GARDEN CITY, NY, May 6, 2021 (GLOBE NEWSWIRE) – Lifetime Brands, Inc. (NasdaqGS: LCUT), a leading global designer, developer, and marketer of a wide range of branded consumer products for use in the home, reported today on its products financial results for the quarter ended March 31, 2021.
Robert Kay, Lifetime's Chief Executive Officer, commented, “Lifetime Brands is off to an excellent start into 2021, with sales growing 34.9%, net income of $ 3.1 million and Adjusted EBITDA growth of 418% or 13 . $ 6 million year over year. This is the seventh consecutive quarter of year-over-year growth in our core US business, which continues to lead our overall business. Our strong results for the quarter show that Lifetime can consistently outperform across the many channels we sell our products on. We continue to gain market share in most of our categories thanks to robust consumer demand, strong brand and product offerings, and vendor consolidation among our largest customers. In addition, in the first quarter we benefited from our strategy of investing in higher inventory levels to ensure product availability for our customers and consumers. It is also important that we have significantly improved our international business compared to the previous year. This is due to increased efficiency and capabilities as a result of the restructuring of this business from the fourth quarter of 2019. We also benefit from our ability to add new products, grow into adjacent categories, and expand brands such as our KitchenAid line, which we recently expanded to cutlery and international markets. Our strong sales growth, the benefits of better utilization of our infrastructure and a disciplined focus on cost efficiency contributed to our strong quarterly results. "
Mr. Kay continued, “Looking ahead, 2021 will be a year of growth investment as we focus more on strategic initiatives, including improving our digital capabilities, expanding our presence in food service and supporting brands that will drive future growth. We're also actively tracking new product launches to break into new categories such as barbecuing, pet, storage, and organization. We will continue to leverage the strength of our balance sheet to capture opportunities for long-term growth and profitability. As more investments are made in support of these growth initiatives in 2021, we expect to see significant growth in the income statement. "
Financial highlights of the first quarter:
Consolidated net sales for the three months ended March 31, 2021 were $ 195.7 million, an increase of $ 50.6 million, or 34.9%, compared to net sales of $ 145.1 million for the corresponding period in the 2020 equals In financial terms, consolidated net sales increased $ 49.6 million, or 34.0%, compared to consolidated net sales for the corresponding period in 2020.
Gross margin for the three months ended March 31, 2021 was $ 66.0 million, or 33.7%, compared to $ 52.9 million, or 36.5%, for the corresponding period in 2020.
Operating profit was $ 9.2 million compared to an operating loss of $ (25.2) million for the corresponding period in 2020. Excluding a non-cash charge of $ 20.1 million for goodwill impairment and a Non-cash debit for bad debts of USD 2.8 million reserves to create a provision against potential credit problems of certain private customers due to the COVID-19 pandemic. The operating loss for the corresponding period in 2020 would have been $ (2.3) million.
Net income was $ 3.1 million, or $ 0.14 per diluted share, compared to a net loss of $ (28.2) million, or (1.36) per diluted share, for the corresponding period in 2020.
Adjusted net income for the corresponding period in 2020 was $ 2.8 million, or $ 0.13 per diluted share, compared to adjusted net loss of $ (5.7) million, or (0.27) per diluted share. Reported GAAP financial measures for net income (loss) are shown below.
Adjusted EBITDA, after taking into account certain adjustments that were permitted and defined under our debt agreements, for the twelve months ended March 31, 2021, was $ 90.9 million. A table that reconciles this non-GAAP financial measure as reported with net income (loss) is provided below.
Instructions for the full year 2021
For the entire fiscal year ending December 31, 2021, the Company announces the following financial guidelines:
| end of year December 31, 2020 |
Instructions for the end of year December 31, 2021 |
||
| Net sales | $ 769.2 million | $ 847 to $ 856 million | |
| Income from operations | $ 25.0 million | $ 53.5 to $ 56 million | |
| Adjusted income from operations | $ 47.9 million | $ 53.5 to $ 56 million | |
| Net profit (loss) | $ (3.0) million | $ 27 to 29 million | |
| Adjusted net income | $ 20.2 million | $ 27 to 29 million | |
| Diluted (loss) earnings per common share | $ (0.14) per share | $ 1.24 to $ 1.33 per share | |
| Adjusted diluted earnings per common share | $ 0.95 per share | $ 1.24 to $ 1.33 per share | |
| Weighted average diluted stocks | 20.9 million | 21.8 million | |
| Adjusted EBITDA | $ 77.3 million | $ 82.5 million to $ 85.5 million |
This forecast is based on a forecast rate of GBP to USD of 1.30 USD. The net income and the diluted earnings per common share were calculated based on an effective tax rate of 30%. The following tables are used to reconcile non-GAAP financial measures with GAAP financial measures.
The company has previously set long-term financial targets in its investor presentations, which are available on the company's website in the Investor Relations section. Based on the Company's accelerated growth and success in achieving its previously disclosed long-term financial goals, the Company will revise those goals upward.
telephone conference
The company has scheduled a conference call for Thursday, May 6, 2021 at 11:00 a.m. The conference call dial-in number is (866) 610-1072 (US) or (973) 935-2840 (International), Conference ID: 7117416.
A live webcast of the conference call is available from:
https://event.on24.com/wcc/r/3152139/7349A42078F1F4A138F6F93840ADD392
An audio replay of the webcast is available for those who cannot hear the live broadcast.
Non-GAAP Financial Measures
This earnings release contains non-GAAP financial measures, including consolidated net sales in constant currency, income from operations excluding certain non-cash expenses, adjusted net income (loss), adjusted diluted earnings (loss) per common share, and adjusted EBITDA. A non-GAAP financial measure is a numeric measure representing a company's historical or future financial performance, financial condition, or cash flow that excludes or is subject to adjustments to exclude amounts included in the most directly comparable measure calculated and presented in a company's income statement, balance sheet, or cash flow statement under GAAP; or contains amounts or is subject to adjustments that result in amounts being included that are excluded from the most directly comparable measure so calculated and presented. In accordance with SEC rules, the Company has reconciled non-GAAP financial measures with the most directly comparable GAAP financial measures. These non-GAAP financial metrics are provided because the company's management uses these financial metrics to evaluate the company's ongoing financial results and trends, and management believes that the exclusion of certain items allows for a more accurate comparison of the company's operating performance from period to period from investors and analysts. Management uses these non-GAAP financial metrics as indicators of business performance. These non-GAAP financial measures should be viewed as a supplement to, and not a substitute for, GAAP financial performance measures.
Forward-Looking Statements
In this press release, the use of the words "believe", "could", "expect", "intend", "may", "positioned", "projected", "projected", "should", "will", "dignity" or similar expressions are intended to identify forward-looking statements. These statements include any statements about the company's growth, our financial policies, our ability to navigate and drive our strategy in the current environment, our commitment to invest more in future growth initiatives, our value initiatives, and our efforts to address geopolitical factors and tariffs, our current and forecast financial and operational performance, results and profitability and all related guidelines, including forecast exchange rates and effective tax rates, as well as our continued growth and success, future plans and intentions with respect to the company and its consolidation subsidiaries . These statements reflect the company's current judgments, estimates and assumptions about possible future events. The company believes that these judgments, estimates and assumptions are reasonable. However, these statements are not guarantees of event or financial or operational results, and actual results could differ materially due to a variety of important factors. These factors could include the company's ability to meet the requirements of its loan agreements. the availability of funding under such loan agreements; the company's ability to maintain adequate sources of liquidity and funding, adequate debt and to relieve its balance sheet; the possibility of impairment in the company's goodwill; the possibility of impairment of the company's intangible assets; Changes in US or foreign trade or tax law and tax policy; the impact of tariffs on imported goods and materials; Changes in general economic conditions that could affect customers' payment practices or consumer spending; the impact of changes in general economic conditions on the company's customers; Ordering behavior of the customer; the performance of our newer products; Expenses and other challenges related to integrating 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 shareholder; Exchange rate fluctuations; Changes in US trade policies or the trade policies of countries in which we or our suppliers do business; Uncertainty about the long-term effects of the UK's exit from the European Union; Shortages and price fluctuations in certain raw materials; global health epidemics such as the COVID-19 pandemic; social unrest, including related protests and riots; our expectations regarding future demand for our products; and material changes in the competitive landscape and the effects of competition on the company's markets, including the company's pricing policies, sources of funding, and the ability to maintain reasonable levels of debt. The company assumes no obligation to update these forward-looking statements unless required by law.
Lifetime Brands, Inc.
Lifetime Brands is a leading global designer, developer, and marketer of a wide range of branded consumer products for use in the home. The company markets its products under well-known kitchenware brands, including Farberware®, KitchenAid®, Sabatier®, Amco Houseworks®, Chef & # 39; n® Chicago ™ Metallic, Copco®, Fred® & Friends, Houdini ™, KitchenCraft®, Kamenstein®, La Cafetière®, MasterClass®, Misto®, Swing-A-Way®, Taylor® Kitchen and Rabbit®; respected brands of tableware and gift items, 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 respected 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 around the world.
The company's corporate website is www.lifetimebrands.com.
Contacts:
Lifetime Brands, Inc.
Laurence Winoker, CFO
516-203-3590
[email protected]
or
Joele Frank, Wilkinson Brimmer Katcher
Ed Trissel / Andrew Squire / Temple of Roses
212-355-4449
LIFETIME BRANDS, INC.
ABRIDGED CONSOLIDATED OPERATING STATEMENTS
(in thousands – except data per share)
(unchecked)
| Three months ended March 31, |
|||||||||
| 2021 | 2020 | ||||||||
| Net sales | $ | 195,653 | $ | 145.070 | |||||
| Cost of sales | 129,653 | 92.136 | |||||||
| Gross margin | 66,000 | 52.934 | |||||||
| Distribution costs | 18,646 | 16,557 | |||||||
| Selling and general administration | 38.108 | 41,522 | |||||||
| Goodwill and other impairments | – – | 20,100 | |||||||
| Result from ongoing business activity | 9.246 | (25.245 | ) | ||||||
| Interest expenses | (4.014 | ) | (4,736 | ) | |||||
| Mark-to-market profit (loss) on interest rate derivatives | 498 | (2.251 | ) | ||||||
| Earnings before loss and equity in the result | 5.730 | (32.232 | ) | ||||||
| Income tax (provision) benefit | (2,416 | ) | 3.729 | ||||||
| Equity in (loss) earnings after taxes | (247 | ) | 339 | ||||||
| NET INCOME (LOSS) | $ | 3.067 | $ | (28, 164 | ) | ||||
| BASIC INCOME (LOSS) PER COMMON SHARE | $ | 0.15 | $ | (1.36 | ) | ||||
| DILUTE INCOME (LOSS) PER SHARED | $ | 0.14 | $ | (1.36 | ) | ||||
LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED COMPENSATION SHEETS
(in thousands – except dividing data)
| March 31, 2021 |
December 31, 2020 |
||||||||
| (unchecked) | |||||||||
| FINANCIAL ASSETS | |||||||||
| CURRENT ASSETS | |||||||||
| Cash and cash equivalents | $ | 30,641 | $ | 35,963 | |||||
| Accounts receivable less allowances of $ 18,333 as of March 31, 2021 and $ 17,013 as of December 31, 2020 | 131.251 | 170.037 | |||||||
| inventory | 210.265 | 203.164 | |||||||
| Prepaid expenses and other current assets | 10.128 | 12.129 | |||||||
| TOTAL CURRENT ASSETS | 382.285 | 421.293 | |||||||
| OWNERSHIP AND EQUIPMENT, net | 22,168 | 23,120 | |||||||
| BUSINESS RENTAL ASSETS | 94,804 | 96,543 | |||||||
| INVESTMENTS | 21,135 | 20,032 | |||||||
| Intangible assets, net | 239,927 | 244.025 | |||||||
| OTHER ASSETS | 2.109 | 2,468 | |||||||
| TOTAL ASSETS | $ | 762,428 | $ | 807,481 | |||||
| LIABILITIES AND SHAREHOLDERS EQUITY | |||||||||
| CURRENT LIABILITY | |||||||||
| Current term of the fixed-term loan | $ | 11,569 | $ | 17,657 | |||||
| Settlement liabilities | 60,570 | 66,095 | |||||||
| accruals | 74,625 | 80,050 | |||||||
| Income taxes payable | 6,948 | 4,788 | |||||||
| Current portion of liabilities from operating leases | 12,141 | 11,480 | |||||||
| TOTAL CURRENT LIABILITIES | 165.853 | 180.070 | |||||||
| OTHER LONG-TERM LIABILITIES | 15,694 | 16,483 | |||||||
| INCOME TAX PAYABLE, LONG TERM | 1,444 | 1,444 | |||||||
| BUSINESS RENTAL LIABILITIES | 100,349 | 102.355 | |||||||
| DELAYED INCOME TAXES | 10,714 | 10,714 | |||||||
| REVOLVING CREDIT FACILITY | – – | 27.302 | |||||||
| TERM LOAN | 234,968 | 238.977 | |||||||
| SHAREHOLDERS 'EQUITY | |||||||||
| Preferred Shares, par value $ 1.00, authorized shares: 100 Series A shares and 2,000,000 Series B shares; none issued and pending | – – | – – | |||||||
| Common stock with a par value of $ 0.01; authorized shares: 50,000,000 as of March 31, 2021 and December 31, 2020; shares issued and outstanding: 21,979,942 as of March 31, 2021 and 21,755,195 as of December 31, 2020 | 220 | 218 | |||||||
| Capital reserve | 268.127 | 268.666 | |||||||
| Retained earnings | 2.548 | 424 | |||||||
| Cumulative other comprehensive loss | (37, 489 | ) | (39.172 | ) | |||||
| TOTAL EQUITY OF THE SHAREHOLDERS | 233,406 | 230.136 | |||||||
| TOTAL LIABILITIES AND EQUITY OF THE SHAREHOLDERS | $ | 762,428 | $ | 807,481 | |||||
LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unchecked)
| Three months ended March 31, |
|||||||||
| 2021 | 2020 | ||||||||
| OPERATING ACTIVITIES | |||||||||
| Net income (loss) | $ | 3.067 | $ | (28, 164 | ) | ||||
| Adjustments to reconcile the net result (loss) with the cash flow from operating activities: | |||||||||
| Depreciation | 5,958 | 6.234 | |||||||
| Goodwill and other impairments | – – | 20,100 | |||||||
| Depreciation of financing costs | 443 | 441 | |||||||
| Mark-to-market loss (loss of profit) on interest rate derivatives | (498 | ) | 2.251 | ||||||
| Material costs | (409 | ) | 702 | ||||||
| Provision for doubtful accounts | 17th | 2.844 | |||||||
| Share Compensation Expense | 1,444 | 1.326 | |||||||
| Undistributed equity in losses (earnings) after taxes | 247 | (339 | ) | ||||||
| Changes in operating assets and liabilities: | |||||||||
| requirements | 38,961 | 43,957 | |||||||
| inventory | (6.479 | ) | 6,788 | ||||||
| Prepaid expenses, other current assets and other assets | 2.121 | (401 | ) | ||||||
| Trade payables, provisions and other liabilities | (10.746 | ) | (18, 148 | ) | |||||
| Taxes on income and earnings | – – | (3.904 | ) | ||||||
| Income taxes payable | 2.156 | – – | |||||||
| CASH GENERATED FROM OPERATIONS | 36.282 | 33.687 | |||||||
| INVESTMENT ACTIVITIES | |||||||||
| Purchase of property, plant and equipment | (674 | ) | (1.222 | ) | |||||
| Acquisition | (178 | ) | – – | ||||||
| NET CASH FOR INVESTMENTS | (852 | ) | (1.222 | ) | |||||
| FINANCING ACTIVITIES | |||||||||
| Revolving Credit Facility Revenue | 7.845 | 67.115 | |||||||
| Revolving Credit Facility Repayments | (35, 131) | ) | (23.436 | ) | |||||
| Repayments of Term Loans | (10.477 | ) | (688 | ) | |||||
| Payments for finance lease obligations | (45 | ) | (25 | ) | |||||
| Withholding tax payments for stock-based compensation | (2.160 | ) | (299 | ) | |||||
| Income from the exercise of stock options | 184 | – – | |||||||
| Cash dividends paid | (1.010 | ) | (934 | ) | |||||
| NET MONEY (USED IN) PROVIDED THROUGH FINANCING ACTIVITIES | (40.794 | ) | 41,733 | ||||||
| Impact of Foreign Exchange on Cash | 42 | (285 | ) | ||||||
| (REDUCTION) INCREASE IN CASH AND CASH EQUAL VALUES | (5.322 | ) | 73.913 | ||||||
| Cash and cash equivalents at the beginning of the period | 35,963 | 11,370 | |||||||
| Cash and cash equivalents at the end of the period | $ | 30,641 | $ | 85.283 | |||||
LIFETIME BRANDS, INC.
additional information
(in thousands)
Reconciliation from GAAP to non-GAAP operating results
Adjusted EBITDA for the twelve months ended March 31, 2021:
| Adjusted EBITDA for the four quarters ended March 31, 2021 | |||
| (in thousands) | |||
| Three months ended on March 31, 2021 | $ | 16,830 | |
| Three months ended on December 31, 2020 | 32,458 | ||
| Three months ended on September 30, 2020 | 29.228 | ||
| Three months ended on June 30, 2020 | 12,388 | ||
| Adjusted EBITDA | $ | 90.904 | |
| Three months ended | |||||||||||||||||||
| June 30, 2020 | 30. September 2020 |
December 31, 2020 |
March 31, 2021 |
Twelve months Ended March 31st 2021 |
|||||||||||||||
| (in thousands) | |||||||||||||||||||
| Net profit (loss) as reported | $ | (3,977 | ) | $ | 13,913 | $ | 15.221 | $ | 3.067 | $ | 28.224 | ||||||||
| Undistributed Equity Losses (Earnings), net | 848 | (147 | ) | (1.620 | ) | 247 | (672 | ) | |||||||||||
| Income tax provision | 3.031 | 3.711 | 6.853 | 2,416 | 16,011 | ||||||||||||||
| Interest expenses | 4,230 | 4.128 | 4.183 | 4.014 | 16,555 | ||||||||||||||
| Loss of market value (profit) from interest rate derivatives | 164 | (99 | ) | (172 | ) | (498 | ) | (605 | ) | ||||||||||
| Depreciation | 6,061 | 6,090 | 6.279 | 5,958 | 24,388 | ||||||||||||||
| Share Compensation Expense | 1,420 | 1.575 | 1,630 | 1,444 | 6.069 | ||||||||||||||
| acquisition cost | 55 | 57 | 126 | 182 | 420 | ||||||||||||||
| Restructuring expenses (benefits) | 253 | – – | (42 | ) | – – | 211 | |||||||||||||
| Warehouse relocation costs | 303 | – – | – – | – – | 303 | ||||||||||||||
| Adjusted EBITDA | $ | 12,388 | $ | 29.228 | $ | 32,458 | $ | 16,830 | $ | 90.904 | |||||||||
Adjusted EBITDA is a non-GAAP financial measure that is defined in the company's debt agreements. Adjusted EBITDA is defined as net profit (loss), adjusted for undistributed equity in losses (earnings), income tax provisions, interest expense, market value loss (profit) from interest rate derivatives, depreciation and share compensation expenses and other items listed in the table above that are related to the match the exclusions allowed in our debt agreements.
LIFETIME BRANDS, INC.
additional information
(in thousands – except data per share)
Reconciliation from GAAP to Non-GAAP Operating Results (continued)
Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) per Common Share (in thousands – excluding data per share):
| Three months to March 31 | |||||||||
| 2021 | 2020 | ||||||||
| Net profit (loss) as reported | $ | 3.067 | $ | (28, 164 | ) | ||||
| Adjustments: | |||||||||
| acquisition cost | 182 | 47 | |||||||
| Warehouse move | – – | 790 | |||||||
| Mark-to-market loss (loss of profit) on interest rate derivatives | (498 | ) | 2.251 | ||||||
| Goodwill and other impairments | – – | 20,100 | |||||||
| Income tax effect on adjustments | 79 | (727 | ) | ||||||
| Adjusted net income (loss) | $ | 2.830 | $ | (5.703 | ) | ||||
| Adjusted diluted earnings per common share (1) | $ | 0.13 | $ | (0.27 | ) | ||||
Adjusted net income and adjusted diluted earnings per common share for the three months ended March 31, 2021 do not include acquisition-related expenses and fair value (profit) from interest rate derivatives. The income tax effect on adjustments reflects the statutory tax rates that are applied to the adjustments.
Adjusted net (loss) and adjusted diluted (loss) per common share for the three months ended March 31, 2020 do not include acquisition-related charges, inventory relocation costs, fair value losses from interest rate derivatives, and goodwill and other impairments. The income tax effect on adjustments reflects the statutory tax rates that are applied to the adjustments.
(1) Adjusted diluted earnings per common share are calculated based on the diluted weighted average number of shares issued of 21,771 and 20,745 for the three-month period ending March 31, 2021 and 2020, respectively. The diluted weighted average shares outstanding for the three month period ended March 31, 2021 include the dilutive securities effect of 685.
LIFETIME BRANDS, INC.
additional information
(in thousands)
Reconciliation from GAAP to Non-GAAP Operating Results (continued)
Constant currency:
| As reported Three months ended March 31, |
Constant currency (1) Three months ended March 31, |
year for year Increase decrease) |
|||||||||||||||||||||||||
| Net sales | 2021 | 2020 | Increase (Reduce) |
2021 | 2020 | Increase (Reduce) |
currency A hit |
Without currency |
Including currency |
currency A hit |
|||||||||||||||||
| US. | $ | 176.181 | $ | 129.208 | $ | 46,973 | $ | 176.181 | $ | 129.214 | $ | 46,967 | $ | (6 | ) | 36.3% | 36.4% | 0.1% | |||||||||
| International | 19,472 | 15,862 | 3,610 | 19,472 | 16,813 | 2,659 | (951 | ) | 15.8% | 22.8% | 7.0% | ||||||||||||||||
| Total net sales | $ | 195,653 | $ | 145.070 | $ | 50.583 | $ | 195,653 | $ | 146.027 | $ | 49,626 | $ | (957 | ) | 34.0% | 34.9% | 0.9% | |||||||||
(1) "Constant currency" is determined by applying the average exchange rates of 2021 to the sales amounts in the local currency of the previous year, whereby the difference between the change in net sales "As reported" and the net sales "Constant currency" shown in the table is given as "currency effect". Constant sales growth in currencies should exclude the effects of exchange rate fluctuations.
LIFETIME BRANDS, INC.
additional information
Transition from GAAP to non-GAAP guidelines
Adjusted EBITDA forecast for the fiscal year ending December 31, 2021 (in millions):
| Net income forecast | $ 27-29 |
| Add back: | |
| Income tax expense | 11.5 to 12 |
| Interest expenses | fifteen |
| Depreciation | 23.5 |
| Share Compensation Expense | 5 |
| Other adjustments (1) | 0.5 to 1 |
| Adjusted EBITDA forecast | $ 82.5 to $ 85.5 |
(1) Includes estimates for acquisition-related expenses, undistributed equity in (income) losses and other items that are compatible with the exclusions permitted in our debt agreements.
Adjusted income from operations, adjusted net income, and adjusted diluted earnings per common share for the full year ended December 31, 2021:
No adjustments have been made to GAAP financial measures with respect to the guidelines for adjusted income from operations, adjusted net income, and adjusted diluted earnings per common share, hence the adjusted income from operations, adjusted net income, and adjusted diluted income amounts each Common Stock Shares are used in accordance with GAAP financial measures: Operating Income, Net Income, and Diluted Earnings per Common Share.
Reconciliation from GAAP to non-GAAP operating results
Adjusted EBITDA for the fiscal year ended December 31, 2020:
| Three months ended | end of year | ||||||||||||||||||
| March 31, 2020 |
June 30th 2020 |
September 30, 2020 | December 31, 2020 | December 31, 2020 |
|||||||||||||||
| (in thousands) | |||||||||||||||||||
| Net profit (loss) 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 (performance) provision | (3.729 | ) | 3.031 | 3.711 | 6.853 | 9,866 | |||||||||||||
| Interest expenses | 4,736 | 4,230 | 4.128 | 4.183 | 17,277 | ||||||||||||||
| Loss of market value (profit) from interest rate derivatives | 2.251 | 164 | (99 | ) | (172 | ) | 2.144 | ||||||||||||
| Depreciation | 6.234 | 6,061 | 6,090 | 6.279 | 24,664 | ||||||||||||||
| Goodwill and other impairments | 20,100 | – – | – – | – – | 20,100 | ||||||||||||||
| Share Compensation Expense | 1.326 | 1,420 | 1.575 | 1,630 | 5,951 | ||||||||||||||
| acquisition cost | 47 | 55 | 57 | 126 | 285 | ||||||||||||||
| Restructuring expenses (benefits) | – – | 253 | – – | (42 | ) | 211 | |||||||||||||
| Warehouse relocation costs | 790 | 303 | – – | – – | 1,093 | ||||||||||||||
| Adjusted EBITDA | $ | 3.252 | $ | 12,388 | $ | 29.228 | $ | 32,458 | $ | 77.326 | |||||||||
Adjusted EBITDA is a non-GAAP financial measure that is defined in the company's debt agreements. Adjusted EBITDA is defined as net profit (loss), adjusted for undistributed equity in (profit) losses, income tax (benefit) provision, interest expense, depreciation and amortization, loss of fair value (profit) from interest rate derivatives, goodwill and other impairments, Share-compensation expenses and other items listed in the table above that are consistent with the exclusions permitted in our debt agreements.
LIFETIME BRANDS, INC.
additional information
(in thousands – except data per share)
Reconciliation from GAAP to Non-GAAP Operating Results (continued)
Adjusted net income and adjusted diluted earnings per common share (in thousands – excluding data per share):
| Fiscal year ended December 31 | ||||
| 2020 | ||||
| Net loss as reported | $ | (3.007 | ) | |
| Adjustments: | ||||
| acquisition cost | 285 | |||
| Restructuring costs | 211 | |||
| Warehouse relocation costs | 1,093 | |||
| Loss of market value for interest rate derivatives | 2.144 | |||
| Goodwill and other impairments | 20,100 | |||
| Loss from currency translation reclassified from accumulated other total loss | 235 | |||
| Income tax effect on adjustments | (858 | ) | ||
| Adjusted net income | $ | 20.203 | ||
| Adjusted diluted earnings per share (1) | $ | 0.95 | ||
(1) Adjusted diluted earnings per common share are calculated based on the diluted weighted average number of shares issued of 21,179 for the fiscal year ended December 31, 2020. The diluted weighted average shares issued for the fiscal year ended December 31, 2020 include the effect of the securities dilution of 319 shares.
Adjusted operating profit (in thousands):
| Fiscal year ended December 31 | |||
| 2020 | |||
| (in thousands) | |||
| Income from operations | $ | 24,970 | |
| Excluded non-cash fees: | |||
| Goodwill and other impairments | 20,100 | ||
| Provision for bad debts in connection with the COVID-19 pandemic (1) | 2.844 | ||
| Total excluded non-cash fees | $ | 22,944 | |
| Adjusted income from operations | $ | 47,914 | |
(1) Bad debt provision created in the first quarter of fiscal 2020 to provide a provision against potential credit problems of certain retail customers who may have financial difficulties caused or increased as a result of the COVID-19 pandemic. This reflects the company's assessment of the risk of not being able to collect claims from certain US customers who are at risk of filing for bankruptcy protection or who have already received bankruptcy protection, as well as our international customer base, the one higher proportion of small and independent bricks has -mortar retailers. This fee was collected in response to the company's assessment of the impact of the COVID-19 pandemic on these accounts