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, 2021.
Robert Kay, Lifetime’s Chief Executive Officer, commented, “We
are pleased to report another strong quarter of growth in a
challenging macroeconomic environment, as we continue to see robust
demand for our products. Our growth has been achieved as a result
of the Lifetime 2.0 strategy the company implemented over the past
two plus years and aided by the mitigating actions we have taken to
offset inflationary and supply chain disruptions. Compared to a
very strong quarter last year, gross profit increased 5.5%. This
strong performance has resulted in our ability to generate adjusted
EBITDA of $96.7 million over the trailing twelve month period ended
September 30, 2021, an increase of 25.1% compared to adjusted
EBITDA over the trailing twelve month period ended December 31,
2020. The transformation of our international business continues to
deliver improved profitability and year over growth in net sales of
16.8%. In addition, we believe that we are making good progress on
our strategic growth initiatives, which have now been formalized
into our next five-year plan and from which we expect to drive
significant growth and long-term value creation.”
Mr. Kay continued, “Our team has done an excellent job
mitigating the impact from global supply chain disruptions, as
evidenced by our strong gross margin improvement in the third
quarter. Our proactive actions to manage inventory levels and
implement price increases, coupled with our best-in-class supply
chain and logistics capabilities, have enabled us to continue
meeting strong customer demand and positioned us well for the
fourth quarter despite shipping challenges. As a result of these
actions, and notwithstanding continued supply chain disruptions
that have caused some missed shipments, we have once again raised
our adjusted EBITDA guidance for the full year.”
Third Quarter Financial Highlights:
Consolidated net sales were $224.8 million for both the three
months ended September 30, 2021 and 2020. In constant
currency, a non-GAAP financial measure, consolidated net sales
decreased by $1.4 million, or 0.6%, as compared to consolidated net
sales in the corresponding period in 2020. 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, 2021
was $83.1 million, or 37.0%, as compared to $78.8 million, or
35.1%, for the corresponding period in 2020.
Income from operations was $21.7 million, as compared to $21.5
million for the corresponding period in 2020.
Net income was $12.6 million, or $0.57 per diluted share, as
compared to a net income of $13.9 million, or $0.65 per diluted
share, in the corresponding period in 2020.
Adjusted net income was $13.4 million, or $0.61 per diluted
share, as compared to adjusted net income, of $13.9 million, or
$0.65 per diluted share, in the corresponding period in 2020. A
table reconciling this non-GAAP financial measure to net income, as
reported, is included below.
Nine Months Financial Highlights:
Consolidated net sales for the nine months ended
September 30, 2021 were $607.1 million, an increase of $87.1
million, or 16.8%, as compared to net sales of $520.0 million for
the corresponding period in 2020. In constant currency, a non-GAAP
financial measure, consolidated net sales increased by $82.5
million, or 15.7%, as compared to consolidated net sales in the
corresponding period in 2020.
Gross margin for the nine months ended September 30, 2021
was $215.3 million, or 35.5%, as compared to $185.9 million, or
35.8%, for the corresponding period in 2020.
Income from operations was $41.9 million, as compared to income
from operations of $0.6 million for the corresponding period in
2020. Excluding a $20.1 million non-cash charge for goodwill
impairment, and a $2.8 million non-cash charge for bad debt
reserves to establish a provision against potential credit problems
from certain retail customers due to the COVID-19 pandemic, income
from operations would have been $23.5 million, for the
corresponding period in 2020.
Net income was $21.4 million, or $0.98 per diluted share, as
compared to a net loss of $(18.2) million, or $(0.87) per diluted
share, in the corresponding period in 2020.
Adjusted net income was $22.4 million, or $1.02 per diluted
share, as compared to adjusted net income, of $5.1 million, or
$0.24 per diluted share, in the corresponding period in 2020. A
table reconciling this non-GAAP financial measure to net income
(loss), as reported, is included below.
Adjusted EBITDA, after giving effect to certain adjustments as
permitted and defined under our debt agreements, was $96.7 million
for the twelve months ended September 30, 2021. A table
reconciling this non-GAAP financial measure to net
income, as reported, is included below.
Full Year 2021 Guidance Update
For the full fiscal year ending December 31, 2021, the
Company is providing raised financial guidance:
|
Year Ended December 31, 2020 |
|
Guidance for the Year Ending December 31, 2021 |
Net sales |
$769.2 million |
|
$870 to $890 million |
Income from operations |
$25.0 million |
|
$59 to $62.5 million |
Adjusted income from
operations |
$47.9 million |
|
$59.5 to $63 million |
Net (loss) income |
$(3.0) million |
|
$30.9 to $33.6 million |
Adjusted net income |
$20.2 million |
|
$31.2 to $33.9 million |
Diluted (loss)
income per common share |
$(0.14) per share |
|
$1.40 to $1.53 per share |
Adjusted diluted income per common share |
$0.95 per share |
|
$1.42 to $1.54 per share |
Weighted-average diluted shares |
20.9 million |
|
22 million |
Adjusted EBITDA |
$77.3 million |
|
$88 to $92 million |
This guidance is based on a forecasted GBP to USD rate of $1.35.
Net income and diluted income per common share were calculated
based on an effective tax rate of 30%. Tables reconciling non-GAAP
financial measures to GAAP financial measures, as reported, are
included below.
The Company has previously provided long term financial
objectives within its investor presentations, available on the
Company's website in the 'Investor Relations' section. Based upon
the company's accelerated growth and success in achieving its
previously disclosed long term financial objectives, the Company
has revised those objectives upward, including the following
forward-looking financial measures:
Five Year
Financial Objectives |
Sales |
$1.25 billion |
Adjusted EBITDA(1) |
$145 million |
(1)The Company is not providing a quantitative reconciliation
with respect to this forward-looking non-GAAP measure in reliance
on the “unreasonable efforts” exception set forth in SEC rules
because certain financial information, the probable significance of
which cannot be determined, is not available and cannot be
reasonably estimated. For example, unusual, one-time, non-ordinary,
or non-recurring costs, which cannot be reasonably estimated.
Mr. Kay added, “Since launching Lifetime 2.0 in 2018, we have
taken significant steps to optimize our business model, utilize our
infrastructure more efficiently, and invest in meaningful growth
opportunities. Our strategy is working, and thanks to the hard work
of our team, we have made incredible progress improving our
operations and taking our business to the next level. As we embark
on our next stage of growth at Lifetime, we are pleased to announce
our new five-year financial objectives, demonstrating our
confidence in the prospects for the business. Our revised targets,
which were recently finalized and approved by our Board of
Directors, reflect our progress to date as well as greater
visibility into key growth opportunities, including commercial
foodservice, our Year & Day® brand and new product categories
that already are or will be shipping this year. In addition to
these growth drivers, we also plan to undertake an expansion and
redesign of our U.S. distribution operations that will support our
planned growth and drive further efficiencies and incremental
profitability moving forward. We are proud of what we have
accomplished over the past few years, and look forward to
continuing to execute the next phase of our strategy, which we
believe will enable us to achieve these long-term financial
objectives to the benefit of our shareholders.”
Dividend
On November 2, 2021, the Board of Directors declared a
quarterly dividend of $0.0425 per share payable on
February 14, 2022 to shareholders of record on
January 31, 2022.
Conference Call
The Company has scheduled a conference call for Thursday,
November 4, 2021 at 11:00 a.m. The dial-in number for the
conference call is (877) 876-9177 (U.S.) or (785) 424-1672
(International), Conference ID: LCUTQ321.
A live webcast of the conference call will be accessible
through:https://event.on24.com/wcc/r/3492211/A3C2AC18245173CCAC310C2D77C2058B
For those who cannot listen to the live broadcast, an audio
replay of the webcast will be available.
Non-GAAP Financial MeasuresThis earnings
release contains non-GAAP financial measures, including
consolidated net sales in constant currency, adjusted income from
operations, adjusted net income, adjusted diluted income per common
share, and 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. As required by SEC rules, the Company has provided
reconciliations of the non-GAAP financial measures to the
most directly comparable GAAP financial measures.
These non-GAAP financial measures are provided because
management of the Company 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.
Forward-Looking StatementsIn this press
release, the use of the words “believe,” “could,” “expect,”
“intend,” “may,” “positioned,” “project,” “projected,” “should,”
“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, including our five-year strategic plan, 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; the impact
of tariffs on imported goods and materials; changes in general
economic conditions which could affect customer payment 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; 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®, 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, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Net sales |
$ |
224,777 |
|
|
|
$ |
224,750 |
|
|
|
$ |
607,066 |
|
|
|
$ |
519,960 |
|
|
Cost of sales |
141,662 |
|
|
|
145,958 |
|
|
|
391,790 |
|
|
|
334,066 |
|
|
Gross margin |
83,115 |
|
|
|
78,792 |
|
|
|
215,276 |
|
|
|
185,894 |
|
|
Distribution expenses |
18,893 |
|
|
|
18,961 |
|
|
|
56,470 |
|
|
|
50,710 |
|
|
Selling, general and
administrative expenses |
42,542 |
|
|
|
38,325 |
|
|
|
116,879 |
|
|
|
114,274 |
|
|
Restructuring expenses |
— |
|
|
|
— |
|
|
|
— |
|
|
|
253 |
|
|
Goodwill and other
impairments |
— |
|
|
|
— |
|
|
|
— |
|
|
|
20,100 |
|
|
Income from operations |
21,680 |
|
|
|
21,506 |
|
|
|
41,927 |
|
|
|
557 |
|
|
Interest expense |
(3,835 |
) |
|
|
(4,128 |
) |
|
|
(11,668 |
) |
|
|
(13,094 |
) |
|
Mark to market gain (loss) on
interest rate derivatives |
120 |
|
|
|
99 |
|
|
|
664 |
|
|
|
(2,316 |
) |
|
Income (loss) before income
taxes and equity in earnings (losses) |
17,965 |
|
|
|
17,477 |
|
|
|
30,923 |
|
|
|
(14,853 |
) |
|
Income tax provision |
(5,589 |
) |
|
|
(3,711 |
) |
|
|
(9,837 |
) |
|
|
(3,013 |
) |
|
Equity in earnings (losses),
net of taxes |
195 |
|
|
|
147 |
|
|
|
341 |
|
|
|
(362 |
) |
|
NET INCOME
(LOSS) |
$ |
12,571 |
|
|
|
$ |
13,913 |
|
|
|
$ |
21,427 |
|
|
|
$ |
(18,228 |
) |
|
BASIC INCOME (LOSS)
PER COMMON SHARE |
$ |
0.58 |
|
|
|
$ |
0.66 |
|
|
|
$ |
1.00 |
|
|
|
$ |
(0.87 |
) |
|
DILUTED INCOME (LOSS)
PER COMMON SHARE |
$ |
0.57 |
|
|
|
$ |
0.65 |
|
|
|
$ |
0.98 |
|
|
|
$ |
(0.87 |
) |
|
LIFETIME BRANDS,
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(in thousands—except share data)
|
September 30,2021 |
|
December 31,2020 |
|
(unaudited) |
|
|
ASSETS |
|
|
|
CURRENT ASSETS |
|
|
|
Cash and cash equivalents |
$ |
8,682 |
|
|
|
$ |
35,963 |
|
|
Accounts receivable, less allowances of $17,968 at
September 30, 2021 and $17,013 at December 31, 2020 |
169,223 |
|
|
|
170,037 |
|
|
Inventory |
256,922 |
|
|
|
203,164 |
|
|
Prepaid expenses and other current assets |
8,991 |
|
|
|
12,129 |
|
|
TOTAL CURRENT ASSETS |
443,818 |
|
|
|
421,293 |
|
|
PROPERTY AND EQUIPMENT,
net |
21,629 |
|
|
|
23,120 |
|
|
OPERATING LEASE RIGHT-OF-USE
ASSETS |
89,211 |
|
|
|
96,543 |
|
|
INVESTMENTS |
22,144 |
|
|
|
20,032 |
|
|
INTANGIBLE ASSETS, net |
231,014 |
|
|
|
244,025 |
|
|
OTHER ASSETS |
1,991 |
|
|
|
2,468 |
|
|
TOTAL ASSETS |
$ |
809,807 |
|
|
|
$ |
807,481 |
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
CURRENT LIABILITIES |
|
|
|
Current maturity of term loan |
$ |
8,549 |
|
|
|
$ |
17,657 |
|
|
Accounts payable |
60,594 |
|
|
|
66,095 |
|
|
Accrued expenses |
108,579 |
|
|
|
80,050 |
|
|
Income taxes payable |
2,152 |
|
|
|
4,788 |
|
|
Current portion of operating lease liabilities |
12,397 |
|
|
|
11,480 |
|
|
TOTAL CURRENT LIABILITIES |
192,271 |
|
|
|
180,070 |
|
|
OTHER LONG-TERM LIABILITIES |
14,779 |
|
|
|
16,483 |
|
|
INCOME TAXES PAYABLE, LONG-TERM |
1,444 |
|
|
|
1,444 |
|
|
OPERATING LEASE LIABILITIES |
93,978 |
|
|
|
102,355 |
|
|
DEFERRED INCOME TAXES |
11,031 |
|
|
|
10,714 |
|
|
REVOLVING CREDIT FACILITY |
1,600 |
|
|
|
27,302 |
|
|
TERM LOAN |
238,729 |
|
|
|
238,977 |
|
|
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, 2021 and December 31, 2020; shares issued
and outstanding: 22,018,193 at September 30, 2021 and
21,755,195 at December 31, 2020 |
220 |
|
|
|
218 |
|
|
Paid-in capital |
270,309 |
|
|
|
268,666 |
|
|
Retained earnings |
18,999 |
|
|
|
424 |
|
|
Accumulated other comprehensive loss |
(33,553 |
) |
|
|
(39,172 |
) |
|
TOTAL STOCKHOLDERS’ EQUITY |
255,975 |
|
|
|
230,136 |
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
809,807 |
|
|
|
$ |
807,481 |
|
|
LIFETIME BRANDS,
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(in thousands)(unaudited)
|
Nine Months EndedSeptember
30, |
|
2021 |
|
2020 |
OPERATING
ACTIVITIES |
|
|
|
Net income (loss) |
$ |
21,427 |
|
|
|
$ |
(18,228 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
|
|
|
Depreciation and amortization |
17,560 |
|
|
|
18,385 |
|
|
Goodwill and other impairments |
— |
|
|
|
20,100 |
|
|
Amortization of financing costs |
1,309 |
|
|
|
1,326 |
|
|
Mark to market (gain) loss on interest rate derivatives |
(664 |
) |
|
|
2,316 |
|
|
Non-cash lease expense |
(1,089 |
) |
|
|
2,915 |
|
|
Provision (recovery) for doubtful accounts |
(166 |
) |
|
|
3,011 |
|
|
Stock compensation expense |
3,973 |
|
|
|
4,321 |
|
|
Undistributed (earnings) losses from equity investment, net of
taxes |
(341 |
) |
|
|
362 |
|
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
659 |
|
|
|
(55,466 |
) |
|
Inventory |
(54,117 |
) |
|
|
(37,303 |
) |
|
Prepaid expenses, other current assets and other assets |
4,733 |
|
|
|
3,573 |
|
|
Accounts payable, accrued expenses and other liabilities |
24,093 |
|
|
|
100,798 |
|
|
Income taxes receivable |
— |
|
|
|
1,577 |
|
|
Income taxes payable |
(2,779 |
) |
|
|
1,521 |
|
|
NET CASH PROVIDED BY OPERATING ACTIVITIES |
14,598 |
|
|
|
49,208 |
|
|
INVESTING
ACTIVITIES |
|
|
|
Purchases of property and equipment |
(3,361 |
) |
|
|
(1,645 |
) |
|
Proceeds from sale of shares of equity method investment |
3,061 |
|
|
|
— |
|
|
Acquisition |
(178 |
) |
|
|
— |
|
|
NET CASH USED IN INVESTING ACTIVITIES |
(478 |
) |
|
|
(1,645 |
) |
|
FINANCING
ACTIVITIES |
|
|
|
Proceeds from revolving credit facility |
16,845 |
|
|
|
107,418 |
|
|
Repayments of revolving credit facility |
(42,531 |
) |
|
|
(113,652 |
) |
|
Repayments of term loan |
(10,478 |
) |
|
|
(7,583 |
) |
|
Payments for finance lease obligations |
(71 |
) |
|
|
(75 |
) |
|
Payments of tax withholding for stock based compensation |
(3,186 |
) |
|
|
(486 |
) |
|
Proceeds from the exercise of stock options |
877 |
|
|
|
— |
|
|
Cash dividends paid |
(2,913 |
) |
|
|
(1,862 |
) |
|
NET CASH USED IN FINANCING ACTIVITIES |
(41,457 |
) |
|
|
(16,240 |
) |
|
Effect of foreign exchange on
cash |
56 |
|
|
|
(18 |
) |
|
(DECREASE) INCREASE IN
CASH AND CASH EQUIVALENTS |
(27,281 |
) |
|
|
31,305 |
|
|
Cash and cash equivalents at
beginning of period |
35,963 |
|
|
|
11,370 |
|
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD |
$ |
8,682 |
|
|
|
$ |
42,675 |
|
|
LIFETIME BRANDS,
INC.Supplemental Information(in
thousands)
Reconciliation of GAAP
to Non-GAAP Operating Results
Adjusted EBITDA for the twelve months ended
September 30, 2021:
|
Quarter Ended |
|
Twelve Months Ended September 30, 2021 |
|
December 31, 2020 |
|
March 31,2021 |
|
June 30,2021 |
|
September 30,2021 |
|
|
(in thousands) |
Net income as reported |
$ |
15,221 |
|
|
|
$ |
3,067 |
|
|
|
$ |
5,789 |
|
|
|
$ |
12,571 |
|
|
|
$ |
36,648 |
|
|
Undistributed equity (losses) earnings, net |
(1,620 |
) |
|
|
247 |
|
|
|
(393 |
) |
|
|
(195 |
) |
|
|
(1,961 |
) |
|
Income tax provision |
6,853 |
|
|
|
2,416 |
|
|
|
1,832 |
|
|
|
5,589 |
|
|
|
16,690 |
|
|
Interest expense |
4,183 |
|
|
|
4,014 |
|
|
|
3,819 |
|
|
|
3,835 |
|
|
|
15,851 |
|
|
Mark to market gain on interest rate derivatives |
(172 |
) |
|
|
(498 |
) |
|
|
(46 |
) |
|
|
(120 |
) |
|
|
(836 |
) |
|
Depreciation and amortization |
6,279 |
|
|
|
5,958 |
|
|
|
5,765 |
|
|
|
5,837 |
|
|
|
23,839 |
|
|
Stock compensation expense |
1,630 |
|
|
|
1,444 |
|
|
|
1,328 |
|
|
|
1,201 |
|
|
|
5,603 |
|
|
Acquisition related expenses |
126 |
|
|
|
182 |
|
|
|
72 |
|
|
|
41 |
|
|
|
421 |
|
|
Restructuring benefit |
(42 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(42 |
) |
|
Wallace facility remedial design expense |
— |
|
|
|
— |
|
|
|
— |
|
|
|
500 |
|
|
|
500 |
|
|
Adjusted EBITDA |
$ |
32,458 |
|
|
|
$ |
16,830 |
|
|
|
$ |
18,166 |
|
|
|
$ |
29,259 |
|
|
|
$ |
96,713 |
|
|
Adjusted EBITDA is a non-GAAP financial measure which is defined
in the Company’s debt agreements. Adjusted EBITDA is defined as net
income, adjusted to exclude undistributed equity in (losses)
earnings, income tax provision, interest expense, mark to market
gain on interest rate derivatives, depreciation and amortization,
stock compensation expense, 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 (loss) and adjusted diluted income
(loss) per common share (in thousands -except per share
data):
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Net income (loss) as reported |
$ |
12,571 |
|
|
|
$ |
13,913 |
|
|
|
$ |
21,427 |
|
|
|
$ |
(18,228 |
) |
|
Adjustments: |
|
|
|
|
|
|
|
Acquisition related expenses |
41 |
|
|
|
57 |
|
|
|
295 |
|
|
|
159 |
|
|
Restructuring expenses |
— |
|
|
|
— |
|
|
|
— |
|
|
|
253 |
|
|
Warehouse relocation |
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,093 |
|
|
Mark to market (gain) loss on interest rate derivatives |
(120 |
) |
|
|
(99 |
) |
|
|
(664 |
) |
|
|
2,316 |
|
|
Goodwill and other impairments |
— |
|
|
|
— |
|
|
|
— |
|
|
|
20,100 |
|
|
Foreign currency translation loss reclassified from Accumulated
Other Comprehensive Loss |
1,362 |
|
|
|
— |
|
|
|
3,404 |
|
|
|
235 |
|
|
Gain on change in ownership in equity method investment |
(971 |
) |
|
|
— |
|
|
|
(2,703 |
) |
|
|
— |
|
|
Wallace facility remedial design expense |
500 |
|
|
|
— |
|
|
|
500 |
|
|
|
— |
|
|
Income tax effect on adjustments |
43 |
|
|
|
11 |
|
|
|
116 |
|
|
|
(878 |
) |
|
Adjusted net income |
$ |
13,426 |
|
|
|
$ |
13,882 |
|
|
|
$ |
22,375 |
|
|
|
$ |
5,050 |
|
|
Adjusted diluted income per
common share(1) |
$ |
0.61 |
|
|
|
$ |
0.65 |
|
|
|
$ |
1.02 |
|
|
|
$ |
0.24 |
|
|
Adjusted net income and adjusted diluted income per common share
in the three and nine months ended September 30, 2021 excludes
acquisition related expenses, 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 remedial
design 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, 2020 excludes
acquisition related expenses, restructuring expenses, warehouse
relocation, mark to market (gain) loss on interest rate
derivatives, goodwill and other impairments, and foreign currency
translation loss reclassified from Accumulated Other Comprehensive
Loss. The income tax effect on adjustments reflects the statutory
tax rates applied on the adjustments.
(1)Adjusted diluted income per common share is calculated based
on diluted weighted-average shares outstanding of 22,085 and 21,285
for the three month period ended September 30, 2021 and 2020,
respectively. Adjusted diluted income per common share is
calculated based on diluted weighted-average shares outstanding of
21,964 and 21,015 for the nine month period ended
September 30, 2021 and 2020, respectively. The diluted
weighted-average shares outstanding for the three and nine month
period ended September 30, 2021 include the effect of dilutive
securities of 536 and 621, respectively. The diluted
weighted-average shares outstanding for the three and nine month
period ended September 30, 2020 include the effect of dilutive
securities of 350 and 180 shares, respectively.
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 |
2021 |
|
2020 |
|
Increase(Decrease) |
|
2021 |
|
2020 |
|
Increase(Decrease) |
|
CurrencyImpact |
|
ExcludingCurrency |
|
IncludingCurrency |
|
CurrencyImpact |
U.S. |
$ |
197,724 |
|
|
$ |
201,539 |
|
|
$ |
(3,815 |
) |
|
|
$ |
197,724 |
|
|
$ |
201,620 |
|
|
$ |
(3,896 |
) |
|
|
$ |
(81 |
) |
|
|
(1.9 |
)% |
|
(1.9 |
)% |
|
0.0 |
% |
International |
27,053 |
|
|
23,211 |
|
|
3,842 |
|
|
|
27,053 |
|
|
24,588 |
|
|
2,465 |
|
|
|
(1,377 |
) |
|
|
10.0 |
% |
|
16.6 |
% |
|
6.6 |
% |
Total net sales |
$ |
224,777 |
|
|
$ |
224,750 |
|
|
$ |
27 |
|
|
|
$ |
224,777 |
|
|
$ |
226,208 |
|
|
$ |
(1,431 |
) |
|
|
$ |
(1,458 |
) |
|
|
(0.6 |
)% |
|
0.0 |
% |
|
0.6 |
% |
|
As ReportedNine Months
EndedSeptember 30, |
|
Constant Currency (1)Nine
Months EndedSeptember 30, |
|
|
|
Year-Over-YearIncrease
(Decrease) |
Net
sales |
2021 |
|
2020 |
|
Increase(Decrease) |
|
2021 |
|
2020 |
|
Increase(Decrease) |
|
CurrencyImpact |
|
ExcludingCurrency |
|
IncludingCurrency |
|
CurrencyImpact |
U.S. |
$ |
540,488 |
|
|
$ |
463,338 |
|
|
$ |
77,150 |
|
|
$ |
540,488 |
|
|
$ |
463,482 |
|
|
$ |
77,006 |
|
|
$ |
(144 |
) |
|
|
16.6 |
% |
|
16.7 |
% |
|
0.1 |
% |
International |
66,578 |
|
|
56,622 |
|
|
9,956 |
|
|
66,578 |
|
|
61,047 |
|
|
5,531 |
|
|
(4,425 |
) |
|
|
9.1 |
% |
|
17.6 |
% |
|
8.5 |
% |
Total net sales |
$ |
607,066 |
|
|
$ |
519,960 |
|
|
$ |
87,106 |
|
|
$ |
607,066 |
|
|
$ |
524,529 |
|
|
$ |
82,537 |
|
|
$ |
(4,569 |
) |
|
|
15.7 |
% |
|
16.8 |
% |
|
1.1 |
% |
(1) “Constant Currency” is determined by applying the 2021
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 fiscal year ending
December 31, 2021 (in millions):
Net income guidance |
$30.9 to $33.6 |
Add back: |
|
Income tax expense |
12.6 to 13.4 |
Interest expense |
15 |
Depreciation and amortization |
23.5 |
Stock compensation expense |
5 |
Other adjustments(1) |
1 to 1.5 |
Adjusted EBITDA guidance |
$88 to $92 |
(1) Includes estimates for acquisition related expenses,
undistributed equity in (earnings) losses, Wallace facility
remedial design expense, and other items that are consistent with
exclusions permitted by our debt agreements.
Adjusted income from operations guidance for the full
fiscal year ending December 31, 2021 (in millions):
Income from operations
guidance |
$59 to $62.5 |
Wallace facility remedial design expense |
0.5 |
Adjusted income from operations
guidance |
$59.5 to $63.0 |
|
|
Adjusted net income and adjusted diluted income per common
share guidance for the full fiscal year
ending December 31, 2021 (in millions -
except per share data): |
Net income guidance |
$30.9 to $33.6 |
Wallace facility remedial design expense |
0.5 |
Other adjustments (1) |
0 |
Income tax effect on adjustment |
(0.2) |
Adjusted net income guidance |
$31.2 to $33.9 |
Adjusted diluted income per share
guidance |
$1.42 to $1.54 |
(1) Includes estimates for acquisition related expenses, mark to
market (gain) on interest rate derivatives, foreign currency
translation loss reclassified from Accumulated Other Comprehensive
Loss and gain on change in ownership in equity method
investment.
Reconciliation of GAAP to Non-GAAP
Operating Results
Adjusted EBITDA for the year ended December 31,
2020:
|
Three Months Ended |
|
Year Ended |
March 31,2020 |
|
June 30, 2020 |
|
September 30, 2020 |
|
December 31, 2020 |
|
December 31,2020 |
|
|
|
|
(in thousands) |
|
|
|
|
Net (loss) income as reported |
$ |
(28,164 |
) |
|
|
$ |
(3,977 |
) |
|
|
$ |
13,913 |
|
|
|
$ |
15,221 |
|
|
|
$ |
(3,007 |
) |
|
Undistributed equity losses (earnings), net |
(339 |
) |
|
|
848 |
|
|
|
(147 |
) |
|
|
(1,620 |
) |
|
|
(1,258 |
) |
|
Income tax (benefit) provision |
(3,729 |
) |
|
|
3,031 |
|
|
|
3,711 |
|
|
|
6,853 |
|
|
|
9,866 |
|
|
Interest expense |
4,736 |
|
|
|
4,230 |
|
|
|
4,128 |
|
|
|
4,183 |
|
|
|
17,277 |
|
|
Mark to market loss (gain) on interest rate derivatives |
2,251 |
|
|
|
164 |
|
|
|
(99 |
) |
|
|
(172 |
) |
|
|
2,144 |
|
|
Depreciation and amortization |
6,234 |
|
|
|
6,061 |
|
|
|
6,090 |
|
|
|
6,279 |
|
|
|
24,664 |
|
|
Goodwill and other impairments |
20,100 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
20,100 |
|
|
Stock compensation expense |
1,326 |
|
|
|
1,420 |
|
|
|
1,575 |
|
|
|
1,630 |
|
|
|
5,951 |
|
|
Acquisition related expenses |
47 |
|
|
|
55 |
|
|
|
57 |
|
|
|
126 |
|
|
|
285 |
|
|
Restructuring expenses (benefit) |
— |
|
|
|
253 |
|
|
|
— |
|
|
|
(42 |
) |
|
|
211 |
|
|
Warehouse relocation expenses |
790 |
|
|
|
303 |
|
|
|
— |
|
|
|
— |
|
|
|
1,093 |
|
|
Adjusted EBITDA |
$ |
3,252 |
|
|
|
$ |
12,388 |
|
|
|
$ |
29,228 |
|
|
|
$ |
32,458 |
|
|
|
$ |
77,326 |
|
|
Adjusted EBITDA is a non-GAAP financial measure which
is defined in the Company’s debt agreements. Adjusted EBITDA is
defined as net income (loss), adjusted to exclude undistributed
equity in (earnings) losses, income tax (benefit) provision,
interest expense, depreciation and amortization, mark to market
loss (gain) on interest rate derivatives, goodwill and other
impairments, stock compensation expense, 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):
|
Year Ended December 31, |
|
2020 |
Net loss as reported |
$ |
(3,007 |
) |
|
Adjustments: |
|
Acquisition related expenses |
285 |
|
|
Restructuring expenses |
211 |
|
|
Warehouse relocation expenses |
1,093 |
|
|
Mark to market loss on interest rate derivatives |
2,144 |
|
|
Goodwill and other impairments |
20,100 |
|
|
Foreign currency translation loss reclassified from Accumulated
Other Comprehensive Loss |
235 |
|
|
Income tax effect on adjustments |
(858 |
) |
|
Adjusted net income |
$ |
20,203 |
|
|
Adjusted diluted income per
share (1) |
$ |
0.95 |
|
|
(1)Adjusted diluted income per common share is calculated based
on diluted weighted-average shares outstanding of 21,179 for the
year ended December 31, 2020. The diluted weighted-average shares
outstanding for the year ended December 31, 2020 include the effect
of dilutive securities of 319 shares.
Adjusted income from operations (in
thousands):
|
Year Ended December 31, |
|
2020 |
|
(in thousands) |
Income from operations |
$ |
24,970 |
|
Excluded non-cash charges: |
|
Goodwill and other impairments |
20,100 |
|
Bad debt reserve related to COVID-19 pandemic (1) |
2,844 |
|
Total excluded non-cash charges |
$ |
22,944 |
|
Adjusted income from
operations |
$ |
47,914 |
|
(1) Bad debt reserve recorded in the first quarter of fiscal
2020 to establish a provision against potential credit problems
from certain retail customers who may have financial difficulty
that has been caused or increased due to the COVID-19 pandemic.
This reflects the Company's assessment of risk of not being able to
collect such receivables from certain customers in the U.S. that
are at risk of seeking or have already obtained bankruptcy
protection and our international customer base which has a higher
proportion of small and independent brick-and-mortar retailers.
This charge was taken in response to the Company's assessment of
the impact of the COVID-19 pandemic on these accounts
Lifetime Brands (NASDAQ:LCUT)
Historical Stock Chart
From Jun 2024 to Jul 2024
Lifetime Brands (NASDAQ:LCUT)
Historical Stock Chart
From Jul 2023 to Jul 2024