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 and full year ended December 31, 2022.
Rob Kay, Lifetime’s Chief Executive Officer, commented, “Our
core business continues to deliver solid performance in the face of
industrywide challenges, as a result of our strong market share
position and proactive cost management actions. Our fourth quarter
results reflect the ongoing impact of reduced orders from our
customers as retailers continue to focus on rightsizing their
inventory levels. Inflationary and other macro-economic challenges
also contributed to weaker end market demand, especially in our
European markets. Despite the difficult environment, our efforts to
reduce costs, restructure our European operations and identify
efficiencies throughout the business have driven improved gross
margins and continued strong cash flow generation, and we believe
that the Company is well positioned for continued top and bottom
line growth.”
Mr. Kay continued, “Although industry headwinds remain, we
believe the Company will outperform 2022 results in the year ahead,
driven by more stable global supply chains, normalization of
customer ordering patterns, improved profitability from our
restructured International business and continued execution on our
strategic growth initiatives, including our commercial food service
expansion. We are proud to have achieved another year of
significant progress for Lifetime, and I’m grateful to our talented
team for all their hard work during these challenging times.
Importantly, we ended the year with historically high levels of
liquidity, and believe we are well positioned to drive shareholder
value in 2023.”
Fourth Quarter
Financial Highlights:
Consolidated net sales for the three months ended
December 31, 2022, were $207.0 million, representing a
decrease of $48.9 million or 19.1%, as compared to
$255.9 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 $45.5 million or 18.0% in the
fourth quarter of 2022, 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 was $74.2 million, or 35.9%, in 2022 as
compared to $88.0 million, or 34.4%, for the corresponding
period in 2021.
Income from operations was $12.8 million, as compared to
$8.9 million in the prior year's quarter.
Adjusted income from operations was $14.4 million as
compared to $24.5 million for the corresponding period in
2021.
Net income was $3.3 million, or $0.15 per diluted share, in
the quarter ended December 31, 2022, as compared to net loss
of $(0.6) million, or $(0.03) per diluted share, for the
corresponding period in 2021.
Adjusted net income was $4.7 million, or $0.22 per diluted
share, in the quarter ended December 31, 2022, as compared to
adjusted net income of $14.4 million, or $0.65 per diluted share,
for the corresponding period in 2021. A table reconciling
this non-GAAP financial measure to net income (loss), as
reported, is included below.
Full Year Financial Highlights:
Consolidated net sales for the year ended December 31,
2022, were $727.7 million, a decrease of $135.2 million, or 15.7%,
as compared to consolidated net sales of $862.9 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
$127.7 million, or 14.9%, 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 2022 was $260.3 million, or 35.8%, compared to
$303.3 million, or 35.2%, for the corresponding period in 2021.
Income from operations was $24.3 million in 2022, as compared to
$50.8 million for the corresponding period in 2021.
Adjusted income from operations was $34.8 million, as compared
to $67.2 million for the corresponding period in 2021. A table
reconciling this non-GAAP financial measure to consolidated net
sales, as reported, is included below.
Net loss was $(6.2) million, or $(0.29) per diluted share, in
the year ended December 31, 2022, as compared to net income of
$20.8 million, or $0.94 per diluted share, in the corresponding
period in 2021.
Adjusted net income was $6.7 million, or $0.31 per diluted
share, as compared to $36.8 million, or $1.67 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 $58.2 million in the year ended
December 31, 2022. A table reconciling
this non-GAAP financial measure to net loss, as reported,
is included below.
Dividend
On March 8, 2023, the Board of Directors declared a
quarterly dividend of $0.0425 per share payable on May 15,
2023 to shareholders of record on May 1, 2023.
Conference Call
The Company has scheduled a conference call for Thursday, March
09, 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=2cyrFsQo
For those who cannot listen to the live broadcast, an audio
replay of the webcast will be available until September 5,
2023.
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, 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 StatementsIn this press
release, the use of the words “believe,” “continue,” “could,”
“deliver,” “drive,”“expect,” “improve,” “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, including weaker end
market demand; 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; macro-economic challenges, 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.CONSOLIDATED STATEMENTS OF
OPERATIONS(in thousands - except per share data) |
|
|
Three Months EndedDecember
31, |
|
Year EndedDecember 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net sales |
|
$ |
207,041 |
|
|
$ |
255,858 |
|
|
$ |
727,662 |
|
|
$ |
862,924 |
|
Cost of sales |
|
|
132,793 |
|
|
|
167,815 |
|
|
|
467,346 |
|
|
|
559,605 |
|
Gross margin |
|
|
74,248 |
|
|
|
88,043 |
|
|
|
260,316 |
|
|
|
303,319 |
|
Distribution expenses |
|
|
19,709 |
|
|
|
24,302 |
|
|
|
74,948 |
|
|
|
80,772 |
|
Selling, general and
administrative expenses |
|
|
40,337 |
|
|
|
40,066 |
|
|
|
154,545 |
|
|
|
156,445 |
|
Goodwill and other intangible
asset impairments |
|
|
— |
|
|
|
14,760 |
|
|
|
— |
|
|
|
14,760 |
|
Wallace facility remediation
expense |
|
|
— |
|
|
|
— |
|
|
|
5,140 |
|
|
|
500 |
|
Restructuring expenses |
|
|
1,420 |
|
|
|
— |
|
|
|
1,420 |
|
|
|
— |
|
Income from operations |
|
|
12,782 |
|
|
|
8,915 |
|
|
|
24,263 |
|
|
|
50,842 |
|
Interest expense |
|
|
(5,125 |
) |
|
|
(3,856 |
) |
|
|
(17,205 |
) |
|
|
(15,524 |
) |
Mark to market (loss) gain on
interest rate derivatives |
|
|
(19 |
) |
|
|
398 |
|
|
|
1,971 |
|
|
|
1,062 |
|
Income before income taxes and
equity in (losses) earnings |
|
|
7,638 |
|
|
|
5,457 |
|
|
|
9,029 |
|
|
|
36,380 |
|
Income tax provision |
|
|
(2,308 |
) |
|
|
(6,704 |
) |
|
|
(5,728 |
) |
|
|
(16,541 |
) |
Equity in (losses) earnings,
net of taxes |
|
|
(2,058 |
) |
|
|
621 |
|
|
|
(9,467 |
) |
|
|
962 |
|
NET INCOME (LOSS) |
|
$ |
3,272 |
|
|
$ |
(626 |
) |
|
$ |
(6,166 |
) |
|
$ |
20,801 |
|
Weighted-average shares
outstanding—basic |
|
|
21,429 |
|
|
|
21,556 |
|
|
|
21,558 |
|
|
|
21,397 |
|
BASIC INCOME
(LOSS) PER COMMON SHARE |
|
$ |
0.15 |
|
|
$ |
(0.03 |
) |
|
$ |
(0.29 |
) |
|
$ |
0.97 |
|
Weighted-average shares
outstanding—diluted |
|
|
21,607 |
|
|
|
21,556 |
|
|
|
21,558 |
|
|
|
22,037 |
|
DILUTED INCOME
(LOSS) PER COMMON SHARE |
|
$ |
0.15 |
|
|
$ |
(0.03 |
) |
|
$ |
(0.29 |
) |
|
$ |
0.94 |
|
LIFETIME BRANDS, INC.CONSOLIDATED BALANCE
SHEETS(in thousands - except share data) |
|
|
December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
ASSETS |
|
|
|
|
CURRENT ASSETS |
|
|
|
|
Cash and cash equivalents |
|
$ |
23,598 |
|
|
$ |
27,982 |
|
Accounts receivable, less allowances of $14,606 at
December 31, 2022 and $16,544 at December 31, 2021 |
|
|
141,195 |
|
|
|
175,076 |
|
Inventory |
|
|
222,209 |
|
|
|
270,516 |
|
Prepaid expenses and other current assets |
|
|
13,254 |
|
|
|
11,499 |
|
TOTAL CURRENT ASSETS |
|
|
400,256 |
|
|
|
485,073 |
|
PROPERTY AND EQUIPMENT,
net |
|
|
18,022 |
|
|
|
20,748 |
|
OPERATING LEASE RIGHT-OF-USE
ASSETS |
|
|
74,869 |
|
|
|
86,487 |
|
INVESTMENTS |
|
|
12,516 |
|
|
|
22,295 |
|
INTANGIBLE ASSETS, net |
|
|
213,887 |
|
|
|
212,678 |
|
OTHER ASSETS |
|
|
6,338 |
|
|
|
1,793 |
|
TOTAL ASSETS |
|
$ |
725,888 |
|
|
$ |
829,074 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
Current maturity of term loan |
|
$ |
— |
|
|
$ |
5,771 |
|
Accounts payable |
|
|
38,052 |
|
|
|
82,573 |
|
Accrued expenses |
|
|
77,602 |
|
|
|
112,741 |
|
Income taxes payable |
|
|
224 |
|
|
|
604 |
|
Current portion of operating lease liabilities |
|
|
14,028 |
|
|
|
12,612 |
|
TOTAL CURRENT LIABILITIES |
|
|
129,906 |
|
|
|
214,301 |
|
OTHER LONG-TERM
LIABILITIES |
|
|
14,995 |
|
|
|
12,116 |
|
INCOME TAXES PAYABLE,
LONG-TERM |
|
|
1,591 |
|
|
|
1,472 |
|
OPERATING LEASE
LIABILITIES |
|
|
76,420 |
|
|
|
90,824 |
|
DEFERRED INCOME TAXES |
|
|
9,607 |
|
|
|
12,842 |
|
REVOLVING CREDIT FACILITY |
|
|
10,424 |
|
|
|
— |
|
TERM LOAN |
|
|
242,857 |
|
|
|
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
December 31, 2022 and 2021; shares issued and outstanding:
21,779,799 at December 31, 2022 and 22,018,016 at
December 31, 2021 |
|
|
218 |
|
|
|
220 |
|
Paid-in capital |
|
|
274,579 |
|
|
|
271,556 |
|
Retained earnings |
|
|
1,145 |
|
|
|
17,419 |
|
Accumulated other comprehensive loss |
|
|
(35,854 |
) |
|
|
(33,549 |
) |
TOTAL STOCKHOLDERS’ EQUITY |
|
|
240,088 |
|
|
|
255,646 |
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
725,888 |
|
|
$ |
829,074 |
|
LIFETIME BRANDS, INC.CONSOLIDATED STATEMENTS OF
CASH FLOWS(in thousands) |
|
|
Year ended December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
OPERATING
ACTIVITIES |
|
|
|
|
Net (loss) income |
|
$ |
(6,166 |
) |
|
$ |
20,801 |
|
Adjustments to reconcile net (loss) income to net cash provided by
operating activities: |
|
|
|
|
Depreciation and amortization |
|
|
19,536 |
|
|
|
22,520 |
|
Goodwill and other intangible asset impairments |
|
|
— |
|
|
|
14,760 |
|
Amortization of financing costs |
|
|
1,809 |
|
|
|
1,739 |
|
Mark to market (gain) on interest rate derivatives |
|
|
(1,971 |
) |
|
|
(1,062 |
) |
Non-cash lease expense |
|
|
(1,483 |
) |
|
|
(1,294 |
) |
Provision (recovery) for doubtful accounts |
|
|
662 |
|
|
|
(5 |
) |
Deferred income taxes |
|
|
(3,825 |
) |
|
|
1,799 |
|
Stock compensation expense |
|
|
3,846 |
|
|
|
5,217 |
|
Undistributed losses (earnings) from equity investment, net of
taxes |
|
|
9,467 |
|
|
|
(807 |
) |
Wallace facility remediation expense |
|
|
5,140 |
|
|
|
500 |
|
Changes in operating assets and liabilities (excluding the effects
of business acquisitions) |
|
|
|
|
Accounts receivable |
|
|
33,889 |
|
|
|
(5,531 |
) |
Inventory |
|
|
47,443 |
|
|
|
(67,501 |
) |
Prepaid expenses, other current assets and other assets |
|
|
(2,447 |
) |
|
|
2,043 |
|
Accounts payable, accrued expenses and other liabilities |
|
|
(81,365 |
) |
|
|
48,079 |
|
Income taxes payable |
|
|
(216 |
) |
|
|
(4,270 |
) |
NET CASH PROVIDED
BY OPERATING ACTIVITIES |
|
|
24,319 |
|
|
|
36,988 |
|
INVESTING
ACTIVITIES |
|
|
|
|
Purchases of property and equipment |
|
|
(2,975 |
) |
|
|
(3,986 |
) |
Proceeds from sale of shares of equity method investment |
|
|
— |
|
|
|
3,061 |
|
Acquisition |
|
|
(17,956 |
) |
|
|
(178 |
) |
NET CASHUSED
IN INVESTING ACTIVITIES |
|
|
(20,931 |
) |
|
|
(1,103 |
) |
FINANCING
ACTIVITIES |
|
|
|
|
Proceeds from revolving credit facility |
|
|
276,288 |
|
|
|
103,385 |
|
Repayments of revolving credit facility |
|
|
(265,662 |
) |
|
|
(130,662 |
) |
Repayments of Term Loan |
|
|
(6,216 |
) |
|
|
(10,478 |
) |
Payment of financing costs |
|
|
(1,021 |
) |
|
|
— |
|
Payments for finance lease obligations |
|
|
(32 |
) |
|
|
(117 |
) |
Payments of tax withholding for stock based compensation |
|
|
(1,067 |
) |
|
|
(3,189 |
) |
Proceeds from the exercise of stock options |
|
|
233 |
|
|
|
877 |
|
Payments for stock repurchase |
|
|
(6,320 |
) |
|
|
— |
|
Cash dividends paid |
|
|
(3,820 |
) |
|
|
(3,843 |
) |
NET CASH USED
IN FINANCING ACTIVITIES |
|
|
(7,617 |
) |
|
|
(44,027 |
) |
Effect of foreign exchange on
cash |
|
|
(155 |
) |
|
|
161 |
|
DECREASE IN CASH AND CASH
EQUIVALENTS |
|
|
(4,384 |
) |
|
|
(7,981 |
) |
Cash and cash equivalents at
beginning of year |
|
|
27,982 |
|
|
|
35,963 |
|
CASH AND CASH
EQUIVALENTS AT END OF YEAR |
|
$ |
23,598 |
|
|
$ |
27,982 |
|
LIFETIME BRANDS,
INC.Supplemental Information(in
thousands)
Reconciliation of GAAP
to Non-GAAP Operating Results
Adjusted EBITDA for the year ended
December 31, 2022:
|
|
Three Months Ended |
|
Year Ended |
|
|
March 31,2022 |
|
June 30,2022 |
|
September 30,2022 |
|
December 31, 2022 |
|
December 31, 2022 |
|
|
|
|
|
|
(in thousands) |
|
|
|
|
Net income (loss) as reported |
|
$ |
380 |
|
|
$ |
(3,460 |
) |
|
$ |
(6,358 |
) |
|
$ |
3,272 |
|
|
$ |
(6,166 |
) |
Undistributed equity (earnings) losses, net |
|
|
(416 |
) |
|
|
(334 |
) |
|
|
8,159 |
|
|
|
2,058 |
|
|
|
9,467 |
|
Income tax provision (benefit) |
|
|
1,673 |
|
|
|
(98 |
) |
|
|
1,845 |
|
|
|
2,308 |
|
|
|
5,728 |
|
Interest expense |
|
|
3,767 |
|
|
|
3,732 |
|
|
|
4,581 |
|
|
|
5,125 |
|
|
|
17,205 |
|
Depreciation and amortization |
|
|
4,899 |
|
|
|
5,038 |
|
|
|
4,598 |
|
|
|
5,001 |
|
|
|
19,536 |
|
Mark to market (gain) loss on interest rate derivatives |
|
|
(1,049 |
) |
|
|
(304 |
) |
|
|
(637 |
) |
|
|
19 |
|
|
|
(1,971 |
) |
Stock compensation expense |
|
|
1,174 |
|
|
|
1,365 |
|
|
|
1,026 |
|
|
|
281 |
|
|
|
3,846 |
|
Acquisition related expenses |
|
|
1,119 |
|
|
|
75 |
|
|
|
109 |
|
|
|
170 |
|
|
|
1,473 |
|
Restructuring expenses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,420 |
|
|
|
1,420 |
|
Warehouse relocation and redesign expenses(1) |
|
|
497 |
|
|
|
73 |
|
|
|
59 |
|
|
|
— |
|
|
|
629 |
|
S'well integration costs(2) |
|
|
781 |
|
|
|
864 |
|
|
|
250 |
|
|
|
— |
|
|
|
1,895 |
|
Wallace facility remediation expense |
|
|
— |
|
|
|
— |
|
|
|
5,140 |
|
|
|
— |
|
|
|
5,140 |
|
Adjusted EBITDA, before
limitation |
|
$ |
12,825 |
|
|
$ |
6,951 |
|
|
$ |
18,772 |
|
|
$ |
19,654 |
|
|
$ |
58,202 |
|
Pro forma projected synergies adjustment(3) |
|
|
|
|
|
|
|
|
|
|
3,590 |
|
Pro forma adjusted EBITDA,
before limitation(5) |
|
|
|
|
|
|
|
|
|
|
61,792 |
|
Permitted non-recurring charge limitation(4) |
|
|
|
|
|
|
|
|
|
|
(3,589 |
) |
Pro forma Adjusted
EBITDA(5) |
|
$ |
12,825 |
|
|
$ |
6,951 |
|
|
$ |
18,772 |
|
|
$ |
19,654 |
|
|
$ |
58,203 |
|
(1) For the year ended December 31, 2022, the 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) For the year ended December 31,
2022, S'well integration costs included $0.5 million of expenses
related to inventory step up adjustment in connection with S'well
acquisition.(3) Pro forma projected synergies represents the
projected cost savings of $2.3 million associated with the
reorganization of the International segment’s workforce, $0.9
million associated with the retirement of the Executive Chairman,
and $0.4 million associated with reorganization of the U.S.
segment’s sales management structure.(4) Permitted non-recurring
charges include restructuring expenses, integration charges,
Wallace facility remediation expense, and warehouse relocation and
redesign expenses. These are permitted exclusions from the
Company’s adjusted EBITDA, subject to limitations, pursuant to the
Company’s Debt Agreements.(5) 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 provision (benefit), interest expense,
depreciation and amortization, mark to market (gain) loss on
interest rate derivatives, stock compensation expense, and other
items detailed in the table above that are consistent with
exclusions permitted by our debt agreements.
Adjusted EBITDA for the year ended December 31,
2021:
|
|
Three Months Ended |
|
Year Ended |
|
|
March 31,2021 |
|
June 30,2021 |
|
September 30,2021 |
|
December 31,2021 |
|
December 31,2021 |
|
|
|
|
|
|
(in thousands) |
|
|
|
|
Net income (loss) as reported |
|
$ |
3,067 |
|
|
$ |
5,789 |
|
|
$ |
12,571 |
|
|
$ |
(626 |
) |
|
$ |
20,801 |
|
Undistributed equity losses (earnings), net |
|
|
247 |
|
|
|
(393 |
) |
|
|
(195 |
) |
|
|
(466 |
) |
|
|
(807 |
) |
Income tax provision |
|
|
2,416 |
|
|
|
1,832 |
|
|
|
5,589 |
|
|
|
6,704 |
|
|
|
16,541 |
|
Interest expense |
|
|
4,014 |
|
|
|
3,819 |
|
|
|
3,835 |
|
|
|
3,856 |
|
|
|
15,524 |
|
Depreciation and amortization |
|
|
5,958 |
|
|
|
5,765 |
|
|
|
5,837 |
|
|
|
4,960 |
|
|
|
22,520 |
|
Mark to market gain on interest rate derivatives |
|
|
(498 |
) |
|
|
(46 |
) |
|
|
(120 |
) |
|
|
(398 |
) |
|
|
(1,062 |
) |
Intangible asset impairments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
14,760 |
|
|
|
14,760 |
|
Stock compensation expense |
|
|
1,444 |
|
|
|
1,328 |
|
|
|
1,201 |
|
|
|
1,244 |
|
|
|
5,217 |
|
Acquisition related expenses |
|
|
182 |
|
|
|
72 |
|
|
|
41 |
|
|
|
378 |
|
|
|
673 |
|
Warehouse relocation expenses(1) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
450 |
|
|
|
450 |
|
Wallace facility remediation expense |
|
|
— |
|
|
|
— |
|
|
|
500 |
|
|
|
— |
|
|
|
500 |
|
Adjusted EBITDA(2) |
|
$ |
16,830 |
|
|
$ |
18,166 |
|
|
$ |
29,259 |
|
|
$ |
30,862 |
|
|
$ |
95,117 |
|
(1) Warehouse relocation expenses included $0.1 million of
expenses related to the International segment and $0.3 million of
expenses related to the U.S. segment.(2) 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 losses
(earnings), income tax provision, interest expense, depreciation
and amortization, mark to market gain on interest rate derivatives,
intangible asset 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):
|
|
Three Months EndedDecember
31, |
|
Year EndedDecember 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net income (loss) as
reported |
|
$ |
3,272 |
|
|
$ |
(626 |
) |
|
$ |
(6,166 |
) |
|
$ |
20,801 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Acquisition related expenses |
|
|
170 |
|
|
|
378 |
|
|
|
1,473 |
|
|
|
673 |
|
Restructuring expenses |
|
|
1,420 |
|
|
|
— |
|
|
|
1,420 |
|
|
|
— |
|
S'well integration costs(1) |
|
|
— |
|
|
|
— |
|
|
|
1,895 |
|
|
|
— |
|
Warehouse relocation and redesign expenses(2) |
|
|
— |
|
|
|
450 |
|
|
|
629 |
|
|
|
450 |
|
Impairment of Grupo Vasconia investment |
|
|
— |
|
|
|
— |
|
|
|
6,168 |
|
|
|
— |
|
Mark to market loss (gain) on interest rate derivatives |
|
|
19 |
|
|
|
(398 |
) |
|
|
(1,971 |
) |
|
|
(1,062 |
) |
Intangible asset impairments |
|
|
— |
|
|
|
14,760 |
|
|
|
— |
|
|
|
14,760 |
|
Foreign currency translation loss reclassified from Accumulated
Other Comprehensive Loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,404 |
|
Gain on change in ownership in equity method investment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,703 |
) |
Wallace facility remediation expense |
|
|
— |
|
|
|
— |
|
|
|
5,140 |
|
|
|
500 |
|
Income tax effect on adjustments |
|
|
(203 |
) |
|
|
(144 |
) |
|
|
(1,922 |
) |
|
|
(28 |
) |
Adjusted net income(3) |
|
$ |
4,678 |
|
|
$ |
14,420 |
|
|
$ |
6,666 |
|
|
$ |
36,795 |
|
Adjusted diluted income per
share(3)(4) |
|
$ |
0.22 |
|
|
$ |
0.65 |
|
|
$ |
0.31 |
|
|
$ |
1.67 |
|
(1) For the year ended December 31, 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
year ended December 31, 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. For the three months ended and year ended December
31, 2021 warehouse relocation expenses included $0.1 million of
expenses related to the International segment and $0.3 million of
expenses related to the U.S. segment.(3) Adjusted net income and
adjusted diluted income per common share in the three months ended
and year ended December 31, 2022 excludes acquisition related
expenses, restructuring expenses, S'well integration costs,
warehouse relocation and redesign expenses, impairment of Grupo
Vasconia investment, mark to market loss (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 months ended and year ended December 31, 2021
excludes acquisition expenses, warehouse relocation expenses, mark
to market (gain) on interest rate derivatives, intangible asset
impairments, 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 21,607 and 22,251
for the three month period ended December 31, 2022 and 2021,
respectively, and 21,818 and 22,037 for the year ended
December 31, 2022 and 2021, respectively. The diluted
weighted-average shares outstanding for the three months ended and
year ended December 31, 2022 include the effect of dilutive
securities of 178 and 260 shares, respectively. The diluted
weighted-average shares outstanding for the three months ended and
year ended December 31, 2021 include the effect of dilutive
securities of 695 and 640 shares, respectively.
LIFETIME BRANDS,
INC.Supplemental Information(in
thousands)
Reconciliation of GAAP
to Non-GAAP Operating Results (continued)
Constant Currency:
|
|
As ReportedThree Months
EndedDecember 31, |
|
Constant Currency(1)Three
Months EndedDecember 31, |
|
|
|
Year-Over-YearIncrease
(Decrease) |
Net
sales |
|
2022 |
|
2021 |
|
Increase(Decrease) |
|
2022 |
|
2021 |
|
Increase(Decrease) |
|
CurrencyImpact |
|
ExcludingCurrency |
|
IncludingCurrency |
|
CurrencyImpact |
U.S. |
|
$ |
192,952 |
|
$ |
230,146 |
|
$ |
(37,194 |
) |
|
$ |
192,952 |
|
$ |
230,161 |
|
$ |
(37,209 |
) |
|
$ |
(15 |
) |
|
(16.2 |
)% |
|
(16.2 |
)% |
|
— |
% |
International |
|
$ |
14,089 |
|
$ |
25,713 |
|
$ |
(11,624 |
) |
|
$ |
14,089 |
|
$ |
22,409 |
|
$ |
(8,320 |
) |
|
$ |
3,304 |
|
|
(37.1 |
)% |
|
(45.2 |
)% |
|
(8.1 |
)% |
Total net sales |
|
$ |
207,041 |
|
$ |
255,859 |
|
$ |
(48,818 |
) |
|
$ |
207,041 |
|
$ |
252,570 |
|
$ |
(45,529 |
) |
|
$ |
3,289 |
|
|
(18.0 |
)% |
|
(19.1 |
)% |
|
(1.1 |
)% |
|
|
As ReportedYear
EndedDecember 31, |
|
Constant Currency(1)Year
EndedDecember 31, |
|
|
|
Year-Over-YearIncrease
(Decrease) |
Net
sales |
|
2022 |
|
2021 |
|
Increase(Decrease) |
|
2022 |
|
2021 |
|
Increase(Decrease) |
|
CurrencyImpact |
|
ExcludingCurrency |
|
IncludingCurrency |
|
CurrencyImpact |
U.S. |
|
$ |
669,178 |
|
$ |
770,633 |
|
$ |
(101,455 |
) |
|
$ |
669,178 |
|
$ |
770,507 |
|
$ |
(101,329 |
) |
|
$ |
126 |
|
|
(13.2 |
)% |
|
(13.2 |
)% |
|
— |
% |
International |
|
$ |
58,484 |
|
$ |
92,291 |
|
$ |
(33,807 |
) |
|
$ |
58,484 |
|
$ |
84,891 |
|
$ |
(26,407 |
) |
|
$ |
7,400 |
|
|
(31.1 |
)% |
|
(36.6 |
)% |
|
(5.5 |
)% |
Total net sales |
|
$ |
727,662 |
|
$ |
862,924 |
|
$ |
(135,262 |
) |
|
$ |
727,662 |
|
$ |
855,398 |
|
$ |
(127,736 |
) |
|
$ |
7,526 |
|
|
(14.9 |
)% |
|
(15.7 |
)% |
|
(0.8 |
)% |
(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,
INC.Supplemental Information(in
thousands)
Reconciliation of GAAP
to Non-GAAP Operating Results (continued)
Adjusted income from operations
(in
thousands):
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
(in thousands) |
|
(in thousands) |
Income from operations |
|
$ |
12,782 |
|
|
$ |
8,915 |
|
|
$ |
24,263 |
|
|
$ |
50,842 |
|
Acquisition related expenses |
|
|
170 |
|
|
|
378 |
|
|
|
1,473 |
|
|
|
673 |
|
Restructuring expenses |
|
|
1,420 |
|
|
|
— |
|
|
|
1,420 |
|
|
|
— |
|
S'well integration costs |
|
|
— |
|
|
|
— |
|
|
|
1,895 |
|
|
|
— |
|
Warehouse relocation and redesign expenses(1) |
|
|
— |
|
|
|
450 |
|
|
|
629 |
|
|
|
450 |
|
Intangible asset impairments |
|
|
— |
|
|
|
14,760 |
|
|
|
— |
|
|
|
14,760 |
|
Wallace facility remediation expense |
|
|
— |
|
|
|
— |
|
|
|
5,140 |
|
|
|
500 |
|
Total adjustments |
|
|
1,590 |
|
|
|
15,588 |
|
|
|
10,557 |
|
|
|
16,383 |
|
Adjusted income from
operations(2) |
|
$ |
14,372 |
|
|
$ |
24,503 |
|
|
$ |
34,820 |
|
|
$ |
67,225 |
|
(1) For the year ended December 31, 2022, the 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. For the three months ended and year
ended December 31, 2021 warehouse relocation expenses included $0.1
million of expenses related to the International segment and $0.3
million of expenses related to the U.S. segment.(2) Adjusted income
from operations for the three months ended and year ended
December 31, 2022 and December 31, 2021, excludes
acquisition related expenses, restructuring expenses, S'well
integration costs, warehouse relocation and redesign expenses,
intangible asset impairments, and Wallace facility remediation
expense.
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