• Lifetime Brands, Inc. Reports Second Quarter 2021 Financial Results

    来源: Nasdaq GlobeNewswire / 05 8月 2021 07:00:05   America/New_York

    GARDEN CITY, N.Y., Aug. 05, 2021 (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, 2021.

    Robert Kay, Lifetime’s Chief Executive Officer, commented, “We are pleased to have sustained the momentum we created in the first quarter of 2021 through the second quarter, with net sales up 24.3% and an increase in income from operations of $6.7 million compared to the second quarter of 2020. Demand for our products remains strong, and in addition to delivering another consecutive quarter of growth in our core U.S. business, our international operations continued to improve, driven by the recovery in Europe, growth in Asia and most notably the actions taken to restructure this business unit during 2020. As geographies have reopened and brick and mortar sales across both our U.S. and international businesses have increased, we have continued to invest in inventory to meet this growing demand and to deliver for our customers and consumers. Additionally, we are taking action to mitigate the impacts of supply chain challenges and increased shipping costs, which are being felt across the industry. We believe we are well positioned to navigate the current environment and we are confident in our ability to continue driving growth and profitability.”

    Mr. Kay continued, “While we are closely monitoring macroeconomic headwinds, our outstanding results and execution give us confidence in our outlook for the remainder of the year, and we are pleased to be raising our full year 2021 net sales, net income and EBITDA guidance. As we look ahead, we remain focused on leveraging our strong cash flow and balance sheet to continue investing in our strategic initiatives and delivering value for all Lifetime Brands stakeholders.”

    Second Quarter Financial Highlights:

    Consolidated net sales for the three months ended June 30, 2021 were $186.6 million, representing an increase of $36.5 million, or 24.3%, as compared to net sales of $150.1 million for the corresponding period in 2020. In constant currency, a non-GAAP financial measure, consolidated net sales increased by $34.3 million, or 22.5%, as compared to consolidated net sales in the corresponding period in 2020. A table which reconciles this non-GAAP financial measure to consolidated net sales, as reported, is included below.

    Gross margin for the three months ended June 30, 2021 was $66.2 million, or 35.4%, as compared to $54.2 million, or 36.1%, for the corresponding period in 2020.

    Income from operations was $11.0 million, as compared to $4.3 million for the corresponding period in 2020.

    Net income was $5.8 million, or $0.26 per diluted share, as compared to a net loss of $(4.0) million, or $(0.19) per diluted share, in the corresponding period in 2020.

    Adjusted net income was $6.1 million, or $0.28 per diluted share, as compared to adjusted net loss, of $(3.1) million, or $(0.15) per diluted share, in the corresponding period in 2020. A table which reconciles this non-GAAP financial measure to net income (loss), as reported, is included below.

    Six Months Financial Highlights:

    Consolidated net sales for the six months ended June 30, 2021 were $382.3 million, representing an increase of $87.1 million, or 29.5%, as compared to net sales of $295.2 million for the corresponding period in 2020. In constant currency, a non-GAAP financial measure, consolidated net sales increased by $84.0 million, or 28.1%, as compared to consolidated net sales in the corresponding period in 2020.

    Gross margin for the six months ended June 30, 2021 was $132.2 million, or 34.6%, as compared to $107.1 million, or 36.3%, for the corresponding period in 2020.

    Income from operations was $20.2 million, as compared to a loss from operations of $(20.9) million for the corresponding period in 2020. Excluding a $20.1 million non-cash charge for goodwill impairment, and a $2.8 million non-cash charge for bad debt reserves to establish a provision against potential credit problems from certain retail customers due to the COVID-19 pandemic, income from operations would have been $2.0 million, for the corresponding period in 2020.

    Net income was $8.9 million, or $0.40 per diluted share, as compared to a net loss of $(32.1) million, or $(1.55) per diluted share, in the corresponding period in 2020.

    Adjusted net income was $8.9 million, or $0.41 per diluted share, as compared to adjusted net loss, of $(8.8) million, or $(0.42) per diluted share, in the corresponding period in 2020. A table which reconciles this non-GAAP financial measure to net income (loss), as reported, is included below.

    Adjusted EBITDA, after giving effect to certain adjustments as permitted and defined under our debt agreements, was $96.7 million for the twelve months ended June 30, 2021. A table which reconciles this non-GAAP financial measure to net income (loss), as reported, is included below.

    Full Year 2021 Guidance Update

    For the full fiscal year ending December 31, 2021, the Company is providing revised financial guidance:

     Year Ended
    December 31, 2020
     Guidance for the
    Year Ending
    December 31, 2021
    Net sales$769.2 million $870 to $890 million
    Income from operations$25.0 million $55 to $58.5 million
    Adjusted income from operations$47.9 million $55 to $58.5 million
    Net (loss) income$(3.0) million $28.1 to $30.8 million
    Adjusted net income$20.2 million $28.1 to $30.8 million
    Diluted (loss) income per common share$(0.14) per share $1.28 to $1.40 per share
    Adjusted diluted income per common share$0.95 per share $1.28 to $1.40 per share
    Weighted-average diluted shares20.9 million 22 million
    Adjusted EBITDA$77.3 million $84 to $88 million

    This guidance is based on a forecasted GBP to USD rate of $1.35. Net income and diluted income per common share were calculated based on an effective tax rate of 30%. Tables reconciling non-GAAP financial measures to GAAP financial measures, as reported, are included below.

    Dividend

    On August 3, 2021, the Board of Directors declared a quarterly dividend of 0.0425 per share payable on November 15, 2021 to shareholders of record on November 1, 2021.

    Conference Call

    The Company has scheduled a conference call for Thursday, August 5, 2021 at 11:00 a.m. The dial-in number for the conference call is (877) 876-9174 (U.S.) or (785) 424-1669 (International), Conference ID: LCUTQ221.

    A live webcast of the conference call will be accessible through:
    https://event.on24.com/wcc/r/3338822/E67971FE77F9A7A1474782ECB6E298D7

    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 income from operations, adjusted net income (loss), adjusted diluted income (loss) per common share, and adjusted EBITDA. A non-GAAP financial measure is a numerical measure of a company’s historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statements of income, balance sheets, or statements of cash flows of a company; or, includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. As required by SEC rules, the Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures. These non-GAAP financial measures are provided because management of the Company uses these financial measures in evaluating the Company’s on-going financial results and trends, and management believes that exclusion of certain items allows for more accurate period-to-period comparison of the Company’s operating performance by investors and analysts. Management uses these non-GAAP financial measures as indicators of business performance. These non-GAAP financial measures should be viewed as a supplement to, and not a substitute for, GAAP financial measures of performance.

    Forward-Looking Statements
    In this press release, the use of the words “believe,” “could,” “expect,” “intend,” “may,” “positioned,” “project,” “projected,” “should,” “will,” “would” or similar expressions is intended to identify forward-looking statements. Such statements include all statements regarding the growth of the Company, our financial guidance, our ability to navigate the current environment and advance our strategy, our commitment to increasing investments in future growth initiatives, our initiatives to create value, our efforts to mitigate geopolitical factors and tariffs, our current and projected financial and operating performance, results, and profitability and all guidance related thereto, including forecasted exchange rates and effective tax rates, as well as our continued growth and success, future plans and intentions regarding the Company and its consolidated subsidiaries. Such statements represent the Company’s current judgments, estimates, and assumptions about possible future events. The Company believes these judgments, estimates, and assumptions are reasonable, but these statements are not guarantees of any events or financial or operational results, and actual results may differ materially due to a variety of important factors. Such factors might include, among others, the Company’s ability to comply with the requirements of its credit agreements; the availability of funding under such credit agreements; the Company’s ability to maintain adequate liquidity and financing sources and an appropriate level of debt, as well as to deleverage its balance sheet; the possibility of impairments to the Company’s goodwill; the possibility of impairments to the Company’s intangible assets; changes in U.S. or foreign trade or tax law and policy; the impact of tariffs on imported goods and materials; changes in general economic conditions which could affect customer payment practices or consumer spending; the impact of changes in general economic conditions on the Company’s customers; customer ordering behavior; the performance of our newer products; expenses and other challenges relating to the integration of any future acquisitions; changes in demand for the Company’s products; changes in the Company’s management team; the significant influence of the Company’s largest stockholder; fluctuations in foreign exchange rates; changes in U.S. trade policy or the trade policies of nations in which we or our suppliers do business; uncertainty regarding the long-term ramifications of the U.K.’s exit from the European Union; shortages of and price volatility for certain commodities; global health epidemics, such as the COVID-19 pandemic; social unrest, including related protests and disturbances; our expectations regarding the future level of demand for our products; and significant changes in the competitive environment and the effect of competition on the Company’s markets, including on the Company’s pricing policies, financing sources and ability to maintain an appropriate level of debt. The Company undertakes no obligation to update these forward-looking statements other than as required by law.

    Lifetime Brands, Inc.
    Lifetime Brands is a leading global designer, developer and marketer of a broad range of branded consumer products used in the home. The Company markets its products under well-known kitchenware brands, including Farberware®, KitchenAid®, Sabatier®, Amco Houseworks®, Chef’n® Chicago™ Metallic, Copco®, Fred® & Friends, Houdini™, KitchenCraft®, Kamenstein®, La Cafetière®, MasterClass®, Misto®, Swing-A-Way®, Taylor® Kitchen, and Rabbit®; respected tableware and giftware brands, including Mikasa®, Pfaltzgraff®, Fitz and Floyd®, Empire Silver™, Gorham®, International® Silver, Towle® Silversmiths, Wallace®, Wilton Armetale®, V&A®, Royal Botanic Gardens Kew® and Year & Day®; and valued home solutions brands, including BUILT NY®, Taylor® Bath, Taylor® Kitchen, Taylor® Weather and Planet Box®. The Company also provides exclusive private label products to leading retailers worldwide.

    The Company’s corporate website is www.lifetimebrands.com.

    Contacts:

    Lifetime Brands, Inc.
    Laurence Winoker, Chief Financial Officer
    516-203-3590
    investor.relations@lifetimebrands.com

    or

    Joele Frank, Wilkinson Brimmer Katcher
    Ed Trissel / Andrew Squire / Rose Temple
    212-355-4449



    LIFETIME BRANDS, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (in thousands—except per share data)
    (unaudited)

     Three Months Ended
    June 30,
     Six Months Ended
    June 30,
     2021 2020 2021 2020
    Net sales$186,636  $150,140  $382,289  $295,210 
    Cost of sales120,475  95,972  250,128  188,108 
    Gross margin66,161  54,168  132,161  107,102 
    Distribution expenses18,931  15,192  37,577  31,749 
    Selling, general and administrative expenses36,229  34,427  74,337  75,949 
    Restructuring expenses  253    253 
    Goodwill and other impairments      20,100 
    Income (loss) from operations11,001  4,296  20,247  (20,949)
    Interest expense(3,819) (4,230) (7,833) (8,966)
    Mark to market gain (loss) on interest rate derivatives46  (164) 544  (2,415)
    Income (loss) before income taxes and equity in earnings (losses)7,228  (98) 12,958  (32,330)
    Income tax (provision) benefit(1,832) (3,031) (4,248) 698 
    Equity in earnings (losses), net of taxes393  (848) 146  (509)
    NET INCOME (LOSS)$5,789  $(3,977) $8,856  $(32,141)
    BASIC INCOME (LOSS) PER COMMON SHARE$0.27  $(0.19) $0.42  $(1.55)
    DILUTED INCOME (LOSS) PER COMMON SHARE$0.26  $(0.19) $0.40  $(1.55)



    LIFETIME BRANDS, INC.

    CONDENSED CONSOLIDATED BALANCE SHEETS
    (in thousands—except share data)

     June 30,
    2021
     December 31,
    2020
     (unaudited)  
    ASSETS   
    CURRENT ASSETS   
    Cash and cash equivalents$33,345  $35,963 
    Accounts receivable, less allowances of $16,901 at June 30, 2021 and $17,013 at
    December 31, 2020
    120,494  170,037 
    Inventory218,184  203,164 
    Prepaid expenses and other current assets9,140  12,129 
    Income taxes receivable1,750   
        TOTAL CURRENT ASSETS382,913  421,293 
    PROPERTY AND EQUIPMENT, net22,544  23,120 
    OPERATING LEASE RIGHT-OF-USE ASSETS92,517  96,543 
    INVESTMENTS23,778  20,032 
    INTANGIBLE ASSETS, net235,762  244,025 
    OTHER ASSETS2,048  2,468 
              TOTAL ASSETS$759,562  $807,481 
    LIABILITIES AND STOCKHOLDERS’ EQUITY   
    CURRENT LIABILITIES   
    Current maturity of term loan$11,530  $17,657 
    Accounts payable55,392  66,095 
    Accrued expenses78,067  80,050 
    Income taxes payable  4,788 
    Current portion of operating lease liabilities12,300  11,480 
    TOTAL CURRENT LIABILITIES157,289  180,070 
    OTHER LONG-TERM LIABILITIES15,174  16,483 
    INCOME TAXES PAYABLE, LONG-TERM1,444  1,444 
    OPERATING LEASE LIABILITIES97,644  102,355 
    DEFERRED INCOME TAXES10,833  10,714 
    REVOLVING CREDIT FACILITY  27,302 
    TERM LOAN235,377  238,977 
    STOCKHOLDERS’ EQUITY   
    Preferred stock, $1.00 par value, shares authorized: 100 shares of Series A and
    2,000,000 shares of Series B; none issued and outstanding
       
    Common stock, $0.01 par value, shares authorized: 50,000,000 at June 30, 2021 and December 31, 2020; shares issued and outstanding: 22,006,623 at June 30, 2021 and 21,755,195 at December 31, 2020220  218 
    Paid-in capital268,976  268,666 
    Retained earnings7,423  424 
    Accumulated other comprehensive loss(34,818) (39,172)
           TOTAL STOCKHOLDERS’ EQUITY241,801  230,136 
                   TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$759,562  $807,481 



    LIFETIME BRANDS, INC.

    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (in thousands)
    (unaudited)

     Six Months Ended
    June 30,
     2021 2020
    OPERATING ACTIVITIES   
    Net income (loss)$8,856  $(32,141)
    Adjustments to reconcile net income (loss) to net cash provided by operating activities:   
    Depreciation and amortization11,723  12,295 
    Goodwill and other impairments  20,100 
    Amortization of financing costs876  878 
    Mark to market (gain) loss on interest rate derivatives(544) 2,415 
    Non-cash lease expense(768) 2,020 
    Provision for doubtful accounts(146) 2,987 
    Stock compensation expense2,772  2,746 
    Undistributed equity in (earnings) losses, net of taxes(146) 509 
    Changes in operating assets and liabilities:   
    Accounts receivable49,943  12,661 
    Inventory(14,305) 2,398 
    Prepaid expenses, other current assets and other assets2,931  782 
    Accounts payable, accrued expenses and other liabilities(12,516) 39,430 
    Income taxes receivable(1,750) (871)
    Income taxes payable(4,795)  
    NET CASH PROVIDED BY OPERATING ACTIVITIES 42,131  66,209 
    INVESTING ACTIVITIES   
    Purchases of property and equipment(2,497) (1,380)
    Acquisition(178)  
    NET CASH USED IN INVESTING ACTIVITIES(2,675) (1,380)
    FINANCING ACTIVITIES   
    Proceeds from revolving credit facility10,845  95,851 
    Repayments of revolving credit facility(38,131) (99,134)
    Repayments of term loan(10,478) (7,583)
    Payments for finance lease obligations(43) (50)
    Payments of tax withholding for stock based compensation(3,185) (486)
    Proceeds from the exercise of stock options735   
    Cash dividends paid(1,957) (937)
    NET CASH USED IN FINANCING ACTIVITIES(42,214) (12,339)
    Effect of foreign exchange on cash140  (323)
    (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS(2,618) 52,167 
    Cash and cash equivalents at beginning of period35,963  11,370 
    CASH AND CASH EQUIVALENTS AT END OF PERIOD$33,345  $63,537 



    LIFETIME BRANDS, INC.

    Supplemental Information
    (in thousands)

    Reconciliation of GAAP to Non-GAAP Operating Results

    Adjusted EBITDA for the twelve months ended June 30, 2021:

     Adjusted EBITDA for the
    Four Quarters Ended
    June 30, 2021
     (in thousands)
    Three months ended June 30, 2021$18,166 
    Three months ended March 31, 202116,830 
    Three months ended December 31, 202032,458 
    Three months ended September 30, 202029,228 
    Adjusted EBITDA for the twelve months ended June 30, 2021$96,682 
      


     Three Months EndedTwelve Months
    Ended June 30,
    2021

     September 30,
    2020
     December 31,
    2020
     March 31,
    2021
     June 30,
    2021
     (in thousands) 
    Net income as reported$13,913  $15,221  $3,067  $5,789  $37,990 
    Undistributed equity losses (earnings), net(147) (1,620) 247  (393) (1,913)
    Income tax provision3,711  6,853  2,416  1,832  14,812 
    Interest expense4,128  4,183  4,014  3,819  16,144 
    Mark to market gain on interest rate
    derivatives
    (99) (172) (498) (46) (815)
    Depreciation and amortization6,090  6,279  5,958  5,765  24,092 
    Stock compensation expense1,575  1,630  1,444  1,328  5,977 
    Acquisition related expenses57  126  182  72  437 
    Restructuring expenses (benefit)  (42)     (42)
    Adjusted EBITDA$29,228  $32,458  $16,830  $18,166  $96,682 

    Adjusted EBITDA is a non-GAAP financial measure which is defined in the Company’s debt agreements. Adjusted EBITDA is defined as net income, adjusted to exclude undistributed equity in losses (earnings), income tax provision, interest expense, mark to market gain on interest rate derivatives, depreciation and amortization, stock compensation expense, and other items detailed in the table above that are consistent with exclusions permitted by our debt agreements.



    LIFETIME BRANDS, INC.

    Supplemental Information
    (in thousands—except per share data)

    Reconciliation of GAAP to Non-GAAP Operating Results (continued)

    Adjusted net income (loss) and adjusted diluted income (loss) per common share (in thousands -except per share data):

     Three Months Ended June 30, Six Months Ended June 30,
     2021 2020 2021 2020
    Net income (loss) as reported$5,789  $(3,977) $8,856  $(32,141)
    Adjustments:       
    Acquisition related expenses72  55  254  102 
    Restructuring expenses  253    253 
    Warehouse relocation  303    1,093 
    Mark to market (gain) loss on interest rate derivatives(46) 164  (544) 2,415 
    Goodwill and other impairments      20,100 
    Foreign currency translation loss reclassified from Accumulated Other Comprehensive Loss2,042  235  2,042  235 
    Gain on change in ownership in equity method investment(1,732)   (1,732)  
    Income tax effect on adjustments(6) (162) 73  (889)
    Adjusted net income (loss)$6,119  $(3,129) $8,949  $(8,832)
    Adjusted diluted income (loss) per common share(1)$0.28  $(0.15) $0.41  $(0.42)

    Adjusted net income and adjusted diluted income per common share in the three and six months ended June 30, 2021 excludes acquisition related expenses, mark to market (gain) on interest rate derivatives, foreign currency translation loss reclassified from Accumulated Other Comprehensive Loss and the gain on change in ownership in equity method investment. 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, 2020 excludes acquisition related expenses, restructuring expenses, warehouse relocation, mark to market loss on interest rate derivatives, goodwill and other impairments, and foreign currency translation loss reclassified from Accumulated Other Comprehensive Loss. The income tax effect on adjustments reflects the statutory tax rates applied on the adjustments.

    (1) Adjusted diluted income (loss) per common share is calculated based on diluted weighted-average shares outstanding of 21,965 and 20,824 for the three month period ended June 30, 2021 and 2020, respectively. Adjusted diluted income (loss) per common share is calculated based on diluted weighted-average shares outstanding of 21,903 and 20,784 for the six month period ended June 30, 2021 and 2020, respectively. The diluted weighted-average shares outstanding for the three and six month period ended June 30, 2021 include the effect of dilutive securities of 643 and 664, respectively.



    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 sales2021 2020 Increase
    (Decrease)
     2021 2020 Increase
    (Decrease)
     Currency
    Impact
     Excluding
    Currency
     Including
    Currency
     Currency
    Impact
    U.S.$166,583  $132,591  $33,992  $166,583  $132,662  $33,921  $(71) 25.6% 25.6% 0.0%
    International20,053  17,549  2,504  20,052  19,672  380  (2,124) 1.9% 14.3% 12.4%
    Total net sales$186,636  $150,140  $36,496  $186,635  $152,334  $34,301  $(2,195) 22.5% 24.3% 1.8%


     As Reported
    Six Months Ended
    June 30,
     Constant Currency (1)
    Six Months Ended
    June 30,
       Year-Over-Year
    Increase (Decrease)
    Net sales2021 2020 Increase
    (Decrease)
     2021 2020 Increase
    (Decrease)
     Currency
    Impact
     Excluding
    Currency
     Including
    Currency
     Currency
    Impact
    U.S.$342,764  $261,799  $80,965  $342,764  $261,865  $80,899  $(66) 30.9% 30.9% 0.0%
    International39,525  33,411  6,114  39,525  36,462  3,063  (3,051) 8.4% 18.3% 9.9%
    Total net sales$382,289  $295,210  $87,079  $382,289  $298,327  $83,962  $(3,117) 28.1% 29.5% 1.4%

     

    (1) “Constant Currency” is determined by applying the 2021 average exchange rates to the prior year local currency sales amounts, with the difference between the change in “As Reported” net sales and “Constant Currency” net sales, reported in the table as “Currency Impact”. Constant currency sales growth is intended to exclude the impact of fluctuations in foreign currency exchange rates.



    LIFETIME BRANDS, INC.

    Supplemental Information

    Reconciliation of GAAP to Non-GAAP Guidance

    Adjusted EBITDA guidance for the full fiscal year ending December 31, 2021 (in millions):

    Net income guidance$28.1 to $30.8
    Add back: 
    Income tax expense11.9 to 12.7
    Interest expense15
    Depreciation and amortization23.5
    Stock compensation expense5
    Other adjustments(1)0.5 to 1
    Adjusted EBITDA guidance$84 to $88

    (1) Includes estimates for acquisition related expenses, undistributed equity in (earnings) losses and other items that are consistent with exclusions permitted by our debt agreements.

    Adjusted income from operations, adjusted net income and adjusted diluted income per common share guidance for the full fiscal year ending December 31, 2021 :

    With respect to the guidance for adjusted income from operations, adjusted net income and adjusted diluted income per common share, there were no adjustments to the GAAP financial measures, therefore the amounts for adjusted income from operations, adjusted net income and adjusted diluted income per common share are consistent with the GAAP financial measures income from operations, net income and diluted income per common share.

    Reconciliation of GAAP to Non-GAAP Operating Results

    Adjusted EBITDA for the year ended December 31, 2020:

     Three Months Ended Year Ended
    March 31,
    2020
     June 30,
    2020
     September 30,
    2020
     December 31,
    2020
     December 31,
    2020
        (in thousands)    
    Net (loss) income as reported$(28,164) $(3,977) $13,913  $15,221  $(3,007)
    Undistributed equity losses (earnings), net(339) 848  (147) (1,620) (1,258)
    Income tax (benefit) provision(3,729) 3,031  3,711  6,853  9,866 
    Interest expense4,736  4,230  4,128  4,183  17,277 
    Mark to market loss (gain) on interest rate derivatives2,251  164  (99) (172) 2,144 
    Depreciation and amortization6,234  6,061  6,090  6,279  24,664 
    Goodwill and other impairments20,100        20,100 
    Stock compensation expense1,326  1,420  1,575  1,630  5,951 
    Acquisition related expenses47  55  57  126  285 
    Restructuring expenses (benefit)  253    (42) 211 
    Warehouse relocation expenses790  303      1,093 
    Adjusted EBITDA$3,252  $12,388  $29,228  $32,458  $77,326 

    Adjusted EBITDA is a non-GAAP financial measure which is defined in the Company’s debt agreements. Adjusted EBITDA is defined as net income (loss), adjusted to exclude undistributed equity in (earnings) losses, income tax (benefit) provision, interest expense, depreciation and amortization, mark to market loss (gain) on interest rate derivatives, goodwill and other impairments, stock compensation expense, and other items detailed in the table above that are consistent with exclusions permitted by our debt agreements.



    LIFETIME BRANDS, INC.

    Supplemental Information
    (in thousands—except per share data)

    Reconciliation of GAAP to Non-GAAP Operating Results (continued)

    Adjusted net income and adjusted diluted income per common share (in thousands - except per share data):

     Year Ended December 31,
     2020
    Net loss as reported$(3,007)
    Adjustments: 
    Acquisition related expenses285 
    Restructuring expenses211 
    Warehouse relocation expenses1,093 
    Mark to market loss on interest rate derivatives2,144 
    Goodwill and other impairments20,100 
    Foreign currency translation loss reclassified from Accumulated Other Comprehensive Loss235 
    Income tax effect on adjustments(858)
    Adjusted net income$20,203 
    Adjusted diluted income per share (1)$0.95 

    (1)Adjusted diluted income per common share is calculated based on diluted weighted-average shares outstanding of 21,179 for the year ended December 31, 2020. The diluted weighted-average shares outstanding for the year ended December 31, 2020 include the effect of dilutive securities of 319 shares.

    Adjusted income from operations (in thousands):

     Year Ended December 31,
     2020
     (in thousands)
    Income from operations$24,970 
    Excluded non-cash charges: 
    Goodwill and other impairments20,100 
    Bad debt reserve related to COVID-19 pandemic (1)2,844 
    Total excluded non-cash charges$22,944 
    Adjusted income from operations$47,914 

    (1) Bad debt reserve recorded in the first quarter of fiscal 2020 to establish a provision against potential credit problems from certain retail customers who may have financial difficulty that has been caused or increased due to the COVID-19 pandemic. This reflects the Company's assessment of risk of not being able to collect such receivables from certain customers in the U.S. that are at risk of seeking or have already obtained bankruptcy protection and our international customer base which has a higher proportion of small and independent brick-and-mortar retailers. This charge was taken in response to the Company's assessment of the impact of the COVID-19 pandemic on these accounts


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