Lifetime Brands, Inc. (NasdaqGS:LCUT), a leading global provider of
branded kitchenware, tableware and other products used in the home,
today reported its financial results for the third quarter ended
September 30, 2017.
Third Quarter Financial
Highlights:
Consolidated net sales were $166.0 million, as
compared to consolidated net sales of $170.1 million in the
corresponding period in 2016. In constant currency, which excludes
the impact of foreign exchange fluctuations, consolidated net sales
decreased 2.5%, as compared to consolidated net sales in the
corresponding period in 2016.
Gross margin was $57.2 million, or 34.5%, as
compared to $58.3 million, or 34.3%, for the corresponding period
in 2016.
Income from operations was $9.3 million, as
compared to $10.8 million for the corresponding period in 2016.
Net income was $4.3 million, or $0.29 per
diluted share, as compared to net income of $6.5 million, or $0.44
per diluted share, in the corresponding period in
2016.
Adjusted net income was $5.5 million, or $0.37
per diluted share, as compared to adjusted net income of $7.5
million, or $0.52 per diluted share, in the corresponding period in
2016.
Consolidated EBITDA was $15.7 million, as
compared to $16.7 million for the corresponding 2016 period.
Equity in losses, net of taxes, was $326,000, as
compared to equity in losses, net of taxes, of $138,000 in the
corresponding 2016 period.
Nine Months Financial
Highlights:
Consolidated net sales were $396.7 million, as
compared to consolidated net sales of $399.1 million for the
corresponding period in 2016. In constant currency,
consolidated net sales increased 0.8%.
Gross margin was $143.9 million, or 36.3%, as
compared to $141.9 million, or 35.5%, for the corresponding period
in 2016.
Income from operations was $4.3 million, as
compared to $5.3 million, for the corresponding period in 2016.
Net income was $0.9 million, or $0.06 per
diluted share, as compared to net income of $1.0 million, or $0.07
per diluted share, in the 2016 period.
Adjusted net income was $3.5 million, or $0.24
per diluted share, as compared to $3.9 million, or $0.27 per
diluted share, in the 2016 period.
Consolidated EBITDA was $21.0 million, as
compared to $21.7 million for the corresponding 2016 period.
Equity in earnings, net of taxes, was $0.7
million, as compared to equity in losses, net of taxes, of $0.3
million in the corresponding 2016 period.
Jeffrey Siegel, Lifetime's Chairman and Chief
Executive Officer, commented,
“The third quarter was a challenging period for
Lifetime. Our quarterly results fell short of last year’s strong
numbers and were also below our internal expectations, as retailers
in the U.S. continued to close stores, reduce inventory levels, and
adjust their strategies in an effort to offset the inroads that
online shopping has made in their business. In addition, we
intentionally limited sales to certain retailers due to credit
concerns. Gross margin percentage in the quarter increased,
partially offsetting the impact of lower net sales.
“Also, on the positive side, our e-commerce
sales grew dramatically in the quarter. If our growth in online
sales through pure play online retailers and online sites of our
traditional customers continues at the same pace as in the third
quarter, we expect such e-commerce sales fully to offset the
decline in sales to traditional brick and mortar stores during
2018.
“In the U.K., the environment also has been
difficult, with consumer confidence suffering from fall-out related
to Brexit and the economic changes it may bring. These headwinds
also impacted Lifetime Brands’ performance.
“Third quarter 2017 financial results included
an unrealized foreign currency loss of $0.9 million, compared to a
loss of $25,000 in the 2016 third quarter. These amounts represent
mark-to-market adjustments on GBP/USD currency contracts related to
purchases of inventory. The adjustments will reverse as the
contracts are settled in the ordinary course of business and,
therefore, are not expected to have a permanent economic impact.
Excluding the non-cash mark-to market adjustments, consolidated
adjusted EBITDA for the twelve months ended September 30, 2017, was
in line with the prior year.
“Despite the quarter’s difficult market
conditions, there were many bright spots in our performance. As
noted, we have made significant progress in building our e-commerce
presence. U.S. Wholesale e-commerce sales for three and nine months
ended September 30, 2017 increased 59% and 51%, respectively,
versus the comparable periods in 2016. The double-digit sales
increases we have achieved reflect the investments we made in
infrastructure, staffing and data resources in order to compete
effectively in this increasingly important arena.
“We have also been forging ahead with Lifetime
Next™, our comprehensive program for achieving more consistent
growth and profitability in today’s complex business environment.
Recent actions in the U.S. include the implementation of new
programs to enable us to reduce SKU’s and to operate with lower
inventories; and the opening of our new West Coast distribution
center, scheduled for later this month, which will be fully
operational by the end of the first quarter of 2018.
“In Europe, we are continuing with the
integration of KitchenCraft and Creative Tops, which includes
combining sales forces, rationalizing other positions and
implementing SAP at KitchenCraft, completed during the quarter,
closing our office and warehouse in the Netherlands and the
finalization of plans for a new UK distribution center, scheduled
to open in 2019. These measures, which we expect will lower our
expenses and increase profitability beginning in 2018, are costly
and negatively impacted our performance during the quarter.
“In addition, we have taken steps to grow our
market share across our major product lines. We have, for example,
been bringing an exciting pipeline of new kitchenware products to
market that will continue into 2018. Early reception from retailers
has been strong, and we expect the new items to contribute to our
results in this year’s important fourth quarter and beyond.
“Given the challenging retail environment in
both North America and Europe, we now expect full-year 2017
consolidated net sales to be approximately flat to last year’s
(excluding foreign currency impact) and gross margin to
improve approximately 25 basis points. Based on the expected
sales volume, distribution and SG&A expenses (excluding the
non-cash unrealized foreign currency adjustments) as a percentage
of sales is expected to be slightly higher than in 2016.”
Dividend
On Tuesday, November 7, 2017, the Board of
Directors declared a quarterly dividend of $0.0425 per share
payable on February 15, 2018 to shareholders of record on February
1, 2018.
Conference Call
The Company has scheduled a conference call for
Thursday, November 9, 2017 at 11:00 a.m. The dial-in number for the
conference call is (844) 787-0801 or (661) 378-9632, passcode #
8787399. A live webcast of the conference call will be accessible
through https://edge.media-server.com/m6/p/opnkiufe. For
those who cannot listen to the live broadcast, an audio replay of
the webcast will be available.
Non-GAAP Financial Measures
This earnings release contains non-GAAP
financial measures, including consolidated net sales in constant
currency, adjusted net income, adjusted diluted income per common
share, and consolidated 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 the 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
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 comparison of the Company’s
operating performance. Management uses this non-GAAP information as
an indicator of business performance. These non-GAAP measures
should be viewed as a supplement to, and not a substitute for, GAAP
measures of performance.
Forward-Looking Statements
In this press release, the use of the words
“believe,” "could," "expect," "may," "positioned," "project,"
"projected," "should," "will," "would" or similar expressions is
intended to identify forward-looking statements that represent the
Company’s current judgment about possible future events. The
Company believes these judgments are reasonable, but these
statements are not guarantees of any events or financial 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; 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; changes in demand
for the Company’s products; shortages of and price volatility for
certain commodities; 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
an appropriate level of debt.
Lifetime Brands,
Inc.
Lifetime Brands is a leading global provider of
kitchenware, tableware and other products used in the home. The
Company markets its products under well-known kitchenware brands,
including Farberware®, KitchenAid®, Sabatier®, Amco Houseworks®,
Chicago™ Metallic, Copco®, Fred® & Friends, Kitchen Craft®,
Kamenstein®, Kizmos™, La Cafetière®, MasterClass®, Misto®, Mossy
Oak®, Swing-A-Way® and Vasconia®; respected tableware and giftware
brands, including Mikasa®, Pfaltzgraff®, Fitz and Floyd®, Creative
Tops®, Empire Silver™, Gorham®, International® Silver, Kirk
Stieff®, Towle® Silversmiths, Tuttle®, Wallace®, Wilton Armetale®,
V&A® and Royal Botanic Gardens Kew®; and valued home solutions
brands, including Bombay®, BUILT NY® and Debbie Meyer® . 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. |
|
|
|
Lippert/Heilshorn & Assoc. |
Laurence Winoker, Chief
Financial Officer |
|
|
|
Harriet Fried, SVP |
516-203-3590
|
|
|
|
212-838-3777 |
investor.relations@lifetimebrands.com
|
|
|
|
hfried@lhai.com |
|
|
|
|
|
|
LIFETIME BRANDS, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(In thousands - except per share data) |
(unaudited) |
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
Net
sales |
$ |
165,957 |
|
|
$ |
170,124 |
|
|
$ |
396,706 |
|
|
$ |
399,099 |
|
Cost of
sales |
|
108,769 |
|
|
|
111,802 |
|
|
|
252,780 |
|
|
|
257,232 |
|
Gross
margin |
|
57,188 |
|
|
|
58,322 |
|
|
|
143,926 |
|
|
|
141,867 |
|
Distribution expenses |
|
13,495 |
|
|
|
14,531 |
|
|
|
39,510 |
|
|
|
40,225 |
|
Selling,
general and administrative expenses |
|
34,088 |
|
|
|
33,009 |
|
|
|
99,572 |
|
|
|
94,662 |
|
Restructuring expenses |
|
272 |
|
|
|
- |
|
|
|
526 |
|
|
|
1,701 |
|
Income from
operations |
|
9,333 |
|
|
|
10,782 |
|
|
|
4,318 |
|
|
|
5,279 |
|
Interest
expense |
|
(1,172 |
) |
|
|
(1,231 |
) |
|
|
(3,114 |
) |
|
|
(3,546 |
) |
Loss on
early retirement of debt |
|
- |
|
|
|
- |
|
|
|
(110 |
) |
|
|
(272 |
) |
Income
before income taxes and equity in earnings |
|
8,161 |
|
|
|
9,551 |
|
|
|
1,094 |
|
|
|
1,461 |
|
Income tax
provision |
|
(3,505 |
) |
|
|
(2,961 |
) |
|
|
(863 |
) |
|
|
(218 |
) |
Equity in
earnings (losses), net of taxes |
|
(326 |
) |
|
|
(138 |
) |
|
|
672 |
|
|
|
(270 |
) |
NET
INCOME |
$ |
4,330 |
|
|
$ |
6,452 |
|
|
$ |
903 |
|
|
$ |
973 |
|
Weighted-average shares outstanding - basic |
|
14,572 |
|
|
|
14,266 |
|
|
|
14,422 |
|
|
|
14,129 |
|
BASIC INCOME PER COMMON SHARE |
$ |
0.30 |
|
|
$ |
0.45 |
|
|
$ |
0.06 |
|
|
$ |
0.07 |
|
Weighted-average shares outstanding - diluted |
|
15,043 |
|
|
|
14,631 |
|
|
|
14,900 |
|
|
|
14,494 |
|
DILUTED INCOME PER COMMON SHARE |
$ |
0.29 |
|
|
$ |
0.44 |
|
|
$ |
0.06 |
|
|
$ |
0.07 |
|
Cash
dividends declared per common share |
$ |
0.0425 |
|
|
$ |
0.0425 |
|
|
$ |
0.1275 |
|
|
$ |
0.1275 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFETIME BRANDS, INC. |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(In thousands - except share data) |
|
|
|
|
|
September 30, |
|
December 31, |
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
(unaudited) |
|
|
ASSETS |
|
|
|
CURRENT
ASSETS |
|
|
|
|
Cash and
cash equivalents |
$ |
5,533 |
|
|
$ |
7,883 |
|
|
Accounts
receivable, less allowances of $4,658 at September 30, 2017 and
$5,725 at December 31, 2016 |
|
119,732 |
|
|
|
104,556 |
|
|
Inventory |
|
175,645 |
|
|
|
135,212 |
|
|
Prepaid
expenses and other current assets |
|
7,110 |
|
|
|
8,796 |
|
|
Income tax
receivable |
|
862 |
|
|
|
- |
|
|
|
TOTAL
CURRENT ASSETS |
|
308,882 |
|
|
|
256,447 |
|
|
|
|
|
|
|
|
PROPERTY
AND EQUIPMENT, net |
|
20,091 |
|
|
|
21,131 |
|
INVESTMENTS |
|
24,480 |
|
|
|
22,712 |
|
INTANGIBLE
ASSETS, net |
|
90,045 |
|
|
|
89,219 |
|
DEFERRED
INCOME TAXES |
|
8,458 |
|
|
|
8,459 |
|
OTHER
ASSETS |
|
1,768 |
|
|
|
1,886 |
|
|
|
|
TOTAL
ASSETS |
$ |
453,724 |
|
|
$ |
399,854 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
CURRENT
LIABILITIES |
|
Current
maturity of Credit Agreement Term Loan |
$ |
- |
|
|
$ |
9,343 |
|
|
Short term
loan |
|
123 |
|
|
|
113 |
|
|
Accounts
payable |
|
47,987 |
|
|
|
29,698 |
|
|
Accrued
expenses |
|
45,339 |
|
|
|
45,212 |
|
|
Income
taxes payable |
|
- |
|
|
|
6,920 |
|
|
|
TOTAL
CURRENT LIABILITIES |
|
93,449 |
|
|
|
91,286 |
|
|
|
|
|
|
|
|
DEFERRED
RENT & OTHER LONG-TERM LIABILITIES |
|
17,429 |
|
|
|
18,973 |
|
DEFERRED
INCOME TAXES |
|
6,290 |
|
|
|
5,666 |
|
REVOLVING
CREDIT FACILITY |
|
128,457 |
|
|
|
86,201 |
|
|
|
|
|
|
|
|
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, $.01 par value, shares authorized: 50,000,000 at September
30, 2017 and December 31, 2016; shares issued and
outstanding: 14,797,199 at September 30, 2017 and 14,555,936
at December 31, 2016 |
|
148 |
|
|
|
146 |
|
|
Paid-in
capital |
|
177,459 |
|
|
|
173,600 |
|
|
Retained
earnings |
|
59,900 |
|
|
|
60,981 |
|
|
Accumulated
other comprehensive loss |
|
(29,408 |
) |
|
|
(36,999 |
) |
|
|
TOTAL
STOCKHOLDERS’ EQUITY |
|
208,099 |
|
|
|
197,728 |
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
453,724 |
|
|
$ |
399,854 |
|
|
|
|
|
|
LIFETIME BRANDS, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(In thousands) |
(unaudited) |
|
|
|
|
|
Nine Months Ended |
|
|
|
|
September 30, |
|
|
|
|
|
2017 |
|
|
|
2016 |
|
OPERATING ACTIVITIES |
|
|
|
|
Net
income |
$ |
903 |
|
|
$ |
973 |
|
|
Adjustments
to reconcile net income to net cash used in operating
activities: |
|
|
|
|
|
Depreciation and amortization |
|
10,697 |
|
|
|
11,744 |
|
|
|
Amortization of financing costs |
|
401 |
|
|
|
513 |
|
|
|
Deferred
rent |
|
(469 |
) |
|
|
(125 |
) |
|
|
Stock
compensation expense |
|
2,482 |
|
|
|
2,115 |
|
|
|
Undistributed equity in (earnings) losses, net |
|
(644 |
) |
|
|
270 |
|
|
|
Loss (gain)
on disposal of fixed assets |
|
- |
|
|
|
(23 |
) |
|
|
Loss on
early retirement of debt |
|
110 |
|
|
|
272 |
|
|
Changes in
operating assets and liabilities (excluding the effects of business
acquisitions) |
|
|
|
|
|
Accounts
receivable |
|
(10,524 |
) |
|
|
(42,360 |
) |
|
|
Inventory |
|
(32,508 |
) |
|
|
(34,552 |
) |
|
|
Prepaid
expenses, other current assets and other assets |
|
1,901 |
|
|
|
(412 |
) |
|
|
Accounts
payable, accrued expenses and other liabilities |
|
14,539 |
|
|
|
38,410 |
|
|
|
Income
taxes receivable |
|
(862 |
) |
|
|
(1,967 |
) |
|
|
Income
taxes payable |
|
(6,949 |
) |
|
|
(5,246 |
) |
|
|
|
NET CASH
USED IN OPERATING ACTIVITIES |
|
(20,923 |
) |
|
|
(30,388 |
) |
|
|
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
|
Purchases
of property and equipment |
|
(4,269 |
) |
|
|
(1,982 |
) |
|
Proceeds
from disposition of GSI |
|
- |
|
|
|
567 |
|
|
Acquisitions |
|
(9,072 |
) |
|
|
(9,382 |
) |
|
|
|
NET CASH USED
IN INVESTING ACTIVITIES |
|
(13,341 |
) |
|
|
(10,797 |
) |
|
|
|
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
|
Proceeds
from Revolving Credit Facility |
|
191,087 |
|
|
|
200,144 |
|
|
Repayments
of Revolving Credit Facility |
|
(149,289 |
) |
|
|
(136,175 |
) |
|
Repayment
of Credit Agreement Term Loan |
|
(9,500 |
) |
|
|
(23,000 |
) |
|
Proceeds
from Short Term Loan |
|
119 |
|
|
|
118 |
|
|
Payments on
Short Term Loan |
|
(114 |
) |
|
|
(248 |
) |
|
Payments of
financing costs |
|
(39 |
) |
|
|
(13 |
) |
|
Payments
for capital leases |
|
(72 |
) |
|
|
(55 |
) |
|
Payments of
tax withholding for stock based compensation |
|
(188 |
) |
|
|
(74 |
) |
|
Proceeds
from exercise of stock options |
|
1,453 |
|
|
|
1,217 |
|
|
Cash
dividends paid |
|
(1,855 |
) |
|
|
(1,804 |
) |
|
|
|
|
|
|
|
|
|
|
NET CASH
PROVIDED BY FINANCING ACTIVITIES |
|
31,602 |
|
|
|
40,110 |
|
Effect of
foreign exchange on cash |
|
312 |
|
|
|
(225 |
) |
|
|
|
|
|
|
|
DECREASE IN CASH AND CASH EQUIVALENTS |
|
(2,350 |
) |
|
|
(1,300 |
) |
Cash and
cash equivalents at beginning of period |
|
7,883 |
|
|
|
7,131 |
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ |
5,533 |
|
|
$ |
5,831 |
|
|
|
LIFETIME BRANDS, INC. |
Supplemental Information |
(In thousands) |
|
|
|
Consolidated adjusted EBITDA for the Four
Quarters Ended September 30, 2017 |
Three
months ended September 30, 2017 |
$ |
15,683 |
Three
months ended June 30, 2017 (1) |
|
2,817 |
Three
months ended March 31, 2017 (1) |
|
2,546 |
Three
months ended December 31, 2016 (1) |
|
24,741 |
|
Total
for the four quarters |
$ |
45,787 |
|
|
|
|
|
Consolidated adjusted EBITDA for the Four
Quarters Ended September 30, 2016 |
Three
months ended September 30, 2016 (1) |
$ |
16,677 |
Three
months ended June 30, 2016 (1) |
|
4,994 |
Three
months ended March 31, 2016 (1) |
|
69 |
Three
months ended December 31, 2015 (1) |
|
23,839 |
|
Total
for the four quarters |
$ |
45,579 |
(1) Consolidated adjusted EBITDA for the
three months ended June 30, 2017, March 31, 2017, December 31,
2016, September 30, 2016, June 30, 2016, March 31, 2016 and
December 31, 2015 presented above have been re-cast to exclude the
non-cash gains and losses related to the Company’s derivative
financial instruments not designated as hedging instruments,
recognized in earnings. These non-cash gains and losses are
permitted to be excluded from the EBITDA covenant in the Company’s
Credit Agreement.
LIFETIME BRANDS, INC. |
Supplemental Information |
(In thousands) |
|
Reconciliation of GAAP to Non-GAAP Operating
Results |
|
Consolidated adjusted EBITDA: |
|
|
|
Three Months Ended |
|
|
|
|
|
September 30, 2017 |
|
June 30, 2017 |
|
March 31, 2017 |
|
December 31, 2016 |
|
|
Net income
(loss) as reported |
$ |
4,330 |
|
$ |
(2,096 |
) |
|
$ |
(1,331 |
) |
|
$ |
14,747 |
|
|
|
|
Subtract
out: |
|
|
|
|
|
|
|
|
|
|
|
Undistributed equity in
(earnings) losses, net |
|
326 |
|
|
(430 |
) |
|
|
(540 |
) |
|
|
(814 |
) |
|
|
|
Add
back: |
|
|
|
|
|
|
|
|
|
|
|
Income tax provision
(benefit) |
|
3,505 |
|
|
(1,698 |
) |
|
|
(944 |
) |
|
|
6,812 |
|
|
|
|
|
Interest expense |
|
1,172 |
|
|
1,001 |
|
|
|
941 |
|
|
|
1,257 |
|
|
|
|
|
Loss on early
retirement of debt |
|
- |
|
|
110 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
Depreciation and
amortization |
|
4,063 |
|
|
3,348 |
|
|
|
3,286 |
|
|
|
2,404 |
|
|
|
|
|
Stock compensation
expense |
|
952 |
|
|
726 |
|
|
|
804 |
|
|
|
827 |
|
|
|
|
|
Permitted acquisition
related expenses, net of acquisitions not completed |
|
166 |
|
|
(9 |
) |
|
|
35 |
|
|
|
(852 |
) |
|
|
|
|
Restructuring
expenses |
|
272 |
|
|
254 |
|
|
|
- |
|
|
|
719 |
|
|
|
|
|
Severance expense |
|
- |
|
|
155 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
Unrealized loss (gain)
on foreign currency contracts |
|
897 |
|
|
1,456 |
|
|
|
295 |
|
|
|
(359 |
) |
|
|
Consolidated adjusted EBITDA |
$ |
15,683 |
|
$ |
2,817 |
|
|
$ |
2,546 |
|
|
$ |
24,741 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
September 30, 2016 |
|
June 30, 2016 |
|
March 31, 2016 |
|
December 31, 2015 |
|
|
Net income
(loss) as reported |
$ |
6,452 |
|
$ |
(1,191 |
) |
|
$ |
(4,288 |
) |
|
$ |
11,006 |
|
|
|
|
Subtract
out: |
|
|
|
|
|
|
|
|
|
|
|
Undistributed equity in
(earnings) losses, net |
|
138 |
|
|
(18 |
) |
|
|
150 |
|
|
|
(517 |
) |
|
|
|
Add
back: |
|
|
|
|
|
|
|
|
|
|
|
Income tax provision
(benefit) |
|
2,961 |
|
|
(473 |
) |
|
|
(2,270 |
) |
|
|
5,962 |
|
|
|
|
|
Interest expense |
|
1,231 |
|
|
1,122 |
|
|
|
1,193 |
|
|
|
1,402 |
|
|
|
|
|
Loss on early
retirement of debt |
|
- |
|
|
272 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
Depreciation and
amortization |
|
4,682 |
|
|
3,578 |
|
|
|
3,484 |
|
|
|
3,500 |
|
|
|
|
|
Stock compensation
expense |
|
825 |
|
|
487 |
|
|
|
803 |
|
|
|
2,972 |
|
|
|
|
|
Contingent
consideration |
|
- |
|
|
- |
|
|
|
- |
|
|
|
(876 |
) |
|
|
|
|
Permitted acquisition
related expenses |
|
363 |
|
|
369 |
|
|
|
555 |
|
|
|
3 |
|
|
|
|
|
Restructuring
expenses |
|
- |
|
|
1,060 |
|
|
|
641 |
|
|
|
437 |
|
|
|
|
|
Unrealized loss (gain)
on foreign currency contracts |
|
25 |
|
|
(212 |
) |
|
|
(199 |
) |
|
|
(50 |
) |
|
|
Consolidated adjusted EBITDA |
$ |
16,677 |
|
$ |
4,994 |
|
|
$ |
69 |
|
|
$ |
23,839 |
|
|
|
|
Consolidated EBITDA is a non-GAAP measure that
the Company defines as net income (loss), adjusted to exclude
undistributed equity in earnings (losses), income taxes, interest,
losses on early retirement of debt, depreciation and amortization,
stock compensation expense, contingent consideration, certain
acquisition related expenses, restructuring expenses,
non-restructuring severance expense and non-cash gains or losses
associated with the Company’s foreign currency contracts, as shown
in the tables above.
Consolidated adjusted EBITDA for the three
months ended June 30, 2017, March 31, 2017, December 31, 2016,
September 30, 2016, June 30, 2016, March 31, 2016 and December 31,
2015 presented above have been re-cast to exclude the non-cash
gains and losses related to the Company’s derivative financial
instruments not designated as hedging instruments, recognized in
earnings. These non-cash gains or losses are permitted to be
excluded from the EBITDA covenant in the Company’s Credit
Agreement.
|
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: |
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
Net income
as reported |
$ |
4,330 |
|
|
$ |
6,452 |
|
|
|
903 |
|
|
$ |
973 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Acquisition related
expenses (adjustments), net |
|
166 |
|
|
|
363 |
|
|
|
192 |
|
|
|
1,287 |
|
|
Depreciation expense
adjustment |
|
- |
|
|
|
1,327 |
|
|
|
- |
|
|
|
1,327 |
|
|
Loss on early
retirement of debt |
|
- |
|
|
|
- |
|
|
|
110 |
|
|
|
272 |
|
|
Restructuring
expenses |
|
272 |
|
|
|
- |
|
|
|
526 |
|
|
|
1,701 |
|
|
Severance expenses |
|
- |
|
|
|
- |
|
|
|
155 |
|
|
|
- |
|
|
Unrealized loss (gain)
on foreign currency contracts |
|
897 |
|
|
|
25 |
|
|
|
2,648 |
|
|
|
(386 |
) |
|
Deferred tax (benefit)
expense for foreign currency translation for Grupo Vasconia |
|
127 |
|
|
|
62 |
|
|
|
(238 |
) |
|
|
517 |
|
|
Income tax effect on
adjustments |
|
(291 |
) |
|
|
(681 |
) |
|
|
(794 |
) |
|
|
(1,758 |
) |
Adjusted
net income |
$ |
5,501 |
|
|
$ |
7,548 |
|
|
$ |
3,502 |
|
|
$ |
3,933 |
|
Adjusted
diluted income per common share |
$ |
0.37 |
|
|
$ |
0.52 |
|
|
$ |
0.24 |
|
|
$ |
0.27 |
|
|
Adjusted net income and adjusted diluted income
per common share in the three and nine months ended September 30,
2017 excludes acquisition related expenses, loss on early
retirement of debt, restructuring expenses, non-restructuring
severance expense, the unrealized loss on foreign currency
contracts, deferred tax (benefit) expense related to our equity
earnings of Vasconia due to recording the tax benefit of cumulative
translation gains through other comprehensive income (loss) and the
related income tax effect on adjustments. Adjusted net income and
adjusted diluted income per common share in the three and nine
months ended September 30, 2016 excludes acquisition related
expenses, a charge to correct accumulated depreciation balance
relating to certain leasehold improvements at one of the Company’s
U.S. warehouses, loss on early retirement of debt, restructuring
expenses, the unrealized (gain) loss on foreign currency contracts,
deferred tax expense related to our equity earnings of Vasconia due
to recording the tax benefit of cumulative translation losses
through other comprehensive income and the related income tax
effect on adjustments.
|
LIFETIME BRANDS, INC. |
Supplemental Information |
(In thousands) |
|
Reconciliation of GAAP to Non-GAAP Operating
Results (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Reported |
|
Constant Currency (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Three Months Ended |
|
|
|
Year-Over-Year |
|
|
September 30, |
|
September 30, |
|
|
|
Increase (Decrease) |
|
Net
sales |
|
2017 |
|
|
2016 |
|
Increase (Decrease) |
|
|
2017 |
|
|
2016 |
|
Increase (Decrease) |
|
Currency Impact |
|
Excluding Currency |
|
|
Including Currency |
|
|
Currency Impact |
|
|
U.S. Wholesale |
$ |
137,096 |
|
$ |
139,607 |
|
$ |
(2,511 |
) |
|
$ |
137,096 |
|
$ |
139,621 |
|
$ |
(2,525 |
) |
|
$ |
14 |
|
|
(1.8 |
) |
% |
|
(1.8 |
) |
% |
|
- |
|
% |
|
International |
|
25,330 |
|
|
26,736 |
|
|
(1,406 |
) |
|
|
25,330 |
|
|
26,740 |
|
|
(1,410 |
) |
|
|
4 |
|
|
(5.3 |
) |
% |
|
(5.3 |
) |
% |
|
- |
|
% |
|
Retail Direct |
|
3,531 |
|
|
3,781 |
|
|
(250 |
) |
|
|
3,531 |
|
|
3,781 |
|
|
(250 |
) |
|
|
- |
|
|
(6.6 |
) |
% |
|
(6.6 |
) |
% |
|
- |
|
% |
|
Total net
sales |
$ |
165,957 |
|
$ |
170,124 |
|
$ |
(4,167 |
) |
|
$ |
165,957 |
|
$ |
170,142 |
|
$ |
(4,185 |
) |
|
$ |
18 |
|
|
(2.5 |
) |
% |
|
(2.5 |
) |
% |
|
- |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Reported |
|
Constant Currency (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
Nine Months Ended |
|
|
|
Year-Over-Year |
|
|
September 30, |
|
September 30, |
|
|
|
Increase (Decrease) |
|
Net
sales |
|
2017 |
|
|
2016 |
|
Increase (Decrease) |
|
|
2017 |
|
|
2016 |
|
Increase (Decrease) |
|
Currency Impact |
|
Excluding Currency |
|
|
Including Currency |
|
|
Currency Impact |
|
|
U.S. Wholesale |
$ |
319,258 |
|
$ |
314,613 |
|
$ |
4,645 |
|
|
$ |
319,258 |
|
$ |
314,641 |
|
$ |
4,617 |
|
|
$ |
28 |
|
|
1.5 |
|
% |
|
1.5 |
|
% |
|
- |
|
% |
|
International |
|
65,923 |
|
|
71,969 |
|
|
(6,046 |
) |
|
|
65,923 |
|
|
6,492 |
|
|
(569 |
) |
|
|
(5,477 |
) |
|
(0.9 |
) |
% |
|
(8.4 |
) |
% |
|
(7.5 |
) |
% |
|
Retail Direct |
|
11,525 |
|
|
12,517 |
|
|
(992 |
) |
|
|
11,525 |
|
|
12,517 |
|
|
(992 |
) |
|
|
- |
|
|
(7.9 |
) |
% |
|
(7.9 |
) |
% |
|
- |
|
% |
|
Total net
sales |
$ |
396,706 |
|
$ |
399,099 |
|
$ |
(2,393 |
) |
|
$ |
396,706 |
|
$ |
393,650 |
|
$ |
3,056 |
|
|
$ |
(5,449 |
) |
|
0.8 |
|
% |
|
(0.6 |
) |
% |
|
(1.4 |
) |
% |
(1) "Constant Currency" is determined by
applying the 2017 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 currency.
Lifetime Brands (NASDAQ:LCUT)
Historical Stock Chart
From Apr 2024 to May 2024
Lifetime Brands (NASDAQ:LCUT)
Historical Stock Chart
From May 2023 to May 2024