8,268 |
|
|
|
3,646 |
|
|
|
1,477 |
|
|
|
1,391 |
|
Income tax
provision |
|
(3,015 |
) |
|
|
(1,845 |
) |
|
|
(2,909 |
) |
|
|
(3,420 |
) |
Equity in
losses, net of taxes |
|
(1,047 |
) |
|
|
(8,159 |
) |
|
|
(9,687 |
) |
|
|
(7,409 |
) |
NET INCOME (LOSS) |
$ |
4,206 |
|
|
$ |
(6,358 |
) |
|
$ |
(11,119 |
) |
|
$ |
(9,438 |
) |
BASIC INCOME (LOSS) PER COMMON SHARE |
$ |
0.20 |
|
|
$ |
(0.30 |
) |
|
$ |
(0.52 |
) |
|
$ |
(0.44 |
) |
DILUTED INCOME (LOSS) PER COMMON SHARE |
$ |
0.20 |
|
|
$ |
(0.30 |
) |
|
$ |
(0.52 |
) |
|
$ |
(0.44 |
) |
|
|
|
|
|
|
|
|
LIFETIME
BRANDS, INC. |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
(in thousands—except
share data) |
|
September
30, |
|
December
31, |
|
|
2023 |
|
|
2022 |
|
|
|
(unaudited) |
|
|
|
ASSETS |
|
|
|
|
CURRENT
ASSETS |
|
|
|
|
Cash and cash equivalents |
$ |
6,318 |
|
|
$ |
23,598 |
|
|
Accounts receivable, less allowances of $16,810 at
September 30, 2023 and $14,606 at December 31, 2022 |
|
153,456 |
|
|
|
141,195 |
|
|
Inventory |
|
217,696 |
|
|
|
222,209 |
|
|
Prepaid expenses and other current assets |
|
12,139 |
|
|
|
13,254 |
|
|
Income taxes receivable |
|
1,254 |
|
|
|
- |
|
|
TOTAL CURRENT ASSETS |
|
390,863 |
|
|
|
400,256 |
|
|
PROPERTY AND
EQUIPMENT, net |
|
16,824 |
|
|
|
18,022 |
|
|
OPERATING
LEASE RIGHT-OF-USE ASSETS |
|
71,834 |
|
|
|
74,869 |
|
|
INVESTMENTS |
|
3,963 |
|
|
|
12,516 |
|
|
INTANGIBLE
ASSETS, net |
|
202,872 |
|
|
|
213,887 |
|
|
OTHER
ASSETS |
|
5,312 |
|
|
|
6,338 |
|
|
TOTAL ASSETS |
$ |
691,668 |
|
|
$ |
725,888 |
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
|
Current maturity of term loan |
$ |
13,866 |
|
|
$ |
- |
|
|
Accounts payable |
|
57,188 |
|
|
|
38,052 |
|
|
Accrued expenses |
|
69,320 |
|
|
|
77,602 |
|
|
Income taxes payable |
|
- |
|
|
|
224 |
|
|
Current portion of operating lease liabilities |
|
13,585 |
|
|
|
14,028 |
|
|
TOTAL CURRENT LIABILITIES |
|
153,959 |
|
|
|
129,906 |
|
|
OTHER LONG-TERM LIABILITIES |
|
14,796 |
|
|
|
14,995 |
|
|
INCOME TAXES PAYABLE, LONG-TERM |
|
1,589 |
|
|
|
1,591 |
|
|
OPERATING LEASE LIABILITIES |
|
72,808 |
|
|
|
76,420 |
|
|
DEFERRED INCOME TAXES |
|
9,560 |
|
|
|
9,607 |
|
|
REVOLVING CREDIT FACILITY |
|
29,305 |
|
|
|
10,424 |
|
|
TERM LOAN |
|
183,234 |
|
|
|
242,857 |
|
|
STOCKHOLDERS’ EQUITY |
|
|
|
|
Preferred stock, $1.00 par value, shares authorized: 100 shares of
Series A and 2,000,000 shares of Series B; none issued and
outstanding |
|
- |
|
|
|
- |
|
|
Common stock, $0.01 par value, shares authorized: 50,000,000 at
September 30, 2023 and December 31, 2022; shares issued
and outstanding: 21,814,236 at September 30, 2023 and
21,779,799 at December 31, 2022 |
|
218 |
|
|
|
218 |
|
|
Paid-in capital |
|
276,813 |
|
|
|
274,579 |
|
|
(Accumulated deficit) retained earnings |
|
(15,333 |
) |
|
|
1,145 |
|
|
Accumulated other comprehensive loss |
|
(35,281 |
) |
|
|
(35,854 |
) |
|
TOTAL STOCKHOLDERS’ EQUITY |
|
226,417 |
|
|
|
240,088 |
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
691,668 |
|
|
$ |
725,888 |
|
|
|
|
|
|
|
LIFETIME
BRANDS,
INC. |
CONDENSED
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(in
thousands) |
(unaudited) |
|
Nine Months
Ended |
|
|
September
30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
OPERATING ACTIVITIES |
|
|
|
|
Net loss |
$ |
(11,119 |
) |
|
$ |
(9,438 |
) |
|
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities: |
|
|
|
|
Depreciation and amortization |
|
14,616 |
|
|
|
14,535 |
|
|
Amortization of financing costs |
|
1,397 |
|
|
|
1,305 |
|
|
Mark to market loss (gain) on interest rate derivatives |
|
135 |
|
|
|
(1,990 |
) |
|
Non-cash lease adjustment |
|
(1,617 |
) |
|
|
(1,055 |
) |
|
Provision (recovery) for doubtful accounts |
|
2,193 |
|
|
|
(140 |
) |
|
Deferred income taxes |
|
5 |
|
|
|
- |
|
|
Stock compensation expense |
|
2,770 |
|
|
|
3,565 |
|
|
Undistributed losses from equity investment, net of taxes |
|
9,687 |
|
|
|
7,409 |
|
|
Contingent consideration fair value adjustments |
|
(50 |
) |
|
|
- |
|
|
Gain on early retirement of debt |
|
(1,520 |
) |
|
|
- |
|
|
Changes in operating assets and liabilities (excluding the effects
of business acquisitions) |
|
|
|
|
Accounts receivable |
|
(14,279 |
) |
|
|
38,765 |
|
|
Inventory |
|
4,828 |
|
|
|
(3,694 |
) |
|
Prepaid expenses, other current assets and other assets |
|
1,784 |
|
|
|
(177 |
) |
|
Accounts payable, accrued expenses and other liabilities |
|
9,615 |
|
|
|
(66,062 |
) |
|
Income taxes receivable |
|
(1,254 |
) |
|
|
(2,583 |
) |
|
Income taxes payable |
|
(230 |
) |
|
|
(525 |
) |
|
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES |
|
16,961 |
|
|
|
(20,085 |
) |
|
INVESTING ACTIVITIES |
|
|
|
|
Purchases of property and equipment |
|
(1,765 |
) |
|
|
(1,975 |
) |
|
Acquisition |
|
- |
|
|
|
(17,956 |
) |
|
NET CASH USED IN INVESTING ACTIVITIES |
|
(1,765 |
) |
|
|
(19,931 |
) |
|
FINANCING ACTIVITIES |
|
|
|
|
Proceeds from revolving credit facility |
|
69,954 |
|
|
|
264,184 |
|
|
Repayments of revolving credit facility |
|
(51,123 |
) |
|
|
(230,365 |
) |
|
Repayments of term loan |
|
(44,866 |
) |
|
|
(6,216 |
) |
|
Payment of finance costs |
|
(433 |
) |
|
|
(882 |
) |
|
Payments for finance lease obligations |
|
(20 |
) |
|
|
(24 |
) |
|
Payments of tax withholding for stock based compensation |
|
(537 |
) |
|
|
(938 |
) |
|
Proceeds from the exercise of stock options |
|
- |
|
|
|
233 |
|
|
Payments for stock repurchase |
|
(2,539 |
) |
|
|
(4,678 |
) |
|
Cash dividends paid |
|
(2,832 |
) |
|
|
(2,887 |
) |
|
NET CASH (USED IN) PROVIDED BY FINANCING
ACTIVITIES |
|
(32,396 |
) |
|
|
18,427 |
|
|
Effect of
foreign exchange on cash |
|
(80 |
) |
|
|
(463 |
) |
|
DECREASE IN CASH AND CASH EQUIVALENTS |
|
(17,280 |
) |
|
|
(22,052 |
) |
|
Cash and
cash equivalents at beginning of period |
|
23,598 |
|
|
|
27,982 |
|
|
CASH
AND CASH EQUIVALENTS AT END OF PERIOD |
$ |
6,318 |
|
|
$ |
5,930 |
|
|
|
|
|
|
|
LIFETIME
BRANDS, INC. |
Supplemental
Information |
(in thousands) |
Reconciliation of GAAP to Non-GAAP Operating
Results |
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA for the twelve months ended
September 30,
2023: |
|
Quarter Ended |
|
Twelve
Months Ended |
|
December
31, |
|
March
31, |
|
June
30, |
|
September
30, |
|
September
30, |
2022 |
|
2023 |
2023 |
2023 |
|
2023 |
|
|
Net income
(loss) as reported |
$ |
3,272 |
|
$ |
(8,805 |
) |
|
$ |
(6,520 |
) |
|
$ |
4,206 |
|
$ |
(7,847 |
) |
Undistributed equity losses, net |
|
2,058 |
|
|
2,777 |
|
|
|
5,863 |
|
|
|
1,047 |
|
|
11,745 |
|
Income tax provision (benefit) |
|
2,308 |
|
|
(1,348 |
) |
|
|
1,242 |
|
|
|
3,015 |
|
|
5,217 |
|
Interest expense |
|
5,125 |
|
|
5,336 |
|
|
|
5,528 |
|
|
|
5,246 |
|
|
21,235 |
|
Depreciation and amortization |
|
5,001 |
|
|
4,870 |
|
|
|
4,925 |
|
|
|
4,821 |
|
|
19,617 |
|
Mark to market loss (gain) on interest rate derivatives |
|
19 |
|
|
234 |
|
|
|
(197 |
) |
|
|
98 |
|
|
154 |
|
Stock compensation expense |
|
281 |
|
|
861 |
|
|
|
1,011 |
|
|
|
898 |
|
|
3,051 |
|
Contingent consideration fair value adjustments |
|
- |
|
|
- |
|
|
|
(50 |
) |
|
|
— |
|
|
(50 |
) |
Gain on early retirement of debt |
|
- |
|
|
- |
|
|
|
(1,520 |
) |
|
|
— |
|
|
(1,520 |
) |
Acquisition related expenses |
|
170 |
|
|
490 |
|
|
|
242 |
|
|
|
186 |
|
|
1,088 |
|
Restructuring expenses |
|
1,420 |
|
|
856 |
|
|
|
- |
|
|
|
— |
|
|
2,276 |
|
Warehouse redesign expenses(1) |
|
- |
|
|
194 |
|
|
|
157 |
|
|
|
176 |
|
|
527 |
|
Adjusted
EBITDA |
$ |
19,654 |
|
$ |
5,465 |
|
|
$ |
10,681 |
|
|
$ |
19,693 |
|
$ |
55,493 |
|
Pro forma
projected synergies adjustment(2) |
|
|
|
|
|
|
|
|
|
323 |
|
Pro forma
Adjusted EBITDA(3) |
$ |
19,654 |
|
$ |
5,465 |
|
|
$ |
10,681 |
|
|
$ |
19,693 |
|
$ |
55,816 |
|
|
|
|
|
|
|
|
|
|
|
(1) For the twelve
months ended September 30, 2023, the warehouse redesign expenses
were related to the U.S. segment. |
|
|
|
|
|
|
|
|
|
|
(2) Pro forma
projected synergies represents the projected cost savings of $0.2
million associated with the Executive Chairman's cessation of
service in such role, and $0.1 million associated with
reorganization of the U.S. segment's sales management
structure. |
|
|
|
|
|
|
|
|
|
|
(3) Adjusted EBITDA is
a non-GAAP financial measure that is defined in the Company’s debt
agreements. Adjusted EBITDA is defined as net income (loss),
adjusted to exclude undistributed equity in losses, income tax
provision (benefit), interest expense, depreciation and
amortization, mark to market loss (gain) on interest rate
derivatives, stock compensation expense, gain on early retirement
of debt, and other items detailed in the table above that are
consistent with exclusions permitted by our debt agreements. |
|
|
|
|
|
|
|
|
|
|
LIFETIME
BRANDS,
INC. |
Supplemental
Information |
(in thousands—except
per share
data) |
Reconciliation of GAAP to Non-GAAP Operating
Results
(continued) |
|
|
|
|
|
|
|
|
|
Adjusted net
income and adjusted diluted income per common share (in thousands -
except per share data): |
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Net income
(loss) as reported |
$ |
4,206 |
|
|
$ |
(6,358 |
) |
|
$ |
(11,119 |
) |
|
$ |
(9,438 |
) |
|
Adjustments: |
|
|
|
|
|
|
|
|
Acquisition intangible amortization expense |
|
3,679 |
|
|
|
3,628 |
|
|
|
11,033 |
|
|
|
10,749 |
|
|
Contingent consideration fair value adjustments |
|
- |
|
|
|
- |
|
|
|
(50 |
) |
|
|
- |
|
|
Gain on early retirement of debt |
|
- |
|
|
|
- |
|
|
|
(1,520 |
) |
|
|
- |
|
|
Acquisition related expenses |
|
186 |
|
|
|
109 |
|
|
|
918 |
|
|
|
1,303 |
|
|
Restructuring expenses |
|
- |
|
|
|
- |
|
|
|
856 |
|
|
|
- |
|
|
S'well integration costs |
|
- |
|
|
|
250 |
|
|
|
- |
|
|
|
1,895 |
|
|
Warehouse relocation and redesign expenses(1) |
|
176 |
|
|
|
59 |
|
|
|
527 |
|
|
|
629 |
|
|
Impairment of Grupo Vasconia investment |
|
340 |
|
|
|
6,168 |
|
|
|
6,834 |
|
|
|
6,168 |
|
|
Mark to market loss (gain) on interest rate derivatives |
|
98 |
|
|
|
(637 |
) |
|
|
135 |
|
|
|
(1,990 |
) |
|
Wallace facility remediation expense |
|
- |
|
|
|
5,140 |
|
|
|
- |
|
|
|
5,140 |
|
|
Income tax effect on adjustments |
|
(1,015 |
) |
|
|
(2,118 |
) |
|
|
(2,931 |
) |
|
|
(4,348 |
) |
|
Adjusted net
income(2)(3) |
$ |
7,670 |
|
|
$ |
6,241 |
|
|
$ |
4,683 |
|
|
$ |
10,108 |
|
|
Adjusted diluted income per common share(4) |
$ |
0.36 |
|
|
$ |
0.29 |
|
|
$ |
0.22 |
|
|
$ |
0.46 |
|
|
|
|
|
|
|
|
|
|
|
(1) For the three and
nine months ended September 30, 2023, warehouse relocation and
redesign expenses were related to the U.S. segment. For the three
months ended September 30, 2022, warehouse relocation and redesign
expenses included $0.1 million of expenses related to the
International segment. For the nine months ended September 30,
2022, warehouse relocation and redesign expenses included $0.5
million of expenses related to the International segment and $0.1
million of expenses related to the U.S. segment. |
|
|
|
|
|
|
|
|
|
|
(2) Adjusted net
income for the three and nine months ended September 30, 2022 has
been recast to reflect the adjustment for acquisition intangible
amortization expense. |
|
|
|
|
|
|
|
|
|
|
(3) Adjusted net
income and adjusted diluted income per common share in the three
and nine months ended September 30, 2023 excludes acquisition
intangible amortization expense, contingent consideration fair
value adjustments, gain on early retirement of debt, acquisition
related expenses, restructuring expenses, warehouse redesign
expenses, impairment of Grupo Vasconia investment, and mark to
market loss on interest rate derivatives. The income tax effect on
adjustments reflects the statutory tax rates applied on the
adjustments. Adjusted net income and adjusted diluted income per
common share in the three and nine months ended September 30, 2022
excludes acquisition intangible amortization expense, acquisition
related expenses, S'well integration costs, warehouse relocation
and redesign expenses, impairment of Grupo Vasconia investment,
mark to market (gain) on interest rate derivatives, and Wallace
facility remediation expense. The income tax effect on adjustments
reflects the statutory tax rates applied on the adjustments. |
|
|
|
|
|
|
|
|
|
|
(4) Adjusted diluted
income per common share is calculated based on diluted
weighted-average shares outstanding of 21,293 and 21,677 for the
three month period ended September 30, 2023 and 2022, respectively.
Adjusted diluted income per common share is calculated based on
diluted weighted-average shares outstanding of 21,266 and 21,890
for the nine month period ended September 30, 2023 and 2022,
respectively. The diluted weighted-average shares outstanding for
the three and nine months ended September 30, 2023 include the
effect of dilutive securities of 77 and 78, respectively. The
diluted weighted-average shares outstanding for the three and nine
months ended September 30, 2022 include the effect of dilutive
securities of 155 and 288, respectively. |
|
Adjusted income from operations (in
thousands): |
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
|
2022 |
|
Income from
operations |
$ |
13,612 |
|
$ |
7,590 |
|
$ |
16,202 |
|
|
$ |
11,481 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Acquisition intangible amortization expense |
|
3,679 |
|
|
3,628 |
|
|
11,033 |
|
|
|
10,749 |
|
Contingent consideration fair value adjustments |
|
- |
|
|
- |
|
|
(50 |
) |
|
|
- |
|
Acquisition related expenses |
|
186 |
|
|
109 |
|
|
918 |
|
|
|
1,303 |
|
Restructuring expenses |
|
- |
|
|
- |
|
|
856 |
|
|
|
- |
|
S'well integration costs |
|
- |
|
|
250 |
|
|
- |
|
|
|
1,895 |
|
Warehouse relocation and redesign expenses (1) |
|
176 |
|
|
59 |
|
|
527 |
|
|
|
629 |
|
Wallace facility remediation expense |
|
- |
|
|
5,140 |
|
|
- |
|
|
|
5,140 |
|
Total
adjustments |
|
4,041 |
|
|
9,186 |
|
|
13,284 |
|
|
|
19,716 |
|
Adjusted
income from operations(2)(3) |
$ |
17,653 |
|
$ |
16,776 |
|
$ |
29,486 |
|
|
$ |
31,197 |
|
|
|
|
|
|
|
|
|
|
(1) For the three and
nine months ended September 30, 2023, warehouse relocation and
redesign expenses were related to the U.S. segment. For the three
months ended September 30, 2022, warehouse relocation and redesign
expenses included $0.1 million of expenses related to the
International segment. For the nine months ended September 30,
2022, warehouse relocation and redesign expenses included $0.5
million of expenses related to the International segment and $0.1
million of expenses related to the U.S. segment. |
|
|
|
|
|
|
|
|
|
(2) Adjusted income
from operations for the three and nine months ended September 30,
2022 has been recast to reflect the adjustment for acquisition
intangible amortization expense. |
|
|
|
|
|
|
|
|
|
(3) Adjusted income
from operations for the three and nine months ended September 30,
2023 and September 30, 2022, excludes acquisition intangible
amortization expense, contingent consideration fair value
adjustments, acquisition related expenses, restructuring expenses,
S'well integration costs, warehouse relocation and redesign
expenses and Wallace facility remediation expense. |
LIFETIME
BRANDS, INC. |
Supplemental
Information |
(in thousands) |
Reconciliation of GAAP to Non-GAAP Operating
Results (continued) |
Constant
Currency: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported |
|
Constant
Currency (1) |
|
|
|
|
Three Months
Ended |
Three Months
Ended |
Year-Over-Year |
September 30, |
September 30, |
Increase (Decrease) |
Net sales |
|
2023 |
|
|
2022 |
|
Increase |
|
|
2023 |
|
|
2022 |
|
Increase |
|
Currency |
|
Excluding |
|
Including |
|
Currency |
(Decrease) |
(Decrease) |
Impact |
Currency |
Currency |
Impact |
U.S. |
$ |
179,393 |
|
$ |
172,818 |
|
$ |
6,575 |
|
|
$ |
179,393 |
|
$ |
172,801 |
|
$ |
6,592 |
|
|
$ |
17 |
|
|
3.8 |
% |
|
3.8 |
% |
|
0.0 |
% |
International |
|
12,276 |
|
|
13,772 |
|
|
(1,496 |
) |
|
|
12,276 |
|
|
14,725 |
|
|
(2,449 |
) |
|
|
(953 |
) |
|
(16.6) |
% |
|
(10.9) |
% |
|
5.7 |
% |
Total net sales |
$ |
191,669 |
|
$ |
186,590 |
|
$ |
5,079 |
|
|
$ |
191,669 |
|
$ |
187,526 |
|
$ |
4,143 |
|
|
$ |
(936 |
) |
|
2.2 |
% |
|
2.7 |
% |
|
0.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported Nine Months Ended |
Constant
Currency (1) |
Year-Over-Year Increase |
September 30, |
Nine Months Ended September 30, |
(Decrease) |
Net sales |
|
2023 |
|
|
2022 |
|
Increase |
|
|
2023 |
|
|
2022 |
|
Increase |
|
Currency |
|
Excluding |
|
Including |
|
Currency |
(Decrease) |
(Decrease) |
Impact |
Currency |
Currency |
Impact |
U.S. |
$ |
447,857 |
|
$ |
476,227 |
|
$ |
(28,370 |
) |
|
$ |
447,857 |
|
$ |
476,185 |
|
$ |
(28,328 |
) |
|
$ |
42 |
|
|
(5.9) |
% |
|
(6.0) |
% |
|
(0.1) |
% |
International |
|
35,683 |
|
|
44,394 |
|
|
(8,711 |
) |
|
|
35,683 |
|
|
43,562 |
|
|
(7,879 |
) |
|
|
832 |
|
|
(18.1) |
% |
|
(19.6) |
% |
|
(1.5) |
% |
Total net sales |
$ |
483,540 |
|
$ |
520,621 |
|
$ |
(37,081 |
) |
|
$ |
483,540 |
|
$ |
519,747 |
|
$ |
(36,207 |
) |
|
$ |
874 |
|
|
(7.0) |
% |
|
(7.1) |
% |
|
(0.1) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) “Constant
Currency” is determined by applying the 2023 average exchange rates
to the prior year local currency sales amounts, with the difference
between the change in “As Reported” net sales and “Constant
Currency” net sales, reported in the table as “Currency Impact.”
Constant currency sales growth is intended to exclude the impact of
fluctuations in foreign currency exchange rates. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFETIME
BRANDS, INC. |
Supplemental
Information |
|
Reconciliation of GAAP
to Non-GAAP Guidance |
|
|
Adjusted EBITDA guidance for the full year ending
December 31, 2023 (in
millions): |
Net loss
guidance |
$(7.2) to
$(6.0) |
|
Undistributed equity losses |
9.7 |
|
Income tax expense |
4.2 to
6.0 |
|
Interest expense(1) |
21.0 |
|
Gain on early retirement of debt |
(1.5) |
|
Depreciation and amortization |
19.5 |
|
Stock compensation expense |
3.8 |
|
Acquisition related expense |
1.0 |
|
Restructuring, and warehouse redesign expenses |
1.6 |
|
Other adjustments(2) |
(0.1) |
|
Adjusted
EBITDA guidance |
$52 to $55 |
|
|
|
|
|
Adjusted net income and adjusted diluted income per common
share guidance for the full year ending |
December 31, 2023 (in millions - except per share
data): |
|
Net loss
guidance |
$(7.2) to
$(6.0) |
|
Acquisition intangible amortization expense |
14.8 |
|
Gain on early retirement of debt |
(1.5) |
|
Acquisition related expense |
1.0 |
|
Restructuring, and warehouse redesign expenses |
1.6 |
|
Impairment of Grupo Vasconia investment |
6.8 |
|
Other adjustments(3) |
(0.1) |
|
Income tax effect on adjustment |
(4.3) |
|
Adjusted net
income guidance |
$11.1 to $12.3 |
|
Adjusted
diluted income per share guidance |
$0.51 to $0.56 |
|
|
|
|
|
Adjusted income from operations guidance for the full year
ending December 31, 2023 (in
millions): |
Income from
operations guidance |
$26.2 to
$29.2 |
|
Acquisition intangible amortization expense |
14.8 |
|
Acquisition related expense |
1.0 |
|
Restructuring, and warehouse redesign expenses |
1.6 |
|
Other adjustments(2) |
(0.1) |
|
Adjusted
income from operations |
$43.5 to $46.5 |
|
|
|
|
|
(1) Includes estimate for interest expense and mark to market loss
on interest rate derivatives. |
(2) Includes
contingent consideration fair value adjustments. |
|
(3) Includes mark to market loss on interest rate derivatives and
contingent consideration fair value adjustments. |
Lifetime Brands (NASDAQ:LCUT)
Historical Stock Chart
From Jul 2024 to Aug 2024
Lifetime Brands (NASDAQ:LCUT)
Historical Stock Chart
From Aug 2023 to Aug 2024