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, 2022.
Rob Kay, Lifetime’s Chief Executive Officer, commented, “Our
core business continues to exhibit solid performance and we have
maintained our market positions in the third quarter, despite
challenges for our product categories globally. Inflationary and
other economic impacts have contributed to weaker end market
demand, particularly in our European and Asia-Pacific markets. In
addition, retailers continue to focus on rightsizing their
inventory levels, which have been distorted by the pandemic-induced
supply chain disruptions. As a result, new customer shipments have
lagged consumer purchases at retailers. In response to economic
conditions in Europe, we have begun implementing a comprehensive
restructuring of our European-based international operations to
reflect significantly reduced demand in the region for the near
term. Our brands and our business model have continued to
demonstrate resilience through all market cycles, and we remain
focused on executing our strategic plan. We are confident that we
are on the right path to create long-term value.”
Mr. Kay continued, “Given the current lack of visibility into
order flow at many of our largest customers and the consumer
environment globally, we are withdrawing our full year 2022
guidance. We will continue to be proactive and nimble in managing
through macroeconomic challenges, as evidenced by the actions we
have already taken to reduce costs and restructure our European
business. Importantly, our balance sheet and liquidity remain
strong, providing us with operating and financial flexibility in
this uncertain environment.”
Third Quarter Financial
Highlights:
Consolidated net sales for the three months ended
September 30, 2022 were $186.6 million, representing a
decrease of $38.2 million, or 17.0%, as compared to net sales of
$224.8 million for the corresponding period in 2021. In constant
currency, a non-GAAP financial measure, which excludes the impact
of foreign exchange fluctuations and was determined by applying
2022 average rates to 2021 local currency amounts, consolidated net
sales decreased by $34.7 million, or 15.7%, as compared to
consolidated net sales in the corresponding period in 2021. 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, 2022
was $67.8 million, or 36.4%, as compared to $83.1 million, or
37.0%, for the corresponding period in 2021.
Income from operations was $7.6 million, as compared to $21.7
million for the corresponding period in 2021.
Adjusted income from operations was $13.1 million, as compared
to $22.2 million for the corresponding period in 2021.
Net loss was $(6.4) million, or $(0.30) per diluted share, as
compared to net income of $12.6 million, or $0.57 per diluted
share, in the corresponding period in 2021.
Adjusted net income was $3.5 million, or $0.16 per diluted
share, as compared to adjusted net income of $13.4 million, or
$0.61 per diluted share, in the corresponding period in 2021. A
table reconciling this non-GAAP financial measure to net (loss)
income, as reported, is included below.
In the third quarter of 2022, the Company recorded an estimated
$5.1 million charge for a potential liability to cover remediation
costs related to soil contamination at its Wallace manufacturing
facility located in Puerto Rico. The contamination occurred prior
to the Company commencing operations at the facility in 2006.
In the third quarter of 2022, the Company recorded a
non-recurring/non-cash impairment charge of $6.2 million related to
its equity investment in Grupo Vasconia. The charge resulted from
the decline in Grupo Vasconia’s quoted stock price.
Nine Months Financial
Highlights:
Consolidated net sales for the nine months ended
September 30, 2022 were $520.6 million, a decrease of $86.5
million, or 14.2%, as compared to net sales of $607.1 million for
the corresponding period in 2021. In constant currency, a non-GAAP
financial measure, which excludes the impact of foreign exchange
fluctuations and was determined by applying 2022 average rates to
2021 local currency amounts, consolidated net sales decreased by
$81.8 million, or 13.6%, as compared to consolidated net sales in
the corresponding period in 2021.
Gross margin for the nine months ended September 30, 2022
was $186.1 million, or 35.7%, as compared to $215.3 million, or
35.5%, for the corresponding period in 2021.
Income from operations was $11.5 million, as compared to $41.9
million for the corresponding period in 2021.
Adjusted income from operations was $20.4 million, as compared
to $42.7 million for the corresponding period in 2021
Net loss was $(9.4) million, or $(0.44) per diluted share, as
compared to net income of $21.4 million, or $0.98 per diluted
share, in the corresponding period in 2021.
Adjusted net income was $2.0 million, or $0.09 per diluted
share, as compared to adjusted net income of $22.4 million, or
$1.02 per diluted share, in the corresponding period in 2021. A
table reconciling this non-GAAP financial measure to net (loss)
income, as reported, is included below.
Adjusted EBITDA was $69.4 million for the trailing twelve months
ended September 30, 2022. After giving effect to the
non-recurring charge limitation permitted under our debt
agreements, adjusted EBITDA was $68.0 million for the trailing
twelve months ended September 30, 2022. Pro forma adjusted
EBITDA was $69.3 million for the twelve months ended
September 30, 2022. Adjusted EBITDA is a non-GAAP financial
measure which is defined in the Company’s debt agreements. A table
reconciling this non-GAAP financial measure to net (loss) income,
as reported, is included below.
We continue to take actions to further strengthen our financial
position. We are highly focused on expense controls and improving
our inventory turns. And as of September 30, 2022, our liquidity
was $170.6 million, which is comprised of our cash on hand and
available borrowings under our credit facility.
Dividend
On November 1, 2022, the Board of Directors declared a
quarterly dividend of 0.0425 per share payable on February 15,
2023 to stockholders of record on February 1, 2023.
Conference Call
The Company has scheduled a conference call for Thursday,
November 3, 2022 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=akzWKahj.
For those who cannot listen to the live broadcast, an audio
replay of the webcast will be available until May 2, 2023.
Non-GAAP Financial Measures
This earnings release contains non-GAAP financial
measures, including consolidated net sales in constant currency,
adjusted (loss) income from operations, adjusted net income,
adjusted diluted income per common share, adjusted EBITDA, before
limitation, adjusted EBITDA 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 “believe,” “could,”
“expect,” “intend,” “maintain,” “may,” “positioned,” “project,”
“projected,” “should,” “will,” “would”, “plan”, “goal”, “target” 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; 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; conflict or war, including the conflict in Ukraine;
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 KatcherEd
Trissel / Andrew Squire / Rose Temple212-355-4449
LIFETIME BRANDS, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(in thousands—except per share data) |
(unaudited) |
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Net sales |
$ |
186,590 |
|
|
$ |
224,777 |
|
|
$ |
520,621 |
|
|
$ |
607,066 |
|
Cost of sales |
|
118,757 |
|
|
|
141,662 |
|
|
|
334,553 |
|
|
|
391,790 |
|
Gross margin |
|
67,833 |
|
|
|
83,115 |
|
|
|
186,068 |
|
|
|
215,276 |
|
Distribution expenses |
|
18,641 |
|
|
|
18,893 |
|
|
|
55,239 |
|
|
|
56,470 |
|
Selling, general and
administrative expenses |
|
36,462 |
|
|
|
42,042 |
|
|
|
114,208 |
|
|
|
116,379 |
|
Wallace facility remediation
expense |
|
5,140 |
|
|
|
500 |
|
|
|
5,140 |
|
|
|
500 |
|
Income from operations |
|
7,590 |
|
|
|
21,680 |
|
|
|
11,481 |
|
|
|
41,927 |
|
Interest expense |
|
(4,581 |
) |
|
|
(3,835 |
) |
|
|
(12,080 |
) |
|
|
(11,668 |
) |
Mark to market gain on
interest rate derivatives |
|
637 |
|
|
|
120 |
|
|
|
1,990 |
|
|
|
664 |
|
Income before income taxes and
equity in (losses) earnings |
|
3,646 |
|
|
|
17,965 |
|
|
|
1,391 |
|
|
|
30,923 |
|
Income tax provision |
|
(1,845 |
) |
|
|
(5,589 |
) |
|
|
(3,420 |
) |
|
|
(9,837 |
) |
Equity in (losses) earnings,
net of taxes |
|
(8,159 |
) |
|
|
195 |
|
|
|
(7,409 |
) |
|
|
341 |
|
NET (LOSS) INCOME |
$ |
(6,358 |
) |
|
$ |
12,571 |
|
|
$ |
(9,438 |
) |
|
$ |
21,427 |
|
BASIC (LOSS)
INCOME PER COMMON SHARE |
$ |
(0.30 |
) |
|
$ |
0.58 |
|
|
$ |
(0.44 |
) |
|
$ |
1.00 |
|
DILUTED (LOSS)
INCOME PER COMMON SHARE |
$ |
(0.30 |
) |
|
$ |
0.57 |
|
|
$ |
(0.44 |
) |
|
$ |
0.98 |
|
LIFETIME BRANDS, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(in thousands—except share data) |
|
|
September 30,2022 |
|
December 31,2021 |
|
(unaudited) |
|
|
ASSETS |
|
|
|
CURRENT ASSETS |
|
|
|
Cash and cash equivalents |
$ |
5,930 |
|
|
$ |
27,982 |
|
Accounts receivable, less allowances of $13,984 at
September 30, 2022 and $16,544 at December 31, 2021 |
|
135,343 |
|
|
|
175,076 |
|
Inventory |
|
269,723 |
|
|
|
270,516 |
|
Prepaid expenses and other current assets |
|
10,091 |
|
|
|
11,499 |
|
Income taxes receivable |
|
2,583 |
|
|
|
— |
|
TOTAL CURRENT ASSETS |
|
423,670 |
|
|
|
485,073 |
|
PROPERTY AND EQUIPMENT,
net |
|
17,737 |
|
|
|
20,748 |
|
OPERATING LEASE RIGHT-OF-USE
ASSETS |
|
76,454 |
|
|
|
86,487 |
|
INVESTMENTS |
|
14,424 |
|
|
|
22,295 |
|
INTANGIBLE ASSETS, net |
|
217,526 |
|
|
|
212,678 |
|
OTHER ASSETS |
|
7,117 |
|
|
|
1,793 |
|
TOTAL ASSETS |
$ |
756,928 |
|
|
$ |
829,074 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
CURRENT LIABILITIES |
|
|
|
Current maturity of term loan |
$ |
— |
|
|
$ |
5,771 |
|
Accounts payable |
|
42,960 |
|
|
|
82,573 |
|
Accrued expenses |
|
79,117 |
|
|
|
112,241 |
|
Income taxes payable |
|
— |
|
|
|
604 |
|
Current portion of operating lease liabilities |
|
13,859 |
|
|
|
12,612 |
|
TOTAL CURRENT LIABILITIES |
|
135,936 |
|
|
|
213,801 |
|
OTHER LONG-TERM LIABILITIES |
|
16,656 |
|
|
|
12,616 |
|
INCOME TAXES PAYABLE, LONG-TERM |
|
1,472 |
|
|
|
1,472 |
|
OPERATING LEASE LIABILITIES |
|
78,534 |
|
|
|
90,824 |
|
DEFERRED INCOME TAXES |
|
12,981 |
|
|
|
12,842 |
|
REVOLVING CREDIT FACILITY |
|
32,545 |
|
|
|
— |
|
TERM LOAN |
|
242,505 |
|
|
|
241,873 |
|
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, 2022 and December 31, 2021; shares issued
and outstanding: 22,004,268 at September 30, 2022 and
22,018,016 at December 31, 2021 |
|
220 |
|
|
|
220 |
|
Paid-in capital |
|
274,301 |
|
|
|
271,556 |
|
Retained earnings |
|
437 |
|
|
|
17,419 |
|
Accumulated other comprehensive loss |
|
(38,659 |
) |
|
|
(33,549 |
) |
TOTAL STOCKHOLDERS’ EQUITY |
|
236,299 |
|
|
|
255,646 |
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
756,928 |
|
|
$ |
829,074 |
|
LIFETIME BRANDS, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(in thousands) |
(unaudited) |
|
|
Nine Months EndedSeptember
30, |
|
2022 |
|
2021 |
OPERATING
ACTIVITIES |
|
|
|
Net (loss) income |
$ |
(9,438 |
) |
|
$ |
21,427 |
|
Adjustments to reconcile net (loss) income to net cash (used in)
provided by operating activities: |
|
|
|
Depreciation and amortization |
|
14,535 |
|
|
|
17,560 |
|
Amortization of financing costs |
|
1,305 |
|
|
|
1,309 |
|
Mark to market (gain) on interest rate derivatives |
|
(1,990 |
) |
|
|
(664 |
) |
Non-cash lease expense |
|
(1,055 |
) |
|
|
(1,089 |
) |
Recovery for doubtful accounts |
|
(140 |
) |
|
|
(166 |
) |
Stock compensation expense |
|
3,565 |
|
|
|
3,973 |
|
Undistributed losses (earnings) from equity investment, net of
taxes |
|
7,409 |
|
|
|
(341 |
) |
Changes in operating assets and liabilities (excluding the effects
of business acquisitions) |
|
|
|
Accounts receivable |
|
38,765 |
|
|
|
659 |
|
Inventory |
|
(3,694 |
) |
|
|
(54,117 |
) |
Prepaid expenses, other current assets and other assets |
|
(177 |
) |
|
|
4,733 |
|
Accounts payable, accrued expenses and other liabilities |
|
(66,062 |
) |
|
|
24,093 |
|
Income taxes receivable |
|
(2,583 |
) |
|
|
— |
|
Income taxes payable |
|
(525 |
) |
|
|
(2,779 |
) |
NET CASH (USED IN) PROVIDED
BY OPERATING ACTIVITIES |
|
(20,085 |
) |
|
|
14,598 |
|
INVESTING
ACTIVITIES |
|
|
|
Purchases of property and equipment |
|
(1,975 |
) |
|
|
(3,361 |
) |
Proceeds from sale of shares of equity method investment |
|
— |
|
|
|
3,061 |
|
Acquisitions |
|
(17,956 |
) |
|
|
(178 |
) |
NET CASH USED
IN INVESTING ACTIVITIES |
|
(19,931 |
) |
|
|
(478 |
) |
FINANCING
ACTIVITIES |
|
|
|
Proceeds from revolving credit facility |
|
264,184 |
|
|
|
16,845 |
|
Repayments of revolving credit facility |
|
(230,365 |
) |
|
|
(42,531 |
) |
Repayments of term loan |
|
(6,216 |
) |
|
|
(10,478 |
) |
Payment of financing costs |
|
(882 |
) |
|
|
— |
|
Payments for finance lease obligations |
|
(24 |
) |
|
|
(71 |
) |
Payments of tax withholding for stock based compensation |
|
(938 |
) |
|
|
(3,186 |
) |
Proceeds from the exercise of stock options |
|
233 |
|
|
|
877 |
|
Payments for stock repurchase |
|
(4,678 |
) |
|
|
— |
|
Cash dividends paid |
|
(2,887 |
) |
|
|
(2,913 |
) |
NET CASH PROVIDED BY (USED
IN) FINANCING ACTIVITIES |
|
18,427 |
|
|
|
(41,457 |
) |
Effect of foreign exchange on
cash |
|
(463 |
) |
|
|
56 |
|
DECREASE IN CASH AND CASH
EQUIVALENTS |
|
(22,052 |
) |
|
|
(27,281 |
) |
Cash and cash equivalents at
beginning of period |
|
27,982 |
|
|
|
35,963 |
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD |
$ |
5,930 |
|
|
$ |
8,682 |
|
LIFETIME BRANDS, INC. |
Supplemental Information |
(in thousands) |
|
Reconciliation of GAAP to Non-GAAP Operating
Results |
|
Adjusted
EBITDA for the twelve months ended
September 30, 2022: |
|
|
Quarter Ended |
|
Twelve Months EndedSeptember
30,2022 |
|
December 31,2021 |
|
March 31,2022 |
|
June 30,2022 |
|
September 30,2022 |
|
|
(in thousands) |
|
Net (loss) income as reported |
$ |
(626 |
) |
|
$ |
380 |
|
|
$ |
(3,460 |
) |
|
$ |
(6,358 |
) |
|
$ |
(10,064 |
) |
Undistributed equity (earnings) losses, net |
|
(466 |
) |
|
|
(416 |
) |
|
|
(334 |
) |
|
|
8,159 |
|
|
|
6,943 |
|
Income tax provision (benefit) |
|
6,704 |
|
|
|
1,673 |
|
|
|
(98 |
) |
|
|
1,845 |
|
|
|
10,124 |
|
Interest expense |
|
3,856 |
|
|
|
3,767 |
|
|
|
3,732 |
|
|
|
4,581 |
|
|
|
15,936 |
|
Mark to market (gain) on interest rate derivatives |
|
(398 |
) |
|
|
(1,049 |
) |
|
|
(304 |
) |
|
|
(637 |
) |
|
|
(2,388 |
) |
Depreciation and amortization |
|
4,960 |
|
|
|
4,899 |
|
|
|
5,038 |
|
|
|
4,598 |
|
|
|
19,495 |
|
Intangible asset impairments |
|
14,760 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
14,760 |
|
Stock compensation expense |
|
1,244 |
|
|
|
1,174 |
|
|
|
1,365 |
|
|
|
1,026 |
|
|
|
4,809 |
|
Acquisition related expenses |
|
378 |
|
|
|
1,119 |
|
|
|
75 |
|
|
|
109 |
|
|
|
1,681 |
|
Warehouse relocation and redesign expenses(1) |
|
450 |
|
|
|
497 |
|
|
|
73 |
|
|
|
59 |
|
|
|
1,079 |
|
S'well integration costs(2) |
|
— |
|
|
|
781 |
|
|
|
864 |
|
|
|
250 |
|
|
|
1,895 |
|
Wallace facility remediation expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,140 |
|
|
|
5,140 |
|
Adjusted EBITDA, before
limitation |
$ |
30,862 |
|
|
$ |
12,825 |
|
|
$ |
6,951 |
|
|
$ |
18,772 |
|
|
$ |
69,410 |
|
Permitted non-recurring charge limitation(3) |
|
|
|
|
|
|
|
|
|
(1,403 |
) |
Adjusted EBITDA(4) |
|
|
|
|
|
|
|
|
|
68,007 |
|
Pro forma historical S'well and projected synergies
adjustment(5) |
|
|
|
|
|
|
|
|
|
1,250 |
|
Pro forma Adjusted
EBITDA(4) |
$ |
30,862 |
|
|
$ |
12,825 |
|
|
$ |
6,951 |
|
|
$ |
18,772 |
|
|
$ |
69,257 |
|
(1) For the twelve months ended September 30, 2022, the
warehouse relocation and redesign expenses included
$0.6 million of expenses related to the International segment
and $0.5 million of expenses related to the U.S. segment.(2)
For the twelve months ended September 30, 2022, S'well integration
costs included $0.5 million of expenses related to inventory
step up adjustment in connection with S'well acquisition.(3)
Permitted non-recurring charges include integration charges,
Wallace facility remediation expense, and warehouse relocation and
redesign expenses. These are permitted exclusions from the
Company’s consolidated adjusted EBITDA, subject to limitations,
pursuant to the Company’s Debt Agreements.(4) Adjusted EBITDA is a
non-GAAP financial measure that is defined in the Company’s debt
agreements. Adjusted EBITDA is defined as net (loss) income,
adjusted to exclude undistributed equity in (earnings) losses,
income tax provision (benefit), interest expense, mark to market
(gain) on interest rate derivatives, depreciation and amortization,
intangible asset impairments, stock compensation expense, Wallace
facility remediation expense, and other items detailed in the table
above that are consistent with exclusions permitted by our debt
agreements.(5) Pro forma historical S'well and projected synergies
adjustment represents a permitted adjustment to the Company’s
adjusted EBITDA for the acquisition of S'well on March 2, 2022
pursuant to the Company’s Debt Agreements. Pro forma projected
synergies represents the amount of projected cost savings,
operating expense reductions and cost saving synergies projected by
the Company as a result of actions taken through September 30, 2022
or expected to be taken as of September 30, 2022, net of the
benefits realized during the twelve months ended September 30,
2022.
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, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Net (loss)
income as reported |
$ |
(6,358 |
) |
|
$ |
12,571 |
|
|
$ |
(9,438 |
) |
|
$ |
21,427 |
|
Adjustments: |
|
|
|
|
|
|
|
Acquisition related expenses |
|
109 |
|
|
|
41 |
|
|
|
1,303 |
|
|
|
295 |
|
S'well integration costs(1) |
|
250 |
|
|
|
— |
|
|
|
1,895 |
|
|
|
— |
|
Warehouse relocation and redesign expenses(2) |
|
59 |
|
|
|
— |
|
|
|
629 |
|
|
|
— |
|
Impairment of Grupo Vasconia investment |
|
6,168 |
|
|
|
— |
|
|
|
6,168 |
|
|
|
— |
|
Mark to market (gain) on interest rate derivatives |
|
(637 |
) |
|
|
(120 |
) |
|
|
(1,990 |
) |
|
|
(664 |
) |
Foreign currency translation loss reclassified from Accumulated
Other Comprehensive Loss |
|
— |
|
|
|
1,362 |
|
|
|
— |
|
|
|
3,404 |
|
Gain on change in ownership in equity method investment |
|
— |
|
|
|
(971 |
) |
|
|
— |
|
|
|
(2,703 |
) |
Wallace facility remediation expense |
|
5,140 |
|
|
|
500 |
|
|
|
5,140 |
|
|
|
500 |
|
Income tax effect on adjustments |
|
(1,229 |
) |
|
|
43 |
|
|
|
(1,719 |
) |
|
|
116 |
|
Adjusted net income(3) |
$ |
3,502 |
|
|
$ |
13,426 |
|
|
$ |
1,988 |
|
|
$ |
22,375 |
|
Adjusted diluted income per
common share(4) |
$ |
0.16 |
|
|
$ |
0.61 |
|
|
$ |
0.09 |
|
|
$ |
1.02 |
|
(1) For the nine months ended September 30, 2022, S'well
integration costs included $0.5 million of expenses related to
inventory step up adjustment in connection with S'well
acquisition.(2) 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.(3)
Adjusted net income and adjusted diluted income per common share in
the three and nine months ended September 30, 2022 excludes
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.Adjusted net income and adjusted diluted income per
common share in the three and nine months ended September 30,
2021 excludes acquisition related expenses and mark to market
(gain) on interest rate derivatives, foreign currency translation
loss reclassified from Accumulated Other Comprehensive Loss, gain
on change in ownership in equity method investment 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
21,677 and 22,085 for the three month period ended
September 30, 2022 and 2021, respectively. Adjusted diluted
income per common share is calculated based on diluted
weighted-average shares outstanding of 21,890 and 21,964 for the
nine month period ended September 30, 2022 and 2021,
respectively. The diluted weighted-average shares outstanding for
the three and nine month ended September 30, 2022 include the
effect of dilutive securities of 155 and 288, respectively. The
diluted weighted-average shares outstanding for the three and nine
month ended September 30, 2021 include the effect of dilutive
securities of 536 and 621, respectively.
Adjusted
income from operations (in thousands): |
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Income from operations |
$ |
7,590 |
|
$ |
21,680 |
|
$ |
11,481 |
|
$ |
41,927 |
Adjustments: |
|
|
|
|
|
|
|
Acquisition related expenses |
|
109 |
|
|
41 |
|
|
1,303 |
|
|
295 |
S'well integration costs |
|
250 |
|
|
— |
|
|
1,895 |
|
|
— |
Warehouse relocation and redesign expenses(1) |
|
59 |
|
|
— |
|
|
629 |
|
|
— |
Wallace facility remediation expense |
|
5,140 |
|
|
500 |
|
|
5,140 |
|
|
500 |
Total adjustments |
|
5,558 |
|
|
541 |
|
|
8,967 |
|
|
795 |
Adjusted income from
operations(2) |
$ |
13,148 |
|
$ |
22,221 |
|
$ |
20,448 |
|
$ |
42,722 |
(1) 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 and September 30, 2021, excludes acquisition related
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 ReportedThree Months
EndedSeptember 30, |
|
Constant Currency(1)Three
Months EndedSeptember 30, |
|
|
|
Year-Over-YearIncrease
(Decrease) |
Net
sales |
2022 |
|
2021 |
|
Increase(Decrease) |
|
2022 |
|
2021 |
|
Increase(Decrease) |
|
CurrencyImpact |
|
ExcludingCurrency |
|
IncludingCurrency |
|
CurrencyImpact |
U.S. |
$ |
172,818 |
|
$ |
197,724 |
|
$ |
(24,906 |
) |
|
$ |
172,818 |
|
$ |
197,623 |
|
$ |
(24,805 |
) |
|
$ |
101 |
|
(12.6 |
)% |
|
(12.6 |
)% |
|
0.0 |
% |
International |
|
13,772 |
|
|
27,053 |
|
|
(13,281 |
) |
|
|
13,772 |
|
|
23,700 |
|
|
(9,928 |
) |
|
|
3,353 |
|
(41.9 |
)% |
|
(49.1 |
)% |
|
(7.2 |
)% |
Total net sales |
$ |
186,590 |
|
$ |
224,777 |
|
$ |
(38,187 |
) |
|
$ |
186,590 |
|
$ |
221,323 |
|
$ |
(34,733 |
) |
|
$ |
3,454 |
|
(15.7 |
)% |
|
(17.0 |
)% |
|
(1.3 |
)% |
|
As
ReportedNine Months
EndedSeptember 30, |
|
Constant
Currency(1)Nine Months
EndedSeptember 30, |
|
|
|
Year-Over-YearIncrease (Decrease) |
Net
sales |
2022 |
|
2021 |
|
Increase(Decrease) |
|
2022 |
|
2021 |
|
Increase(Decrease) |
|
CurrencyImpact |
|
ExcludingCurrency |
|
IncludingCurrency |
|
CurrencyImpact |
U.S. |
$ |
476,227 |
|
$ |
540,488 |
|
$ |
(64,261 |
) |
|
$ |
476,227 |
|
$ |
540,354 |
|
$ |
(64,127 |
) |
|
$ |
134 |
|
(11.9 |
)% |
|
(11.9 |
)% |
|
0.0 |
% |
International |
|
44,394 |
|
|
66,578 |
|
|
(22,184 |
) |
|
|
44,394 |
|
|
62,102 |
|
|
(17,708 |
) |
|
|
4,476 |
|
(28.5 |
)% |
|
(33.3 |
)% |
|
(4.8 |
)% |
Total net sales |
$ |
520,621 |
|
$ |
607,066 |
|
$ |
(86,445 |
) |
|
$ |
520,621 |
|
$ |
602,456 |
|
$ |
(81,835 |
) |
|
$ |
4,610 |
|
(13.6 |
)% |
|
(14.2 |
)% |
|
(0.6 |
)% |
(1) “Constant Currency” is determined by applying the 2022
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 (NASDAQ:LCUT)
Graphique Historique de l'Action
De Mai 2024 à Juin 2024
Lifetime Brands (NASDAQ:LCUT)
Graphique Historique de l'Action
De Juin 2023 à Juin 2024