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Lifetime Brands, Inc. Reports Second Quarter 2023 Financial Results
Source: Nasdaq GlobeNewswire / 03 Aug 2023 06:00:34 America/Chicago
Quarterly Net Sales Surpass Analysts' Estimates
Declares Regular Quarterly Dividend
GARDEN CITY, N.Y., Aug. 03, 2023 (GLOBE NEWSWIRE) -- 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 June 30, 2023.
Rob Kay, Lifetime’s Chief Executive Officer, commented, “Our solid results this quarter are a testament to the strong progress we are making to position Lifetime for growth and enhanced profitability, despite the ongoing macroeconomic headwinds impacting demand. Our core U.S. business performed in line with our expectations as oversupply issues continued to abate for our retailers and order flow improved. We remain confident that the recently completed restructuring of our European operations will drive future growth and profitability for this business as market conditions improve.”
Mr. Kay continued, “As we look to the future, we remain confident that our strategic initiatives have positioned the business for long-term growth. We have a leading portfolio of widely-recognized brands with multi-channel growth opportunities, a strong innovation engine, a resilient and efficient business model, and a healthy balance sheet that will enable us to unlock our full potential.”
Second Quarter Financial Highlights:
Consolidated net sales for the three months ended June 30, 2023 were $146.4 million, representing a decrease of $4.9 million, or 3.2%, as compared to net sales of $151.3 million for the corresponding period in 2022. In constant currency, a non-GAAP financial measure, which excludes the impact of foreign exchange fluctuations and was determined by applying 2023 average rates to 2022 local currency amounts, consolidated net sales decreased by $5.3 million, or 3.5%, as compared to consolidated net sales in the corresponding period in 2022. A table reconciling this non-GAAP financial measure to consolidated net sales, as reported, is included below.
Gross margin for the three months ended June 30, 2023 was $56.0 million, or 38.2%, as compared to $55.2 million, or 36.5%, for the corresponding period in 2022.
Income from operations was $4.4 million, as compared to loss from operations of $(0.5) million for the corresponding period in 2022.
Adjusted income from operations(1) was $8.4 million, as compared to $4.2 million for the corresponding period in 2022.
Net loss was $(6.5) million, or $(0.31) per diluted share, as compared to net loss of $(3.5) million, or $(0.16) per diluted share, in the corresponding period in 2022. Net loss for the current period includes a non-cash impairment charge of $4.4 million related to the Company’s equity investment in Grupo Vasconia.
Adjusted net loss(1) was $(0.3) million, or $(0.02) per diluted share, as compared to adjusted net loss(1) of $(0.2) million, or $(0.01) per diluted share, in the corresponding period in 2022.
(1) A table reconciling this non-GAAP financial measure to its most comparable GAAP financial measure, as reported, is included below.
Six Months Financial Highlights:
Consolidated net sales for the six months ended June 30, 2023 were $291.9 million, a decrease of $42.1 million, or 12.6%, as compared to net sales of $334.0 million for the corresponding period in 2022. In constant currency, a non-GAAP financial measure, which excludes the impact of foreign exchange fluctuations and was determined by applying 2023 average rates to 2022 local currency amounts, consolidated net sales decreased by $40.3 million, or 12.1%, as compared to consolidated net sales in the corresponding period in 2022. A table reconciling this non-GAAP financial measure to consolidated net sales, as reported, is included below.
Gross margin for the six months ended June 30, 2023 was $109.8 million, or 37.6%, as compared to $118.2 million, or 35.4%, for the corresponding period in 2022.
Income from operations was $2.6 million, as compared to $3.9 million for the corresponding period in 2022.
Adjusted income from operations(1) was $11.8 million, as compared to $14.4 million for the corresponding period in 2022.
Net loss was $(15.3) million, or $(0.72) per diluted share, as compared to net loss of $(3.1) million, or $(0.14) per diluted share, in the corresponding period in 2022. Net loss for the current period includes a non-cash impairment charge of $6.5 million related to the Company’s equity investment in Grupo Vasconia.
Adjusted net loss(1) was $(3.0) million, or $(0.14) per diluted share, as compared to adjusted net income(1) of $3.9 million, or $0.18 per diluted share, in the corresponding period in 2022.
Adjusted EBITDA(1) was $54.6 million for the trailing twelve months ended June 30, 2023. Pro forma adjusted EBITDA(1) was $56.0 million for the trailing twelve months ended June 30, 2023. After giving effect to the non-recurring charge limitation permitted under our debt agreements, pro forma adjusted EBITDA(1) was $52.9 million for the twelve months ended June 30, 2023.
Lifetime continues to take actions to further strengthen its financial position and is highly focused on expense controls and improving inventory turns. At June 30, 2023, the Company’s liquidity was $190.5 million, which is comprised of cash on hand, available borrowings under the credit facility, and availability under the Receivables Purchase Agreement.
(1) A table reconciling this non-GAAP financial measure to its most comparable GAAP financial measure, as reported, is included below.
Full Year 2023 Guidance Update
For the full year ending December 31, 2023, the Company is reaffirming its guidance for net sales, income from operations, adjusted income from operations and adjusted EBITDA. Financial guidance for net loss and adjusted net income has been revised as per the table below primarily as a result of the non-cash impairment charge in the Company’s equity investment in Grupo Vasconia that was recorded in the second quarter of 2023.Net sales $660 to $720 million Income from operations $24.5 to $29.5 million Adjusted income from operations $41.5 to $46.5 million Net loss $(6.1) to $(3.8) million Adjusted net income $11.6 to $13.9 million Diluted loss per common share $(0.28) to $(0.17) per share Adjusted diluted income per common share $0.53 to $0.64 per share Weighted-average diluted shares 21.8 million Adjusted EBITDA $50 to $55 million Tables reconciling non-GAAP financial measures to GAAP financial measures, as reported, are included below.
Dividend
On August 2, 2023, the Board of Directors declared a quarterly dividend of $0.0425 per share payable on November 15, 2023 to stockholders of record on November 1, 2023.
Conference Call
The Company has scheduled a conference call for Thursday, August 3, 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=QwAlItAS
For those who cannot listen to the live broadcast, an audio replay of the webcast will be available until February 3, 2024.
Non-GAAP Financial Measures
This earnings release contains non-GAAP financial measures, including constant currency net sales, adjusted (loss) income from operations, adjusted net loss, adjusted net income, adjusted diluted (loss) income per common share, adjusted EBITDA, adjusted EBITDA, before limitation, pro forma adjusted EBITDA, before limitation, and pro forma adjusted EBITDA. A non-GAAP financial measure is a numerical measure of a company’s historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statements of income, balance sheets, or statements of cash flows of a company; or, includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. These non-GAAP financial measures are provided because the Company's management uses these financial measures in evaluating the Company’s on-going financial results and trends, and management believes that exclusion of certain items allows for more accurate period-to-period comparison of the Company’s operating performance by investors and analysts. Management uses these non-GAAP financial measures as indicators of business performance. These non-GAAP financial measures should be viewed as a supplement to, and not a substitute for, GAAP financial measures of performance. As required by SEC rules, the Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.
Forward-Looking Statements
In this press release, the use of the words “advance” “believe,” “continue,” “could,” “deliver,” “drive,” “enable,” “expect,” “gain,” “goal,” “grow,” “intend,” “maintain,” “manage,” “may,” “outlook,” “plan,” “positioned,” “project,” “projected,” “should,” “take,” “target,” “unlock,” “will,” “would”, or similar expressions is intended to identify forward-looking statements. Such statements include all statements regarding the growth of the Company, our financial guidance, our ability to navigate the current environment and advance our strategy, our commitment to increasing investments in future growth initiatives, our initiatives to create value, our efforts to mitigate geopolitical factors and tariffs, our current and projected financial and operating performance, results, and profitability and all guidance related thereto, including forecasted exchange rates and effective tax rates, as well as our continued growth and success, future plans and intentions regarding the Company and its consolidated subsidiaries. Such statements represent the Company’s current judgments, estimates, and assumptions about possible future events. The Company believes these judgments, estimates, and assumptions are reasonable, but these statements are not guarantees of any events or financial or operational results, and actual results may differ materially due to a variety of important factors. Such factors might include, among others, the Company’s ability to comply with the requirements of its credit agreements; the availability of funding under such credit agreements; the Company’s ability to maintain adequate liquidity and financing sources and an appropriate level of debt, as well as to deleverage its balance sheet; the possibility of impairments to the Company’s goodwill; the possibility of impairments to the Company’s intangible assets; the Company's ability to drive future growth and profitability from its European operations; changes in U.S. or foreign trade or tax law and policy; changes in general economic conditions that could affect customer purchasing practices or consumer spending; the impact of changes in general economic conditions on the Company’s customers; customer ordering behavior; the performance of our newer products; expenses and other challenges relating to the integration of any future acquisitions; changes in demand for the Company’s products; changes in the Company’s management team; the significant influence of the Company’s largest stockholder; fluctuations in foreign exchange rates; changes in U.S. trade policy or the trade policies of nations in which we or our suppliers do business; uncertainty regarding the long-term ramifications of the U.K.’s exit from the European Union; shortages of and price volatility for certain commodities; global health epidemics, such as the COVID-19 pandemic; social unrest, including related protests and disturbances; conflict or war, including the conflict in Ukraine; macroeconomic conditions, including inflationary impacts and disruptions to the global supply chain; increase in supply chain costs; the imposition of tariffs and other trade policies and/or economic sanctions implemented by the U.S. and other governments; our ability to successfully integrate acquired businesses, including our recent acquisition of S'well; our ability to achieve projected synergies with respect to the S'well business; our expectations regarding the future level of demand for our products; our ability to execute on the goals and strategies set forth in our five-year plan; and significant changes in the competitive environment and the effect of competition on the Company’s markets, including on the Company’s pricing policies, financing sources and ability to maintain an appropriate level of debt. The Company undertakes no obligation to update these forward-looking statements other than as required by law.
Lifetime Brands, Inc.
Lifetime Brands is a leading global designer, developer and marketer of a broad range of branded consumer products used in the home. The Company markets its products under well-known kitchenware brands, including Farberware®, KitchenAid®, Sabatier®, Amco Houseworks®, Chef’n® Chicago™ Metallic, Copco®, Fred® & Friends, Houdini™, KitchenCraft®, Kamenstein®, La Cafetière®, MasterClass®, Misto®, Swing-A-Way®, Taylor® Kitchen, and Rabbit®; respected tableware and giftware brands, including Mikasa®, Pfaltzgraff®, Fitz and Floyd®, Empire Silver™, Gorham®, International® Silver, Towle® Silversmiths, Wallace®, Wilton Armetale®, V&A®, Royal Botanic Gardens Kew® and Year & Day®; and valued home solutions brands, including BUILT NY®, S’well®, Taylor® Bath, Taylor® Kitchen, Taylor® Weather and Planet Box®. The Company also provides exclusive private label products to leading retailers worldwide.
The Company’s corporate website is www.lifetimebrands.com.
Contacts:
Lifetime Brands, Inc.
Laurence Winoker, Chief Financial Officer
516-203-3590
investor.relations@lifetimebrands.comor
Joele Frank, Wilkinson Brimmer Katcher
Ed Trissel / T.J. O'Sullivan / Carly King
212-355-4449LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands—except per share data)
(unaudited)Three Months Ended
June 30,Six Months Ended
June 30,2023 2022 2023 2022 Net sales $ 146,436 $ 151,314 $ 291,871 $ 334,031 Cost of sales 90,445 96,147 182,038 215,796 Gross margin 55,991 55,167 109,833 118,235 Distribution expenses 15,732 17,373 32,617 36,598 Selling, general and administrative expenses 35,863 38,258 73,770 77,746 Restructuring expenses — — 856 — Income (loss) from operations 4,396 (464 ) 2,590 3,891 Interest expense (5,528 ) (3,732 ) (10,864 ) (7,499 ) Mark to market gain (loss) on interest rate derivatives 197 304 (37 ) 1,353 Gain on early retirement of debt 1,520 — 1,520 — Income (loss) before income taxes and equity in (losses) earnings 585 (3,892 ) (6,791 ) (2,255 ) Income tax (provision) benefit (1,242 ) 98 106 (1,575 ) Equity in (losses) earnings, net of taxes (5,863 ) 334 (8,640 ) 750 NETLOSS $ (6,520 ) $ (3,460 ) $ (15,325 ) $ (3,080 ) BASIC LOSS PER COMMON SHARE $ (0.31 ) $ (0.16 ) $ (0.72 ) $ (0.14 ) DILUTED LOSS PER COMMON SHARE $ (0.31 ) $ (0.16 ) $ (0.72 ) $ (0.14 ) LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands—except share data)June 30,
2023December 31,
2022(unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 15,122 $ 23,598 Accounts receivable, less allowances of $15,452 at June 30, 2023 and $14,606 at December 31, 2022 114,965 141,195 Inventory 212,527 222,209 Prepaid expenses and other current assets 11,878 13,254 Income taxes receivable 3,049 — TOTAL CURRENT ASSETS 357,541 400,256 PROPERTY AND EQUIPMENT, net 17,422 18,022 OPERATING LEASE RIGHT-OF-USE ASSETS 72,428 74,869 INVESTMENTS 5,303 12,516 INTANGIBLE ASSETS, net 206,608 213,887 OTHER ASSETS 5,936 6,338 TOTAL ASSETS $ 665,238 $ 725,888 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES Current maturity of term loan $ 14,857 $ — Accounts payable 48,396 38,052 Accrued expenses 58,329 77,602 Income taxes payable — 224 Current portion of operating lease liabilities 13,597 14,028 TOTAL CURRENT LIABILITIES 135,179 129,906 OTHER LONG-TERM LIABILITIES 14,826 14,995 INCOME TAXES PAYABLE, LONG-TERM 1,589 1,591 OPERATING LEASE LIABILITIES 73,789 76,420 DEFERRED INCOME TAXES 9,622 9,607 REVOLVING CREDIT FACILITY 25,232 10,424 TERM LOAN 181,950 242,857 STOCKHOLDERS’ EQUITY Preferred stock, $1.00 par value, shares authorized: 100 shares of Series A and 2,000,000 shares of Series B; none issued and outstanding — — Common stock, $0.01 par value, shares authorized: 50,000,000 at June 30, 2023 and December 31, 2022; shares issued and outstanding: 21,814,236 at June 30, 2023 and 21,779,799 at December 31, 2022 218 218 Paid-in capital 275,915 274,579 (Accumulated deficit) retained earnings (18,596 ) 1,145 Accumulated other comprehensive loss (34,486 ) (35,854 ) TOTAL STOCKHOLDERS’ EQUITY 223,051 240,088 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 665,238 $ 725,888 LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)Six Months Ended
June 30,2023 2022 OPERATING ACTIVITIES Net loss $ (15,325 ) $ (3,080 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 9,795 9,937 Amortization of financing costs 975 843 Mark to market loss (gain) on interest rate derivatives 37 (1,353 ) Non-cash lease adjustment (1,255 ) (690 ) Provision (recovery) for doubtful accounts 1,528 (258 ) Stock compensation expense 1,872 2,539 Undistributed losses (earnings) from equity investment, net of taxes 8,640 (750 ) Contingent consideration fair value adjustments (50 ) — Gain on early retirement of debt (1,520 ) — Changes in operating assets and liabilities (excluding the effects of business acquisitions) Accounts receivable 25,524 69,500 Inventory 11,492 (25,325 ) Prepaid expenses, other current assets and other assets 1,563 (816 ) Accounts payable, accrued expenses and other liabilities (10,989 ) (55,117 ) Income taxes receivable (3,049 ) (3,729 ) Income taxes payable (245 ) (558 ) NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 28,993 (8,857 ) INVESTING ACTIVITIES Purchases of property and equipment (993 ) (1,479 ) Acquisition — (17,956 ) NET CASHUSED ININVESTING ACTIVITIES (993 ) (19,435 ) FINANCING ACTIVITIES Proceeds from revolving credit facility 30,378 157,751 Repayments of revolving credit facility (16,546 ) (136,970 ) Repayments of term loan (44,866 ) (6,216 ) Proceeds from short-term loan — 30 Payment of finance costs (433 ) — Payments for finance lease obligations (14 ) (17 ) Payments of tax withholding for stock based compensation (537 ) (938 ) Proceeds from the exercise of stock options — 233 Payments for stock repurchase (2,539 ) (4,199 ) Cash dividends paid (1,907 ) (1,929 ) NET CASH (USED IN) PROVIDED BYFINANCING ACTIVITIES (36,464 ) 7,745 Effect of foreign exchange on cash (12 ) (238 ) DECREASE IN CASH AND CASH EQUIVALENTS (8,476 ) (20,785 ) Cash and cash equivalents at beginning of period 23,598 27,982 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 15,122 $ 7,197 LIFETIME BRANDS, INC.
Supplemental Information
(in thousands)Reconciliation of GAAP to Non-GAAP Operating Results
Adjusted EBITDA for the twelve months ended June 30, 2023:
Quarter Ended Twelve
Months Ended
June 30, 2023September 30,
2022December 31,
2022March 31,
2023June 30,
2023(in thousands) Net (loss) income as reported $ (6,358 ) $ 3,272 $ (8,805 ) $ (6,520 ) $ (18,411 ) Undistributed equity losses, net 8,159 2,058 2,777 5,863 18,857 Income tax provision (benefit) 1,845 2,308 (1,348 ) 1,242 4,047 Interest expense 4,581 5,125 5,336 5,528 20,570 Depreciation and amortization 4,598 5,001 4,870 4,925 19,394 Mark to market (gain) loss on interest rate derivatives (637 ) 19 234 (197 ) (581 ) Stock compensation expense 1,026 281 861 1,011 3,179 Contingent consideration fair value adjustments — — — (50 ) (50 ) Gain on early retirement of debt — — — (1,520 ) (1,520 ) Acquisition related expenses 109 170 490 242 1,011 Restructuring expenses — 1,420 856 — 2,276 Warehouse relocation and redesign expenses(1) 59 — 194 157 410 S'well integration costs(2) 250 — — — 250 Wallace facility remediation expense 5,140 — — — 5,140 Adjusted EBITDA, before limitation $ 18,772 $ 19,654 $ 5,465 $ 10,681 $ 54,572 Pro forma projected synergies adjustment(3) 1,412 Pro forma Adjusted EBITDA, before limitation(5) 55,984 Permitted non-recurring charge limitation(4) (3,124 ) Pro forma Adjusted EBITDA(5) $ 18,772 $ 19,654 $ 5,465 $ 10,681 $ 52,860 (1) For the twelve months ended June 30, 2023, the warehouse relocation and redesign expenses were related to the U.S. segment.
(2) For the twelve months ended June 30, 2023, S'well integration costs included $0.3 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 $0.8 million associated with the reorganization of the International segment's workforce, $0.4 million associated with the Executive Chairman's cessation of service in such role, and $0.2 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 that is defined in the Company’s debt agreements. Adjusted EBITDA is defined as net (loss) income, adjusted to exclude undistributed equity in losses, income tax provision (benefit), interest expense, depreciation and amortization, mark to market (gain) loss on interest rate derivatives, stock compensation expense, gain on early retirement of debt, Wallace facility remediation 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 (loss) income and adjusted diluted (loss) income per common share (in thousands -except per share data):
Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net loss as reported $ (6,520 ) $ (3,460 ) $ (15,325 ) $ (3,080 ) Adjustments: Acquisition intangible amortization expense 3,678 3,633 7,354 7,121 Contingent consideration fair value adjustments (50 ) — (50 ) — Gain on early retirement of debt (1,520 ) — (1,520 ) — Acquisition related expenses 242 75 732 1,194 Restructuring expenses — — 856 — S'well integration costs — 864 — 1,645 Warehouse relocation and redesign expenses(1) 157 73 351 570 Impairment of Grupo Vasconia investment 4,441 — 6,494 — Mark to market (gain) loss on interest rate derivatives (197 ) (304 ) 37 (1,353 ) Income tax effect on adjustments (571 ) (1,066 ) (1,916 ) (2,230 ) Adjusted net (loss) income(2)(3) $ (340 ) $ (185 ) $ (2,987 ) $ 3,867 Adjusted diluted (loss) income per common share(4) $ (0.02 ) $ (0.01 ) $ (0.14 ) $ 0.18 (1) For the three and six months ended June 30, 2023, warehouse relocation and redesign expenses were related to the U.S. segment.
For the three months ended June 30, 2022, warehouse relocation and redesign expenses included $0.1 million of expenses related to the U.S. segment. For the six months ended June 30, 2022, warehouse relocation and redesign expenses included $0.4 million of expenses related to the International segment and $0.2 million of expenses related to the U.S. segment.
(2) Adjusted net (loss) income for the three and six months ended June 30, 2022 has been recast to reflect the adjustment for acquisition intangible amortization expense.
(3) Adjusted net loss and adjusted diluted loss per common share in the three and six months ended June 30, 2023 excludes acquisition intangible amortization expense, contingent consideration fair value adjustments, gain on early retirement of debt, acquisition related expenses, restructuring expenses, warehouse relocation and redesign expenses, impairment of Grupo Vasconia investment, and mark to market gain (loss) on interest rate derivatives. The income tax effect on adjustments reflects the statutory tax rates applied on the adjustments.
Adjusted net loss and adjusted diluted loss per common share in the three and six months ended June 30, 2022 excludes acquisition intangible amortization expense, acquisition related expenses, S'well integration costs, warehouse relocation and redesign expenses and mark to market (gain) on interest rate derivatives. The income tax effect on adjustments reflects the statutory tax rates applied on the adjustments.
(4)Adjusted diluted (loss) income per common share is calculated based on diluted weighted-average shares outstanding of 21,123 and 21,531 for the three month period ended June 30, 2023 and 2022, respectively. Adjusted diluted (loss) income per common share is calculated based on diluted weighted-average shares outstanding of 21,174 and 21,956 for the six month period ended June 30, 2023 and 2022, respectively.The diluted weighted-average shares outstanding for the three and six months ended June 30, 2023 do not include the effect of dilutive securities. The diluted weighted-average shares outstanding for the three and six months ended June 30, 2022 include the effect of dilutive securities of zero and 314, respectively.
Adjusted income from operations (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Income (loss) from operations $ 4,396 $ (464 ) $ 2,590 $ 3,891 Adjustments: Acquisition intangible amortization expense 3,678 3,633 7,354 7,121 Contingent consideration fair value adjustments (50 ) — (50 ) — Acquisition related expenses 242 75 732 1,194 Restructuring expenses — — 856 — S'well integration costs — 864 — 1,645 Warehouse relocation and redesign expenses(1) 157 73 351 570 Total adjustments 4,027 4,645 9,243 10,530 Adjusted income from operations(2)(3) $ 8,423 $ 4,181 $ 11,833 $ 14,421 (1) For the three and six months ended June 30, 2023, warehouse relocation and redesign expenses were related to the U.S. segment.
For the three months ended June 30, 2022, warehouse relocation and redesign expenses included $0.1 million of expenses related to the U.S. segment. For the six months ended June 30, 2022, warehouse relocation and redesign expenses included $0.4 million of expenses related to the International segment and $0.2 million of expenses related to the U.S. segment.
(2) Adjusted income from operations for the three and six months ended June 30, 2022 has been recast to reflect the adjustment for acquisition intangible amortization expense.
(3) Adjusted income from operations for the three and six months ended June 30, 2023 and June 30, 2022, excludes acquisition intangible amortization expense, contingent consideration fair value adjustments, acquisition related expenses, restructuring expenses, S'well integration costs and warehouse relocation and redesign expenses.
LIFETIME BRANDS, INC.
Supplemental Information
(in thousands)Reconciliation of GAAP to Non-GAAP Operating Results (continued)
Constant Currency:
As Reported
Three Months Ended
June 30,Constant Currency(1)
Three Months Ended
June 30,Year-Over-Year
Increase (Decrease)Net sales 2023 2022 Increase
(Decrease)2023 2022 Increase
(Decrease)Currency
ImpactExcluding
CurrencyIncluding
CurrencyCurrency
ImpactU.S. $ 134,979 $ 137,191 $ (2,212 ) $ 134,979 $ 137,663 $ (2,684 ) $ (472 ) (1.9 )% (1.6 )% 0.3 % International 11,457 14,123 (2,666 ) 11,457 14,109 (2,652 ) 14 (18.8 )% (18.9 )% (0.1 )% Total net sales $ 146,436 $ 151,314 $ (4,878 ) $ 146,436 $ 151,772 $ (5,336 ) $ (458 ) (3.5 )% (3.2 )% 0.3 % As Reported Six Months Ended
June 30,Constant Currency(1)
Six Months Ended
June 30,Year-Over-Year
Increase (Decrease)Net sales 2023 2022 Increase
(Decrease)2023 2022 Increase (Decrease) Currency Impact Excluding
CurrencyIncluding
CurrencyCurrency
ImpactU.S. $ 268,464 $ 303,409 $ (34,945 ) $ 268,464 $ 303,383 $ (34,919 ) $ 26 (11.5 )% (11.5 )% — % International 23,407 30,622 (7,215 ) 23,407 28,771 (5,364 ) 1,851 (18.6 )% (23.6 )% (5.0 )% Total net sales $ 291,871 $ 334,031 $ (42,160 ) $ 291,871 $ 332,154 $ (40,283 ) $ 1,877 (12.1 )% (12.6 )% (0.5 )% (1) “Constant Currency” is determined by applying the 2023 average exchange rates to the prior year local currency sales amounts, with the difference between the change in “As Reported” net sales and “Constant Currency” net sales, reported in the table as “Currency Impact.” Constant currency sales growth is intended to exclude the impact of fluctuations in foreign currency exchange rates.
LIFETIME BRANDS, INC.
Supplemental InformationReconciliation of GAAP to Non-GAAP Guidance
Adjusted EBITDA guidance for the full year ending December 31, 2023 (in millions):
Net loss guidance $(6.1) to $(3.8) Undistributed equity losses 8.6 Income tax expense 2.5 to 5.2 Interest expense(1) 21.0 Gain on early retirement of debt (1.5) Depreciation and amortization 19.5 Stock compensation expense 3.8 Acquisition related expense 0.7 Restructuring, warehouse relocation and redesign expenses 1.6 Other adjustments(2) (0.1) Adjusted EBITDA guidance $50 to $55 Adjusted net income and adjusted diluted income per common share guidance for the full year ending December 31, 2023 (in millions - except per share data): Net loss guidance $(6.1) to $(3.8) Acquisition intangible amortization expense 14.8 Gain on early retirement of debt (1.5) Acquisition related expense 0.7 Restructuring, warehouse relocation and redesign expenses 1.6 Impairment of Grupo Vasconia investment 6.5 Other adjustments(2) (0.1) Income tax effect on adjustment (4.3) Adjusted net income guidance $11.6 to $13.9 Adjusted diluted income per share guidance $0.53 to $0.64 Adjusted income from operations guidance for the full year ending December 31, 2023 (in millions): Income from operations guidance $24.5 to $29.5 Acquisition intangible amortization expense 14.8 Acquisition related expense 0.7 Restructuring, warehouse relocation and redesign expenses 1.6 Other adjustments(2) (0.1) Adjusted income from operations $41.5 to $46.5 (1) Includes estimate for interest expense and mark to market loss on interest rate derivatives.
(2) Includes contingent consideration fair value adjustments.
